Bowdens Exploration Activities – EL 5920(1) Review … · Bowdens Exploration Activities – EL 5920(1) ... (1) Review of Environmental Factors Prepared for: Kingsgate Consolidated

ABN: 88 138 395 141

Bowdens Exploration Activities – EL 5920(1)

Review of

Environmental Factors

December 2011

Prepared by:

R.W. CORKERY & CO. PTY. LIMITED

R. W. CORKERY & CO. PTY. LIMITED

ABN: 88 138 395 141

Bowdens Exploration Activities – EL 5920(1)

Review of

Environmental Factors

Prepared for:

Kingsgate Consolidated Limited ABN: 88 138 395 141 Suite 801, Level 8 14 Martin Place SYDNEY NSW 2000

Telephone: (02) 8256 4800 Facsimile: (02) 8256 4810 Email: [email protected]

Prepared by:

R.W. Corkery & Co. Pty. Limited Geological & Environmental Consultants ABN: 31 002 033 712

Brooklyn Office: 1st Floor, 12 Dangar Road PO Box 239 BROOKLYN NSW 2083 Telephone: (02) 9985 8511 Facsimile: (02) 9985 8208 Email: [email protected]

Orange Office:62 Hill Street ORANGE NSW 2800 Telephone: (02) 6362 5411 Facsimile: (02) 6361 3622 Email: [email protected]

Brisbane Office: Level 19, 1 Eagle Street BRISBANE QLD 4000 Telephone: (07) 3360 0217 Facsimile: (07) 3360 0222 Email: [email protected]

Ref No. 429/09 December 2011

KINGSGATE CONSOLIDATED LIMITED REVIEW OF ENVIRONMENTAL FACTORS Bowdens Exploration Activities – EL 5920(1) Report No. 429/09

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This Copyright is included for the protection of this document

COPYRIGHT

© R.W. Corkery & Co. Pty Limited 2011 and

© Kingsgate Consolidated Limited 2011

All intellectual property and copyright reserved.

Apart from any fair dealing for the purpose of private study, research, criticism or review, as permitted under the Copyright Act, 1968, no part of this report may be reproduced, transmitted, stored in a retrieval system or adapted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without written permission. Enquiries should be addressed to R.W. Corkery & Co. Pty Limited.

REVIEW OF ENVIRONMENTAL FACTORS KINGSGATE CONSOLIDATED LIMITED Report No. 429/09 Bowdens Exploration Activities – EL 5920(1)

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CONTENTS Page

R. W. CORKERY & CO. PTY. LIMITED v

1. INTRODUCTION ........................................................................................................................... 1

1.1 SCOPE ................................................................................................................................ 1

1.2 DOCUMENT FORMAT ........................................................................................................ 1

1.3 THE LICENSEE ................................................................................................................... 3

1.4 EXPLORATION LICENCES ................................................................................................ 3

1.5 EXPLORATION AREA ........................................................................................................ 3

1.6 PREVIOUS ACTIVITIES WITHIN THE EXPLORATION AREA ........................................... 6

1.7 STAKEHOLDER CONSULTATION ..................................................................................... 6

1.8 MANAGEMENT OF EXPLORATION ACTIVITIES .............................................................. 8

1.9 MANAGEMENT OF INVESTIGATIONS .............................................................................. 9

2. DESCRIPTION OF EXPLORATION ACTIVITIES ......................................................................... 9

2.1 INTRODUCTION ................................................................................................................. 9

2.2 GEOLOGICAL SETTING ..................................................................................................... 9

2.2.1 Regional Geology ................................................................................................... 9

2.2.2 Exploration Area Geology ..................................................................................... 11

2.2.3 Bowdens Mineralisation ........................................................................................ 11

2.3 PROPOSED EXPLORATION ACTIVITIES ........................................................................ 13

2.3.1 Introduction ........................................................................................................... 13

2.3.2 Exploration Equipment .......................................................................................... 14

2.3.3 Drilling Program Design ........................................................................................ 14

2.3.4 Access Tracks ....................................................................................................... 16

2.3.5 Vegetation Clearing ............................................................................................... 16

2.3.6 Description of Drilling Operations .......................................................................... 16

2.3.7 Waste Management .............................................................................................. 24

2.3.8 Traffic .................................................................................................................... 25

2.3.9 Hours of Operation and Timeline .......................................................................... 25

2.3.10 Employment .......................................................................................................... 26

2.4 REHABILITATION AND ONGOING MONITORING/MAINTENANCE ................................ 26

2.5 DOCUMENTATION AND RECORD MAINTENANCE ....................................................... 27

2.6 LICENCES AND APPROVALS REQUIRED ...................................................................... 27

3. ENVIRONMENTAL SETTING ..................................................................................................... 29

3.1 INTRODUCTION ............................................................................................................... 29

3.2 LAND USE AND PLANNING CONSIDERATIONS ............................................................ 30

3.2.1 Land Use............................................................................................................... 30

3.2.2 Planning Considerations ....................................................................................... 30

3.3 TOPOGRAPHY AND DRAINAGE ..................................................................................... 30

3.3.1 Regional and Local Topography and Drainage ..................................................... 30

3.3.2 Exploration Area Topography and Drainage ......................................................... 37

3.4 LAND OWNERSHIP AND RESIDENCES ......................................................................... 37

3.5 SERVICES ........................................................................................................................ 38

KINGSGATE CONSOLIDATED LIMITED REVIEW OF ENVIRONMENTAL FACTORS Bowdens Exploration Activities Report No. 429/09

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3.6 CLIMATE ........................................................................................................................... 38

3.6.1 Introduction ........................................................................................................... 38

3.6.2 Temperature ......................................................................................................... 42

3.6.3 Rainfall .................................................................................................................. 42

3.6.4 Wind Speed and Direction ..................................................................................... 43

4. ENVIRONMENTAL IMPACTS AND MANAGEMENT ................................................................. 44

4.1 INTRODUCTION ............................................................................................................... 44

4.2 AIR QUALITY .................................................................................................................... 44

4.2.1 Existing Environment ............................................................................................ 44

4.2.2 Potential Dust Sources .......................................................................................... 46

4.2.3 Mitigation Measures .............................................................................................. 46

4.2.4 Assessment of Impacts ......................................................................................... 46

4.3 SURFACE WATER ............................................................................................................ 46



4.3.3 Assessed Impacts ................................................................................................. 48

4.4 GROUNDWATER .............................................................................................................. 48




4.5 VISUAL AMENITY ............................................................................................................. 51




4.6 NOISE AND VIBRATION ................................................................................................... 52


4.6.2 Identified Noise Sources ....................................................................................... 52


4.7 HERITAGE ........................................................................................................................ 56




4.8 FLORA AND FAUNA ......................................................................................................... 60

4.8.1 Existing Environment - Flora ................................................................................. 60

4.8.2 Assessment of Likelihood of the Presence of Endangered Ecological Communities in the Exploration Area .................................................................... 62

4.8.3 Existing Environment - Fauna ............................................................................... 64



4.9 SOILS AND LAND CAPABILITY ....................................................................................... 66





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4.10 NATURAL RESOURCE USE ............................................................................................ 68

4.10.1 Introduction ........................................................................................................... 68



4.11 CONTAMINATED LAND ................................................................................................... 68




4.12 CHEMICAL AND HAZARDOUS SUBSTANCE MANAGEMENT ....................................... 69

4.13 IMPACT ON THE COMMUNITY ........................................................................................ 69

4.14 CUMULATIVE ENVIRONMENTAL IMPACTS ................................................................... 70

4.15 SUMMARY OF SAFEGUARDS AND MITIGATION MEASURES ...................................... 70

4.16 SUMMARY OF IMPACTS AND CONCLUSIONS .............................................................. 73

5. ACTIVITY JUSTIFICATION ........................................................................................................ 74

5.1 SUMMARY OF RESIDUAL ENVIRONMENTAL IMPACTS ............................................... 74

5.2 JUSTIFICATION OF THE PROPOSED ACTIVITY ............................................................ 74

5.3 EVALUATION OF ALTERNATIVES .................................................................................. 74

6. ECOLOGICALLY SUSTAINABLE DEVELOPMENT .................................................................. 74

7. CONCLUSIONS .......................................................................................................................... 75

8. REFERENCES ............................................................................................................................ 76 APPENDICES

Appendix 1 Coverage of Exploration Licence 5920(1) Conditions ..................................................... A1-1

Appendix 2 DPI – Content Requirements for a Review of Environmental Factors ............................. A2-1

Appendix 3 DECCW – Content Requirements for a Review of Environmental Factors ..................... A3-1

Appendix 4 Drill Hole Locations ......................................................................................................... A4-1

Appendix 5 Assessment of Significance - 7 Part Test Fauna……………………………………..........A5-1 FIGURES

Figure 1.1 Locality Plan ........................................................................................................................ 2

Figure 1.2 Exploration Area Land Titles ................................................................................................ 4

Figure 1.3 Previous Drilling and Indicative Mineralisation ..................................................................... 7

Figure 2.1 Regional Geology .............................................................................................................. 10

Figure 2.2 Geology of the Mineralisation Area .................................................................................... 12

Figure 2.3 Exploration Areas .............................................................................................................. 15

Figure 2.4 Proposed Access Tracks ................................................................................................... 17

Figure 2.5 ACCESS TRACK CONSTRUCTION ................................................................................ 18

KINGSGATE CONSOLIDATED LIMITED REVIEW OF ENVIRONMENTAL FACTORS Bowdens Exploration Activities Report No. 429/09

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Figure 2.6 SCHEMATIC DRILL PAD LAYOUTS ................................................................................ 19

Figure 2.7 Resource and Metallurgy Drilling ....................................................................................... 20

Figure 2.8 Tailings Storage Facility – Sterilisation Drilling ................................................................... 22

Figure 2.9 Processing Plant Sterilisation Drilling Program .................................................................. 23

Figure 3.1 Mid-Western LGA .............................................................................................................. 29

Figure 3.2 Land Use ........................................................................................................................... 31

Figure 3.3 LEP Zoning ........................................................................................................................ 32

Figure 3.4 Local Topography and Drainage ........................................................................................ 33

Figure 3.5 Topography and Drainage of the Resource Area ............................................................... 34

Figure 3.6 Topography and Drainage of the Tailings Storage Facility Sterilisation Drilling Area ......... 35

Figure 3.7 Topography and Drainage of the Processing Plant Sterilisation Drilling Area .................... 36

Figure 3.8 Land Ownership and Surrounding Residences .................................................................. 39

Figure 3.9 Services ............................................................................................................................. 41

Figure 3.10 Temperature Statistics For Mudgee ................................................................................... 42

Figure 3.11 Bowdens Annual Wind Rose ............................................................................................. 43

Figure 4.1 Baseline Environmental Monitoring ................................................................................... 45

Figure 4.2 Groundwater Bores ............................................................................................................ 50

Figure 4.3 AHIMS Search Results ...................................................................................................... 57

Figure 4.4 Aboriginal Heritage Site Locations ..................................................................................... 58

Figure 4.5 Ecology .............................................................................................................................. 61 TABLES

Table 1.1 Land Titles and Landowners within the Exploration Area ..................................................... 5

Table 2.1 Exploration Personnel ........................................................................................................ 26

Table 3.1 Proximity of Residences to Exploration Area ..................................................................... 38

Table 3.2 Monthly Rainfall – Mudgee/Lue area ................................................................................. 43

Table 4.1 Proximity of Residences to Exploration Area ..................................................................... 53

Table 4.2 Estimated Sound Pressure Levels at Residences – RC Drilling Operations within the Resource Area ................................................................................................................... 55

Table 4.3 Sound Pressure Levels at Residences – Diamond Drilling Operations within the Resource Area ................................................................................................................... 55

Table 4.4 Sound Pressure Levels at Residences – RC Drilling & Komatsu Dozer Operations within the Resource Area ................................................................................................... 56

Table 4.5 Sound Pressure Levels at Residences – Diamond Drilling & Komatsu Dozer Operations within the Resource Area ................................................................................ 56

Table 4.6 Overview of Safeguards and Mitigation Measures ............................................................. 70

Table 4.7 Overview of Expected Impacts for Each Environmental Aspect ......................................... 73

Table 6.1 Overview of Expected Impacts for Each Environmental Aspect ......................................... 75


R. W. CORKERY & CO. PTY. LIMITED 1

1. I N T R O D U C T I O N

1.1 SCOPE

This Review of Environmental Factors (REF) has been prepared by R.W. Corkery & Co. Pty. Limited on behalf of Kingsgate Consolidated Limited (Kingsgate) to assess the possible environmental impacts of proposed mineral exploration activities for the Bowdens Silver Project within a 288ha area within EL 5920(1) (the Exploration Area) near Lue, approximately 26km east of Mudgee (Figure 1.1).

The Bowdens Silver Project has reached the stage of evaluation that requires further information to enable Kingsgate to:

upgrade the status of the current knowledge of ore reserve/resource;

obtain sufficient ore samples to assist with metallurgical testing; and

provide data confirming the suitability of key areas for future mine infrastructure.

The information is provided to enable the Department of Trade and Investment, Regional Infrastructure and Services – Division of Resources & Energy (DTIRIS-DRE) to assess the proposed mineral exploration activities in accordance with Part 5 of the Environmental Planning and Assessment Act 1979 (EP&A Act).

