January 2001 aerial view of the Denton-Rawhide Mine. click here for a larger version of this picture.

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Geographic location of the Denton-Rawhide Mine. click here for a larger version.

Kennecott Rawhide Mining Company operates the Denton-Rawhide Mine, which is jointly owned by Kennecott Minerals Company (51 percent) and Dayton Mining Company (49 percent). The mine is located in the old Rawhide mining district, approximately 55 miles southeast of Fallon, Nevada.

The Denton-Rawhide Mine site is located in Mineral County. However, the majority of the 180 mine employees live in the city of Fallon, which is located in Churchill County approximately 60 miles southeast from Reno, at the intersection of U.S. Highways 95 and 50.

Gold and silver production at Rawhide began in 1990 and has averaged approximately 100,000 ounces of gold and 1 million ounces of silver annually. During 2000, Rawhide employees and contractors worked 429,355 hours producing 104,000 ounces of gold and 814,000 ounces of silver.

Potential Project Impacts

The mine is currently in the process of planning for final reclamation and closure. Mining is scheduled to end during the second half of 2002. Processing (crushing and stacking) of a low grade stockpile ore is slated for completion by the first quarter of 2003. Leaching of ore and solution recirculation will continue for an estimated three years during which fresh water additions will be discontinued to reduce the total volume of solution in the spent ore heaps. The remaining solution will be processed through a carbon plant and land applied.

Recontouring of the spent ore heaps should begin at the end of year 2004, with final reclamation following initial pad drain-down occurring over a period of two years. During this time, remaining portions of the waste rock storage areas, roads and unnecessary facilities will be reclaimed and/or removed.

Since the mine facilities are located on both state and federal lands, Rawhide has submitted a preliminary mine reclamation and closure plan to the State of Nevada, Department of Environmental Protection and to the Federal Bureau of Land Management. The mine is proceeding on the assumption that an Environmental Assessment will be required to address changes in the Plan of Operation and any potential impacts related to closure activities.

Rawhide is undertaking a comprehensive testing program to support the planned reclamation and closure activities to ensure protection of the environment. The mine has drilled to depths of 2,000 feet without encountering ground water. Management options for long-term solution drain-down are included in the mine's closure plan and will be addressed in the Environmental Assessment.

Denton-Rawhide Mine Location Map showing the main communities surrounding Rawhide and the approximate number of employees living in each community. Local communities include Fallon, Schurz, Hawthorne, Yerington, and Gabbs. The closest town to the mine site is the Paiute/Shoshone tribal community of Schurz, which is approximately 30 miles away.

Communities plans are common to all Kennecott Minerals Company operations and are based on three basic principles:

• Mutual Respect - Mutual respect is an essential ingredient to building a lasting and beneficial relationship between the mine and its host communities. It requires continuing and effective two-way communications and realistic expectations from both the mine and communities.
• Active Partnership - Active partnership defines the way the mine works with the host communities. It seeks mutual commitment and reciprocity based on trust and candor, such that agreed upon objectives are reached.
• Long-Term Commitment - Long-term commitment to the local communities is important and extends throughout the mine's life and beyond, where possible addressing the social and economic well-being of the communities.

In an effort to raise the visibility of the mine's activities with the local communities, a rolling Five-Year Communities Plan is utilized. This plan is reviewed and revised annually to formally address the ever-changing community issues that arise during operations and through the transition to closure. The success of the mine's community relations will be judged on the establishment of effective working relationships and consultations with interested parties, such as local governments and Non-Governmental Organizations. Recognizing that health, safety and environmental issues have a significant impact on the local community perceptions, community relations planning at the Rawhide Mine is integrated with the company's health, safety and environmental policies.

