INFORMATIONDirectors & Officers
Edward G. Thompson, Chairman of the Board
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2002 - 2007 Golden Queen Mining Corp. & Digisys
Imaging Systems & Consulting.
Financial Statements & InformationInterim (unaudited) Financial Statements - June 30, 2008 and Management Discussion & Analysis (MD&A) Form 10-K for the fiscal year ended December 31, 2007 Summary of Information on a Passive Foreign Investment Company or PFIC
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2002 - 2008 Golden Queen Mining Corp. & Digisys
Imaging Systems & Consulting. Offices: Share Capital: Stock Exchange Listing: Registered & Records Office: Bankers: Legal Counsel: Auditors: Registrar & Transfer Agent: U.S. Subsidiary:
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2002 - 2007 Golden Queen Mining Corp. & Digisys
Imaging Systems & Consulting. Environmental Issues & Permits Background Information The area surrounding Mojave is typical of the western Mojave Desert. The immediate vicinity of the Project is sparsely populated with considerable historical and more recent mining activity. The Standard Hill, Tropico and Cactus mines are located within a radius of 12 km (7.5 miles) of the Property. The Project and the immediate area surrounding the Project or a total of approximately 9,600 acres are included in the Specific Plan (the “Plan”) for Soledad Mountain - Elephant Butte & Vicinity - South of Mojave. This Plan was prepared in March 1973 and adopted by the Kern County Board of Supervisors as Resolution 73-485 on June 18, 1973. Gold and silver mining operations are recognized in the Plan as important past land uses and the protection of mineral deposits, potentially of commercial value, is included in the Plan through restriction of incompatible land uses. The Project as presently defined is consistent with the Plan. An independent consulting engineering firm reviewed the major permits that were previously issued for the Project and the current regulatory environment in California in 2005. Additional work is now required due to the time that has passed since the permits were first issued and changes that have been made in the Project. There have also been changes in regulations imposed by the three levels of government. No significant environmental issues were however identified in the review and furthermore, the footprint of the Project as presently defined has been significantly reduced. Environmental issues and the status of permits are summarized in the following sections. CEQA/NEPA The Project is subject to the California Environmental Quality Act (“CEQA”) and the National Environmental Policy Act (“NEPA”), each of which requires written analysis of proposed mining activities and their effect on the physical, biological, social and economic resources of the area. This analysis is known under CEQA as an environmental impact report (“EIR”), and under NEPA as an environmental impact statement (“EIS”). The company submitted its combined EIR/EIS to the Kern County Planning Department (“Kern County”) in February 1996, in accordance with a memorandum of understanding between Kern County and the Bureau of Land Management (“BLM”), which gave Kern County, as the lead agency, primary responsibility for the environmental reviews. The EIR/EIS took the form of a combined Conditional Use Permit application, Environmental Information Statement, Plan of Operations and Surface Mining Reclamation Plan as required by the California Surface Mining and Reclamation Act. Comments were received in response to the submission on ground water quality and quantity, air quality, the effect of development on native species of plants and animals, the visual impact of the project and the potential hazards associated with transporting supplies and chemicals to site. These comments were incorporated into a revised EIR/EIS released for public comment in June 1997. In September 1997, the Company received a favorable notice of determination regarding the EIR/EIS, as well as approval of its Conditional Use Permit application and Surface Mining Reclamation Plan. This was followed by a Record Of Decision from the BLM approving the Company’s Plan of Operations under NEPA in November 1997. Kern County, as the lead agency, approved and issued two Conditional Use Permits (“CUPs”) for the Project in September 1997. Kern County confirmed in writing in 1998 that the CUPs had been activated and would not expire at some future date. There are 87 conditions of approval and mitigation measures listed in Exhibit “E” to the CUPs and this includes a requirement to reclaim historical disturbances on the Property. Site inspections are conducted annually to verify that the Company is in compliance with these conditions of approval. The Company was in compliance for the year ended December 31, 2006. Air Quality The Project lies within the Southeast Desert Air Basin, which falls under the jurisdiction of the Kern County Air Pollution