Note: Due to the limitations of scanning the formating of these letters varies from the originals.

A fax can be sent to anyone who needs an exact copy.

ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY

ROSE MOFFORD, GOVERNOR

RANDOLPH WOOD, DIRECTOR

     March 28, 1989

Mr. Tony Gomez

Environmental Coordinator

Cyprus Sierrita Corporation

P.O. Box 527

Green Valley, Arizona 85622-0527

RE: Groundwater Quality Protection Permit Application Cyprus Sierrita Corporation,

��� Sierrita Operation

     Dear Mr. Gomez:

     As you know, the Arizona Department of Environmental Quality ADEQ) Water Permits unit

has for several years been working with the Sierrita Mine, first under the Duval Corporation and now under the Cyprus Corporation, in an effort to obtain the information needed for issuance of a Groundwater Quality Protection Permit for the Sierrita Mine. The ADEQ has recently reviewed the history of the permitting process for this facility. We recognize that the change of ownership from Duval to Cyprus did add some complications to the process, but nonetheless we feel that information submittal has been slow.

January 18, 1985 � A Notice of Disposal was submitted for the Sierrita Mine by Duval Corporation.

November, 1985 � A Proposal for a Permit Application was submitted by Reed and Associates for the Duval-Sierrita facility.

July 25, 1986 - Subsequent to Cyprus Corporation's assumption of ownership, Montgomery & Associates submitted a Supplemental Proposal for a Permit Application.

February 22, 1988 - Montgomery and Associates submitted a Scope of Work for completion of the permit application. This Scope included a schedule graph of estimated project timing, in which the anticipated completion date for information submittals was set in October, 1988.

May 10, 1988 - Montgomery and Associates submitted a "Data Compilation and preliminary Assessment of Existing Groundwater Monitoring System" for the Sierrita facility. This report was the first of the tasks outlined in the Scope of Work.

Central Palm Plaza Building��������������������� 2005 North Central Avenue����������������������� Phoenix, Arizona 85004
 

____________________________

Mr. Tony Gomez

March 28, 1989

Page 2

October 20, 1988 - A meeting was held at the ADEQ offices in Phoenix to discuss remaining information needs. Attending were ADEQ representatives, plus representatives of Cyprus-Sierrita and of Montgomery and Associates. At this meeting ADEQ was informed that substantial portions of the Scope of Work had been completed, but that more time was still needed for final completion. The remaining information deficiencies were outlined. Late December or early January was agreed on as the new deadline.

As of the present, ADEQ Water Permits unit has still not received the final information submittals, from either Montgomery and Associates or Cyprus-Sierrita, necessary to complete the permit application. We are hereby informing Cyprus-Sierrita that the remaining information must be submitted within ten (10) days of the date of this letter. If the information has not been received by that time, the Cyprus-Sierrita file will be referred to the ADEQ Compliance section for enforcement action.

If you wish to contact me for discussion, you may do so at 257-2270 or 257-6806.

Sincerely,

William Marceau

Water Permits Unit

WM/wm

Debra Daniel, Manager, ADEQ State Permits Hydrology Unit

Skip Hellerud, Manager, ADEQ Water Permits Unit

Gary Ullinskey, Manager, New Facilities Team, ADEQ Water Permits

Dave Woodruff, Manager, ADEQ Water Pollution Compliance Unit

Montgomery & Associates

From:����� Greg Olsen

Project Officer, APP Mining Unit

1)�������� Cyprus-Sierrita has a 2,000 + acre tailings impoundment which has apparently generated a TDS/sulfate plume downgradient. Concentrations in the groundwater exceed 2,000 mg/L TDS and 1,500 mg/L sulfate (the EPA secondary drinking water standards for TDS is 500 mg/L and 250 mg/L for sulfate). "Ambient" groundwater concentrations for TDS and sulfate outside the plume are below the drinking water standards. The town of Green Valley is located approximately 1.5 miles east of the tailings impoundment, and just west of the Santa Cruz River. Groundwater in the area flows to the east and northeast from the impoundment area. The groundwater velocity is approximately 500 ft/year, yielding a travel time of approximately 10 years from the impoundment to the town of Green Valley, and its public water supply wells. Issue: To what degree should we permit continued discharge, and/or require remediation of the aquifer?

