Panoramic view of the Cortez Gold Mines processing facilities near Crescent Valley, Nevada.

Potential Project Impacts

All key potential environmental impacts of the project have been identified and analyzed following the National Environmental Policy Act process that involved public participation throughout all major steps of permitting. Numerous studies and assessments have addressed the key environmental effects and mitigation methods for the project:

Community Relations

Successful community relations at Cortez are fundamental to its Sustainable Development Program. The key elements to measuring sustainable development which are being reported on annually include:

• Encouraging Public Participation
  - identifying and engaging stakeholders in a collaborative process.


• Public Sustainability Reporting
  - publicly reporting on issues, actions and performance.
  - ensuring meaningful data are reported annually.
• Verifying Sustainability Performance
  - working with stakeholders to define an appropriate process.
• Continuous Learning
  - expanding knowledge of employees and stakeholders.
  - improving mutual understanding of sustainability.
  - developing sustainability skills.
• Research Alternatives for Sustainable Priorities
  - researching alternative gold recovery methods.
  - preventing acid rock drainage.
  - improving effluent treatment and discharge.
  - improving health risk assessments.
  - integrating community development and mining.
• Global Leadership
  - mine closure methods and principles.
• Legal Matters
  
• Progress on Issues and Commitments

Sustainability information and site descriptions are published in an annual report that can be downloaded from the Cortez link on the Kennecott Minerals Company web site: www.kennecottminerals.com.

Cortez is recognized as one of the preferred employers within the Nevada gold industry. During 2000, the economic contribution from the Cortez operation totaled over $135 million. This included wages and benefits ($36M), supplies and capital expenditures ($73M), taxes, royalties and fees ($26M), external donations including scholarships, education and wellness contributions ($.3M).

The Cortez operation has established excellent relationships with a variety of stakeholders, including local ranchers, community leaders, state and regulatory personnel and the news media. Given the location of the operation and the increasing movement addressing cultural and sociopolitical issues in Nevada, including environmental impacts from mining, two significant community opportunities remain:

• Developing an ongoing working relationship with Native Americans that will beneficially and constructively serve common interests.
• Advancing relationships with the environmental organizations that have historically and continue to disapprove of the operation and appeal BLM decisions.

Through active participation and interaction between all stakeholders, Cortez will continue to openly address issues and work to strengthen community relationships.

Year 2000 Activities

During 2000, Cortez publicly reported to its stakeholders through public consultation processes required by the National Environmental Policy Act permitting process. Native American consultations took place on a proposed BLM/State of Utah land exchange and on the permitting of a satellite mine project that involved areas of potential cultural significance. Public reporting and education efforts continued with mine tours and through various presentations given to local, state and federal agency personnel. Presentations were also given on a regular basis to local community councils, political leaders and the media. Cortez also engaged stakeholders in a heap leach research project designed to determine successful alternatives for final reclamation and closure methods.

Verification of the sustainability practices implemented by Cortez is recognized through the interchange of information and feedback involved in the formal permitting processes under the National Environmental Policy Act and the consultation process with Native Americans.

Cortez educated stakeholders on its sustainability practices and programs designed to provide long-term economic and social benefits past the active mine life. During 2000, this included discussions with the local Crescent Valley Town Board, Eureka and Lander County Commissioners, and state and federal agency personnel. Sustainable development training at Cortez is ongoing for employees and the local communities.

The following items have been determined to be priorities of the local communities through stakeholder engagement:

During 2000, the Environmental Management Framework and Issue Management Planning programs at Cortez focused on monitoring activities, maintaining compliance, pit dewatering and reinfiltration, obtaining permits for the South Pipeline project, reclamation and mine closure planning, creating wildlife habitat and remediation of ground water impacts from older facilities.

Toxic Release Inventory Reporting

To ensure that the public is fully informed about all facets of its operations, information on how Cortez safely and effectively manages substances reported under the Toxic Release Inventory (TRI) reporting requirements is available on Placer Dome's web site:

www.placerdome.com (click the back button to get back to the report)

Health, Safety and Environment

During 2000, Cortez employees and contractors worked 811,700 and 139,000 hours, respectively. Total injury frequency for employees and contractors was 4.21 compared to 2.8 last year. Cortez employees reached a safety milestone of working three years without a lost time injury. At the end of 2000, employees were very close to achieving a goal of working three million hours without a lost time injury.

