Vol. 145, No. 21 — October 12, 2011

Registration

SOR/2011-202 September 30, 2011

FISHERIES ACT

Regulations Amending the Metal Mining Effluent Regulations

P.C. 2011-1106 September 29, 2011

His Excellency the Governor General in Council, on the recommendation of the Minister of Fisheries and Oceans, pursuant to subsection 36(5) of the Fisheries Act (see footnote a), hereby makes the annexed Regulations Amending the Metal Mining Effluent Regulations.

REGULATIONS AMENDING THE METAL
MINING EFFLUENT REGULATIONS

AMENDMENT

1. Schedule 2 to the Metal Mining Effluent Regulations (see footnote 1) is amended by adding the following after item 18:

Item	Column 1 Water or Place	Column 2 Description
19.	Mallard Lake, Saskatchewan	Mallard Lake, located at 56°00′32″ north latitude and 104°16′38″ west longitude, approximately 120 km northeast of the town of La Ronge, Saskatchewan. More precisely, the area bounded by (a) the contour of elevation around Mallard Lake at the 490 m level, and (b) the dam built at the south end of Mallard Lake.

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issue

Golden Band Resources Inc. (GBR) has constructed and is operating a gold mining and milling project referred to as the Jolu Central Gold Mill Project (Jolu Project). The Jolu Project involves the re-commissioning of the Jolu mill to use it as a central facility to process ores mined from a series of regional gold deposits over a four-year period. The Jolu Project is located approximately 120 km northeast of La Ronge, Saskatchewan (Figure 1). GBR will use Mallard Lake for the disposal of mine tailings. The use of Mallard Lake as a tailings management facility was permitted by the Province of Saskatchewan in 1988.

During the course of obtaining approvals to re-open the Jolu Mill, it was determined that fish were present in Mallard Lake. The fish population in the lake is currently isolated. In June 2008, Fisheries and Oceans Canada determined that Mallard Lake is a natural, fish-frequented water body. Therefore, the use of Mallard Lake for the disposal of mine tailings will require amending the Metal Mining Effluent Regulations (MMER) to add Mallard Lake to Schedule 2, designating Mallard Lake as a tailings impoundment area (TIA).

A screening level environmental assessment of the project was undertaken under the Canadian Environmental Assessment Act. (see footnote 2) Fisheries and Oceans Canada was the responsible authority for the environmental assessment and Environment Canada, Natural Resources Canada and Health Canada provided technical advice as federal authorities.

As part of the federal environmental assessment, GBR assessed alternatives for the disposal of tailings from the Jolu Project. In this assessment, GBR concluded that “the continued use of . . . Mallard [Lake] as a tailings management facility is the most environmental [sic] acceptable option and is also the preferred option both on a technical and socioeconomic basis.”

The environmental assessment screening report, prepared by Fisheries and Oceans Canada, stated that the potential environmental impacts of the proposed TIA could be offset through the implementation of the fish habitat compensation plan along with other mitigation measures. The screening report concluded that “taking into account the implementation of mitigation measures as described in Sections 28 and 29 of the screening report, the proposed Project (Mallard Lake Tailings Impoundment Area near McLennan Lake, Saskatchewan) is not likely to cause significant adverse environmental effects.”

The Jolu Project was also subject to an environmental assessment conducted under the Saskatchewan Environmental Assessment Act. The environmental impact statement was approved by the provincial government on May 25, 2009, concluding that the “project is environmentally acceptable and would not pose a significant risk to the environment.” (see footnote 3)

Objectives

The objective of the Amendments is to allow the disposal of tailings from the Jolu Central Gold Mill into Mallard Lake, which is a natural, fish-frequented water body.

No change to the policy objectives or requirements of the MMER will be undertaken as part of the Amendments.

Description

The Amendments

The Amendments add Mallard Lake, a natural, fish-frequented water body, to Schedule 2 of the MMER, designating it as a TIA. This will enable tailings from the Jolu Project to be disposed of in Mallard Lake. Any effluent from the TIA will be subject to the requirements of the MMER.

The Amendments will come into force on the day on which they are registered.

Background

The MMER came into force on December 6, 2002, under the Fisheries Act and in 2009 applied to 104 facilities across Canada. The MMER impose limits on releases of arsenic, copper, cyanide, lead, nickel, zinc, radium-226 and total suspended solids, and prohibit the discharge of effluent that is acutely lethal to fish.

The MMER include provisions to designate natural, fish-frequented water bodies as TIAs because at some sites the disposal of mine waste (e.g. tailings or waste rock) in such water bodies may be the preferred disposal option for pollution prevention and reduction of long-term environmental risk. Approval for the use of a water body as a TIA requires an environmental assessment and an assessment of alternatives for mine waste disposal. The assessment of alternatives for mine waste disposal must clearly demonstrate that the use of a water body for waste disposal is the option that makes the most environmental, technical and socio-economic sense.

In the case where a fish-frequented water body has been designated as a TIA, section 27.1 of the MMER requires the development and implementation of a fish habitat compensation plan which requires approval by the Minister of Fisheries and Oceans. This requirement is based on the Policy for the Management of Fish Habitat (1986) developed by Fisheries and Oceans Canada to ensure that there is no net loss of the productive capacity of fish habitat as a result of the use of the water body as a TIA. The MMER also require that the mining company submit an irrevocable letter of credit to Fisheries and Oceans Canada to ensure that adequate funding is available to implement all elements of the habitat compensation plan.

Any effluent discharged from a TIA must meet the effluent standards specified in the MMER to help ensure the protection of downstream ecosystems.