2)� ������ Cyprus-Sierrita operates a series of "interceptor" wells east and south of the impoundment, in an effort to create a line sink barrier. The system pumps approximately 5,000 gpm. The water from the interceptor wells is used for process water at the Sierrita operations. Most of the water is ultimately disposed of in the tailings impoundment or is lost to evaporation or recharge of the aquifers up gradient. Additional process water for the Sierrita operation is pumped from the Canoa well field (3 miles southeast of the impoundment) at a rate of approximately 7,000 gpm. The tailings impoundment of slurry/tailings from the Cyprus-Twin Buttes facility. This volume of waste water has or will likely result in hydrolic mounding under the impoundment. This mounding in conjunction with continued aquifer pumping by Cyprus and the Town of Green Valley north and east of the impoundment, will likely aggravate the situation by increasing the hydraulic gradient in north and east directions. The two-fold issue here is: a.) should we suggest/mandate a hydraulic analysis and modeling of the area to assess current and projected aquifer conditions; and b.) as a result of the data, what remedial or water management efforts should be made?

3)�������� The fact that the Cyprus-Twin Buttes facility contributes a waste stream to the Cyprus-Sierrita facility will likely complicate permitting, compliance and enforcement. Issue: should the two facilities be combined into one permit; if not, how do we permit the waste stream from the Twin Buttes facility into the Sierrita APP? The two facilities have different APP due dates (Sierrita - September 1, 1994: Twin Buttes - October 30, 1995). The Twin Buttes Oxide Plant has an GWQPP, and no waste stream monitoring is required.

4)������� Methyl Isobutyl Ketone (MIBK) has been detected in the tailings waste stream and the tailings water reclaim ponds in concentrations of 140 mg/L to 11,000 mg/L. MIBK has no MCL to date, but is an EPA hazardous waste. MIBK has a Federal standard of 100 ppm in air, and a NIOSH TWA of 50 ppm. According to the submitted reports, MIBK is not used at the Sierrita facility. Cyprus' consultants suggest that the MIBK may be a breakdown product of Methyl Isobutyl Carbinol (MIBC), which is used at the Sierrita facility. However, the Handbook of Toxic and Hazardous Chemicals and Carcinogens states that one use of MIBK is as a solvent in uranium extraction from fission products. Thus, raising the possibility that the source of the MIBK may be from the Twin Buttes facility, where they extract uranium "yellow cake" from the pregnant solution prior to the copper extraction process.

Issue: regardless of the origin, the MIBK is/or was present in the tailings and is soluble in water (1.9%) Thus, it is reasonable to expect that the compound will enter the waters of the State. A) How do we address this contaminant issue in the APP without a current MCL, HBGL, etc.? B) Is this an issue for . . . . .

Note: Unfortunately, the copy department at ADEQ missed the second page, but the important points are here.

_______________________

ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY

Governor Jane Dee Hull� Russell F. Rhoades, Director

MU97:0479

Inventory No. 101679

December 19, 1997

Joe Brister, Environmental Coordinator

Cyprus Sierrita Corporation

P.O. Box 527

Green Valley, Arizona 85622-0527

SUBJECT:

PRELIMINARY HYDROLOGY TECHNICAL REVIEW of Draft Report �Additional Characterization of Hydrogeologic Conditions, Sierrita Operation. Aquifer Protection Permit Application. Cyprus Sierrita Corpora/ion. Pima County, Arizona, November 13, 1997 (Vols. I. II. III)

INTRODUCTION

This letter transmits comments resulting from the Arizona Department of Environmental Quality (ADEQ) Water Permits Section, Mining Unit (WPS-MU) preliminary technical review of the above referenced Aquifer Protection Pt:rmit (APP) application documents. Pursuant to agreements between Cyprus Sierrita Corporation (CSC) and WPS-MU as detailed in a February 18, 1997 letter, the WPS-MU commenced technical review of this APP application when it received these documents on November 17, 1997. The following comments and recommendations are provided in the context of technical review under Arizona Administrative Code (A.A. C.) RI8-9-I 07.F.

Cyprus Sierrita Corporation's (CSC) Sierrita Mine site is located approximately 5 miles west of the town of Green Valley, Arizona.