Safety Performance: Year 2000

Cortez is presently involved in a voluntary mercury reduction effort to identify all on-site sources of mercury and reduce emissions in the workplace and to the environment. Research efforts were successful in identifying a reagent that is now being used to precipitate and recover mercury from process solutions.

Environmental Performance:

During 2000, Cortez operations were successful in maintaining mine pit dewatering in advance of the mine development by permitting, constructing and utilizing ground water infiltration basins. Through a better understanding of the area hydrology and subsurface soil and geological conditions, Cortez operations maximized efficiencies of the infiltration basins. The infiltration ponds were cycled to minimize ground water mounding and resultant seepage. The mine also transferred mine water to the Dean Ranch for the beneficial use of irrigation to raise alfalfa.

The mine operations are permitted as zero discharge facilities. During 2000, there were minor and insignificant spills of process solutions. However, there was one significant incident where approximately 900 gallons of diesel fuel, three gallons of battery acid and ten gallons of ethylene glycol (antifreeze solution) were spilled on disturbed areas within the mine as a result of the collision of two haul trucks. This compares to one significant spill of diesel fuel in 1999. All spills were properly reported to the regulatory agencies and cleaned up and disposed according to accepted procedures.

No notices of violation were issued by state or federal environmental regulatory agencies during 2000. The outstanding BLM 1997 Notice of Alleged Violation for the unauthorized release of water from the ground water infiltration system was suspended.

In June 2000, the Bureau of Land Management approved the Record of Decision and Mining Plan of Operations for the South Pipeline Amendment to the Pipeline Gold Mine Plan of Operations that extended gold mining operations at the Pipeline Mine. The BLM's approval was appealed by three Non-Governmental Organizations that also filed a petition for stay of the BLM decision. The Interior Board of Land Appeals denied the request for stay, allowing South Pipeline operations to proceed. The Board directed the BLM to address mining and mill site claim allegations and any other issues it finds appropriate.This appeal and the appeal on the BLM 1999 Record of Decision on the Infiltration Project are currently pending before the Interior Board of Land Appeals.

In 1998, Cortez commenced a complete review of all disturbances attributed to its 30 years of operation in the area, and developed reclamation plans and associated costs. Area-wide mine reclamation and closure planning continued during 2000, along with upgrading the existing reclamation bond to reflect site conditions based on actual performance and costs. The reclamation bond is a $30 million surety bond payable to the regulatory agencies. The reclamation plans and estimated costs are currently under review for approval by the state and federal regulatory agencies which is expected by the end of 2001.

In conjunction with Bats Conservation International, Cortez created bat habitat utilizing old mine adits located in the Indian Creek area.

Cortez maintained relationships with indigenous people, preserved and improved the relationships with local stakeholders and pursued ongoing cooperation with Non-Governmental Organizations having environmental concerns. However, reaching agreed-upon objectives with shared involvement from these organizations remains open to further planning and development.

During 2000, Placer Dome partnered with four other mining companies, including Kennecott Minerals Company, on a proposed interstate land exchange involving federal, state and private lands in Nevada and Utah. When completed, the exchange will transfer ownership of state and private lands to the Bureau of Land Management, including an area of unique habitat to protect threatened and endangered wildlife species. In return, the mining companies will receive federal lands of equal fair market value in Nevada associated with their current mining operations to allow for exploration and potential expansion. The land exchange has been described as a win-win situation, providing significant benefits to the environment as well as sustaining long-term economic benefits to northeast Nevada and local communities.

Key Health, Safety and Environmental Issues

• Key HSE Issues:

  -Remained in compliance with HSE regulations and permits, vacated outstanding alleged Notice of Violation for unauthorized discharge of mine water.
  -Voluntarily initiated and completed a mercury workplace exposure reduction and control program.
  -Protected wildlife by maintaining cyanide concentrations below the threshold concentration of 50 milligrams per liter in the tailings impoundment decant pond during the entire year (i.e., <13 mg/l).
  -Fostered and maintained good relationships with most stakeholders. However, more effort needed with some Non-Governmental Organizations.
  -Continued area-wide reclamation and closure planning, including remediation of contaminated ground water from older facilities and upgraded the reclamation bond.
  -Continued to address and report on key issues included in the Cortez Sustainable Development Program.