1.2 DOCUMENT FORMAT

This document has been prepared in accordance with the Guidelines for Review of Environmental Factors (ESB18) published by the former Industry & Investment NSW in June 2006. The document comprises five sections as follows.

Section 1: introduces the proposed exploration activities, and provides relevant background information about the previous exploration, stakeholder consultation and management of the exploration activities.

Section 2: outlines details of the proposed mineral exploration and rehabilitation-related activities describes the licences and approvals required.

Section 3: describes the environmental setting in the vicinity of the Exploration Area, including the topography, geology, climate, land ownership, land use and zoning.

Section 4 describes and assesses the likely environmental impacts of the proposed activities on the air quality, surface water, groundwater, visual amenity, noise and vibration, heritage, flora and fauna, waste minimisation and management, soils and land capability, natural resource use, contaminated land, chemical and hazardous substance management, impacts on the surrounding community and cumulative environmental impacts. Also included in this section is a summary of the mitigation measures that will be implemented by Kingsgate to minimise and manage environmental impacts associated with the proposed exploration activities.

Section 5: concludes this document with a summary of residual environmental impacts and a justification of the proposed activities.


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Figure 1.1 Locality Plan

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1.3 THE LICENSEE

The licensee, Kingsgate Bowdens Pty Ltd, is a fully owned subsidiary of Kingsgate Consolidated Limited (“Kingsgate”), a gold mining, development and exploration company, traded on the Australian Stock Exchange (KCN:ASX). In line with the company’s strategy and vision to explore, develop and operate high quality gold projects and become a significant mid-tier gold producer, and their willingness to develop new mineral projects leveraged off a proven record demonstrating world’s best practice in sustainability together with the company’s commitment to local development and training.

Kingsgate purchased the Bowdens Silver Project when it acquired Silver Standard Australia Pty Ltd on 23 September 2011. The Company is operated by a board and a management team. The board includes Ross Smyth-Kirk and Gavin Thomas.

Kingsgate's management team has a comprehensive range of skills and experience including mine development and operations, exploration, finance and administration. They are supported by highly qualified specialists, whose backgrounds cover the full scope of mining resources activities.

1.4 EXPLORATION LICENCES

Kingsgate Bowdens Pty Ltd is the holder of two Exploration Licences (ELs) in three tenements located in Lue/Rylstone area in the central western NSW (see Figure 1.1). EL 5920 is divided into two separate areas with the exploration activities covered in this document to wholly occur within EL 5920(1), at the Bowdens site. The residual area of EL 5920 referred as EL 5920(2) is located west of the townships of Rylstone and Kandos and is not the subject of any exploration addressed in this REF.

EL 6354 shares the northern border of EL 5920(1) and is not the subject of any drilling program to be undertaken by Kingsgate for the purpose of this REF. It should be noted that Kingsgate is currently pursuing the renewal of EL 6354 for future exploration.

1.5 EXPLORATION AREA

For the purposes of this REF, the area in which the proposed exploration activities will be conducted is referred to as the “Exploration Area”. This area incorporates three distinct areas of investigation with three drilling programs as follows.

1. Resources and Metallurgy Drilling Program.

2. Tailings Storage Facility Sterilisation Drilling Program.

3. Processing Plant Sterilisation Drilling Program.

Figure 1.2 displays the location of the Exploration Area and the land titles within the Exploration Area. Table 1.1 lists the landowners of each of the lots on which the exploration activities are proposed. The Exploration Area covers an area of 288ha.


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Figure 1.2 Exploration Area Land Titles

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Table 1.1

Land Titles and Landowners within the Exploration Area

Lot/DP Number Landowner

Resource and Metallurgy Drilling Program

143/755435 F. & J. Bryant

140/755435 F. & J. Bryant

1/814633 Kingsgate Consolidated Limited




26/755435 P. & S. Wood

Tailings Storage Facility Sterilisation Drilling Program


25/755435 P. & S. Wood

161/755435 P. & S. Wood

26/755435 P. & S. Wood

149/755435 The State of NSW

2/766856 W. & C. Price

Processing Plant Sterilisation Drilling Program

2/572701 F. & T. Green

119/755435 L. King

26/755435 P. & S. Wood

3/572701 P. & S. Wood

4/572701 P. & S. Wood

7007/1029353 The State of NSW

Kingsgate has written access agreements in place with the landowners identified in Table 1.1 to allow drilling to be undertaken on their properties. The key common commitments that Kingsgate has made to the respective landowners are as follows.

Kingsgate will compensate all affected land owners for exploration disturbances carried out on their properties as stipulated in the signed access agreements.

Kingsgate will repair, reinstate, rehabilitate, make good or pay compensation in respect of any damage to fences, gates, buildings, crops, stock, dams, and other improvements, arising from its exploration activities.

Kingsgate will consult with the landowner prior to implementing any drilling program so as to minimise any interference with the landowner’s farming activities.

Kingsgate will notify the owner within 14 (fourteen) days of completion of each identifiable phase of work. Compensation is payable within 14 (fourteen) days of the landowner issuing Kingsgate a Tax Invoice.

Kingsgate will ensure adequate public liability cover is maintained by itself or its subcontractors to satisfy all eventualities including drilling areas, workings and sumps.


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In addition to exploring on the above mentioned properties (Table 1.1), Kingsgate also intends to conduct exploration activities (including drilling) on property of Mr B. Winter (Lot 122 DP 755435). While no current access agreement is in place, Kingsgate intends to work with Mr Winter to achieve a signed agreement in the near future. Kingsgate will inform the DPI when this agreement has been achieved. Kingsgate will not conduct any exploration activities on the Winter property until an agreement has been signed.

1.6 PREVIOUS ACTIVITIES WITHIN THE EXPLORATION AREA

Multiple drilling programs have previously been undertaken within the Exploration Area with the following summary showing the relevant company and dates when activities were undertaken.

CRA Exploration (1989 – 1994)

Golden Shamrock Mines (1994 – 1997)

Silver Standard Australia Pty Ltd (1997 – August 2011)

Kingsgate (August 2011 – present)

Silver Standard Australia Pty Ltd (Silver Standard) undertook two drilling programs in 1998 and 2002 in which REFs were lodged with the then Department of Mineral Resources and subsequently approved.

In total, approximately 485 exploration drill holes have been previously been drilled within and surrounding the Exploration Area. The locations of all previous drill holes are displayed on Figure 1.3. Programs of both geophysical and geochemical exploration have also been undertaken.

1.7 STAKEHOLDER CONSULTATION

The following provides an overview of consultation undertaken with various stakeholders.

Surrounding Landowners - All landowners within a 2km radius of the Exploration Area have been contacted primarily to introduce Kingsgate as the new project owners, and to give a brief rundown on project development and planned exploration activities. It is planned to re-contact all landowners either personally or through a newsletter to notify them about the planned commencement of drilling activities. Follow up contact with individual landowners would occur typically two weeks prior to commencement of activities within 2km of their residence.

Wider Community - In addition to comments above, a meeting was held with the Bingman Landcare Group plus invited local landowners to answer questions about development of the project. Kingsgate has commenced engagement with Lue residents including the School Principal, Local Fire Brigade, etc.



Figure 1.3 Previous Drilling and Indicative Mineralisation

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Local Aboriginal Communities - Contact with Aboriginal stakeholders is occurring through the Archaeologist managing the Aboriginal Cultural Heritage assessment for the EIS for the Bowdens Silver Project.

Local Council - Two meetings have been held with the Mid-Western Regional Council including a presentation on the project to the full Council. This outlined expected project timelines and an initial assessment of factors likely to impact on the Council including workforce, accommodation, traffic etc. Brief reference was made to ongoing exploration activities.

Other Government Agencies - Ongoing discussions are occurring with Transgrid regarding the twin 500kV power line. No other agencies have been contacted at this stage.

Other Groups - Bingman Landcare Group as discussed under Wider Community.

1.8 MANAGEMENT OF EXPLORATION ACTIVITIES

A description of the key Kingsgate personnel involved in the management of the exploration activities their respective roles is as follows.

Dr Simon McDonald

Dr McDonald is Kingsgate’s Manager of New Projects and will be the key contact person for all Bowdens Silver Project matters. He has overall responsibility for all activities conducted throughout the duration of the forthcoming exploration program. Any government or public requests or actions need to be directed through Dr McDonald.

Mr Ron James

Mr James is Kingsgate’s General Manager of Exploration and has overall responsibility for all exploration personnel working on Kingsgate projects in Australia, Thailand and South America. Mr James reports directly to Kingsgate’s Managing Director and Chief Executive Officer.

Mr Brendan Bradley

Mr Bradley is Kingsgate’s Regional Exploration Manager and reports directly to Mr James. Mr Bradley will be involved in the Bowdens Project from a geological, logistical and staffing perspective.

Mr Graham Kubale

Mr Kubale is Kingsgate’s Senior Exploration Geologist and will be responsible for the day to day execution and management of all field-related exploration activities. In Mr Kubale’s absence, Mr John Elliot will assume Graham’s responsibilities on site.

Mr John Elliot

Mr Elliot is a consulting geologist to Kingsgate and former Silver Standard employee. Mr Elliot will assume site-based management responsibilities whilst Mr Kubale is absent from site.



Mr Paul Beer

Mr Beer is Kingsgate’s Logistics Officer and Occupational Health and Safety Officer for the Exploration Division. Mr Beer is responsible for supervision of field staff and the site implementation of the company’s Occupation Health and Safety Procedures.

1.9 MANAGEMENT OF INVESTIGATIONS

This REF has been prepared by Mr Rob Corkery (M.Appl.Sc, B.Sc (Hons)), Principal of R.W Corkery and Co Pty Ltd, with the assistance of Ms Christy Hill, (B.Env Man), Senior Environmental Consultant and Mr Chris Dickson (B.Sc Phys Geog), Environmental Consultant (Graduate), both with R.W Corkery and Co Pty Ltd. The bulk of the assessment (excluding flora, fauna and soils) has been based on a desktop assessment of publicly available literature with information provided to R.W Corkery and Co Pty Ltd by Kingsgate personnel as described in Section 1.8.

The flora and fauna assessment of the proposed exploration program has been respectively undertaken by Mr Geoff Cunningham of Geoff Cunningham Natural Resource Consultants Pty Ltd and Mr Martin Denny of Biodiversity Monitoring Services. The soils information has also been assembled by Mr Cunningham.

2. D E S C R I P T I O N O F E X P L O R AT I O N A C T I V I T I E S

2.1 INTRODUCTION

This section describes in detail the proposed exploration activities throughout the 2011-2012 exploration program for the Bowdens Silver Project. The section incorporates information on:

the proposed drilling activities;

rehabilitation and ongoing maintenance;

documentation and record maintenance; and

licences and approvals required.

2.2 GEOLOGICAL SETTING

2.2.1 Regional Geology

The Bowdens Silver Project is situated on the northeastern margin of the Lachlan Fold Belt, one of the main components of the Tasman Fold Belt System in southeastern Australia. In Victoria, the system is approximately 700km wide and its total strike length, including the New South Wales and Tasmanian portions, is approximately 1 200km. There is a general consensus that the system formed by protracted accretion of mainly oceanic crust against the Australian Craton from the Late Ordovician to the Carboniferous.

Figure 2.1 displays the regional geology in the Lue area, drawn from the Mudgee 1:100 000 Geological Map Sheet (Colqhoun G.P., et.al. 2000).


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Figure 2.1 Regional Geology

A4 - Colour



2.2.2 Exploration Area Geology

Figure 2.2 displays the detailed mapped geology of the mineralisation area already defined.

The Bowdens silver deposit is hosted by flat-lying Early Permian Rylstone Volcanics that unconformably overlie the Ordovician Lue Beds, a fine-grained basic volcanogenic sequence. The Rylstone Volcanics are partially overlain by a sequence of marine sandstones, conglomerates and shales of the Permo-Triassic Sydney Basin Shoalhaven Group. The Rylstone Volcanics range in thickness from 10m to 200m and are dominated by dacitic and rhyolitic pyroclastics and epiclastics (including ignimbrites and crystal-rich epiclastics, e.g. tuffs) and minor intrusions and flows.

The silver mineralization occurs as flat-lying to moderately dipping zones of disseminations and silicic fracture-filling within the Rylstone Volcanics and is closely associated with sulphides of iron, arsenic, lead and zinc. High grade silver mineralization is also hosted in steeply-dipping fracture zones which host banded sulphide veins.

2.2.3 Bowdens Mineralisation

Silver mineralization within the Bowdens Resource is associated wi th minor lead and zinc sulphides within air-fall breccias, ignimbrites and crystal tuffs of rhyolitic composition. The ignimbrites, and to a lesser degree the tuffs, are frequently welded and have been brecciated in place to form crackle, mosaic and rotational types of breccias. Base and precious metal mineralization are fracture controlled in ignimbrite units, fracture and locally disseminated in crystal tuff units, and mainly disseminated in the matrix of coarse grained tuff breccia units.

The mineralization event began as fluidized brecciation followed by wallrock replacement and open space filling dominated by quartz/adularia, then sulphides, then carbonates and finally clay minerals. Base metal mineralization began late in the quartz event and extended into the carbonate and rarely the clay event. Silver mineralization began in the sulphide event and extends through to the clay event (Leach, 2003).