The Jolu Central Gold Mill Project

The project proponent, GBR, has re-opened the existing Jolu Central Gold Mill and operations at the mill have begun. GBR is operating or will operate several nearby satellite mines to supply ore to the mill. The mill is located approximately 120 km northeast of La Ronge, Saskatchewan (Figure 1). The existing mill will be used as a central facility to process ores mined from a series of regional gold deposits, referred to as the Jolu and Decade deposits which are adjacent to Mallard Lake, the Komis and EP deposits about 75 km north of Mallard Lake, and the Bingo deposit about 55 km south of Mallard Lake. GBR is planning the sequential mining, over a four-year period, of these deposits. The Komis and EP deposits and a small portion of the Jolu deposit will be mined using open-pit methods. The Bingo and Decade deposits and the remainder of the Jolu deposit will be mined using underground methods. GBR has re-opened the mill and production began in December 2010. The mill will process about 700 tonnes of gold ore per day, using cyanide for the recovery of gold.

Tailings disposal for the Jolu Project will be carried out in two successive phases. For the first phase, a new on-land tailings management facility was constructed upland of Mallard Lake and became operational in December of 2010. Provincial permits were issued for the construction of this on-land facility, but no federal permits or authorizations were required. GBR will operate the on-land tailings management facility for about a year and the facility is designed to accommodate 160 000 m³ of tailings.

In the second phase, tailings will be deposited in Mallard Lake. GBR has determined that approximately 430 000 m³ of tailings produced over the remaining three-year life of the project will be deposited in Mallard Lake.

Figure 1: The Jolu Central Gold Mill Project

Historical use of Mallard Lake for tailings disposal

Mallard Lake is a small, headwater lake that has been used for tailings disposal by three different mining companies over the past 37 years, 1973–1975, 1988–1991 and 1996–1997. In 1987, a series of dams and berms were built to isolate the facility from the natural environment and control effluent discharges. Prior to construction of the dams, fish were removed from the lake as authorized by the Province of Saskatchewan. The construction resulted in the division of the lake into cells A, B and C. In 1988, an Approval to Operate a Pollutant Control Facility under the Saskatchewan Environment Act was issued. In 1998 additional work to create small channels to allow flow between the cells was undertaken.

The Metal Mining Liquid Effluent Regulations (MMLER), which were made under the Fisheries Act and were in force from 1977 to 2002, did not apply to gold mining or milling operations using cyanide; therefore, previous operations at the site were not subject to requirements of the MMLER. Operations at the site had ceased prior to the promulgation of the MMER in 2002.

Mallard Lake has been impacted by past disposal of tailings in the lake. In particular, tailings deposited between 1973 and 1975 were processed using mercury for the recovery of gold. Mercury was not used in later mining and processing operations at the site and will not be used by GBR.

Water and sediment quality in Mallard Lake are degraded. Sediments near the outlet of the lake, where tailings were deposit- ed between 1973 and 1975, contain mercury concentrations up to 100 times the existing guidelines. Water and sediment quality are also degraded in Yew Lake, about 300 m downstream from Mallard Lake. Fish in Yew Lake contain elevated concentrations of mercury and a fish consumption advisory has been issued by the Province of Saskatchewan. The federal screening report concluded that impacts on the water quality of Yew Lake resulting from the Jolu Project will likely be negligible.

The Province of Saskatchewan, local First Nations and GBR are developing a management plan to further assess downstream impacts from past tailings disposal in Mallard Lake and to address the risks posed by the historic mercury contamination.

GBR acquired the Jolu Mill in 2004, and during the course of obtaining approvals to re-open the mill, it was determined that fish were present in Mallard Lake. In June of 2008, Fisheries and Oceans Canada determined that Mallard Lake is a natural, fish-frequented water body.

Use of Mallard Lake as a TIA

GBR will use Mallard Lake for the disposal of 430 000 m³ of tailings from the Jolu Project over the course of three years. In order to use Mallard Lake as a TIA for the Jolu Project, upgrades to the existing structures and facilities are required. The principal upgrades will include

• restoration of Dams 1 and 2 to their original elevations;
• establishment of a final point of control with an engineered stop-log control structure at the outlet to Mallard Creek;
• construction of new pump houses to provide recycling or treatment of tailings solution in the mill, as required;
• construction of reclaim water pumping stations in Cells A and B and possibly a flow control structure at Dam 1 to control and manage flows between Cells A and B;
• raising of Dams 1 and 2 by 2.8 m to accommodate the approximately 430 000 m³ of tailings that will accumulate over the life of the project;
• installation of geotechnical instrumentation for monitoring of groundwater levels and dam settlement; and
• upgrading of the perimeter roadway to all-weather standards to allow daily inspections of the TIA.

Tailings will be pumped for disposal from the Jolu Mill as slurry via an insulated 1.5 km tailings pipeline to the TIA. Samples of the discharged tailings slurry will be taken periodically to control metallurgical and environmental performance of the mill. Solids from the tailings slurry will settle in the tailings pond. The use of Mallard Lake as a TIA will provide retention time for the partial degradation of residual cyanide from ore processing. Water from the TIA will be pumped back to the mill for re-use.

Effluent from the TIA will be treated using a reverse osmosis treatment plant prior to discharge to the environment. The final effluent will be subject to the effluent monitoring and reporting requirements of the MMER. The final effluent discharge point will be the control structure at the outlet of the TIA into Mallard Creek. Mallard Creek is a small stream that connects Mallard Lake to Yew Lake.

