Environmental Management and Protection

Overview

As an extractive industry, mining will always have some level of both short-term and long-term environmental impact. TVIRD’s primary objective is to minimize its impact footprint, to implement appropriate and best practice measures to control the impacts, and to promote restoration and rehabilitation that best support the needs of the community and the natural environment. The company’s corporate environmental policy guides this process and commits TVIRD to a course of responsible mining and sustainability.

The development and implementation of environmental management and protection programs is an ongoing activity at each of the TVIRD projects during all phases of project development, operation and closure. It has a wide ranging portfolio of activities that includes monitoring of various environmental parameters, regulatory agency reporting and permitting, rehabilitation of disturbed areas, design and construction of environmental management facilities, environmental impact and mitigation assessment, and implementation of various environmental-based research programs.

Since the beginning of operations at the Canatuan Mine in 2004, a number of data collection and management systems have been put in place to support the environmental management programs. These systems also support regulatory reporting needs and provide a basis for developing and refining future reclamation and restoration plans in the post-mining environment.

The environmental programs at TVIRD’s operating mines and exploration sites are audited by government regulatory agencies on a regular basis. Quarterly environmental monitoring is performed by a multi-partite monitoring team composed of regulatory agency personnel, host community representatives, local and regional government units and non-governmental organizations. Other non-scheduled audits are also done by various government agencies throughout the year.

Internal monitoring and audits are conducted by the TVIRD Environment Department throughout the year on both a scheduled and non-scheduled basis. Any deficiencies or issues identified during the monitoring and audits are documented. The causes are then identified and discussed with the responsible parties. Subsequently, corrective actions are scheduled for implementation.

TVIRD also implements company-wide and community-wide training and education programs to introduce employees and community members to environmental management techniques and environmental risks. Ongoing research activities focus on a wide variety of environmental risk and management topics. Environmental specialists and consultants from both the regulatory and private sectors are engaged as needed in order to evaluate operations, address impacts and participate in research programs.

TVIRD’s overall goal is to prevent the occurrence of any significant environmental incidents and fully comply with all regulatory standards. Operations, monitoring and reporting are identified within the Environmental Compliance Certificates (ECC) issued for its projects. These represent the minimum level of compliance. Our objective is to strive to exceed these compliance requirements wherever and whenever possible. These efforts have been recognized by the regulatory agencies and a number of environmental awards have been presented to the Company.

Tailings management is the single most key element of the environmental management program. Four distinct tailings storage facilities have been constructed within the Canatuan operations area— three of which served the disposal and containment needs of the Gossan Phase (gold and silver operations) and have since been decommissioned. These are currently undergoing reclamation and are ready to be redeveloped as cash crop plantation zones. The fourth tailings storage facility, meanwhile, serves the disposal and containment needs of the Sulphide Phase (copper and zinc operations) and remains in operation.

All facilities were designed by international consulting engineering companies specializing in mining and facilities design. Quality control and assurance during construction was also provided by the same engineering companies as well as other third party testing laboratories. Design criteria and standards were based on Philippine regulations and those of the Canadian Dam Association. Geotechnical factors of safety exceed the standards of both groups and incorporate Maximum Credible Earthquake and Probable Maximum Flood criteria in the design.

Performance monitoring of the tailings storage facilities is incorporated in the daily environmental monitoring activities and includes water quality, internal water pressure, filter drain discharge and embankment movements. These data are reviewed by third parties on a regular basis. To date, the facilities are performing as designed and meet the expected engineering parameters.

Water quality monitoring has been an integral part of the environmental monitoring activities during all phases of the Canatuan Project as well as the company’s exploration and pre-development projects. Both internal monitoring and external third party monitoring programs have been in place since the beginning of the Canatuan Project in 2004 and will continue throughout the remaining operations phase and well into the mine closure and rehabilitation period.

Monitoring is done at locations within the immediate project impact area as well as locations upstream and downstream. During the current operations phase, 15 to 20 thousand water quality samples are collected and analyzed on an annual basis. Results of these data indicate that the overall water quality within and downstream of the impact areas is within the applicable regulatory standards and has not significantly changed from the baseline conditions identified in 1996 when TVIRD began pre-development in Canatuan.

Regardless of the size of operations, retention and management of the biodiversity is a critical component of the environmental programs both at the Canatuan Mine site as well as the active exploration areas. Due to the mining operations and the activities associated with exploration, habitats within the immediate area are unavoidably changed and altered. The objective is to reduce the area directly affected by the operations, protect those areas not impacted and to promote and support an appropriately diverse rehabilitation and reclamation program.