The first stage of mineralization was the deposition of fine-grained disseminated mineralization both within the matrix and the siliceous fill cementing the breccias. The crystal tuffs, however, display less brecciation and locally within them the mineralization may be finely disseminated within the matrix. A later stage of mineralization is represented by crustiform veining, up to 100mm in width, often within sub-vertical shear or fault zones, and comprising quartz-carbonate-sulphide assemblages.

The bulk of the Bowdens mineralization occurs as a thick zone extending from surface, and near surface, to vertical depths of about 200m. The deposit is poorly constrained below 200m.


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Figure 2.2 Geology of the Mineralisation Area

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2.3 PROPOSED EXPLORATION ACTIVITIES

2.3.1 Introduction

The principal exploration activities proposed within the Exploration Area during 2011-2012 will involve defining the extent and grade of the mineralisation to a greater detail than previous studies, as well as metallurgical drilling via DC drilling methods. A total of 144 drill holes will be drilled for either ore body definition drilling or metallurgical purposes with an additional 27 sterilisation drill holes within the footprint of the proposed tailings storage facility and processing plant areas (15 and 12 bore holes respectively). A total of 171 drill holes will be drilled throughout the exploration programs with specific details of each drilling activity to be discussed further in Section 2.4.4. One or two further RC holes would be drilled immediately south of the Tailings Storage Facility during the sterilisation drilling program to serve as piezometers for establishing groundwater levels in the vicinity of the proposed dam wall. The exact location of these holes has not yet been finalised, however, they will be in close proximity to drill holes T1 and T2.

To date, the general locations of all drill holes have been identified through pegging and definition by GPS (see Appendix 4). Exploration activities will involve the following.

1. Confirmation of specific drill hole locations, and pegging.

2. Access preparation, potentially involving track preparation.

3. Drill pad preparation including sump excavation, if required.

4. Drilling and sample collection.

5. Demobilisation of all equipment and temporary stabilisation.

6. Rehabilitation of the drill pad and access tracks.

The process for identifying each drill hole location will take into consideration the following to ensure that each drill hole has a minimal impact on the surrounding environment.

Areas of disturbance associated with all drill hole locations will avoid as far as possible threatened flora, fauna and ecological communities, farm dams, and mature, established vegetation areas.

In steep terrain, drill pads are to be shaped through earthmoving works to provide a near horizontal slope.

Identification and avoidance of the underground service cables and overhead power lines.

The orientation of the drill rig and ancillary equipment, where possible, to minimise noise impacts upon surrounding residents.

In general, the exploration activities would be undertaken, with reference to, NSW Minerals Council – Mineral Exploration Handbook: Towards Environmental Excellence dated September 2010.


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2.3.2 Exploration Equipment

The proposed exploration activities will involve the use of the following equipment/vehicles, either continuously or sporadically, throughout the entire exploration process.

Drill Rig

UDR650 drill rig

Drill Support Equipment/Vehicles

2 x Toyota Landcruiser diesel traybacks

1 x 8x8 man truck

1 x 4x4 Mercedes truck with 10 000L water tank

1 x 4x4 Mercedes support truck (incl. booster, auxiliary and fuel)

Earthmoving Equipment

1 x 2007 Kolbelco SK2008 Excavator

1 x 2002 Komatsu D65E6/12

1 x 1995 Komatsu WA420 loader

1 x 1990 Ford LTL 9000 tip truck

1 x 1980 120g Caterpillar grader (Occasional use)

Transport Vehicles

2 x Toyota Landcruiser diesel traybacks

1 x Great wall petrol single cab utility

1 rental 4x4 diesel vehicle (Occasional)

2.3.3 Drilling Program Design

The 2011-2012 exploration drilling is planned in three stages with each stage delivering a unique objective. These are summarised below.

1. Reverse Circulation Resource Drilling – to increase to overall resource of the deposit within and outside the current defined limit of mineralisation (see Figure 1.3). This will involve drilling approximately 132 RC holes to varying depths.

2. Metallurgical Diamond Drilling – to ensure adequate diamond core is sent for metallurgical test work. This test work is necessary in establishing recovery grades, grind optimisation and deposit mineralogy. The drilling will involve 12 HQ Diamond holes to varying depths.

3. Reverse Circulation Sterilisation Drilling – to test ground/bedrock beneath the key proposed infrastructure namely the processing plant and tailings storage facility ensuring no economic mineralisation is present, in these areas. The drilling will involve 27 RC holes to varying depths.

Figure 2.3 displays the locations of all drill holes planned for the 2011-2012 program.



Figure 2.3 Exploration Areas

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2.3.4 Access Tracks

The drilling program requires access tracks to be constructed and/or upgraded to provide access for the drill rig to the specified drill hole locations shown in Figure 2.3. The access tracks have been designed to provide the best access to the drill sites with minimised impacts to the environment as possible. Figure 2.4 shows the proposed access tracks which have been interpreted from aerial photography and topographical maps to allow best access from the existing road/track network. Track clearing will avoid mature, established trees where possible, and with no clearing within open, topographically flat paddocks. While Kingsgate will endeavour to confine its access to the proposed access tracks, some tracks will need to be modified pending unforeseen field practicalities and safety issues.

The construction of both existing and new tracks will incorporate drainage channels as well as windrows if topography becomes a safety issue. If any additional fill material is required for track construction or windrows, material will be sourced/quarried from either of the existing borrow pits (see Figures 2.3 and 2.7) within the resource area. Sediment traps are to be incorporated into the design of all tracks where erosional runoff is likely to occur and will either involve rocky material being placed in the drainage channels at regular intervals or by the construction of silt-stop fencing as dictated by the track’s length and slope. Sumps will be excavated at the base of hillside tracks to catch excess runoff water. A cross-sectional view and plan view of the proposed tracks to be constructed are shown in Figure 2.5.

2.3.5 Vegetation Clearing

Vegetation clearing for access tracks and other activities would be kept to a minimum but will be unavoidable particularly within the resources area where placement of holes in a grid pattern is essential to achieve the best statistical assessment of the ore body.

All vegetation would preferably be cut/removed just above ground level to enable re-shooting at a later date. All vegetation removed would be stockpiled immediately adjacent to where it is cleared.

2.3.6 Description of Drilling Operations

2.3.6.1 Introduction

Two methods of drilling will be used throughout the 2011-2012 exploration program, namely:

Reverse Circulation (RC) Drilling; and

Diamond Core (DC) Drilling.

Both RC and diamond core drilling will require the construction of a drill pad typically 20m x 20m (approximately). Figure 2.6 displays the typical layouts of the drill pads for both drilling operations.



Figure 2.4 Proposed Access Tracks

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Figure 2.5

ACCESS TRACK CONSTRUCTION



Figure 2.6

SCHEMATIC DRILL PAD LAYOUTS


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Figure 2.7 Resource and Metallurgy Drilling

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2.3.6.2 Resource and Metallurgical Drilling Program

The resource and metallurgical drilling operations will utilise both RC and DC drilling methods with each drill hole shown in Figure 2.7.

RC drilling involves the use of compressed air to drive a slowly rotating percussion drill bit, which operates in a similar manner to a jack hammer. The percussion drill bit is typically fitted with numerous, hardened protrusions that crush the rock at the bottom of the hole. The crushed material is brought to the surface with the returning air through the centre of the drill rods. This drilling method is relatively fast compared with diamond drilling methods. Typically, this drilling method requires multiple trucks, including a rig truck, compressor truck and support truck, as well as one or more light vehicles.

Diamond core drilling involves the use of a rapidly rotating, diamond impregnated drill bit and water with drilling additives to cool and lubricate the drill bit. As the drill rods and drill bit spin, the diamonds grind away the face of the hole leaving a cylinder of rock in the centre of the drill barrel. The cutting face of the drill bit is lubricated using the water and additives mix. As the drill rods advance, the cylinder of remaining rock gradually becomes enveloped by the drill rods. The drill rods are stopped at regular intervals, commonly 1.5m, 3m or 6m intervals, and the resulting drill core is bought to the surface. Ground-up rock material is transported to the surface by the returning drilling fluids and is separated from the fluids, typically in drill sumps. This drilling method is capable of drilling holes to many kilometres depth. Typically this drilling method requires a truck or track mounted drill rig, a support truck and a number of light vehicles. Depending on the duration of the drilling program, additional equipment such as portable shelters, storage containers and portable lighting plants may be required.

Figure 2.6 presents a typical drill site layout for RC and Diamond Core drilling.

2.3.6.3 Tailings Storage Facility Drilling Program

It is proposed that 15 separate drill holes are to be drilled within the footprint of the proposed Tailings Storage Facility using the RC drill rig discussed in Section 2.3.4.1 to confirm that the defined resource does not extend into the area where the tailings storage facility is likely to be located. The location of the tailings storage facility sterilisation drill holes are shown in Figure 2.8.

The drilling operations will follow the exact same RC drilling procedures as nominated in Section 2.3.4.1.

2.3.6.4 Processing Plant Sterilisation Drilling Program

It is proposed to drill 12 separate drill holes within the footprint of the proposed location of the processing plant using the RC drill rig discussed in Section 2.3.4.1 to confirm that the defined resource does not extend into the area where the Processing Plant is likely to be constructed. The location of the processing plant sterilisation drill holes are shown in Figure 2.9.

The drilling operations will follow the same RC drilling procedures as nominated in Section 2.3.4.1.


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Figure 2.8 Tailings Storage Facility – Sterilisation Drilling

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Figure 2.9 Processing Plant Sterilisation Drilling Program

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2.3.6.5 Sample Management and Processing

A proportion of the drilled materials (‘drill cuttings’) from each drill hole to be sent for assay will be directly placed into calico bags, sealed in green plastic bags and transported in heavy duty “Bulka Bags”. The samples will be despatched approximately weekly from site via an enclosed truck and transported to the contracted laboratory(ies).

The drilled material that is not used for the initial assay (estimated 75% to 94% of the drilled material) will be kept on the drill pad, in their calico or green bags, until it’s no longer required. At that time, the materials would be disposed on site (see Section 2.3.7).

The diamond drill core will be stored in core trays and selected section of core will be split longitudinally to provide core for assay and reference material retained.

The core saw used to cut diamond core will be positioned on the southern end of the sample storage shed adjacent to the “Bowden” residence. Hay bales will be positioned around the saw to muffle the sound generated by the cutting operations. There will also be a roof above the saw to shelter the operator and further contain the sound. All cuttings and fluids will be captured by a primary drum and excess water drained to a small lined sump and allowed to evaporate. All cuttings will be stored in drums for disposal, and is discussed in Section 2.4.7.

2.3.7 Waste Management

Waste will be produced through different mechanisms of the drilling program. A summary of the waste produced from the drilling operations is as follows.

Reverse Circulation Drilling Waste Products

All retention bags (green plastics) and duplicate split samples (calicos) will be stored on the drill pad adjacent to the drill hole until all analytical testing is complete. All residue samples will be removed from the bags and placed into sumps. All retention green plastic and calico bags will then be taken to the local waste facility and disposed of at the appropriate location.

All water and drill sediments will be captured by on-site sumps (4m x 4m x 2m). The water will eventually evaporate and/or naturally drain leaving the residual drill sludge in the bottom of the sumps.

Hydro-carbon spill mats will be used by the drilling contractor as a precaution to hydrocarbon spills. Spill kits will be present on all active drill sites. Any spills will be cleaned up promptly and taken to the local waste facility and disposed of at the appropriate location.

Diamond Core Drilling Waste Products

All diamond cores will be removed daily from the rig site to the designated core cutting/processing facility adjacent to the “Bowden” residence. All water used in cutting core will be re-circulated and captured in an above ground poly tank. The small proportion of waste rock cuttings/sludge residue will be buried within one or more of the drill sumps once they are no longer required.



All residual drill sludge captured in the base of poly tanks at the drill sites will be transferred from the tank(s) and buried within a site sump no longer required.

Hydrocarbon spill mats will be used by the drilling contractor as a precaution to hydrocarbon spills. Spill kits will be present on all active drill sites. Any spills will be cleaned up promptly and stored until removed from site.

Non Drilling Related Waste Products

All other waste, chiefly domestic household, will be placed in plastic bags and drums and disposed of at the local waste facility. All drill contractor waste material (including plastic drums, PVC, etc.) will also be taken to the local waste facility and disposed of at the appropriate location.

Whilst the above waste management procedures are typical of most drilling campaigns.

2.3.8 Traffic

The exploration program will generate approximately up to 14 vehicle movements per day for up to 7 days per week within the Exploration Area through the use of two to three light vehicles for personnel transport and the use of associated drilling equipment.

2.3.9 Hours of Operation and Timeline

Drilling and related activities will only be undertaken between the hours of 7:00am and 7:00pm Monday to Sunday. It is Kingsgate’s intention to finish all drilling activities before 6:00 pm on Monday to Saturday with the provision of an hour to conclude any activity that may only slightly exceed 6:00 pm. Furthermore, it is proposed that, when required, maintenance is undertaken during Saturday afternoons and Sundays, whenever possible. These days will invariably be rostered days off for the drill crew. It will also serve to minimise noise impacts at surrounding residences throughout the weekend.

It is envisaged that one or two shallow RC drill holes (<150m) will be completed each day. When diamond drilling, an estimated 20m will be completed each day. Deeper RC holes will require operations over periods of up to 2 or 3 days.

When diamond drilling, an estimated 20m will be completed each day which will involve activities between 2 and 10 days at each hole.