Decommissioning of the TIA will commence at the end of its operational life. The TIA will be designed to permanently maintain a water cover of at least 1 m depth over the tailings. In order to maintain the water cover, the freshwater diversion works will be dismantled and site runoff will be directed to the TIA. Within the TIA, Dam 1 will be breached and a permanent spillway will be established in Dam 2. The stop-log control structure at the outlet of the TIA will be replaced with a rock weir and spillway. The weir will be designed to prevent fish passage by maintaining a vertical separation of at least 1 m between the spillway and downstream water level. GBR has stated that long-term monitoring and maintenance of Dam 2 will be needed following mine closure. Mine closure will be completed in accordance with provincial legislation and a security bond will be provided to the province to cover the costs of closure and post-closure monitoring and maintenance.

Fish and fish habitat: impacts and compensation

The designation of Mallard Lake as a TIA requires the development and implementation of a fish habitat compensation plan in accordance with section 27.1 of the MMER, to offset the loss of fish habitat that will occur. These requirements are based on Fisheries and Oceans Canada’s policy of ensuring no net loss of the productive capacity of fish habitat. Section 27.1 includes requirements for monitoring and reporting of the implementation of the fish habitat compensation plans to ensure that the measures are achieving the intended objectives.

GBR has developed a fish habitat compensation plan, and the proposed plan was considered as part of the federal environmental assessment of the project.

In developing the fish habitat compensation plan, GBR undertook a detailed assessment of the quality of fish habitat in Mallard Lake, particularly spawning habitat. A quantitative habitat assessment was completed using physical characteristics obtained from the detailed habitat assessment. The assessment concluded that 15 hectares (ha) of fish habitat will be lost as a result of using Mallard Lake as a TIA. The assessment noted, however, that as a result of the past use of Mallard Lake for tailings disposal, the physical, chemical and biological attributes of fish habitat within Mallard Lake are degraded. As a result, habitat conditions are not considered pristine, which was taken into account in the development of the compensation measures.

The fish habitat compensation plan prepared by GBR includes compensation measures to offset the loss of fish habitat that will occur as a result of the Amendments. These measures consist of two separate projects which are described below.

Fish habitat compensation measures: Project 1

Project 1, which is the main component of the compensation plan, will involve the improvement of existing walleye spawning habitat within Tobacco Creek and the creation of new habitat within the creek. Tobacco Creek is a tributary of Lac La Ronge and is located near the town of La Ronge. Historically, spawning runs of walleye in Tobacco Creek contributed significantly to the total Lac La Ronge spawning run, but they have declined to the point where no walleye were observed in Tobacco Creek in a 2007 population assessment.

The compensation measures include

• removal of beavers and beaver dams in the lower 2 km of Tobacco Creek, facilitating more natural flow and improving fish passage;
• replacement of an undersized, perched culvert, improving flow conditions needed for fish spawning habitat downstream and upstream of the culvert. This will also provide connectivity to approximately 3.2 km of riverine habitat and 26 ha of lacustrine habitat that are currently inaccessible to fish in Tobacco Creek;
• creation of 213 m² of walleye spawning habitat upstream of the new culvert; and
• stocking of walleye fry for a minimum of two consecutive years to enhance the natural recovery of walleye within the creek.

The physical improvements to Tobacco Creek will result in a direct habitat gain. More importantly, however, the works will indirectly improve the productive capacity of fish habitat in the Lac La Ronge watershed since Tobacco Creek will once again function as high-quality spawning habitat and an important source of walleye recruitment. Lac La Ronge is a large lake with an area of approximately 1 413 km². Despite its small size, Tobacco Creek once provided about 12% of the entire estimated spawning run of Lac La Ronge. For this reason, any improvement in the walleye spawning success in Tobacco Creek is expected to benefit the walleye population in Lac La Ronge itself. The habitat improvements included in this fish habitat compensation plan will also benefit other spring spawning fish species, such as northern pike and sucker species.

Fish habitat compensation measures: Project 2

Project 2 will involve the replacement of an undersized, perched culvert on the access road to the Jolu Central Gold Mill. This culvert is a barrier to fish migration. This project will improve or restore fish passage between two fish-frequented lakes and improve habitat connectivity within the stream that connects the lakes. This project will result in a very small direct habitat gain and it is included in the fish habitat compensation plan as an additional measure. Project 1 is sufficient to offset the habitat loss that will be associated with the use of Mallard Lake as a TIA.

The fish habitat compensation plan has been approved by Fisheries and Oceans Canada. GBR will be required, under section 27.1, to implement that plan, monitor its implementation, and take measures to verify the extent to which the plan’s purpose has been achieved.

Regulatory and non-regulatory options considered

A report on the assessment of alternatives for the disposal of tailings from the proposed Jolu Project mine was submitted by GBR to Fisheries and Oceans Canada and Environment Canada in July 2009. In this assessment, GBR concluded that “the continued use of . . . Mallard [Lake] as a tailings management facility is the most environmental [sic] acceptable option and is also the preferred option both on a technical and socioeconomic basis.” In preparing the screening report, which evaluates the potential impacts of the project under the Canadian Environmental Assessment Act, Fisheries and Oceans Canada and Environment Canada considered GBR’s assessment of alternatives.

Regulatory options

As part of the assessment of alternatives, GBR identified two potential options that would involve using natural, fish-frequented water bodies for tailings disposal. Pursuing this course would trigger the regulatory requirement that those water bodies first be added to Schedule 2 of the MMER.

Option 1: Use Mallard Lake as a TIA

As an outcome of the assessment of alternatives, GBR concluded that “the continued use of . . . Mallard [Lake] as a tailings management facility is the most environmental [sic] acceptable option and is also the preferred option both on a technical and socioeconomic basis.” The federal environmental assessment stated that “major factors contributing to this conclusion include the demonstrated success of the use of the previously-operated Mallard TMF [tailings management facility], predicted minimal environmental impacts, the lowest overall cost of all options considered, and community and First Nations support for the option.” In particular, it was noted that the Lac La Ronge First Nation “expressed a clear desire for Mallard Lake to continue to be managed as a TMF in part to reduce risks to the downstream receiving environment associated with previously-deposited tailings in the lake.”

