Kamloops, BC, Canada

Environmental & Permitting

The permitting process for the Ajax Project commenced in early 2011 in conformity with the procedures prescribed by the various levels of the British Columbia and the Canadian governments. Abacus submitted a Project Description to the BC Environmental Assessment Office (EAO) and the federal Canadian Environmental Assessment Agency (CEAA) in early 2011. The project description was accepted by EAO on February 25, 2011 and on March 16, 2011 by CEAA.

The provincial Environmental Assessment Office issued an Order under Section 10 of the Environmental Assessment Act on February 25, 2011 indicating that the Project must proceed through the provincial Environmental Assessment review. The CEAA commenced a comprehensive study on May 25, 2011 and posted a Notice of Commencement on the CEAA Registry on May 31, 2011. A federal project agreement was signed on August 17, 2011. The draft Project Application Information Requirements) was provided to the EAO and CEAA on August 12, 2011 for distribution to the Technical Working Group.

On September 14, 2015, Abacus announced that the Environmental Assessment Application/Environmental Impact Statement (the "EA Application" for the Ajax Copper-Gold Project was submitted by KGHM Ajax Mining Inc. to the British Columbia Environmental Assessment Office and the Canadian Environmental Assessment Agency. The EA Application incorporated extensive work conducted by the independent consultants comprising scientists, engineers and researchers who looked at key environmental, health and social issues.

On November 24, 2015, the EA Application passed through the screening process by the B.C. Environmental Assessment Office and was accepted for formal review, clearing the way for official submission of the Application/EIS to the provincial and federal governments. Following submission of the Application/EIS, a 75-day public commenting period ensued wherein public comments were invited throughout the period January 26, 2016 to April 11, 2016. During this period, a number of open houses and other initiatives were conducted to enhance understanding of its contents, including plain language summaries and fact sheets of key studies. These studies were designed to demonstrate the extent to which the Ajax mine has been designed to mitigate the impacts, while providing the maximum benefit to the community.

The review process was expected to conclude in late 2016, but due to the large number of requests and questions from the public, First Nations and the working group reviewing the application on behalf of various governments, the review was suspended on May 4, 2016 at the request of KGHM Ajax. The review was restarted on March 30, 2017 after all outstanding requests were addressed. The EAO also informed KGHM Ajax that, going forward, the Canadian Environmental Assessment Agency ("Agency") and the EAO had agreed to seek a greater level of coordination and to prepare a joint assessment report.

In August 2017, the provincial and federal agencies responsible for the EA process issued a Joint Assessment Report together with proposed provincial EA Certificate conditions. Significant conclusions of the joint Assessment Report are as follows:

• The Ajax Project is not likely to cause significant adverse effects with respect to the various environmental issues required to be evaluated under the B.C. Environmental Assessment Act. This conclusion was reached by taking into account the implementation of proposed mitigation measures and the proposed EAO's EA Certificate conditions.
• With respect to Indigenous groups, the report noted that the Ajax Project is likely to cause significant adverse effects to heritage and to the current use of lands and resources for traditional Aboriginal purposes.

On August 8, 2017, the final public comment period on the Joint Assessment Report began, which ended on October 10, 2017. On December 15, 2017, Abacus announced that the British Columbia Minister of Environment and Climate Change Strategy and Minister of Energy, Mines and Petroleum Resources declined the issuance of an Environmental Assessment Certificate. The Federal Minister of Environment and Climate Change Canada announced that the Project 'is likely to cause significant adverse environmental effects and cumulative effects to Indigenous heritage and the current use of lands and resources for traditional purposes by Indigenous peoples.' The Minister has referred the Project back to the responsible Federal authorities, Fisheries and Oceans Canada and Natural Resources Canada. The two agencies must now seek a final decision from Cabinet on whether the Project can proceed.

The decision follows a six-year environmental assessment review process that involved extensive engagement with provincial and federal government agencies, technical working and community advisory groups, First Nations and a broad array of stakeholder interest groups including thousands of community members who took part. The provincial Ministers' decisions to reject the Ajax Project in view of the highest standards that were consistently met for public consultation and stakeholder engagement was a major disappointment to the Company. However, in the Company's view, the Project is technically sound, viable and economically beneficial for the Kamloops community, the First Nations, and for the Province of BC and the rest of Canada.