Drilling is programmed to start by approximately mid-January 2012. The timing of RC versus diamond core (DC) drilling will be dependent on the requirements of Kingsgate at the time of drilling.


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2.3.10 Employment

Table 2.1 details both the drill crew and Kingsgate employees that will be on site at any given time throughout the exploration programs. In total, there would typically be 7 full-time personnel and 5 part-time personnel on site.

Table 2.1

Exploration Personnel

Personnel Full Time Part Time

Caretaker 1 -

Field assistant 2 -

Field geologist 1 -

Senior geologist - 1

Field supervisor - 1

Driller 1 -

Drill offsider 2 -

Drilling supervisor - 1

Plant operator - 2

Total 7 5

Source: Kingsgate Consolidated Limited

2.4 REHABILITATION AND ONGOING MONITORING/MAINTENANCE

Rehabilitation of areas disturbed during the drilling programs will be undertaken in three stages.

1. Following Construction Works

Following construction works for each hole, all embankments created adjacent to tracks or drill ponds would be seeded with a pasture mix. Silt-stop fencing will be positioned downslope from all embankments until they are adequately stabilised by the vegetation. Appropriate drainage controls, if required, will be constructed to protect disturbed areas.

2. Following Completion of Drilling

Once all drilling activities are completed on each drill pad, and the access track to them, the need for temporary rehabilitation would be reviewed. The key factor influencing the decision whether some temporary rehabilitation is undertaken will centre around the likelihood of natural revegetation or excess sediment loss until the drill pad or pad(s) are either permanently rehabilitated or incorporated within an approved mine. For those drill pads and access tracks where excess sediment loss is likely, those areas will be lightly scarified and seeded with a pasture mix.

3. Long Term Rehabilitation

In the event that the proposed silver mine does not receive approval or within a period of 2 years of the exploration period (whichever occurs later), Kingsgate will undertake a program of final rehabilitation to provide for a stable long term landform in those areas disturbed by exploration. The exact timing of the need for long term rehabilitation would be discussed, if required, with the DRE.



Long term rehabilitation will involve the following component activities.

i) Re-shaping the drill pads to remove their geometric shape and creating slopes comparable with those natural slopes around the pads.

ii) Re-placing topsoil set aside during pad construction onto the final landform.

iii) Installation of any required surface water management structures to protect the disturbed area, including silt-stop fencing.

iv) Revegetation of the entire disturbed area with a pasture weed mix.

All revegetated areas will be inspected at least every 6 months for a period of up to 2 years or following any substantial storm events to identify whether there is a need for any maintenance activities.

All PVC drill collars will be retained as long as the holes are required to be open and available for further tests or groundwater monitoring. In the unlikely event the mine does not proceed and the exploration licence is relinquished, the drill collars would be cut to a level approximately 1m below the ground surface and a metal plate positioned on the hole before the hole is backfilled to ground level. In the event the mine does proceed, all drill holes within the footprint of the proposed Tailings Storage Facility will be fully grouted.

All sumps will be rehabilitated within 6 months of the drilling program. This will include the pumping of any remaining water and subsequent disposal at an appropriate off-site facility. Once the sumps are removed of excess water, the sumps are to be suitably filled in with available material and covered with previously removed vegetation.

2.5 DOCUMENTATION AND RECORD MAINTENANCE

Kingsgate will manage the exploration programs with a consolidated set of documentation comprising:

1. a register for all drill holes and their locations, results, rehabilitation progress, etc. and individual folders for each drill hole;

2. procedures reflecting all operational aspects of the program, including aspects influencing environmental issues;

3. procedures to check or monitor the activities are being undertaken in accordance with EL conditions and any other relevant approvals;

4. induction and training programs; and

5. procedures for informing surrounding residents and responding to any issues/complaints (see Section 1.7).

2.6 LICENCES AND APPROVALS REQUIRED

Exploration for minerals in NSW requires an exploration licence or mining lease issued in accordance with the Mining Act 1992. Kingsgate Bowdens Pty Ltd is the holder of ELs 5920(1), 5920(2) and 6354. The exploration works will occur wholly within EL 5920(1).


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The conditions of an exploration licence list three categories of activities and their requirements of notification and approvals. The activities proposed in this REF are classed as Category 3, requiring a REF be prepared to accompany a surface disturbance notice. Category 3 activities include:

a) Operations under Category 2 (c) to (g) within or adjacent to Sensitive Areas.

b) Operations under Category 2 (c) to (g) of a concentrated or cumulative nature.

c) Excavations or bulk sampling in excess of 60 cubic metres.

d) Shaft sinking or tunnelling

e) Drilling holes in excess of 400 millimetre diameter.

f) Intensive drilling, such as for resource definition purposes.

g) Access tracks involving formed construction.

It is activities f) and g) that qualify the proposed exploration program as Category 3. The Company notes that no land within the licence area is classified as sensitive land.

A Part 5 Water Licence under the Water Act 1912 will also be required for the installation of piezometers and ongoing monitoring of selected drill holes as they potentially will intercept groundwater. An activity is considered to interfere with an aquifer if it does any of the following.

Penetrates an aquifer.

Interferes with water in an aquifer.

Obstructs the flow of water in an aquifer.

Takes water from an aquifer in the course of carrying out mining, or any other activity prescribed by the regulations.

Disposes of water taken from an aquifer in the course of carrying out mining, or any other activity prescribed by the regulations.

It is the recovery of water for monitoring purposes that qualifies the proposed exploration program as requiring a Part 5 Water Licence.

In the order of 23 drill holes are located within 40m of a defined watercourse for which Kingsgate will apply for a controlled activity approval under the Water Management Act 2000. It is recognised that whilst some holes have been positioned within 40m of a watercourse (see Figures 2.7, 2.8 and 2.9), the location of these holes will be reviewed and relocated beyond the 40m nominated from the subject watercourse, if appropriate. However, for the purposes of planning the drill holes, all 23 drill holes within 40m of a defined watercourse will be included in the application for a controlled activity approval.

For the proposed activities, as no contaminated waters will be discharged from site, no items of Aboriginal-heritage significance will be disturbed and no threatened species or endangered ecological communities will be adversely impacted by the proposed activities, no further approvals other than that required under the Mining Act 1992 are required.



3. E N V I R O N M E N TA L S E T T I N G

3.1 INTRODUCTION

The Bowdens Silver Project Exploration Area is located within the Mid-Western Local Government Area (LGA) (see Figure 3.1) The Exploration Area is located within EL 5920 (1) which and is bounded by Hawkins Creek to the south and unnamed western spurs of the Great Dividing Range to the north.

Figure 3.1 Mid-Western LGA

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This section describes the environmental setting within and surrounding the Exploration Area, including land use and planning considerations, topography and drainage, land ownership, services and climate. Other components of the existing environment are described in Section 4 together with the controls Kingsgate intends to adopt to ensure acceptable impacts occur throughout the exploration program.


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3.2 LAND USE AND PLANNING CONSIDERATIONS

3.2.1 Land Use

Land use throughout the Exploration Area comprises primarily rural activities such as grazing and some cropping with interspersed hobby farming (see Figure 3.2). Land parcels range from grazing properties of up to 200ha to hobby farms/lifestyle blocks of <50ha. The township of Lue is included within EL 5920 (1) but is not within the Exploration Area to covered by this REF.

3.2.2 Planning Considerations

3.2.2.1 State Planning Instruments

No State Environmental Planning Policies (SEPPs) are relevant to the proposed exploration activities. It is noteworthy that the, with the exception of, as discussed in Section 2.7, (SEPP (Mining, Petroleum Production and Extractive Industries)) 2007 states that mineral exploration activities described in Section 2, does not require development consent under the Environmental Planning and Assessment Act 1979. Rather, the activities are approved by the DRE as part of the exploration licence activities.

3.2.2.2 Local Planning Instruments

The Exploration Area is located entirely within an area covered by the Rylstone LEP 1996 as shown in Figure 3.3. The Exploration Area is zoned as 1(a) – General Rural within Rylstone LEP 1996. Mining is permissible within this zone. The zones in the area to the west of the Exploration Area are also displayed on Figure 3.3, i.e. within the area covered by the Mid-Western Regional Interim Local Environmental Plan (LEP) 2008.

It should be noted that the amalgamation of Mudgee and Rylstone Councils on 28 May 2004 resulted in the creation of the Mid-Western Regional Council. A Draft LEP for the new LGA is currently on public exhibition. That instrument provides for a Rural Zone 1 (RU1 – Primary Production) across the Exploration Area which, as previously, nominated that mining is permissible in this zone. As the LEP is in its draft version and has not been finalised, the REF will subjected to the aforementioned Mid-Western Regional Interim LEP and the Rylstone LEP.

3.3 TOPOGRAPHY AND DRAINAGE

3.3.1 Regional and Local Topography and Drainage

The Exploration Area is located on the western flanks of the Great Dividing Range. Throughout the region, the topography is dominated by rocky ridges with broad, flat valleys intersecting the ridges. General topography of the regional area ranges from <800m AHD within the western flanks Great Dividing Range to <500m AHD to the west of the Exploration Area within the broad, flat valleys. Figures 3.4 to 3.7 display the topography within the Exploration Area.



Figure 3.2 Land Use

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Figure 3.3 LEP Zoning

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Figure 3.4 Local Topography and Drainage

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Figure 3.5 Topography and Drainage of the Resource Area

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Figure 3.6 Topography and Drainage of the Tailings Storage Facility Sterilisation Drilling Area

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Figure 3.7 Topography and Drainage of the Processing Plant Sterilisation Drilling Area

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The drainage associated with the regional topography is generally towards the west where the water throughout the western flanks of the Great Dividing Range flow until they reach local creeks and join with the Cudgegong River. The most prominent local creek to the Exploration Area within the region is Lawsons Creek. All rainfall that falls within the regional area flows into either Lawsons Creek or Bara Creek catchments before joining the Cudgegong River, just east of Mudgee.

3.3.2 Exploration Area Topography and Drainage

The Exploration Area comprises of two valleys intersected with a north-south trending, rocky ridge. Within the localised area surrounding the Exploration Area, the highest point is 782m AHD located northwest of the Exploration Area with the lowest point in the area located south of the Exploration Area near the intersection of Hawkins Creek and Lawsons Creek at an elevation of approximately 560m AHD.

The topography of the Exploration Area creates two drainage lines, Blackmans Gully and Price Creek with both drainage lines flowing southwards into Hawkins Creek. Hawkins Creek has its headwaters to the east of the Exploration Area and flows westerly towards Lawsons Creek where it joins approximately 1.5km south of the Exploration Area. Both the drainage lines are ephemeral with flowing water experienced only during and after heavy rainfall events.

Drainage on local land not associated with the Exploration Area is typically the same as ephemeral drainage associated the Exploration Area but is regularly intercepted by stock dams.

3.4 LAND OWNERSHIP AND RESIDENCES

The Exploration Area encompasses nine separate properties and includes two residences (one of which is owned by the Company) as shown in Figure 3.8. All cadastral data and land title information was sourced from the NSW Land and Property Management Authority (now known as NSW Lands and Property Information (LPI)).

Kingsgate has negotiated access agreements for all landholders on whose properties drilling will be conducted.

Figure 3.8 also displays the locations of residences on surrounding properties. Table 3.1 lists the distance of the surrounding residences from each drilling area.


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Table 3.1

Proximity of Residences to Exploration Area

Residences Distance (m) to Closest Drill Hole Locations

Resource Area Tailing Storage Facility Area

Processing Plant Area

A 720 1650 640

B 510 1170 190

C 570 280 240

D 760 1960 2130

E 1040 2120 2430

F 1130 2100 2530

I 1550 550 1400

J 990 290 1550

K 1180 890 2170

L 1660 1380 2660

M 1280 1380 2550

N 1240 1580 2620

S 2130 1330 2390

U 2130 1770 3050

V 2060 1950 3210

3.5 SERVICES

Figure 3.9 displays the services known to occur within the Exploration Area. The key services are:

1. A 500kV power transmission line oriented generally north-south through the Exploration Area.

2. A 415V power transmission line oriented generally east-west.

3. Various buried telecommunications cables principally to the residences and located largely within the local road reserves.

3.6 CLIMATE

3.6.1 Introduction

The climate in the vicinity of Lue is warm temperate, i.e. warm to hot summers and mild to cool winters with the rainfall pattern having a summer maximum.

Temperature data was sourced from the meteorological stations at Mudgee Airport and George St, Mudgee (approximately 26km northwest from the Exploration Area) whilst data on wind speed and direction has been drawn from a weather station on the “Bowden” property.



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Figure 3.8 Land Ownership and Surrounding Residences

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Figure 3.9 Services

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3.6.2 Temperature

January is the hottest month with a mean maximum temperature of 31°C, mean minimum temperature of 15.5°C, and highest recorded temperature of 42.2°C (see Figure 3.10). July is the coolest month with a mean maximum temperature of 14.4°C, a minimum temperature of 1.3°C, and lowest recorded temperature of -8.3°C.

(Sourced: Bureau of Meteorology 2011)

Figure 3.10

TEMPERATURE STATISTICS FOR MUDGEE

3.6.3 Rainfall

Mean annual rainfall measured at Lue is approximately 615mm, with rainfall distributed unevenly throughout the year. April and May are the driest months while the mean monthly rainfalls in November and December are generally higher than other months. The average monthly rainfall varies from 33mm in the driest month to 87mm during the wettest month

Rainfall can be extremely variable, with infrequent, high intensity rainfall events occurring. This is evidenced by the highest daily rainfall values shown in Table 3.2, and the fact that the maximum daily rainfall values can be as high as 2 and 3.5 times the average monthly rainfall values. This is particularly the case in February.