The federal environmental assessment concluded that “taking into account the implementation of mitigation measures as described in Sections 28 and 29 of the screening report, the proposed Project (Mallard Lake Tailings Impoundment Area near McLennan Lake, Saskatchewan) is not likely to cause significant adverse environmental effects.”

Option 2: Use another lake as a TIA

This option would have entailed the disposal of tailings in a previously un-impacted natural water body in the immediate area of the Jolu mill, requiring that the water body be designated a TIA. Any lake chosen would have needed to be close enough to the mill to allow for pumping of tailings slurry to the lake, particularly during the winter, and would have needed to be of sufficient size to contain the volume of tailings that will be produced by the development.

All lakes of suitable size and within an acceptable distance from the mill were found to be fish-frequented. During public consultation activities undertaken by GBR, widespread opposition to the use of a pristine, fish-frequented lake as a TIA was expressed by the public. This option would also have taken longer to construct and bring into operation, would have been more costly, and would have required more extensive fish habitat compensation than would have been required for the use of Mallard Lake.

Non-regulatory options

Non-regulatory options would have involved the disposal of tailings and waste rock in a manner that would not have directly impacted a natural, fish-frequented water body. As part of the assessment of alternatives, GBR identified five potential non-regulatory options.

Option 3: Deposit tailings into a new, constructed, “purpose-built” pit

This option would have entailed the mining of a new pit for the sole purpose of converting it into a tailings management facility. To provide adequate tailings storage capacity, it would have been necessary to excavate approximately one million cubic metres of rock which would have resulted in a rock pile 10 m high covering a surface area of 10 ha. This option would have impacted areas of terrestrial habitat that have not been previously impacted by mining activity and would not otherwise have been impacted by the Jolu Project. Construction of the pit would also have resulted in a substantial delay in the project, and this option would have been more costly than other regulatory options considered.

Option 4: Deposit tailings into a mined-out pit

The mine plan for the Jolu Project includes the recovery of ore from a small near-surface ore body near the milling facility by open pit methods. If this tailings disposal option had been implemented, the pit would have been converted into a tailings management facility once all of the ore had been recovered. The deposit would have been mined prior to operation of the mill, with all ore stockpiled until the conversion of the pit into a tailings management facility was complete. In the interim, no income would have been generated from the operation. In addition, the pit would only have had sufficient volume to contain approximately one year of tailings production (145 000 m³); therefore, a second disposal facility would have been required within two years of initial mill start-up. Additional drawbacks include a high cost per unit of tailings disposal, unproven geological conditions, and the requirement to move existing mine infrastructure.

Option 5: Deposit tailings into a new above-ground tailings management facility and a mined-out pit

This option would have involved the deposition of tailings into a newly constructed above-ground tailings management facility followed by tailings disposal within a mined-out pit. Given that the mined-out pit could only contain approximately one year’s production of tailings, the constructed tailings management facility would have needed to be large enough to contain three years’ production of tailings. This new facility would have impacted terrestrial habitat that would otherwise not have been impacted by the project and would have been more costly than most other options considered.

Option 6: Deposit tailings as backfill into an underground mine

GBR concluded that this option was not be feasible due to insufficient underground capacity. As with option 5, additional above-ground storage capacity would have been required. The proponent also stated that water pumping and treatment requirements, including cyanide treatment, could have been excessive with this option. Other concerns included significant occupational safety and health issues. For example, the condition and stability of the existing underground workings is unknown. From historical records it is known that the previous operators of the Jolu mill abandoned underground tailings disposal due to a collapse of some of the mine workings. Extensive work would have been required to assess and potentially rehabilitate the underground facilities to ensure that they were stable, safe, and accessible for tailings storage.

Option 7: Deposit tailings into a new, constructed, above-ground tailings management facility

An above-ground tailings management facility of sufficient size to contain all of the tailings that will be generated by the Jolu Project would have covered an area of approximately 40 ha. This area would have consisted of terrestrial habitat that had not been impacted by past mining activity and would not have otherwise been impacted by the Jolu Project. Depending on the location, such a facility could have negatively affected the groundwater recharge of the Mallard Lake basin. Capital costs for this option would have been the highest of any of the options considered, in part due to the poor availability and proximity of suitable construction materials. Decommissioning would also have been more complex due to the need for a dry cover over the tailings, and decommissioning costs would also have been higher than those of other options considered.

GBR conducted a quantitative assessment of these 7 options against 3 categories: environmental considerations (19 criteria), technical considerations (19 criteria) and socio-economic considerations (23 criteria). In each category, option 1, the use of Mallard Lake, was the preferred option.

Table 1 summarizes the estimated costs of the regulatory and non-regulatory options which were assessed.

Table 1: Comparison of Estimated Maximum Total Costs
of Regulatory and Non-regulatory Options

Tailings Disposal Option	Estimated Total Undiscounted Cost of TIA (million $)
Regulatory options
Option 1: Use Mallard Lake as a TIA	3.4
Option 2: Use another lake as a TIA	5.3
Non-regulatory options
Option 3: Deposit tailings in “purpose-built” pit	7.8
Option 4: Deposit tailings in mined-out pit	7.8
Option 5: Deposit tailings in above-ground tailings management facility and a mined-out pit	7.9
Option 6: Deposit tailings as backfill underground	4.8
Option 7: Deposit tailings in above-ground tailings management facility	10.0

Impact of the Amendments associated with using Mallard Lake as a TIA

Summary

The present value of total incremental costs for all works associated with the TIA is estimated to be roughly $2.8 million over 25 years using a 7% discount rate. The TIA will result in the loss of approximately 15 ha of fish habitat in Mallard Lake. However, this loss will be offset through the implementation of the fish-habitat compensation plan. As a result, the federal environmental assessment concluded that “taking into account the implementation of mitigation measures . . . the proposed Project is not likely to cause significant adverse environmental effects.”