Year 2000 Activities

During 2000, the major accomplishments under the Rawhide Mine's Communities Relations Plan included:

• Continued support of the school districts in Mineral, Churchill, and Lyon counties with Science Screen Reports, a video-based educational supplement to junior and senior high school science curriculums. This educational program helped motivate students in the study of natural and physical sciences and to expand their studies.
• Continued to conduct mine tours to local area schools and provided technical experts to the local school districts.
• Provided assistance in resources and personnel for two Nevada Mining Association Minerals Education Workshops held during the year. Approximately 70 teachers toured the mine prior to the workshop held July 20 and 21.
• Donated over 300 copies of the book "Facts Not Fear: A Parent's Guide to Teaching Children About the Environment" to educators through the Nevada Mining Association Minerals Education Workshops.
• Continued to develop a positive relationship with the Walker River Paiute Tribe. The Rawhide Systems Analyst visited the Walker River Paiute Tribal offices once a month to assist in resolving computer-related issues.
• Continued higher education support through the Kennecott Minerals Scholarship Program at the University of Nevada-Reno.
• The Rawhide General Manager represented the mine at meetings of the Churchill Economic Development Authority and as a member of the Mayor's Millennium Council.
• Rawhide Emergency Response Team members participated in a mock disaster drill. The event was a joint effort by Churchill County and the Fallon Naval Air Station to enhance coordination of emergency services in the County.

Rawhide's long-term strategy with respect to community relations included a shift to focus more on issues within the host communities located outside the Fallon area, to include the communities of Hawthorne and Schurz.

Rawhide encouraged and supported volunteer activities by employees in their local communities. Whenever possible, employees were allowed flexibility in work schedules to facilitate these activities. Rawhide recognizes that its employees are the most important assets in developing and maintaining positive and mutually beneficial relationships with host communities.

Examples of community volunteer activities in which Rawhide employees were involved during 2000 included:

• Coaching youth softball in the Fallon area by the Mobile Maintenance Supervisor and the Senior HSEQ Technician.
• Teaching classes at the local community college by the Senior Project Engineer.
• Conducting presentations to schoolchildren by the Projects Manager and the Mine Administrative Clerk prior to mine tours.
• Providing hazardous material response training to local volunteer fire departments by the Senior HSEQ Technician.
• Providing leadership to young boys as a Boy Scout Leader by the Electrical Supervisor.

Employee community involvement, in addition to the company's community relations program, is a practice that Rawhide continues to encourage, support and recognize.

Toxic Release Inventory Reporting

The expansion of the TRI reporting requirements to the metals mining industry presented a unique opportunity for the Denton-Rawhide Mine to build relationships with employees, the local communities and media. Rawhide coordinated its efforts with Kennecott Minerals Company to develop consistent procedures for TRI reporting requirements. TRI data for the Denton-Rawhide Mine for activities covering 1998 and 1999 are available on KMC's web site: www.kennecottminerals.com.

Rawhide realizes that the contents of the TRI report are important to the local communities and general public. The mine is committed to the safe and responsible use, management and disposal of TRI substances.

Health, Safety and Environmental Targets

Rawhide fell short of achieving its safety goal of zero injuries. The mine did achieve its target of reducing the first aid incidence rate by 25% below 1999 levels:

Safety Performance: Year 2000

2001 Safety Target:
- No more than 2 reportable injuries.

Rawhide achieved its occupational health goal of zero occupational diseases.

For 2001, the mine will continue to comply with the new MSHA Noise Exposure regulations that became effective in October 2000. Additional noise exposure monitoring will be conducted throughout the mine as warranted.

Annual health maintenance testing of all employees will also continue, including audiometric and spirometry testing. EKG tests are part of the annual health maintenance program for selected portions of the workforce. Health testing for lead, silver and mercury levels will continue for higher risk areas in the refinery. Industrial hygiene monitoring will continue on a scheduled basis for all areas of the mine. Rawhide's Occupational Health Strategy will be updated in 2001 and will address newly drafted internal standards.

Environmental Performance:

Continue the record of full compliance with operating and reclamation plans contained in both the Mine Plan of Operations and Exploration Plan of Operations. Rawhide will continue to monitor and revise these plans as appropriate to address new or modified regulations that may influence mine operations.

Key Health, Safety and Environmental Issues

Key HSE Issues:

- Mine closure planning and implementation.

- Reduce worker exposures to silver fumes and dust in the refinery.

- Revise Safety and Health Standards.

- Implement a Health, Safety and Environmental Manage-ment System consistent with the ISO 14001 EMS standard.