The period of above average rainfall between November and February poses the greatest risk for soil erosion, with the period from April to September posing the least risk.



Table 3.2

Monthly Rainfall – Mudgee/Lue area

Rainfall Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

Mean Monthly (mm)

Mudgee Airport 67 71 47 34 38 39 43 39 51 57 81 87 653

George St, Mudgee 68 64 51 44 49 55 53 53 52 60 62 65 676

Lue 57 47 49 39 33 56 52 51 47 50 66 62 615

Max Monthly (mm)

Mudgee Airport 196 233 187 108 124 127 144 112 114 136 163 242 1152

George St, Mudgee 225 263 303 237 158 201 178 171 188 212 237 268 1443

Lue 143 127 229 123 135 145 152 132 127 160 227 156 1047

Max Daily (mm)

Mudgee Airport 65 174 53 46 39 37 48 51 45 51 57 101 -

George St, Mudgee 95 169 104 87 74 57 71 68 71 68 103 119 -

Lue 52 165 88 60 58 42 50 41 54 50 85 71 -

Sourced: BOM 2011

3.6.4 Wind Speed and Direction

The annual wind rose (Figure 3.11) has been calculated from the most complete yearly dataset recovered from the on-site weather station (location shown in Figure 4.1). The predominant winds range from the northwest to the northeast for a combined total of 46% northerly trending winds. A smaller proportion of the total winds are from the south to southwest with a combined total of 28%. It is noted that both combined wind direction totals exclude the 24.6% of calm conditions.

The predominant winds are influenced by the local topography, as a review of the regional topographic features surrounding the monitoring station show a valley alignment to the northeast and southwest with a valley gap to the north.

Figure 3.11 Bowdens Annual Wind Rose


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4. E N V I R O N M E N TA L I M PA C T S A N D MA N A G E ME N T

4.1 INTRODUCTION

This section provides further description of the existing environment within and surrounding the Exploration Area and an outline of the potential impacts of the proposed exploration activities and where relevant, measures are proposed to minimise, manage and monitor impacts for each potential impact. The following environmental attributes are discussed in throughout this section.

Air Quality

Surface Water

Groundwater

Visual Amenity

Noise and Vibration

Heritage

Flora and Fauna

Soils and Land Capability

Natural Resource Use

Contaminated Land

Chemical and Hazardous Substance Management

Impact of the Community

Cumulative Environmental Impacts

With the exception of the flora and fauna studies and noise assessment, information gathered in the absence of specialist consultant assessments has been sourced by R.W. Corkery and Co. Pty Limited from publicly available sources to assess the potential environmental impacts of the exploration activities.

4.2 AIR QUALITY

4.2.1 Existing Environment

The air quality of the Exploration Area and surrounds is typical of a rural environment with the principal air-quality related environmental issue being deposited dust. Mean measured deposited dust levels were recorded at “Bundarra”, Bowden”, “Bingman” and the Price holiday cottage (see Figure 4.1) in 2000 and returned levels ranging from 0.4g/m2/month to 2.1g/m2/month. These levels are consistent with natural rural levels.



Figure 4.1 Baseline Environmental Monitoring

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4.2.2 Potential Dust Sources

The primary source of dust arising from the proposed exploration program is from vehicle movements on the unsealed Bara and Powells Roads with other minor dust sources from wind and agricultural activities. The drilling programs have the potential to generate airborne dust during the proposed activities with the following dust sources.

RC drilling.

Access track and drill pad construction.

Vehicle movements associated with the drilling program on unsealed roads, anticipated up to 14 movements per day (7 return trips per day).

4.2.3 Mitigation Measures

Kingsgate will implement the following mitigation measures to reduce potential dust emissions related to the proposed drilling activities.

Minimise surface disturbance.

Use of cyclone dust extraction system on RC drill rigs.

Removal of drilling residues once dried.

Restrict, in consultation with the respective landowner, the speed limit which all Kingsgate contractors will need to follow on all unsealed roads on each property in order to minimise dust lift-off.

4.2.4 Assessment of Impacts

All drilling will be carried out on land for which access agreements have been negotiated with the landowners and, given background levels and the general rural nature of the Exploration Area, it is assessed that the proposed activities will readily satisfy the allowable incremental increase of 2g/m2/month, and a maximum of 4g/m2/month of deposited dust.

4.3 SURFACE WATER


As discussed in Section 3.3, there are no permanent watercourses within or immediately adjacent to the proposed Exploration Area. All existing watercourses are predominantly Order 1 and 2 streams and recognised to be intermittent and intercepted by stock dams before progressing to Hawkins Creek and hence to Lawsons Creek.



Based upon previous drilling results, a number of drill holes will intercept the groundwater table and bring the water to the surface where it will flow from the drill rig down slope into a purpose built sump. Testwork on the water samples contained in the sumps will be performed at regular intervals throughout the drill program to ensure water quality is of an appropriate standard. If the water quality results show elevated levels of any relevant analytes, all remaining hole sumps will be plastic lined and the water will be disposed of via evaporation or delivered to a facility licensed to receive the liquids.

Testing of the surface water quality in 2004 at locations shown on Figure 4.1, displayed the water quality to be variable but generally good and is summarised as follows.

pH: 6.9 – 8.9

EC: 139 – 3 210μS/cm

Cl: 7 – 514mg/L

SO4: 7 – 452mg/L

Ca: 5 – 84mg/L

Mg: 4 – 104mg/L

K: <20mg/L

TSS: 6 – 106mg/L

As: <0.01mg/L

Cu: <0.01mg/L

Pb: <0.05mg/L

Zn: <0.05mg/L

Mn: 0.1 – 2.7mg/L

Cd: <0.001mg/L

Fe: 0.5 – 8.4

It should be noted that all monitoring results were taken at locations in very minor to no flow conditions.

The initial grid pattern for the RC drilling proposed within the Exploration Area has placed some hole locations within 40m of the watercourses shown on the 1:25 000 topographic plan (see Figures 2.7, 2.8 and 2.9). Kingsgate will review the exact location of those holes and determine if it is necessary to relocate those drill holes to be greater than 40m from the watercourse. In any event, Kingsgate will apply for a controlled activity approval under the Water Management Act 2000 for these drill holes should they proceed in those locations – as discussed in Section 2.6.


Mitigation measures to manage the impact(s) on surface water will include the following.

Drill residues from the RC drilling will be collected in a sump excavated within the drill pad, dried and then buried within the sump. If the water contains elements that exceed safe levels, then all future sumps will be lined.

The sumps of all diamond drill holes will be lined to contain all drilling fluids. Sumps in conjunction with above ground tanks will be used.

Storage of drilling chemicals on bunded trays on the support vehicles.

Undertaking refuelling carefully, for example, using funnels. Any spillages will be cleaned up and contaminated soil removed.


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Any excess water /drilling fluids encountered would be contained in the sump.

If the water quality from the residues is suitable (satisfying the above criteria), most of the water will be left to drain or allowed to evaporate leaving only silt within the sump.

Additional site specific mitigation measures may be necessary for any drill holes located within 40m of a watercourse. These measures would be detailed in an application for a controlled activity approval sought for those holes.

4.3.3 Assessed Impacts

The proposed methods of water management will protect the water quality in the watercourses and dams within and immediately surrounding the Exploration Area. The discharge of minor quantities of groundwater to the land surface or its replacement in completed holes will not have any measurable impact on surface or groundwater. Due to the limited flow conditions and low order streams within the vicinity of the drilling program, there are to be negligible impacts on the catchment and ephemeral waterways.

4.4 GROUNDWATER


A review of groundwater information in the local area within and surrounding the Exploration Area by C.M. Jewell and Associates in September 2003, identified two types of aquifers in the Exploration Area and surrounding region, namely, alluvial / colluvial aquifers and fractured rock aquifers.

4.4.1.1 Alluvial / Colluvial Aquifers

The Quaternary aquifers are not extensive in the Exploration Area and there is no significant delineation of Quaternary alluvial sediments apart from that associated with Lawsons Creek approximately 5km to the west of Lue.

Throughout the local area, minor alluvium / colluvium is present within and adjacent to watercourses in varying thicknesses as a result of continuing erosion.

4.4.1.2 Fractured Rock Aquifers

Groundwater occurrences within the Exploration Area principally occur within Rylstone Volcanics and the underlying Ordovician basement rocks of the Adaminaby Group. Groundwater is controlled primarily by the presence of secondary permeability due to faulting and fracturing. Groundwater storage and flow characteristics are therefore likely to be highly variable and generally controlled by local geological structural features.



4.4.1.3 Surrounding Groundwater Bores

Figure 4.2 displays the locations of the groundwater bores surrounding the Exploration Area. A total of three existing registered groundwater bores are located within 1.5km of the boundary of the Exploration Area.


Borehole construction methods will be in accordance with the Minimum Construction Requirements for Water Bores in Australia (Edition 3) with boreholes appropriately grouted on completion. However, in order to confirm that no impacts have occurred, it is proposed that monitoring of private groundwater bores within a 2km radius (with landholder permission) will be undertaken before drilling commences, to more clearly establish baseline conditions, and then monitoring will be continued on a regular basis throughout the duration of all drilling activities to identify changes in the parameters being monitored. It is proposed that monitoring will include water level and water quality (electrical conductivity) observations.

In order to manage/prevent the risk of any seepage of drilling fluids into shallow groundwater the following mitigation measures are proposed.

The drilling sumps for the diamond drill holes will be lined with plastic.

Should artesian conditions be encountered, which is considered unlikely, drilling will cease and the holes grouted.

In the event of unmanageable volumes of water are encountered, drilling will cease until either the sump capacity is increased or stored water is removed to a containment area.

Cuttings from the diamond drill hole will be removed to a safe containment area in the event mining does not proceed.

Cuttings from RC drilling will be bagged and despatched to a laboratory and stored on the edge of the drill pad.

Following the completion all exploration drilling activities, each exploration drill hole casing will be securely capped in the short term as further testing may need to be undertaken.

The management of the risks associated with chemicals, hydrocarbons and any other hazardous substances are addressed in Section 4.12.


Water from the targeted drilling horizons is not anticipated to be lifted to the surface during diamond (DC) drilling, whereas RC drilling may produce water if fractures with some storage capacity are intersected.


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Figure 4.2 Groundwater Bores

A4 – Colour



The potential impacts of resource delineation drilling relate to the following.

The possibility of cross contamination of aquifers (e.g. brackish or saline water being introduced to a fresh water aquifer via the drilling process).

The possibility of contamination of the aquifers by drilling muds / fluids.

Groundwater discharging to the surface, this may cause flooding or impact on surface water quality depending on the discharge and receiving water qualities.

Seepage of drilling mud, drilling additives and/or hydrocarbons (oils / lubricants, etc.) to shallow groundwater beneath the rig at exploration sites.

With regard to the first three possible impacts, the proposed drilling construction and abandonment methodologies eliminate the risks.

During the drilling of diamond exploration holes, the circulating drilling mud will establish a wall cake (low permeability “skin” around the wall of the hole) and also maintain a positive head (pressure) on the various aquifers intercepted. This will prevent both the ingress of groundwater to the hole (and any possible mixing or discharge to the surface) and also limit the ingress of drilling mud into the aquifers to the immediate vicinity of the exploration holes. Further, there are no artesian pressures anticipated in the area and therefore the potential for pressurised groundwater reaching the surface is considered negligible.

During the drilling of RC exploration holes, the volume of water produced from drill holes will be dependent on the nature of structures intersected. There is potential for significant short term flows with historical drilling records indicating that 5L/s are not uncommon, although predominantly previous exploration holes resulted in negligible to no water. Drill cuttings from RC drilling will be bagged for removal.

Following the completion of the drill holes, each hole will be securely capped which will allow the possibility of further studies to be undertaken.

The long term solution for exploration drill holes, if the Bowdens Silver Project does not proceed, will involve the cutting of the drill hole casing approximately 1m below ground, plugging the bore hole with 1m of concrete and placing backfill over the drill hole into a slight mound.

4.5 VISUAL AMENITY


As discussed in Section 3.2.1, the area within and surrounding the Exploration Area is rural in nature, and has been substantially cleared for agricultural purposes. The proposed Exploration Area is partially visible from Bara and Powells Roads and from up to five adjacent residences, albeit at distances of 0.5km to 4km. The Exploration Area is not visible from the township of Lue.


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Mitigation measures to manage visual impacts will include:

minimising surface disturbance;

routine utilisation of dust collation equipment;

maintaining the operational area in a neat and tidy condition at all times; and

all consumables, including plastic, is removed as soon as practicable.


Some motorists will periodically observe the drilling activities when travelling along sections of Bara Road. It is also likely for some residences to periodically observe drilling activities but as the activities will invariably be short-lived, as well as well-established vegetation communities blocking much of the drilling activities, the impacts will likely be minimal.

Therefore, given the relatively short duration of the exploration activities, no line-of-sight from either the township of Lue or Lue Road and established vegetation communities preventing sight of the activities, minimal impacts will be associated by the proposed drilling activities.