Impact analysis

The impact analysis quantifies and monetizes the incremental impacts associated with the Amendments, including the construction, operation, and closure of the Mallard Lake TIA, monitoring and reporting, and the implementation of the fish habitat compensation plan. The following points outline the key assumptions used in the analysis:

• All costs are expressed as present values in 2009 dollars over a 25-year timeframe; and
• A social discount rate of 7% was used for the analysis.

As previously described, tailings disposal for the Jolu Project will occur in two successive phases. For the first phase, a new on-land tailings management facility was constructed upland of Mallard Lake and became operational in December 2010. Tailings disposal into Mallard Lake will occur in the second phase. This two-phase approach was proposed to facilitate the commencement of mine operations prior to the coming into force of the Amendments. The costs associated with the construction and operation of the on-land tailings management facility are not considered incremental to the Amendments as they will be incurred irrespective of the Mallard Lake addition to Schedule 2.

The impacts of the Amendments are discussed in more detail below.

Costs to industry

After discounting and accounting for just three years of operation, the present value of total incremental costs to industry associated with the TIA is estimated to be roughly $2.78 million. This includes an estimated capital cost of $1.51 million incurred during the first year of the mine’s life for the restoration of dams and other associated works of the TIA. Costs associated with the on-land tailings management facility, including capital costs and operational cost in year one, are not included. There will be operation and maintenance costs associated with the Amendments beginning in year two and continuing over a period of three years, with a present value of $980,000. GBR will experience incremental costs for the final closure and post-closure monitoring of the TIA after mine operations cease following year four. The present value of these costs is estimated to be about $165,000. Finally, there will be incremental construction costs for the associated works of the fish habitat compensation plan, with further costs incurred over several years for monitoring and reporting on implementation. In total, the costs of the fish habitat compensation plan are estimated to have a present value of about $130,000.

Table 2 summarizes the discounted incremental cost impacts of the TIA.

Costs to Government

There are no incremental costs to Government associated with the Amendments. A compliance and enforcement regime is already in place for the MMER. Therefore, the Amendments will not result in any incremental costs to the federal government.

Table 2: Present Value of Total Industry Costs (2010 to 2034)

Incremental Costs	Present Value (2009 million $)
Tailing impoundment area
Construction costs	1.51
Operation and maintenance costs	0.98
Closure costs	0.14
Post-closure costs	0.02
Sub-total	2.65
Habitat compensation plan
Construction costs	0.06
Monitoring costs	0.07
Sub-total	0.13
Total	2.78

Total costs

The present value of total costs to industry and government are estimated to be roughly $2.78 million over 25 years.

Environmental impacts

The Amendments will allow the disposal of tailings from the Jolu Central Gold Mill into Mallard Lake, which is a natural, fish-frequented water body. As a result of the Amendments, there will be a loss of approximately 15 ha of fish habitat in Mallard Lake. However, this loss will be offset through the implementation of the fish-habitat compensation plan. As a result, the federal environmental assessment concluded that “taking into account the implementation of mitigation measures . . . the proposed Project is not likely to cause significant adverse environmental effects.”

GBR expects that approximately 430 000 m³ of tailings produced over the remaining three-year life of the project will be deposited in Mallard Lake. Mallard Lake has been impacted by past disposal of tailings, including the past deposition of tailings contaminated with mercury. As a result, water and sediment quality in Mallard Lake and nearby Yew Lake are degraded and any further impacts on water quality will be negligible. Effluent from the TIA will be required to meet the effluent discharge limits prescribed in the MMER as well as provincial requirements. GBR will treat effluent prior to discharge.

The federal environmental assessment concluded that the TIA will result in the elimination of approximately 15 ha of fish habitat for northern pike, yellow perch, and white sucker. This loss will be offset by the implementation of the fish habitat compensation plan which will create and improve fish habitat as per section 27.1 of the MMER. The MMER also place regulatory requirements for monitoring and reporting of the implementation of the fish habitat compensation plans to ensure that the measures are achieving the established objectives.

The destruction of terrestrial habitat, fish habitat and aquatic vegetation is also expected to reduce the availability of food and habitat for wildlife such as waterfowl and shorebirds. This will lead to a temporary reduction in wildlife numbers in the immediate vicinity of the TIA. However, conditions for wildlife are expected to improve due to better water quality and increased vegetation growth in and around the TIA. Decommissioning of the TIA will commence at the end of its operational life. The TIA will be designed to permanently maintain a water cover of at least 1 m depth over the tailings.

Environment Canada and Fisheries and Oceans Canada accept GBR’s conclusion that the continued use of Mallard Lake for tailings disposal is the most environmentally acceptable option and is also the preferred option both on a technical and socio-economic basis. The screening level environmental assessment of the project, which took into consideration the assessment of alternatives for tailings disposal conducted by GBR and the proposed fish habitat compensation plan, concluded that “taking into account the implementation of mitigation measures as described in Sections 28 and 29 of the screening report, the proposed Project (Mallard Lake Tailings Impoundment Area near McLennan Lake, Saskatchewan) is not likely to cause significant adverse environmental effects.”