What We Said We Would Do:

• Conduct meetings with regulatory agencies to finalize reclamation and closure issues. Update the mine closure plan to reflect the most current knowledge of the mine plan.
• Initiate test work necessary to support the final reclamation and closure plan.
• Implement engineering upgrades and workplace modifications in the refinery to reduce employee exposures to silver fumes and dust. Conduct industrial hygiene monitoring to test the efficiency of various upgrades or changes as they are implemented.
• Continue partnership with NIOSH to develop analytical methods for silver monitoring in the refinery.
• Continue sponsorship of area teachers at National Mining Association workshops.
• Conduct audits to ensure HSE compliance.
• Continue to address community issues in Fallon, Hawthorne and Schurz.

What We Did Do:

• A comprehensive planning process was initiated in 2000 to identify and evaluate various approaches to the final reclamation and closure of the mine and process facilities. Various portions of the closure plan were modified to reflect permanent reclamation and closure. Closure cost calculations were revised to reflect the most recent information available. Meetings were held with regulatory agencies and a preliminary closure plan was submitted.
• To address closure activities and potential environmental issues, test work was initiated by an outside environmental and engineering firm with support from an outside laboratory.
• Numerous engineering upgrades and workplace modifications have been completed in the refinery to reduce worker exposures to silver fumes and dust. A new and improved baghouse was installed. Industrial hygiene monitoring was conducted to test the effectiveness of the upgrades and changes to resolve the outstanding silver exposure issue with the Mine Safety and Health Administration using the existing National Institute of Occupational Health's analytical methods.
• Conducted an internal safety audit and an external environmental audit in addition to a detailed risk review of cyanide management practices.
• Continued to support various social and economic programs within the local communities of Fallon, Hawthorne and Schurz.
• Contributed time and money to the NMA Minerals Education Workshop.

HSE Management Practices

A principal element of the Denton-Rawhide Mine's HSE Policy is to ensure the operation remains in compliance with existing regulations. This was verified through internal and external audits and inspections:

Agency Inspections

• Nevada Division of Environmental Protection Bureau of Air Quality: Two inspections per year.
• Nevada Bureau of Mining Regulation and Reclamation: Two inspections per year.
• Nevada Bureau of Waste Management: One inspection per year.
• Nevada Division of Wildlife: Two inspections per year.
• U.S. Bureau of Land Management: Two inspections per year.
• Mine Safety and Health Administration: Two inspections per year.

Audits and Reviews

Audits and strategic risk reviews have been conducted by both internal (Rio Tinto and Kennecott Minerals Company) and external personnel (outside consultants and other mining company personnel). Rawhide plans to conduct an annual HSE audit utilizing a combination of internal and external parties.

Internal Inspections:

• General Manager: Six inspections/audits per year.
• Area Manager: One monthly inspection.
• Supervisor: Two inspections per day.
• Leak Detection Monitoring: One inspection per day.

Emergency Planning

Rawhide has a formal Emergency Response Plan that is updated as conditions or information change, including an active Emergency Response Team consisting of mine employees trained and certified as First Responders and/or Emergency Medical Technicians. The Emergency Response Team meets twice a month for training.

Compliance

The only issue of non-compliance at Rawhide is the 1999 outstanding MSHA citation for exceeding the silver fume and dust standard in the refinery. During 2000, there were no issues of environmental non-compliance and no reportable spills to the environment.

HSE Recognition

In 2000, the Denton-Rawhide Mine was recognized in the Open Pit Mine category by the U.S. Department of Labor's Sentinels of Safety Program for its outstanding safety record in 1999, having worked 248,509 employee-hours without a lost workday injury.

Rawhide also received first place in the Nevada Mining Association's Medium Surface Mine category for a 0.0 reportable incident rate after 429,134 employee-hours worked.

Year 2001 Outlook

Rawhide will continue to meet with State of Nevada and Bureau of Land Management personnel during 2001 to finalize closure planning issues to the extent feasible prior to submitting a permanent reclamation and closure plan at the end of the year. The mine will continue its test work necessary to support individual components of the plan.

Worker exposure levels to silver fumes and dust in the refinery will continue to be monitored. As appropriate, meetings will be held with MSHA to arrive at a satisfactory operating plan for the refinery.

Contacts and Feedback

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