Baseline terrestrial flora and fauna studies and aquatic habitat resource studies were completed in 1996. Subsequent to the beginning of operations in 2004, multiple terrestrial flora and fauna as well as aquatic habitat resource monitoring programs were completed within the Canatuan area by third party experts during the period 2006 to 2012.

Results of monitoring activities have shown an increasing trend in the number of species over the years rather than a decreasing trend, as might be expected. This is especially noted in the increase of threatened and endangered flora species and increasing populations and diversity of birds within the immediate Canatuan area. Of particular note is the return of the Rufus Hornbill bird known locally as the Kalaw. This threatened species has been absent from the Canatuan area for many years but has recently returned.

Results of flora and fauna monitoring and aquatic habitat studies conducted during the mining operations indicate the protected forest and other habitat zones have retained a significant degree of biodiversity when compared to the baseline studies. This also speaks well of the effectiveness of the ongoing progressive rehabilitation activities and the company’s ability to rehabilitate the disturbed areas in a diverse manner.

Although the Agata Nickel Laterite Project is in the pre-development stage, the potentially affected near shore marine environment has already been part of TVIRD’s programs to protect and enhance biodiversity. Baseline studies have identified the potential loss of some coral communities as a result of port construction needed to support the project. A mitigation program unique to the Philippine mining sector was completed in mid-2013. More than 8 thousand corals were individually removed from the impact area and relocated to a nearby marine reserve. Monitoring programs indicate continued coral growth and viability.

Progressive rehabilitation activities in Canatuan began the day after operations started in 2004 and have continued on a daily basis since then. Over the course of operations, approximately 166 hectares – or less than one third of the 508-hectare MPSA area – were to be subject to disturbance and subsequent progressive rehabilitation activities. These activities are divided into three sectors: structural and landform management, source erosion and sedimentation controls, and reforestation/revegetation.

To date, nearly 65% of the disturbed areas have been subject to different levels of rehabilitation. Since 2004, nearly 380 thousand seedlings have been planted as part of the rehabilitation efforts. Beginning with fast-growing species to assist in soil erosion controls, intercropping and the introduction of slower growing hardwood species and threatened/endangered plant species are now being done within many of the disturbed parcels. This compares to baseline forest inventories indicating less than 5 thousand trees within the identified disturbed areas. The diverse forest character within the rehabilitated areas has resulted in increased flora and fauna species as well as the re-establishment of several threatened and endangered flora species endemic to the area.

Two nurseries are maintained within the operations area to support the progressive rehabilitation activities and supply seedlings in support of the Philippine National Greening Program. Nearly 100 thousand seedlings are maintained in the nurseries at any given time in of which several thousand are donated annually to other organizations.

A series of research programs has been included as part of the progressive rehabilitation activities since 2008. Among these is the evaluation of cash crop and agricultural viability of tailings impoundment plantations, viability of different intercropping species and the use of indigenous wetland species to provide passive treatment of acid mine drainage.

For the most part, the progressive rehabilitation activities and programs are based on the Final Mine Rehabilitation and Decommissioning Plan (FMRDP) approved by the regulatory agencies. This plan was developed for the Canatuan Mine using previous rehabilitation experience, regulatory requirements and local community consultation relative to post-mining land use planning.

The FMRDP recognizes that the restoration of the environment to original conditions is generally not possible and is not necessarily compatible with the longer term land use and community development goals. However, a robust ecosystem can still be established to supplement and enhance the changed habitat area and also coexist with land use changes requested by the stakeholders. A long-term development program is currently in the preparation stage by the host Subanon indigenous people to further guide the final rehabilitation and closure plan. TVIRD is a participant in this process.

Regulatory requirements also include the establishment of a mine reclamation fund for post-mining rehabilitation and decommissioning. This fund is administered jointly by the regulatory agency and the company and is in addition to the annual progressive rehabilitation program costs. Under the current plan, nearly US$2.5 million has been allocated for post-mining rehabilitation and decommissioning programs.

Final closure activities are planned to begin in 2014 and will continue for a two-year period. During this time frame, decommissioning and active rehabilitation programs will be implemented. Following this, a three-year company sponsored monitoring and maintenance period will commence. This will include the participation of the host community and the regulatory agencies.