Conclusion

The present value of the total estimated incremental cost of the TIA associated with the Jolu Project is $2.8 million (over the 25-year analysis period discounted at 7%).

While the impact on fish habitat could not be monetized, the loss of the fish habitat due to the TIA will be offset by the implementation of the fish habitat compensation plan.

Consultation

The consultation activities conducted with Aboriginal communities as part of the federal environmental assessment of the project are described in Section 30 of the Screening Report prepared by Fisheries and Oceans Canada. The Screening Report is available for viewing at www.ceaa.gc.ca/052/details-eng.cfm?pid= 42291#report.

In a letter dated March 10, 2009, Fisheries and Oceans Canada formally initiated consultations with Aboriginal communities who could potentially be affected by the project — four First Nations communities and the Métis.

In response to this initiative, three of the four First Nations forwarded a letter to the Government of Canada in May 2009, stating that

• First Nations are in favour of the proposed development;
• First Nations are primarily concerned with the impacts of past mining activities and potential risks to human health posed by these activities;
• First Nations and the proponent intend to negotiate an Impact Benefit Agreement that will include provision to mitigate harmful impacts of the proposed development on traditional activities, including fishing, trapping, hunting and gathering; and
• First Nations request that Mallard Lake be added to Schedule 2 of the MMER without further delay.

The fourth First Nation and the Métis did not express any concerns about the Jolu Project.

Consultations on the proposed Amendments prior to publication in the Canada Gazette , Part Ⅰ

In April 2010, Environment Canada and Fisheries and Oceans Canada held two consultation sessions, one in La Ronge, Saskatchewan, and the other in Gatineau, Quebec. These consultation sessions took place during the public review period of the environmental screening report prepared by Fisheries and Oceans Canada for the federal environmental assessment. The objective of these consultation sessions was to provide stakeholders with the necessary information to enable them to provide comments on the environmental assessment of the proposed mine and the proposed Amendments to the MMER.

Participants in the La Ronge session included local residents, representatives of the local business community, municipal representatives of the City of Prince Albert and the Town of La Ronge, local First Nations groups and persons, the provincial government and GBR. Participants in the Gatineau session included representatives of national Aboriginal organizations, local First Nations groups, environmental non-government organizations (ENGOs), the provincial government and the mining industry, including GBR. The Lac La Ronge Indian Band made a formal presentation at both the La Ronge and the Gatineau consultation sessions.

Following the two consultation sessions, written submissions were received from Aboriginal groups, local communities, environmental non-government organizations, the mining industry and local businesses.

The project is strongly supported by members of the local communities, local businesses, including Aboriginal owned businesses, and by the mining industry. Aboriginal communities potentially affected by the project have been consulted and they are in support of the project, as are the two national Aboriginal organizations which participated in consultations. During the consultations on the proposed Amendments some ENGOs were not opposed, and one ENGO stated that the use of Mallard Lake “does make sense.”

GBR and the Lac La Ronge Indian Band entered into a Memorandum of Understanding in 2007 to work together to provide economic opportunities to the local residents and residents in Northern Saskatchewan. In 2007, GBR also signed a General Services Agreement with the Kitsaki Management Limited Partnership which performs the for-profit economic development activities of the Lac La Ronge Indian Band. The intent of this agreement is “that business opportunities . . . are available to the members of the Lac La Ronge Indian Band.” The agreement also “asserts the commitments that both organizations have to environmentally responsible mineral development.” (see footnote 4) GBR and the Lac La Ronge Indian Band are negotiating an Impact Benefit Agreement to ensure that cultural, economic, health and environmental measures and commitments will be implemented during the course of the project. In addition, GBR, the Lac La Ronge Indian Band and the Government of Saskatchewan are working together to create a care and maintenance plan, which will include biological and chemical monitoring in downstream water bodies in response to concerns about contamination from past tailings disposal in Mallard Lake. The focus will be mostly on existing mercury contamination but could include other pollutants.

A summary of comments on the proposed Amendments is provided below.

Comments related to mercury contamination from past mining activity

• One ENGO raised concern with respect to bio-monitoring and human health assessment of the local community. It was believed that bio-monitoring and a full human health assessment would be beneficial to determine the extent of the damage caused by the historical contamination and to ensure that the re-establishment and expansion of tailings impoundment area by using Mallard Lake does not contribute to more pollution in the watershed and downstream of Mallard Lake basin.

 Environment Canada and Fisheries and Oceans Canada responded by agreeing on the importance of human health assessment, but noted that this is related to concerns about contamination from past disposal of tailings in Mallard Lake. It was also noted that GBR has agreed to participate with the Province of Saskatchewan and local First Nations in the development of a management plan to further assess downstream impacts resulting from the historic deposition of tailings into Mallard Lake and further address the risks posed by the historic mercury contamination of the aquatic ecosystem of Yew and Long lakes. With respect to the proposed designation of Mallard Lake as a TIA, effluent from the proposed TIA would be subject to the requirements of the MMER, and downstream environmental effects monitoring would be required.

• One ENGO commented on risks of bioaccumulation of mercury in waterfowl and caribou.

 Environment Canada and Fisheries and Oceans Canada responded by noting that this is related to concerns about contamination from past disposal of tailings in Mallard Lake. As part of the environmental assessment, GBR conducted a screening level risk assessment and a conceptual human health risk assessment. This human health risk assessment showed that “risks to human health from the environment in the Mallard Lake area are a result of previous mining activities, and that the proposed development was unlikely to result in an incremental increase in the concentration of COPC (contaminants of potential concern) within the water column, sediments, or fish within Yew Lake or other environments downstream of Mallard Lake.”