4.6 NOISE AND VIBRATION


The existing noise environment is typical of rural areas with principal noise sources including birds, stock, wind in trees and agricultural activity. The assumed LA90 noise level is therefore 30dB(A).

4.6.2 Identified Noise Sources

Potential noise sources will include the following plant and corresponding LAeq sound power level (SWL):

Site preparatory works, e.g. the use of a small bulldozer – 113dB(A).

Drilling activities – two types of drilling rigs will be utilised:

– reverse circulation (RC) – 114dB(A).

– diamond core –102dB(A).

Table 4.1 shows the proximity of the residences to the closest bore hole locations from each of the drilling areas.



Table 4.1

Proximity of Residences to Exploration Area

Residences Distance (m) to Closest Drill Hole Locations

Resources Tailing Storage Facility Area

Processing Plant Area

A* 720 1 650 640

B* 510 1 170 190

C* 570 280 240

D 760 1 960 2 130

E* 1 040 2 120 2 430

F 1 130 2 100 2 530

I 1 550 550 1 400

J# 990 290 1 550

K# 1 180 890 2 170

L 1 660 1 380 2 660

M 1 280 1 380 2 550

N 1 240 1 580 2 620

S 2 130 1 330 2 390

U 2 130 1 770 3 050

V 2 060 1 950 3 210

* Kingsgate holds an access agreement with the landowner of the nominated residence.

# Kingsgate will seek an agreement with the landowner of the nominated residence. In recognition of potential noise exceedances with the drilling operations.


The following mitigation measures will be implemented in order to manage the risk of adverse noise-related impacts upon residents within and surrounding the Exploration Area.

Consult with the surrounding residents regarding noise-related impacts prior to and during periods when drilling operations are planned and underway and particularly when drilling within relative close proximity to the residences, where residents will be consulted personally.

Use standard noise mitigated drilling and other equipment, such as silenced generators and compressors.

Where practicable, drilling rigs will be orientated to enable the side of the rig with the quietest sound power level usually to be directed towards the closest residence.

Education and training of drillers and other on-site personnel in quiet work methods and locations of nearby residents.

Drilling operations will commence in the first instance at locations more remote from the nearest non project-related residences to enable noise monitoring to be conducted in order to establish the actual noise levels of the operations so that they are more fully understood.


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Conduct hand-held noise monitoring at the initial borehole locations for both reverse circulation and diamond core drilling in order to monitor the noise levels and re-assess the actual noise impacts.

Limit the hours of operation to daytime only.

Other management and mitigation responses to the measured noise levels may include the following.

Staggering and careful planning of the exploration program in order to work with local residents requirements.

Promptly responding to any complaint in relation to noise.

Use of noise reduction barriers, e.g. hay bales.

4.6.3.1 Assessment of Impacts

The assessment of noise impacts has been assessed an as construction activity given the comparatively short duration of the drilling programs – in accordance with the ‘Interim Construction Noise Guidelines’. The guideline nominates the impacts of short term noise can be assessed either quantitatively or qualitatively. Qualitative assessments invariably relate to those activities that are experienced by a resident for less than 3 weeks in total.

It is recognised, particularly the TSF drilling program, will be undertaken in a comparatively short period of time and less than 3 weeks in total. Hence it is considered appropriate to assess noise impacts from that drilling program in a qualitative sense. A similar approach is appropriate for the processing plant sterilisation drilling program.

Given the duration of the drilling activities within the resource area will extend beyond 3 weeks, it is considered appropriate to assess the noise impacts quantitatively at the surrounding residences.

A preliminary evaluation of the potential noise from the reverse circulation and diamond core drilling operation has been undertaken by SLR Consulting under calm and adverse weather conditions.

Attenuation from topography has been estimated and included in predictions although it is considered the predictions remain conservative. Table 4.2 to Table 4.5 show the sound pressure levels expected at the residences for different operations and weather conditions for the following scenarios.

Table 4.2 Reverse circulation drilling operations only.

Table 4.3 Diamond Drilling operations only.

Table 4.4 Reverse Circulation drilling operations and bulldozer.

Table 4.5 Diamond Drilling operations and bulldozer.



The noise levels for each of these scenarios were assessed under both calm conditions and adverse conditions e.g. gentle wind from the drilling operations to a nearby residence. It is noted that the estimated sound pressure levels at the surrounding residences was based upon the noise generated at the closest point to the drilling area. In reality, the drilling at the closest point would typically be for no more than 1 or 2 days.

Table 4.2

Estimated Sound Pressure Levels at Residences – RC Drilling Operations within the Resource Area

Residences Calm Adverse 3 m/s wind (in all directions)

D 44 49

F 43 48

I 27 32

J 33 38

K 41 46

L 38 43

M 35 40

N 35 40

S 24 29

U 36 41

V 32 37

Table 4.3

Sound Pressure Levels at Residences – Diamond Drilling Operations within the Resource Area


D 32 37

F 31 36

I 15 20

J 21 26

K 30 35

L 27 32

M 23 28

N 23 28

S 12 17

U 24 29

V 21 26


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Table 4.4

Sound Pressure Levels at Residences – RC Drilling & Komatsu Dozer Operations within the Resource Area


D 47 52

F 45 50

I 30 35

J 35 40

K 44 49

L 41 46

M 37 42

N 37 42

S 27 32

U 39 44

V 35 40

Table 4.5

Sound Pressure Levels at Residences – Diamond Drilling & Komatsu Dozer Operations within the Resource Area


D 44 49

F 42 47

I 27 32

J 32 37

K 41 46

L 38 43

M 34 39

N 34 39

S 24 29

U 36 41

V 32 37

Based upon the above qualitative and quantitative assessments, it is assessed that the noise impacts from the proposed drilling operations would be acceptable. Surrounding residents would be aware of the noise from the drilling operations from time to time. However, Kingsgate will regularly inform surrounding residents about its plans and sequence drilling operations, wherever practicable, to reduce noise impacts for surrounding residents.

4.7 HERITAGE


A search of the AHIMS database identified multiple registered archaeological deposits in a 30km radius of the Exploration Area (see Figure 4.3) with three registered archaeological sites identified in close proximity to the Exploration Area (see Figure 4.4).



Figure 4.3 AHIMS Search Results

A4 – Colour


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Figure 4.4 Aboriginal Heritage Site Locations

A4 – Colour



An archaeological survey of a portion of the Exploration Area was undertaken by consultant archaeologist, J. Appleton of Archaeological Surveys and Reports Pty Ltd in 1996 with 10 archaeological sites identified comprising of five open scatters and five isolated artefacts. In 1998, D. Maynard of Murong Gialinga ATSIC inspected a broader section of the Exploration Area and identified a total of 42 sites comprising:

22 open camp sites;

14 isolated finds that were found in areas closely associated with the open camp site areas;

five shelters, three with artefact deposits; and

a stone quarry site.

Both Appleton and Maynard recorded sites and their survey areas are shown in Figure 4.4. None of these sites have been placed on the AHIMS register.

Given the limited scope of the exploration works proposed, the Exploration Area’s previous drilling operations and an official AHIMS search revealing no registered archaeological deposits within the Exploration Area, it is considered that the proposed drilling activities in the 2011-2012 program will have a minimal impact on the archaeological setting.

In recognition of the sites identified by Appleton and Maynard in 1996 and 1998 respectively, the drilling program has been designed to avoid disturbance to these sites.


The Company would implement the following mitigation measures to manage the potential risks to items of Aboriginal or European significance.

Utilise previously disturbed areas whenever practicable.

Surface disturbance will be minimised as far as practicable.

Should any ‘objects’ or other Aboriginal sites (such as burials) be uncovered during the course of the activities, work in that area will cease and the OEH and the relevant registered aboriginal stakeholders contacted to discuss how to proceed.


There will be minimal impact expected on Aboriginal or European heritage.


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4.8 FLORA AND FAUNA

4.8.1 Existing Environment - Flora

4.8.1.1 Introduction

Site surveys were undertaken by Geoff Cunningham Natural Resources Consultants in October and November 2011. These surveys examined species and communities in the proposed pit area with the exception of one property, the Winter property, and most other areas where sterilisation drilling is to occur. The Winter property was not surveyed as access could not be arranged. It is not expected that the communities occurring in areas not surveyed will differ greatly from those already examined.

No threatened species have been identified in the surveys undertaken, however, there is one species of Pomaderris collected that has yet to be identified at the National Herbarium.

No easily identifiable endangered ecological communities have been recorded at the site. However there may be a potential for the White Box – Yellow Box – Blakely’s Red Gum Woodland (NSW Threatened Species Conservation Act) and the White Box – Yellow Box – Blakely’s Red Gum Grassy Woodland and Derived Native Grasslands (Commonwealth Environment Protection and Biodiversity Conservation Act). Each community is Endangered/Critically Endangered (respectively) Ecological Communities (the EEC) to occur in the region in which the Bowdens Silver Project is located.

Accordingly, it is appropriate to undertake an assessment of significance of the likely impact of the proposed exploration activity on any possible occurrences of the EEC.

Two communities were identified (see Figure 4.5), a summary of these is as follows. Note an * denotes an introduced species.

4.8.1.2 Open Cleared Land with Scattered Trees

This community occurs over the more level lands within the Project Site including some of the valley floors between the more hilly areas. The dominant species is Rough-barked Apple [Angophora floribunda] which occurs as scattered single paddock trees and clumps. Also present are individual Blakely’s Red Gums [Eucalyptus blakelyi] as scattered trees or, at times, in clumps.

While a shrub layer is not prominent in this community, a number of shrub species were recorded. These include Acacia caesiella, Hopbush [Dodonaea sp.], Hibbertia sp., Native Peas [Pultenaea spp.] and Cassinia sp. The introduced weedy shrubs, Blackberry* [Rubus sp.] and Briar Rose* [Rosa rubiginosa] are also present.

4.8.1.3 Rough-barked Apple – Stringybark – Scribbly Gum Community

This community is very variable and difficult to map. There are some discrete areas of Stringybark and Scribbly Gum and similar areas of Rough-barked Apple but these quickly merge into a community comprising all three types. For this reason the community has been described as one. Rough-barked Apple [Angophora floribunda] is very common throughout and particularly on the lower slopes but is also found on the ridge tops.



Figure 4.5 Ecology

A4 – Colour


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A number of Stringybark species were recorded at the site, including Red Stringybark [Eucalypus macrorhyncha], Narrow-leaf Stringybark [Eucalyptus sparsifolia] and Blue-leaved Stringybark [Eucalyptus agglomerata]. These species are usually confined to the ridge tops and upper slopes.

Scribbly Gum [Eucalyptus rossii] was recorded primarily from the ridge tops and upper slopes but also occurred in drainage lines on lower slopes.

Other eucalypts recorded in the community include Red Box [Eucalyptus polyanthemos], Yellow Box [Eucalyptus melliodora], Bundy [Eucalyptus goniocalyx] and Apple Box [Eucalytus bridgesiana]. Black Cypress Pine [Callitris endlicheri] is common in patches that appear on the aerial photos but is also distributed through the community, particularly on the more elevated areas.

A shrub layer is prominent in this community with Chinese Shrub [Cassinia arcuata], Acacia filicifolia and Acacia caesiella common. A range of groundcover species was recorded and in general introduced species were uncommon in this community although where the community borders the Open Cleared Land with Scattered Trees community there is a greater degree of invasion for some distance from the boundary.

4.8.2 Assessment of Likelihood of the Presence of Endangered Ecological Communities in the Exploration Area

No threatened or endangered flora species or readily recognisable endangered ecological communities are present within the Exploration Area.

However, there may be a potential for the White Box-Yellow Box – Blakely’s Red Gum Woodland (NSW Threatened Species Conservation Act) and the White Box – Yellow Box – Blakely’s Red Gum Grassy Woodlands and Derived Native Grasslands (Commonwealth Environment Protection and Biodiversity Conservation Act). The aforementioned communities are respectively defined as Endangered/Critically Endangered Ecological Communities (EEC) and have the potential to occur in the region in which the Exploration Area is located.

Occurrences of two of the three defining species of this endangered ecological community have been recorded during the field survey. These species are Yellow Box and Blakely’s Red Gum.

Accordingly, it is appropriate to undertake an assessment of significance of the likely impact of the proposed exploration activity on any possible occurrences of the EEC.

Yellow Box

Four occurrences of this species were noted in the field. All comprised single trees or small groups of trees occupying a very small area ranging from <100m2 to 200m2.

In the Commonwealth Department of Environment and Heritage publication titled ‘White Box – Yellow Box – Blakely’s Red Gum Grassy Woodlands and Derived Native Grasslands’, it is noted (page 5) that if at least one of the defining species is present in a field situation, the site is not regarded as being a remnant of the EEC under the Commonwealth Environment Protection and Biodiversity Conservation Act (EPBC Act) if it is less than 1000 m2 in area.



There is no minimum area stipulation in the case of the NSW Threatened Species Conservation Act (TSC Act).

However, all four of the recorded occurrences of Yellow Box were below the minimum area required to qualify as a remnant under the EPBC Act. With regard to the TSC Act, all four occurrences were single trees or small groups of threes within a community dominated by such species as Eucalyptus rossii, Eucalyptus macrochyncha, Eucalyptus sparsifolia and Angophora floribunda and were unmappable.

Rather than forming a remnant of the EEC, these trees appear to be isolated occurrences within an otherwise dissimilar community.