GENERAL COMMENTS

In general, the hydrogeologic report under review here fulfills the items listed on page 15 of CSC's work plan dated January 30, 1997. The WPS-MU appreciates the quality presentation and completeness of the information provided in the report. Although there are omissions cited in the specific comments section below, the information that is provided in this report significantly increases our understanding of the groundwater system and conditions in western portions of the CSC Sierrita site.

               3033 North Central Avenue.                        Phoenix. Arizona 85012.                     (602) 207-2300

____________________________________________________________________________________

Joe Brister

MU97:0479

December 19, 1997

Page 2

The primary focus of the hydrology technical review is the demonstration of compliance with aquifer water quality standards for the CSC Sierrita mine site. This demonstration is required to be submitted in the application for an APP permit, pursuant to A.A.C. R18-9-108.B.6.

A.A.C. R18-9-108.B.6

A demonstration that the facility will not cause or contribute to a violation of Aquifer

Water Quality Standards at the applicable point of compliance. The demonstration shall propose the point or points of compliance for the facility based on A.R.S. � 49-244. If an Aquifer Water Quality Standard for a pollutant has been exceeded in an aquifer, the application shall also include a demonstration that no additional degradation of the aquifer, relative to that pollutant and determined at the applicable point of compliance, will occur as a result of the discharge from the proposed facility.

Furthermore, the Arizona Revised Statutes requires that one of the following conditions be met in order to issue an APP.

A.R.S. � 49-243.B.2

That pollutants discharged will in no event cause or contribute to a violation of aquifer water quality standards at the applicable point of compliance for the facility.

A.R.S. � 49-243.B.3

That no pollutants discharged will further degrade at the applicable point of compliance the quality of any aquifer that at the time of the issuance of the permit violates the aquifer quality standard for that pollutant.

WPS-MU has the following general and preliminary concerns about the required A WQS

demonstrations:���������������������������������������������������������������������������������������������������������������������������������� .�������������������

����� There are no estimates of future water quality at points of compliance for the western CSC facilities in the application. The existing AWQS demonstration is currently based on a 1994 groundwater model of areas easterly of the tailings impoundments and the interceptor well system. CSC must provide discharge quantity and quality estimates for each facility, and then provide a clear AWQS demonstration to show compliance with A.R.S. � 49-243.B.2 or A.R.S. � 49-243.B.3.

e water quality data is incomplete and some data do not meet data quality objectives.

While much of the site water quality data to date indicates general conformance with numeric AWQSs, there are significant violations of aquifer water quality standards within the pollutant management area. CSC has not demonstrated how compliance will be achieved and maintained at the POC.

Joe Brister

MU97:0479

December 19, 1997

Page 3

SPECIFIC COMMENTS

1.� Page 36 - Demonstration of Compliance at Points of Compliance --The statement is made that compliance has been demonstrated in the eastern portions of the CSC site thorough the use of a 1994 report (model). However, since that time CSC has implemented a major program to repair and upgrade the interceptor well system. At a minimum the model will require a post-audit, and revised and recalibrated if necessary with the new data.

2.� Page 36 - Ambient Water Ouality -- The report states that "Data are not sufficient to establish ambient groundwater quality at proposed POC wells in the plant and the heap leach areas". �While it is preferable to have sufficient data to issue the permit with aquifer quality limits (AQLs) and alert levels (ALs) calculated, it is not necessary for existing facilities, and should not be needed to make the demonstrations required by A.R.S.� 49-243.B.2 or A.R.S. � 49-243.B.3. Two or three rounds of samples are generally adequate to confirm or refute any existing violations of A WQSs. The WPS�MU has no intent of allowing CSC to defer submittal of the A WQS demonstration until. eight quarters of data are collected.

3.� Page 36 - Information for A WOS Demonstration -- The WPS-MU agrees that the information listed on page 36 is appropriate for the A WQS demonstration. The WPS�MU proposes that a meeting be held to discuss how the demonstration will be made.

4.� Table 7 - Secondary MCL Exceedances -- The following parameters indicate widespread concentrations above EP A secondary MCL (SMCL) guidelines: chloride. sulfate and total dissolved solids (TDS).