Comments about baseline data and monitoring

• An ENGO commented that, prior to completion of the proposed Amendments, baseline studies should be undertaken to establish baseline data and help improve local capacity by engaging the community in this monitoring. This could include collection of information on health, economic, cultural, and social issues relevant to the local communities. It was also noted that monitoring of all aspects of the Project, including social, economic, cultural and environmental aspects, should be monitored to improve the potential outcomes of the project.

 Environment Canada and Fisheries and Oceans Canada responded that, with respect to environmental aspects of the project, GBR will be required to conduct monitoring in accordance with the MMER, including weekly and monthly monitoring of effluent quality flow, and regular environmental effects monitoring. GBR will also be required to conduct monitoring to ensure that the objectives of the fish habitat compensation plan are achieved. The project will also be subject to provincial environmental monitoring requirements. Monitoring related to historical mercury contamination will be undertaken as part of the management plan involving the Province of Saskatchewan, local First Nations and GBR.

Comments about integrity of containment structures

• One ENGO noted that fish were able to re-enter Mallard Lake due to damage to the existing dam at the outlet of Mallard Lake. Concern was raised about risks of damage or failure of this dam in the future.

 Environment Canada responded by noting that the GBR intends to replace the existing dam with an engineered stop-log control structure as part of planned upgrades to existing infrastructure in Mallard Lake, if the proposed Amendments are approved. During mine closure, GBR proposes to replace this control structure with a rock weir and spillway which would be designed to prevent fish passage. Mine closure would be completed in accordance with provincial legislation and a security bond would be provided to the province to cover the costs of closure and post-closure monitoring and maintenance.

Comments with respect to the fish habitat compensation plan

• One ENGO raised concerns over lack of specific details in the fish habitat compensation plan such as measures for sediment erosion control and the success rate in fish habitat restoration.

 Fisheries and Oceans Canada responded by acknowledging comments about erosion control and recommended that these comments be addressed to GBR for consideration in the final detailed design of the compensation measures.

Comments on First Nations employment opportunities and training needs

• There was a significant amount of discussion at the Gatineau session with respect to First Nations employment opportunities and training needs.

 Questions regarding employment opportunities and training were responded to by representatives of GBR and the Lac La Ronge Indian Band. For example, it was noted that several of the sub-contractors will be First Nations companies, including contractors for re-commissioning the mill, open-pit mining, ore hauling, snow clearing, road maintenance and catering, and a high proportion of those employed will be Aboriginal.

 A human resource development agreement is being developed between the Province of Saskatchewan and the Kitsaki Management Limited Partnership, and there will be on-site training opportunities as well as on-the-job training. The Kitsaki Management Limited Partnership also has a scholarship program in place.

Consultations on the proposed Amendments following publication in the Canada Gazette, Part Ⅰ

On February 19, 2011, the proposed Amendments were published in the Canada Gazette, Part Ⅰ for a 30-day comment period. During this period, two submissions were received, one from a citizen’s group and one from the Métis Nation–Saskatchewan.

An overview of the comments that were submitted along with Fisheries and Oceans Canada and Environment Canada’s responses to these comments is presented below.

Comments from the citizens’ group and Government’s response

• The citizens’ group stated that they are opposed on the principle of designating a natural, fish-frequented water body as a TIA.

 Environment Canada and Fisheries and Oceans Canada are aware of this perspective but are of the view that the GBR proposal for tailings disposal is what makes the most environmental sense.

• The citizen’s group commented that they are concerned about the adequacy of the fish habitat compensation measures.

 Fisheries and Oceans Canada is of the opinion that the implementation of the fish habitat compensation plan in accordance with section 27.1 of the MMER will offset the loss of fish habitat directly associated with the TIA. GBR will be required to monitor the implementation of the plan, and take measures to verify the extent to which the plan’s purpose has been achieved. GBR will also be required to submit to Fisheries and Oceans Canada an irrevocable letter of credit to cover the plan’s implementation costs. The citizens’ group commented that, given the contamination of Mallard Lake and Yew Lake due to past tailings disposal in Mallard Lake, they are concerned about the potential consequences of further tailings disposal in Mallard Lake.

 Environment Canada notes that GBR will upgrade existing dams at the outlet of TIA and within the TIA to ensure appropriate containment for the tailings, and all effluent discharged from the TIA will be treated prior to discharge. Effluent from the TIA will be subject to the effluent monitoring and reporting requirements of the MMER, including downstream environmental effects monitoring, and that downstream mercury concentrations are not expected to increase as a result of the Jolu Project. To address the issue of historic mercury contamination of the aquatic ecosystem of Yew and Long lakes, GBR has agreed to participate with the Province of Saskatchewan and local First Nations in the development of a management plan to further assess downstream impacts resulting from the historic deposition of tailings into Mallard Lake.

Comments from the Métis Nation–Saskatchewan (MN-S) and the Government’s response

• The Métis Nation–Saskatchewan (MN-S) sought clarification regarding the process for consulting the Métis on the Jolu Central Mill Gold project.

 Environment Canada and Fisheries and Oceans Canada responded that Aboriginal consultations on the Jolu Project were conducted as part of the environmental assessment, and Aboriginal groups were invited to participate in the consultation sessions on the proposed MMER amendments. Crown consultation with Aboriginal groups and communities as part of the environmental assessment is summarized in the Screening Report.

 In March 2009, Fisheries and Oceans Canada invited the MN-S to participate in consultations on the environmental assessment of the Jolu Project. In response, an MN-S representative stated that they did not have the capacity to hire technical experts to assist the MN-S. Therefore, where the MN-S would engage in such activities, the MN-S representative stated that only “lay people” would be involved.