Blakely’s Red Gum

A number of occurrences of Blakely’s Red Gum were recorded in the field within the Exploration Area. Again, as with the Yellow Box, these occurrences were small in size and often associated with species such as Eucalyptus rossii, Eucalyptus macrorhyncha and Angophora floribunda in a community that would be regarded on the basis of general appearance, location in the toposequence and general floristics as a Scribbly Gum – Stringybark community

The occurrences were usually accompanied by a relatively dense understorey of shrubs and hence do not fit within the definition of the EEC under either Act.

The occurrences were less than 100m2 to approximately 300m2 in area and so do not qualify as the EEC under the Commonwealth EPBC Act even if they are deemed to be true remnants which is extremely doubtful.

With regard to the TSC Act definition, the NSW Department of Environment and Conservation [DEC] publication titled ‘Reconstructed and Extant Distribution of Native Vegetation in the Central West Catchment’ [Department of Environment and Conservation, Information and Assessment Section, North-West Branch, Dubbo, 2006] describes a community from the Mudgee to Coonabarabran area that is styled .BVT 17 – Blakely’s Red Gum – Rough-barked Apple Woodland on Flats and Alluvial Terraces.

The accompanying text notes that ‘it could be part of the White Box – Yellow Box – Blakely’s Red Gum Endangered Ecological Community’. This community has Blakely’s Red Gum, Rough-barked Apple, White Box, White Cypress Pine, River Red Gum and River Red Gum / Dirty Gum intergrades and River Oak as principal components.

Such a community is very different in composition and location in the toposequence to the occurrences at the Exploration Area and it is concluded that the community within the Exploration Area is not equivalent to the community identified by DEC.

In addition, it should be noted that when the Scientific Committee’s Final Listing Determination is consulted, Rough-barked Apple is not listed as a component species of the EEC – let alone a principal component.

Most of the Blakely’s Red Gum occurrences, in addition to being small, have a relatively dense shrub layer or a highly invaded groundcover where shrubs are absent or few, which means that they do not fit the TSC Act definition of the EEC.


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4.8.3 Existing Environment - Fauna

A preliminary desktop fauna assessment was undertaken by Biodiversity Monitoring Services in October 2011 where searches of the NSW Office of Environment and Heritage Wildlife Atlas, and the CSIRO and Australian Government’s Atlas of Living Australia web site were undertaken to identify the known presence of any fauna species within a 20km radius of the Exploration Site. A summary of observed species during a recent site inspection (September 2011) are as follows.

Mammals

– Protected (National Parks and Wildlife Act, 1974) 11

– Vulnerable (Threatened Species Conservation Act, 1995) 2

– Unprotected 7

Birds


– Vulnerable (Threatened Species Conservation Act, 1995) 12

– Unprotected 2

– Endangered (Threatened Species Conservation Act, 1995) 1

Reptiles


Amphibians


A search of threatened species within 50km of the Exploration Area identified:

Mammals

– Vulnerable (Threatened Species Conservation Act, 1995): 13

Birds


– Endangered (Threatened Species Conservation Act, 1995): 2

Reptiles


– Endangered (Threatened Species Conservation Act, 1995): 1

Amphibians


A total of 42 threatened species have been recorded from an area of 50km surrounding the Exploration Area. Few of these species have been recorded from within 20km of the project area as the wider area captures a number of National Parks and other conservation areas. While it is possible these threatened species could occur in the Exploration Area, the number is likely to be less than that from a far larger area.




A development or activity undertaken under the Environmental Planning and Assessment Act 1979 (EP&A Act) requires an Assessment of Significance to be provided to the appropriate determining authority. Under the Threatened Species Conservation Amendment Act 2002, several factors to be considered when determining whether an action, development or activity is likely to significantly affect threatened species, populations or ecological communities, or their habitats. The factors are collectively known as the 7-part test. The Assessment of Significant for the Proposed Exploration Drilling Program has been undertaken for three ‘woodland’ birds that may occur within the area (Brown Treecreeper - eastern subspecies (Climacteris picumnus victoriae), Grey-crowned Babbler - south-eastern sub-species (Pomatostomus temporalis) and the Scarlet Robin (Petroica boodang). Appendix 5 displays the complete results of the detailed 7-part tests which have resulted that in the case of the drilling program proposed for EL 5920, the extent of any impacts will be low, provided a number of conservation and mitigation measures are undertaken. Such measures are part of ‘standard’ procedures undertaken during exploratory drilling.

Provided the mitigation measures listed in Section 4.8.5 and the rehabilitation strategies described in Section 2.4 are undertaken the extent of loss of vegetation during drilling programs is relatively low and it is unlikely that there would be any significant impacts upon threatened species that may occur within EL 5920.


Mitigation measures for the management of flora and fauna impact will include the following.

Selection of access tracks to avoid areas of natural vegetation, particularly woodland.

Use of existing tracks where possible.

Keep clearing at drill sites to a minimum.

Avoid removing any mature trees, where possible.

If a mature tree is removed, then an inspection of any hollows should be undertaken by a qualified animal rescue person.

Clearing will utilize the salvage and re-use of felled tree hollows, fallen timber, hollow logs and boulders.

Felled timber will be re-used to cover the access track when drilling is completed.

Soil erosion and run-off prevention procedures will be undertaken.


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4.9 SOILS AND LAND CAPABILITY


A preliminary desktop assessment was undertaken by (Geoff Cunningham Natural Resource Consultants Pty Ltd) in October 2011, to identify the soil landscapes within the Exploration Area. A review of the Dubbo 1:250 000 Soil Landscapes map and the Mudgee 1:100 000 Geological Map assists to identify six soil landscapes with the Exploration Area.

Details of the major soils within each of these six soil landscapes are set out below.

Barigan Creek

– Topography - undulating low rises and flats; relief 40-80m, slopes 3-8%.

– Geological Units - Illawarra Coal Measures; Shoalhaven Group - shale, sandstone, siltstone, conglomerate, chert.

– Soils – Commonly Yellow Podsolics on lower slopes and along drainage lines; Red podsolic soils on higher colluvial slopes, benches and rises.

Bald Hill

– Topography – low hillocks and small basalt caps with moderate to steep slopes; relief 60-120m, slopes 10-35%.

– Geological Units – Tertiary Basalt – olivine basalt, dolerite, teschenite.

– Soils – Euchrozems on crests; Euchrozems / Chocolate Soils on mid-slopes with basalt outcrop and floaters; Shallow Stony Soils on steeper slopes near crests; Brown Clays with linear gilgais on lower slopes.

Lees Pinch

– Topography – rolling hills and low hills with steep rocky slopes and valley sides; relief to 240m, slopes 15-40%.

– Geological Units – Narrabeen Group, Illawarra Coal Measures – sandstone, shale, conglomerate, mudstone, chert, coal seams, torbanite seams.

– Soils - shallow sandy soils with extensive rock outcrop, boulder debris slopes and sandstone cliffs; Grey or Yellow Podsolics on lower slopes, shallow acid loams on coal bearing strata and Oodzols on lower slopes.

Murrumbo

– Topography – ancient river gravels and levee bank; relief to 20m, slopes 1-3%.

– Geological Units - undifferentiated river gravels; derived from various rocks within the catchment.

– Soils – Gravelly Red Earths on crests and benches.



Rylstone

– Topography – undulating low hills and hills; relief 40-60m, slopes 5-15%; outcrop common on upper slopes and crests.

– Geological Units - Rylstone tuff.

– Soils – mainly shallow siliceous sands and bleached sands; Red Podsolic Soils with floaters between the outcrops; shallow Yellow Podsolic soils / Soloths in drainage lines.

Ulan

– Topography – low undulating rises and flats; relief 10-40m, slopes 2-10%.

– Geological Units – Undifferentiated material; Illawarra Coal Measures; shale, sandstones, conglomerate, chert, coal, torbanite.

– Soils – Yellow Podsolics on lower slopes and drainage lines with patches of Solodic Soils / Solonetz Soils on salt scalds on footslopes, Earthy Sands on low rises.

Land Capability

Land within and surrounding the Exploration Area is classed as follows.

Class VII land on ridges and steep vegetated slopes.

Class II/III land in cleared valleys.


The following mitigation measures will be adopted to protect the soil resources disturbed throughout the exploration program.

Minimise surface disturbance as far as practicable.

Define clear tracks and avoid deviation from these.

Separate topsoil and subsoil from areas disturbed.

Undertake rehabilitation of disturbed areas.


The impacts on soils are assessed as negligible given the adoption of the above mitigation measures.

There will be no adverse impacts on medium to long term land use or land capability.


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4.10 NATURAL RESOURCE USE

4.10.1 Introduction

The main natural resources to be used during the exploration activities comprise of fuels such as diesel that are designated for vehicles, drilling activities and ancillary equipment. Water resources are likely to be used for drilling personnel as well as for use in the DC drilling activities (See Section 2.2.4) Potable water for consumption will be brought to site in appropriate bottles and containers.


The primary mitigation measures to be employed in the Exploration Area relates to the extractions and storage of waste water produced from drilling activities. As mentioned in Sections 2.2.4 and 4.3, the waste water produced from drilling activities will be collected by purpose built sumps that are located in a down slope position of the drill rig.

In relation to natural resource uses from vehicles, all vehicles will be used in an efficient manner where engines are turned off when not in use.


Based on the appropriate mitigation measures that will be implemented throughout the exploration program, it is assessed that the proposed activities will have no significant impact on the local environment in relation to natural resource use.

4.11 CONTAMINATED LAND


Due to the agricultural land within the Exploration Area, it is anticipated that contaminated land is unlikely to be encountered throughout the exploration drilling program and associated activities. There is the possibility of groundwater being brought to the surface through drilling activities that contain elevated levels of naturally occurring lead associated with drilling and defining the ore body.


If the groundwater and subsequent surface water associated with drilling activities is found by water quality testing to contain elevated levels of lead and zinc, all extracted water is to be contained in a plastic lined, excavated sump as to not contaminate the soil. When drilling has ceased and there are is no further groundwater brought to the surface, the sumps will be left to evaporate for a period of up to 6 months. After the 6 month period and if the water has not fully evaporated, Kingsgate will then remove the water from site to a licensed facility, if the quality is inappropriate for irrigation on site.



Furthermore, Kingsgate will ensure that all refuelling of plant and equipment is done with the correct gear (e.g. funnels), in appropriate areas such as flat areas away from any drainage lines and within close proximity of a hydrocarbon spill kit.


It is expected that the proposed mitigation measures will prevent any contamination of lands associated with the exploration drilling program.

4.12 CHEMICAL AND HAZARDOUS SUBSTANCE MANAGEMENT

Throughout the drilling program within the Exploration Area, various chemicals and hazardous substances are to be used to fuel the machinery, for use when drilling is being undertaken and for various other activities. A consolidated list of chemicals and hazardous substances are listed below with all associated MSDSs held by Kingsgate and the associated drilling contractors.

Cement

Diesel/Petrol

ZN50 (Used for Lubrication)

Rod Grease

Sunscreen

Talcor Blue, Talcor Blue (2), Talcor Blue (3)

Tuff CRP (Flocculation agent)

Tuff DET (Dispersion Agent)

Tuff Drill 320 w-moly (Drilling Oil)

Tuff Foam Ultra (Foaming Agent)

Tuff Gel Extra (Used in oil well drilling fluids; cement slurries for oil well casings)

Tuff Pac R (Used in the well drilling industry)

Tuff Plug A (Isocyanate component used to make polyurethane)

Tuff Plug B (Polyurethane foam polyol blend)

Tuff Pol (Drilling fluid additive)

Tuff Set (High strength gypsum cement, formulated to set as a strong plug in various set times)

Type N Solvent Cement (For bonding PVC-U pipes and fittings in non-pressure applications)

UPVC Priming Fluid (Cleaning and priming PVC-U pipes and fittings)

WD-40 Aerosol (Lubricates, corrosion inhibitor, displaces moisture, penetrant, cleans (spray).

4.13 IMPACT ON THE COMMUNITY

Impacts on the community are expected to be minimal and limited in length of duration although the increased level of activity would be noticeable. Impacts will be limited to visual and noise impacts, however these will last only as long as the duration of the exploration activities. Mitigation measures have been proposed in Sections 4.5 and 4.6 respectively.


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4.14 CUMULATIVE ENVIRONMENTAL IMPACTS

It is proposed that there are to be no cumulative environmental impacts associated with the Bowdens Exploration Activities for the following reasons.

The relatively small-scale exploration activities are located on land that has been mostly cleared and used for grazing purposes as well as being exposed to other previous drilling activities with no cumulative impacts.

Assessments of environmental issues noted in Section 4 have shown that none to negligible impacts are to be associated with the Bowdens Exploration Activities.

4.15 SUMMARY OF SAFEGUARDS AND MITIGATION MEASURES

An overview of the proposed safeguards and mitigation measures associated with the proposed activities is provided Table 4.6.

Table 4.6

Overview of Safeguards and Mitigation Measures Page 1 of 3

Aspect Safeguards and Mitigation Measures

Drill hole placement

Areas of disturbance associated with all drill hole locations will avoid as far as possible threatened flora, fauna and ecological communities, farm dams, and mature, established vegetation areas.

In steep terrain, drill pads are to be shaped through earthmoving works to provide a near horizontal slope.

Identification and avoidance of the underground service cables and overhead power lines.