Control District. The district is charged to regulate sources of air pollution within the basin, pursuant to authority granted under the federal Clean Air Act. The area is designated as unclassified for PM10 emissions (that portion of the total suspended particulates less than 10 microns in size) and as a non-attainment area for ozone. The typically windy conditions and very dry nature of the general area are responsible for high background PM10 levels recorded at several nearby monitoring stations. Fugitive dust from a mining operation on the Property, combined with background dust, may result in unacceptable levels of PM10 emissions in the surrounding areas, especially downwind, and this may present the greatest potential environmental issue for the Project. A PM10 level of 44 micrograms per cubic meter is projected by computer modeling for a mining rate of 27 million t (30 million ton) per year of ore and waste. This level is below the California attainment standard of 50 micrograms per cubic meter and the Federal standard of 150 micrograms per cubic meter. However, the company believes that it will achieve compliance with applicable standards by a greater margin, as the modeling methodology assumes worst-case conditions, which are considered unlikely to be encountered in the actual operation based on the planned use of commonly accepted dust control techniques in all phases of the operation. Kern County Air Pollution Control District transferred an Emission Reduction Credit Certificate from Cactus Gold Mines Company to the Project on February 3, 1999 and this remains valid. Authority To Construct & Permit To Operate The company had obtained seven Authority To Construct permits dated March 16, 2002. These permits expired on March 16, 2004 and were not renewed due to changes anticipated in the Project. WZI, Inc., Bakersfield was asked to assess air quality for the Project in a letter dated February 27, 2006 and was commissioned to obtain the Authority To Construct permits in a meeting held in Bakersfield on April 11, 2006. Modeling and calculations were done by WZI and these were submitted to the Kern County Air Pollution Control District in September 2006. Officials of the Kern County Air Pollution Control District visited the site on June 20, 2007. The Authority To Construct permits remain outstanding. The Authority To Construct permits are converted to a Permit To Operate after construction has been completed and subject to inspection by the Kern County Air Pollution Control District. PM10 Monitoring Station The company is required to install both upwind and downwind PM10 monitoring stations before the start of construction and decided to proceed with the upwind PM10 monitoring station in May 2006 to add to the air quality database. The station was designed by Air Sciences Inc., Golden and commissioned during the week of September 4, 2006. Data is being recorded on a continuous basis. The equipment for the downwind PM10 monitoring station has been purchased and is in storage in Mojave. The Kern County Air Pollution Control District formally approved the monitoring station in a letter dated October 17, 2006. The first report with data for the last four months of 2006 was released in March 2007. A second report with data for the first quarter of 2007 was released in May 2007. A second report with data for the first quarter of 2007 was released in May 2007. Water Quality The Project is located in the northern portion of the Antelope Valley Groundwater Basin. The mean recorded annual rainfall in the surrounding area is approximately 156 mm (6.14 in). Typical patterns of precipitation are winter rains and summer thunderstorms and these tend to be short-lived and of high intensity. The site is dominated by Soledad Mountain and surface drainage patterns in the area are largely influenced by local topography. This varies from steep, rugged hillsides at the upper elevations to a gently sloping desert floor around the toe of Soledad Mountain. Runoff on the northern side of Soledad Mountain is via a series of gullies or channels, which direct surface flows to the north, northeast and northwest and eventually to the east to the Gloster and Chaffee Hydrologic Areas of the Antelope Hydrologic Unit. There are no springs or intermittent streams in the immediate area. The closest intermittent stream is approximately 5 km (3 miles) to the west. Evaporation rates are high. Groundwater is typically found at depths of 55 to 61 m (180 to 200 ft) in the area north of the Project. The Lahontan Water Quality Control Board (“Regional Board”) is responsible for ensuring compliance with the federal Clean Water Act and California’s Porter-Cologne Water Quality Act. The company submitted a Report of Waste Discharge (“ROWD”) to the Regional Board in June 1997. The application was approved and the Board issued Board Order No. 6-98-9 on March 5, 1998, which set out the waste discharge requirements for the Project. Revised