Overview of Pipeline Mine complex at Cortez Gold Mines near Crescent Valley, Nevada.

What We Said We Would Do:

• Focus on sustainable development initiatives.
• Address communications with Native Americans.
• Continue with the environmental management framework and issue management planning.
• Maintain pit dewatering and infiltration rates ahead of pit development.
• Obtain environmental permits for the South Pipeline project.
• Continue with area-wide reclamation and closure planning and environmental remediation programs for older sites.
• Focus on industrial health programs, including hearing conservation and mercury reduction action plan.
• Continue with mine tours and safety talks for local schools.

What We Did Do:

• Identified sustainable development priorities and performance measurements. Publicly reported on sustainable development progress in an annual report that is available through the Cortez link on the Kennecott Minerals Company web site: www.kennecottminerals.com.
• Maintained relationships with indigenous people, consulted with Native Americans through the process of multi-stakeholder participation on cultural issues specific to the Pediment Mine Project Plan of Operations.
• Continued to identify, list and prioritize environmental issues. Developed plans to address them, including schedules and responsibilities.
• Successfully maintained pit dewatering and enhanced infiltration rates by permitting and developing additional infiltration basins, gaining a better understanding of the site hydrology and through detailed operation and maintenance procedures.
• Successfully obtained the Mine Plan of Operations for the South Pipeline project and initiated work. An appeal to BLM's approval of this project is currently under review by the Interior Board of Land Appeals.
• Held meetings with federal and state regulatory agencies to present an updated reclamation and closure plan and associated surety bond which are currently under review by the agencies. Continued with the state reviewed ground water remediation programs addressing hydrocarbons and leakage from older tailings and process ponds.
• Initiated a voluntary mercury reduction effort and continued with a hearing conservation program to identify, inform and protect employees in high risk noise areas.
• Conducted extensive planning and initiated site closure activities for the spent heap leach pads and older facilities at the Toiyabe mine site.
• Continued with mine tours and public education efforts on mining. Hosted the Whitman College political science class in 1999 and 2000. Their focus was on public land issues in the West.

HSE Management Practices

The principal elements for managing health, safety and environmental issues at Cortez are found in the Environmental Management and Issues Management Plan and through the Sustainable Development Program. These programs, along with others focused on health and safety, are updated on a regular basis to keep current with changing issues. Cortez has undergone strategic risk reviews conducted by outside reviewers covering the tailings and waste rock facilities and cyanide management.

Emergency Planning

Cortez has a formal Emergency Response Plan and conducts regular training for emergencies. Mutual aid agreements exist with response units in the local communities. The mine contracted with a local helicopter ambulance service for emergency response medivac services at the mine. In addition, this service was extended to include all employees at Cortez.

Compliance

At the end of 2000 there were no outstanding issues of environmental non-compliance

Cortez was recognized for having no lost time employee injuries during 2000, placing second among all Placer Dome mines worldwide and receiving the Corporate Silver safety award.

Cortez also placed second in the Nevada Mining Association's Large Surface Mine category for safety performance during 2000.

The Cortez Mines Superintendent was recognized for exemplary safety performance by the Nevada Mining Association as the "Mine Superintendent of the Year" for the Large Mine Category.

Year 2001 Outlook

Cortez will continue to address priority issues identified and reported on in its Sustainable Development Program.

In 2001, a multi-discipline team will tour several reclamation projects within the U.S. to expand knowledge on closure issues and identify the best practices being implemented in the mining industry.

Cortez will enhance its closure plan by addressing human resource elements associated with the retraining, transfer, attrition and benefits for employees.

The heap leach closure activities will be completed at the Toiyabe mine site.

New sustainability areas will be reviewed to provide potential economic growth in the local communities. Cortez will work with Eureka County and a contractor to evaluate sustainable commercial ventures, looking at the use of abundant geothermal water resources and other opportunities associated with the mine. In addition, efforts will continue on developing the Dean Ranch for long-term sustainable economic benefit.

The Nevada/Utah land exchange will require Congressional approval. This program and the reclamation and closure planning will remain key issues for sustainable development during 2001.

Cortez will continue mining the South Pipeline/Pipeline deposits and looks forward to a favorable decision on the two outstanding appeals to the Records of Decisions for the Infiltration Project and South Pipeline Mine Plan of Operations.

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