The orientation of the drill rig and ancillary equipment, where possible, to minimise noise impacts upon surrounding residents.

Track placement

Track clearing will avoid mature, established trees where possible, and with no clearing within open, topographically flat paddocks.

The construction of both existing and new tracks will incorporate drainage channels as well as windrows if topography becomes a safety issue.

Sediment traps are to be incorporated into the design of all tracks where erosional runoff is likely to occur and will either involve rocky material being placed in the drainage channels at regular intervals or by the construction of silt-stop fencing as dictated by the track’s length and slope.

Sumps will be excavated at the base of hillside tracks to catch excess runoff water.

Waste Hydro-carbon spill mats will be used by the drilling contractor as a precaution to hydrocarbon spills.

Spill kits will be present on all active drill sites.

Any spills will be cleaned up promptly and taken to the local waste facility and disposed of at the appropriate location.

All other waste, chiefly domestic household, will be placed in plastic bags and drums and disposed of at the local waste facility.

All drill contractor waste material (including plastic drums, PVC, etc.) will be taken to the local waste facility and disposed of at the appropriate location.



Table 4.16 (Cont’d)



Air Quality Surface disturbance will be minimised.

Cyclone dust extraction systems on RC drill rigs will be used.

Drilling residues will be removed once dried.

In consultation with the respective landowner, the speed limit which all Kingsgate contractors will need to follow on all unsealed roads on each property will be restricted.

Surface Water

Drill residues from the RC drilling will be collected in a sump excavated within the drill pad, dried and then buried within the sump. If the water contains elements that exceed safe levels, then all future sumps will be lined.

The sumps of all diamond drill holes will be lined to contain all drilling fluids. Sumps in conjunction with above ground tanks will be used.

Drilling chemicals will be stored on bunded trays on the support vehicles.

Refuelling will be undertaken carefully, for example, using funnels. Any spillages will be cleaned up and contaminated soil removed.

Any excess water /drilling fluids encountered will be contained in the sump.

If the water quality from the residues is suitable, most of the water will be left to drain or allowed to evaporate leaving only silt within the sump.

Groundwater Borehole construction methods will be in accordance with the Minimum Construction Requirements for Water Bores in Australia (Edition 3) with boreholes appropriately grouted on completion.

The drilling sumps for the diamond drill holes will be lined with plastic.

Should artesian conditions be encountered drilling will cease and the holes grouted.

In the event of unmanageable volumes of water are encountered, drilling will cease until either the sump capacity is increased or stored water is removed to a containment area.

Cuttings from the diamond drill hole will be removed to a safe containment area in the event mining does not proceed.

Cuttings from RC drilling will be bagged and despatched to a laboratory and stored on the edge of the drill pad.

Following the completion all exploration drilling activities, each exploration drill hole casing will be securely capped in the short term as further testing may need to be undertaken.

Visual Impact Surface disturbance will be minimised.

Dust collation equipment will be routinely utilised.

The operational area will be maintained in a neat and tidy condition at all times.

All consumables, including plastic, will be removed as soon as practicable.

Noise Standard noise mitigated drilling and other equipment, such as silenced generators and compressors, will be used.

Where practicable, drilling rigs will be orientated to enable the side of the rig with the quietest sound power level usually to be directed towards the closest residence.

Education and training of drillers and other on-site personnel regarding quiet work methods and locations of nearby residents will be undertaken.

Drilling operations will commence in the first instance at locations more remote from the nearest non project-related residences to enable noise monitoring to be conducted. This will enable the actual noise levels of the operations to be established.


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Table 4.6 (Cont’d)



Noise (Cont’d)

Hand-held noise monitoring will be conducted at the initial borehole locations for both reverse circulation and diamond core drilling in order to monitor the noise levels and re-assess the actual noise impacts.

Hours of operation will be limited to daytime only.

Heritage Previously disturbed areas will be utilised whenever practicable.

Surface disturbance will be minimised as far as practicable.

Should any ‘objects’ or other Aboriginal sites (such as burials) be uncovered during the course of the activities, work in that area will cease and the OEH and the relevant registered aboriginal stakeholders contacted to discuss how to proceed.

Flora and Fauna

Access tracks will be selected to avoid areas of natural vegetation, particularly woodland.

Existing tracks will be used where possible.

Clearing at drill sites will be kept to a minimum.

Where possible mature trees will be avoided.

If a mature tree is removed, then an inspection of any hollows will be undertaken by a qualified animal rescue person.

Clearing will utilize the salvage and re-use of felled tree hollows, fallen timber, hollow logs and boulders.

Felled timber will be re-used to cover the access track when drilling is completed.

Soil erosion and run-off prevention procedures will be undertaken.

Soil Surface disturbance will be minimised as far as practicable.

Clear tracks will be defined and deviation avoided.

Topsoil and subsoil from areas disturbed will be separated.

Disturbed areas will be rehabilitated.

Natural Resources

All vehicles will be used in an efficient manner where engines are turned off when not in use.

Contaminated Land

If the groundwater and subsequent surface water associated with drilling activities is found by water quality testing to contain elevated levels of lead and zinc, all extracted water will be contained in a plastic lined, excavated sump as to not contaminate the soil. When drilling has ceased and there are is no further groundwater brought to the surface, the sumps will be left to evaporate for a period of up to 2 years. Where the water has not fully evaporated, Kingsgate will then remove the water from site to a licensed facility, if the quality is inappropriate for irrigation on site.

All refuelling of plant and equipment will be done with the correct gear (e.g. funnels) in appropriate areas such as flat areas away from any drainage lines and within close proximity of a hydrocarbon spill kit.

Bushfire All mobile equipment will be maintained in good working order with appropriate exhaust and fire suppression and extinguishing systems.

Mobile equipment working in areas that are not cleared will not be left unattended with the engine running. If mobile equipment must be left unattended within these areas they will first be inspected and made fire safe through removal of low vegetation and grasses.

All work areas will be equipped with suitable fire extinguishers and their locations indicated by appropriate signage.



4.16 SUMMARY OF IMPACTS AND CONCLUSIONS

Expected impacts associated with the proposed activities are limited in extent and in duration. The following provides an overview of the expected impacts (with the mitigation measures detailed in this report implemented) for each environmental aspect with the section they have been addressed in.

Table 4.7

Overview of Expected Impacts for Each Environmental Aspect

Aspect Expect Impacts (with Mitigation Measures Implemented) REF Section

Air Quality Given background levels and the general rural nature of the Exploration Area, it is assessed that the proposed activities will readily satisfy the air quality criteria.

4.2

Surface Water The proposed management methods will protect the water quality within and immediately surrounding the Exploration Area.

4.3

Groundwater Potential impacts of aquifer, groundwater and surface water contamination have been minimised through drilling technics and management methods. Partial rehabilitation of groundwater bores will occur following construction and again following drilling activities if required. They will remain installed until the proposed silver mine does not receive approval or within a period of 2 years of the exploration period (whichever occurs later). At that time Kingsgate will cap the bores and will undertake a program of final rehabilitation to provide for a stable long term landform in those areas disturbed by exploration.

4.4

Visual Amenity Given the relatively short duration of the exploration activities, no line-of-sight from either the township of Lue or Lue Road and established vegetation communities preventing sight of the activities, minimal impacts will be associated by the proposed drilling activities.

4.5

Noise and Vibration

It is assessed that the noise impacts from the proposed drilling operations would be acceptable. Surrounding residents would be aware of the noise from the drilling operations from time to time. However, Kingsgate will regularly inform surrounding residents about its plans and sequence drilling operations, wherever practicable, to reduce noise impacts for surrounding residents.

4.6

Heritage There will be minimal impact expected on Aboriginal or European heritage. 4.7

Flora and Fauna Minimal short-term impacts are expected due to the clearing of small sections of vegetation; however given the mitigation measures and rehabilitation (Section 2.4) proposed, impacts are predicted to be limited in extent and temporary in nature. There will be no impact on endangered ecological communities, and impacts on threatened species are unlikely and would be temporary in nature.

4.8

Soils and Land Capability

The impacts on soils are assessed as negligible given the adoption of the mitigation measures. There will be no adverse impacts on medium to long term land use or land capability.

4.9

Natural Resource Utilisation

The proposed activities will have no significant impact on the local environment in relation to natural resource use.

4.10

Contaminated Land

It is expected that the proposed mitigation measures will prevent any contamination of lands associated with the exploration drilling program.

4.11

Impact on the Community

Impacts on the community are expected to be minimal and limited in length of duration. Impacts will be limited to visual and noise impacts; however these will last only as long as the duration of the Exploration activities.

4.13

Cumulative Impacts

It is proposed that there are to be no cumulative environmental impacts associated with the Bowdens Exploration Activities.

4.14


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Given the mitigation measures proposed throughout this section, it is assessed that the proposed exploration activities will have no long-term residual impacts on the environment within or surrounding the Bowdens Exploration Area.

5. A C T I V I T Y J U S T I F I C AT I O N

5.1 SUMMARY OF RESIDUAL ENVIRONMENTAL IMPACTS

Given the mitigation measures proposed throughout this document, it is anticipated that the proposed exploration activities will have no long-term residual impacts on the environment within and surrounding the Exploration Area.

Minimal short-term residual impacts are anticipated, however they will be limited in extent and temporary in nature. These could include noise during drilling activities and clearing of small sections of vegetation, however this will be avoided as much as practicable.

5.2 JUSTIFICATION OF THE PROPOSED ACTIVITY

The proposed exploration activities are essential to further understand the resource within the Exploration Area and provide the information upon which to plan for the development of a new mine in the area. Given that the anticipated residual environmental impacts will be limited to minor short-term impacts and that no long-term impacts are anticipated, the Company contends that the proposed activities are justified.

5.3 EVALUATION OF ALTERNATIVES

Given the need to positively locate the resource, the Company contends that there are no feasible alternatives to the proposed exploration program to enable a full and robust assessment of the resource. The program will effectively be undertaken with a range of practices consistent with industry best practice. Therefore, consideration of alternatives with lesser environmental benefits was considered un-necessary.

6. E C O L O G I C A L LY S U S TA I N A B L E D E V E L O P ME N T

Section 6(2)(1-d) of the Protection of the Environment Administration Act 1991 states that ecologically sustainable development (ESD) requires the effective integration of economic and environmental considerations in decision-making processes. It then outlines principles and guidelines by which ESD can be achieved. Table 6.1 outlines the principles and details how the proposed exploration activities comply.



Table 6.1

Overview of Expected Impacts for Each Environmental Aspect

Principle Compliance

Precautionary principle

The REF is the culmination of a development process which has examined options for the Activity against environmental criteria, and where impact is unavoidable, provides for suitable mitigation measures.

The drilling of the exploration drill holes would not irreversibly degrade the health, diversity or productivity of the environment.

Inter-generational equity

The drilling of the exploration drill holes would not irreversibly degrade the health, diversity or productivity of the environment for future generations.

If the outcomes of the drilling activities are favourable and the mine proceeded, the project could deliver jobs for the region for over a minimum ten years.

Conservation of biological diversity and ecological integrity

The drill hole locations and access track have been designed to minimise impacts upon biological diversity and ecological integrity as far as practicable.

Mitigation measures have been designed following the general principle of avoid, minimise, mitigate to reduce impacts as far as practicably possible.

Improved valuation, pricing and incentive mechanisms

The Company has provided a security to the Division of Resources and Energy (DRE) such that if the Company defaults with its rehabilitation obligations, funds would be available for the rehabilitation of the areas disturbed by exploration. In the event the Company satisfactorily rehabilitates areas disturbed during exploration activities, the DRE would refund the security.

7. C O N C L U S I O N S

Given the mitigation measures proposed throughout this document, it is assessed that the proposed exploration activities will have no long-term residual impacts on the environment within or surrounding the Bowdens Exploration Area.

Minimal short-term residual impacts associated with areas of disturbance may occur. However, these are anticipated to be limited in extent and temporary. Seeding and appropriate drainage controls will be implemented following construction works, with further requirements for rehabilitation assessed on a hole by hole basis following exploration drilling. In the event that the proposed silver mine does not receive approval or within a period of 2 years of the exploration period (whichever occurs later), Kingsgate will undertake a program of final rehabilitation to provide for a stable long term landform in those areas disturbed by exploration.

The proposed exploration activities are essential to further delineate the potential economic resource and to provide data confirming the suitability of key areas for future mine infrastructure. Given that the assessed residual environmental impacts will be limited to minor short-term impacts and that no long-term impacts are anticipated, Kingsgate contend that the proposed activities are justified.


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8. R E F E R E N C E S

Colqhoun G.P., Meakin N.S., Henderson G.A.M., Krynen J.P., Jagodzinski E.A., Watkins J.J. and Yoo E.K., 2000, Mudgee 1:100 000 Geological Sheet 8832, 1st edition. Geological Survey of New South Wales, Sydney & Geoscience Australia, Canberra.

Leach 2003, Petrological Evaluation of the Alteration and Mineralisation at The Bowdens Silver Prospect, Central New South Wales, Prepared for Silver Standard Australia.

Pincock Allen & Holt 2001, Bowdens Property, Australia Technical Report- Prepared for Silver Standard Resources Inc.

Documents

Bowdens Exploration Activities – EL 5920(1) Review … · Bowdens Exploration Activities – EL 5920(1) ... (1) Review of Environmental Factors Prepared for: Kingsgate Consolidated