Report Of Waste Discharge The ROWD prepared in 1997 included a design for the heap leach facility done before and in 1997. The company and its consulting engineers prepared an engineering review that set out significant differences between the layout designs prepared for the heap leach facility in 1997 and 2005 and a presentation was made to the Regional Board in Victorville in May 2006. The Regional Board requested that the company submit a revised ROWD to reflect these changes. There were a number of requirements in the Board Order adopted in 1998 for further studies to be done before the start of production. The company’s consulting engineers did the studies in 2006 and prepared a revised ROWD, which was submitted to the Regional Board on March 8, 2007. Regional Board officials visited the site on June 12, 2007. It is expected that the Regional Board will issue a Board Order with only minor changes to the waste discharge requirements for the Project. Closure, Reclamation and Financial Assurance Closure and reclamation will be done in accordance with the requirements set out in the CUPs and an approved Surface Mining Reclamation Plan and as set out in the Board Order to be re-issued by the Regional Board. The following general principles apply: • Considerable experience gained in reclamation of other heap leach operations in the California deserts since the mid-1990s shows that reclamation can be completed successfully. The following points will have an impact on closure and reclamation costs: • The footprint required for Project facilities has been significantly reduced from earlier requirements. Revegetation Sites have been revegetated successfully elsewhere in the California deserts, for example at the Castle Mountain Mine in San Bernardino County, and it is expected that revegetation can be completed successfully for the Project as per the detailed revegetation plan that has been prepared by the Company’s consulting engineers. A summary of the proposed revegetation procedures is given below: • A first revegetation test plot was prepared and seeded on a suitable site in November 2006; Financial Assurances The Company is required to provide three different financial assurances for the Project: • Financial assurance to be held by Kern County to cover the general reclamation on site; The Company provided reclamation financial assurance in the form of an Irrevocable Standby Letter Of Credit backed by a Certificate Of Deposit with Union Bank of California in the amount of U.S.$245,337 on November 21, 2006 and this is the current estimate for reclamation of historical disturbances on the property. This is the first time in its history that the Company has provided any form of financial assurance. The adequacy of the financial assurance is reassessed annually. Recent Developments The State of California introduced backfilling requirements for certain types of open pit, metal mines in December 2002. The company contended that these regulations did not apply to the Project under a grandfathering provision included in the regulation. The company therefore pursued both a favorable interpretation under the regulation and subsequently an amendment of the regulation with the State Mining and Geology Board (the “Board”) in 2006. These efforts were supported by Kern County officials. Both approaches were rejected by the Board and the decision was duly recorded by the Board in January 2007. The company and its consulting engineers prepared a life-of-mine waste rock management plan in 2006 and this plan incorporates backfilling of mined-out phases of the open pit. The waste rock management plan plus other changes proposed for the Project will require an amendment to the Conditional Use Permits for the Project. The application for a revised Surface Mining Reclamation Plan was submitted to the Kern County Planning Department on April 9, 2007. The Planning Department has completed its assessment of the revised Surface Mining Reclamation Plan and is expected to issue its findings in July. Environmental, Safety and Health Policy The company has prepared an Environmental, Safety and Health Policy and a management system to implement this Policy. The company expects to sign the International Cyanide Management Code. The Code was developed under the auspices of the United Nations Environment Program and the International Council on Metals and the Environment. The International Cyanide Management Institute, a non-profit organization, administers the Code. Signatories to the Code commit to follow the Principles set out in Code and to follow the Standards of Practice. Companies are expected to design, construct, operate and decommission their facilities consistent with the requirements of the Code and must have their operations audited by an independent third party. Audit results are made public.
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2002 - 2007 Golden Queen Mining Corp. & Digisys
Imaging Systems & Consulting. |