 In an August 2009 letter to the Canadian Environmental Assessment Agency, the MN-S stated that they supported mineral exploration and were hopeful that the Jolu project would proceed. They also expressed concerns about the lack of consultation with the Métis regarding exploration activities, including exploration associated with the Jolu project. Subsequently, in October 2009, representatives of Fisheries and Oceans Canada and the Agency met with a representative of the MN-S. During the meeting the MN-S expressed concerns regarding consultation with the Métis on projects that may impact them, but expressed no specific concerns regarding the Jolu project.

 Following the October 2009 meeting, Fisheries and Oceans Canada continued to seek Métis participation in the environmental assessment of the project. A copy of the Screening Report was provided to the MN-S for comment, but no comments were received.

 In March 2010, Environment Canada invited the MN-S to participate in the consultation session in La Ronge on the possible MMER amendments and the Métis National Council was invited to participate in the consultation session in Gatineau, Quebec. There was no Métis representation at either session and Environment Canada did not receive any comments from Métis representatives.

Rationale

In the assessment of alternatives for the disposal of tailings from the Jolu Project, GBR concluded that “the continued use of . . . Mallard [Lake] as a tailings management facility is the most environmental [sic] acceptable option and is also the preferred option both on a technical and socioeconomic basis.” Further, the federal environmental assessment concluded that “taking into account the implementation of mitigation measures as described in Sections 28 and 29 of the screening report, the proposed Project (Mallard Lake Tailings Impoundment Area near McLennan Lake, Saskatchewan) is not likely to cause significant adverse environmental effects.” Mitigation measures will include the implementation of the fish habitat compensation plan to offset the loss of fish habitat that will occur as a result of the use of Mallard Lake as a TIA.

During consultations on the proposed designation of Mallard Lake as a TIA, there was general support for the project. As described above, the Jolu Project, including the use of Mallard Lake as a TIA, is strongly supported by the local community, including First Nations groups.

Implementation, enforcement and service standards

GBR will be informed of the Amendments and will receive information from Environment Canada to confirm their obligations under the MMER. This will be undertaken in accordance with Environment Canada’s practices to promote compliance with the MMER, particularly for facilities newly subject to the regulatory requirements. Fisheries and Oceans Canada will confirm GBR’s obligations with respect to section 27.1 of the MMER.

The Amendments will not impact the manner in which the MMER are enforced. With the exception of section 27.1, compliance with all provisions of the MMER will be enforced by Environment Canada in accordance with the Department’s plans for enforcement, particularly for facilities newly subject to the MMER. Fisheries and Oceans Canada will be responsible for enforcement of section 27.1. Compliance and enforcement activities will be carried out in accordance with the “Compliance and Enforcement Policy for the Habitat Protection and Pollution Prevention Provisions of the Fisheries Act.” (see footnote 5)

There are no service standards associated with designating the water bodies as TIAs in Schedule 2 of the MMER.

Performance measurement and evaluation

GBR, as owner/operator of the Jolu Project, is subject to the regulatory requirements of the MMER, including section 27.1 which requires the development and implementation of a fish habitat compensation plan.

Effluent from the TIA will be subject to the MMER, and GBR will be required to conduct regular effluent monitoring and report the results to Environment Canada on a quarterly and annual basis. GBR will also be required to conduct environmental effects monitoring to determine if effluent from the Jolu Project is having effects on fish, fish habitat or the use of fish resources. The results of environmental effects monitoring will also be reported to Environment Canada.

In order to review and assess the effectiveness of the MMER, Environment Canada examines all reports submitted, for all facilities subject to the MMER, in accordance with the MMER requirements with respect to effluent and environmental effects monitoring. This will include reports submitted by GBR.

In order to meet the requirements of section 27.1 of the MMER, GBR will be required to implement a fish habitat compensation plan to offset the loss of fish habitat resulting from the Amendments. This plan will include descriptions of habitat that will be lost, habitat measures to be implemented, and measures to be taken to monitor the plan’s implementation and verify the extent to which the plan’s purpose has been achieved. GBR will also be required to submit an irrevocable letter of credit to cover the plan’s implementation costs. GBR will not be able to begin disposal of tailings into Mallard Lake until the fish habitat compensation plan has been approved by Fisheries and Oceans Canada and the letter of credit has been submitted. The results of monitoring conducted under section 27.1 will be reported to and will be available upon request from Fisheries and Oceans Canada.

Contacts

Mr. Chris Doiron
Manager
Mining Section
Mining and Processing Division
Public and Resources Sectors Directorate
Environment Canada
351 Saint Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-1105
Fax: 819-994-7762
Email: Chris.Doiron@ec.gc.ca

Mr. Luis Leigh
Director
Regulatory Analysis and Valuation
Environment Canada
10 Wellington Street, 24th Floor
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-1170
Fax: 819-994-6787
Email: Luis.Leigh@ec.gc.ca

Footnote a
R.S., c. F-14

Footnote 1
SOR/2002-222

Footnote 2
Fisheries and Oceans Canada (February 2010), Canadian Environmental Assessment Act (CEAA) Screening Report.

Footnote 3
Information on the provincial environmental assessment of the project is available at www.environment.gov.sk.ca/Default.aspx?DN=318ba277-286f-46b3-bbee2e36f4ea44ed.

Footnote 4
Press release from GBR Web site, dated September 19, 2007, www.goldenbandresources.com/html/news/press_releases/index.cfm?ReportID=203101.

Footnote 5
The policy is available at www.ec.gc.ca/alef-ewe/default.asp?lang=En&n=D6B74D58-1.