5.� Table 7 - Nitrate -- Nitrate is elevated to levels approaching the AWQS in wells PZ-2. PZ-13, and PZ-14. These wells are located down gradient of the leach dumps. The source of the nitrates is reasonably attributed to residual blasting agents contained within the leach dump rock. A contributing factor here may be that Sierrita's ore is reportedly quite hard, and requires more energy (i.e. anfo explosives) to blast than most other deposits.

6.� Table 8 - Missine Data Wells MH-20 and PZ-15 -- Analytical data was not provided for wells MH-20 and PZ-15. The table indicates that the data for these wells will be provided in the final report. PZ-15 is the deepest of the 3-well cluster at the toe of the leach dump in Esperanza Wash. Well MH-20 is the proposed POC well in Esperanza Wash. Submittal of the data for PZ-15 and MH-20 is needed for the APP application and should be provided to the WPS-MU as soon as the data is available.

Joe Brister

MU97:0479

December 19, 1997

Page 4

7.� Table 8 - Detection limits -- Detection limits (DLs) were frequently above the AWQS for beryllium, cadmium, and lead. These parameters also had reported values that exceed the applicable AWQS. In order for the WPS-MU to evaluate the potential extent of the AWQS exceedances for beryllium, cadmium, and lead, CSC should collect additional samples and select a laboratory and/or method that will result in DLs lower than the applicable AWQS or method with the lowest DL available.

8.� The detection limit for thallium was above the AWQS in four samples. However, at each well location, a second sample was available where the DL was at or below the thallium AWQS. Therefore, at this time there is no indication that thallium is a concern at the CSC Sierrita site.

Table 9 - Radionuclide Data -- Radionuclide analytical data is presented on Table 9. In general, the data indicates widespread elevated levels of radionuclides in groundwater. This is not completely unexpected since the rocks in the area are known to contain elevated concentrations of uranium. This is exhibited by the former commercial production of yellowcake uranium at the Twin Buttes mine a few miles northerly of the CSC Sierrita mine. Thus, some naturally occurring levels of radionuclides is expected. The challenge facing CSC is determining what contribution the CSC facility discharges are making to the observed concentrations. The WPS-MU must insure that adequate demonstrations are made showing present and continued compliance with A WQSs, both numeric and narrative. The WPS-MU has concerns about the data provided, as discussed in the comments below.

A.� Pursuant to current EPA analysis protocol, a sample with a gross-α values greater than 15 pCi/L should not be compared to MCL (or AWQS) until activity from radon and uranium are subtracted. After the subtraction of radon and uranium the resulting value may be termed "adjusted gross-α". Adjusted gross-α values can be compared the MCL (or AWQS) to determine compliance with that standard. CSC must provide the adjusted gross-α data as well as gross-α.

B.� Radon is a gas that is essentially driven off during the initial sample preparation, so it is assumed to already be accounted for in the gross-α number. Therefore, no further analysis or subtraction is required for radon.

C.� Uranium activity in pCi/L shall be measured and subtracted from samples with gross-α values over 15 pCi/L. The uranium data in Table 9 are reported in mg/L. The uranium activity can only be estimated from the mass data if the isotopes of U²³⁴ and U²³⁸ are in secular equilibrium, which is not often the case. Therefore, CSC will need to re-analyze or obtain new samples and report isotopic uranium activities as the WPS-MU had requested in the letter of March 3, 1997 (MU97:0082).

�Joe Brister

MU97:0479

December 19, 1997

Page 5

D.� Some of the gross-α data is not useful to the WPS-MU due to the large error reported. For example, the gross-a for the 8/13/97 sample from PZ-2 is reported as 14 � 61 pCi/L, meaning the true value (with a 95% confidence interval) may range from -47 to +75 pCi/L. With such large errors, the WPS-MU will not be able to determine compliance from this data, the WPS-MU is aware of the difficulties in obtaining acceptable data from groundwater and process solutions at mining sites. Samples with high TDS levels are most problematic. In general there are two ways to reduce the sample error, 1) is to prepare the sample using a co-precipitation method, to reduce the TDS interference for the self absorption phenomenon, and 2) increase the counting time for the sample. CSC must re�analyze samples where the errors are so large that compliance with the AWQS can not be determined.

E.� The gross-β AWQS (and MCL) is based on man-made radionuclides, and. excludes Th²³², U²³⁵, U²³⁸ and their progeny. However, EPA analysis protocol for gross-β analysis require identification of isotopic activities if gross-p exceeds 50 pCi/L. Therefore 13 samples listed on Table 9 with gross-β results in excess of 50 pCi/L must have isotopic analysis reported. Once the radionuclides are identified and activities reported, the annual dose shall be calculated and reported in mrem/year.

F.� The AWQS for combined radium²²⁶ + radium²²⁸ is 5 pCi/L. Based on the data on Table 9, twelve samples exceed the AWQS for this parameter at the following wells: MH-17, MH-21, MH-23, PZ-2, PZ-), PZ-5 and PZ-6.

G.� The EP A has proposed substantial changes for the regulation of radionuclides and the methodology for determining compliance (FR Vol. 56, No. 138, Thursday July 18, 1991). The MCL for radium is proposed to be raised. The methodologies and applicability of the gross-α, gross-β standards are proposed to be revised, but the numeric levels are unchanged. A new MCL is proposed for uranium at 0.020 mg/L, or 30 pCi/L. Additionally, under 40 CFR 192.04 EPA has adopted groundwater standards for U²³⁴ and U²³⁸ at 30 pCi/L and molybdenum at 0.1 mg/L. CSC should expect the WPS-MU to consider these EPA citations in the determination of compliance pursuant to A.A.C. R 18-11-405.

9.���� Tables II and 12 - Technical Deficiencies and Sample Documentation -- In ADEQ's letter of March 3, 1997

(MU97:0082), the WPS-MU stated:

"The work plan does not propose sampling of existing monitoring wells. A very preliminary review of groundwater data in the application to date indicates potential data deficiencies, including incomplete analyte� lists, insufficient number of samples, analyses by laboratories not certified by ADHS, analytical detection limits greater than AWQS, and lack of sample

Joe Brister

MU97:0479

December 19, 1997

Page 6

QA/QC documentation. WPS-MU will require additional samples from the existing wells at the site (e.g., "BW" series wells and monitoring wells east of the tailings impoundments).

In CSC stated in its response on March 25, 1997:

"Sampling of the existing monitor wells is on-going on a quarterly basis. The deficiencies mentioned will be resolved prior to the next sampling event. Future sampling will be consistent with the proposed work plan. "

An inspection of Tables 11 and 12 indicate that the technical deficiencies have not been corrected, on the basis of incomplete analyte lists and field parameter records (i.e., field specific conductivity and pH). Additionally the WPS-MU has not been able to locate copies of the field sheets, chain-of-custody, and laboratory reports for these samples, and should be provided in the final report. CSC is reminded that the WPS-MU must make a determination of the applicant's technical ability to implement all conditions of the APP. Continued examples of deficiencies in the groundwater sampling protocol by CSC may hinder a positive technical capability determination.

10.��� Tables 11 and 12 - Missing Groundwater Data � In the Revised Groundwater Monitoring Plan, dated May 27, 1997, CSC was to sample wells in the vicinity of the site so that a "snap-shot" of groundwater quality data would be available to evaluate existing site conditions, and provide new data to update the previously submitted groundwater flow and transport model(s).

The missing analytical data parameters are presented here by well [number]:

Joe Brister

MU97:0479

December 19, 1997

Page

CONCLUSIONS

In general, CSC has provided a comprehensive, well organized and documented hydrogeologic study for the APP application. On the basis of the technical review to date, CSC still needs to provide the outstanding data in a final draft and provide clear demonstrations that will satisfy the requirements of A.R.S. � 49-243.8.2 or A.R.S. � 49-243.B.3. Please call me to arrange a meeting in January. If you have any questions concerning matters discussed in this letter, please call me at 602-207-4449.

Sincerely,

Katherine W Bueler, Project Officer

Water Permits Section, Mining Unit

KB:ls

Typical Response from owners of Duval/Sierrita Mine

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cc:������������������ Dennis Turner, Supervisor, WPS-MU

����������������������� Greg Olsen, Hydrologist, WPS-MU

����������������������� Shirin Tolle, Engineer, WPS-MU