TasekoVIA EMAIL

Livain MichaudPanel ManagerCanadian Environmental Assessment Agency160 Elgin StreetOttawa, ONK1A 0H3

Dear Mr. Michaud:

Tascko IVlines Limited15th Floor, 1040 West Georgia St.Vancouver, BC V6E 4Wrasekornines. corn

July 11,2013

In response to your email of June 25, 2013 requesting responses to questions ofclarification from Dr. Leslie Smith, please find attached letter reports from both KnightPiesold Ltd. and BGC Engineering Inc.

Sincerely,

TASEKO MINES LIMITED

Katherine GizikoffDirector, Environment & Governmental Affairs

cc: Brian Battison, VP Corporate Affairs Taseko

N:\BGC\Projects\0499 Knight Piesold\002 - New Prosperity\70 NRCan Meeting and Follow Up\Leslie_Smith_Review_Response\Panel_Expert_Response_BGC_8July2013.docx

BGC ENGINEERING INC.

R2.9  2013‐

02‐15

Suite 800 - 1045 Howe Street, Vancouver, British Columbia, Canada. V6Z 2A9 Telephone (604) 684-5900 Fax (604) 684-5909

BGC Project Memorandum

To: Knight Piesold Ltd. Doc. No.: 0499-002-70

Attention: Greg Smyth cc:

From: Katherine Johnston, Trevor Crozier Date: July 8, 2013

Subject: Response to Panel Expert Questions of Clarification

Project No.: 0499-002-60

1.0 INTRODUCTION

Taseko Mines Ltd. (TML) has prepared an Environmental Impact Statement (EIS) for the proposed New Prosperity Gold-Copper project located approximately 125 km southwest of Williams Lake in west-central British Columbia. The EIS was submitted to the Canadian Environmental Assessment Agency (CEAA) in September 2012.

As part of this work, BGC Engineering Inc. (BGC) was retained by Knight Piésold Ltd. (KP) to complete a numerical hydrogeologic evaluation of the site (BGC 2012a) and a baseline groundwater hydrology assessment (BGC 2012b) for the purposes of supporting the Environmental Assessment (EA) studies.

BGC has prepared this memorandum to address questions of clarification from Dr. Smith, independent expert retained by the panel. The questions were provided to TML by the CEAA panel in email format on June 25, 2013.

2.0 RESPONSE TO QUESTIONS

Questions and responses are provided below in numerical order. For clarity, the questions are included in bold italic text followed by the BGC response to the question.

1. Please clarify the calibration process used for the groundwater flow model. The values listed in Table 1 are based on the results from hydraulic tests in the field, but these seem to be the same values used following calibration of the model. What parameter adjustments were made during calibration?

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Hydraulic conductivity and recharge values were adjusted during model calibration. Table 1 in the numerical modelling report (BGC 2012a) summarizes the post-calibration values. For comparison, Table C7 in the baseline groundwater hydrology report (BGC 2012b), summarizes the geometric mean of field hydraulic test results. During the calibration process, the model hydraulic conductivities were adjusted within these observed ranges to achieve the Table 1 (BGC 2012a) values. Total streamflows measured at station H4 (KP 2012a) were also checked against the calibrated model results for comparison, but were not considered to be a primary calibration target since they are driven primarily by the surface water input into the SFR package (Prudic et. al. 2004).

2. The main embankment length is 2860 m, but the embankment is shown to be approximately 3800 m on the figures in the report. Please clarify this difference. BGC would like clarification on where the 2860 m main embankment length is from and for which lifetime or mine Year footprint of the TSF. The TSF footprint shown on the numerical modeling report figures is for Year 20 (i.e. life of mine or ultimate extent) and includes a 3800 m long main embankment as shown in Figure 1.2 of the TSF Design Report (KP 2012b). Although the TSF footprint shown on the model figures is for Year 20, the TSF was implemented in stages as described in our response to Question #3 below.

3. Please provide a physical interpretation of the model-predicted variation in the seepage flux through the mine life. In particular: (a) the reason for the high oscillations in years -2 to +5, and (b) the reason the seepage peaks in years 2 and 3, and then declines to a stable range in years 6 – 17. The TSF boundary condition was implemented in the model based on the TSF filling schedule provided by the KP Water Balance, which included an estimate for the volume and elevation of tailings and potentially acid generating (PAG) waste rock placed within the facility and the pond elevation throughout the mine life. TSF footprints were provided by KP for mine years 1, 3, 16 and year 20 (ultimate), and the PAG, tailings and pond elevations were built up within these footprints on an annual basis according to basin topography and the filling curve. From year -2 to year 5, the facility footprint increases very quickly based on the 1 and 3 year footprints and the rapid growth of the filling curve (from years -2 to 5, the pond height increases from 1493 to 1561 masl). After about Year 6, the efficiency of the tailings storage basin increases such that between years 6 and 20 the growth in footprint area is not very large. The PAG

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footprint is fully built by year 16. Between years 6 and 20, the pond height increases from 1561 to 1589 masl such that large oscillations in facility flows are not as evident as they are in earlier stages of the mine life. The increase in the efficiency of the TSF combined with the regional groundwater table rise in response to the TSF filling results in stable flows to and from the TSF in the later stages of mine development.

4. The report indicates that most of the seepage originates from the PAG zone (page 12, value of 70% given). Given this prediction, I would like to understand why the seepage flux is not sensitive to a reduction in the PAG zone hydraulic conductivity by two orders of magnitude (sensitivity run A1.18). The PAG footprint takes up about 50% of the facility and is primarily underlain by areas of thinner (5 m thickness) glacial till, as shown in Figure 7 (BGC 2012a). For sensitivity run A1.18, with the PAG zone conductance reduced by a factor of 100 (equivalent material K = 1.0 x 10-6 m/s), flow out of the facility is still being regulated by the hydraulic conductivity of the underlying glacial till, such that a significant reduction in seepage is not observed. The equivalent PAG material K (represented in the model as riverbed conductance) would have to be lowered below that of the glacial till (less than 5.0 x 10-8 m/s) before significant reductions in seepage out of the facility would be realized.

5. I did not develop a clear understanding of the relationship between the

calculated water table elevation and the TSF pond level. For example, the year 17 water table beneath the footprint of the TSF (Figure 40) is ~ 1550 m, and the pond is at 1584 m. Does this indicate a 35 m unsaturated zone beneath the TSF at full build-out? For simplicity, Figure 40 (BGC 2012a) was originally produced with 50 m contours. For clarification, Figure 40 has been reproduced and is included here with a 20 m contour interval. This shows the hydraulic head beneath a large portion TSF is higher than 1580 m. This is even more pronounced at Year 100, and Figure 42 (BGC 2012a) with a 20 m contour interval is also reproduced and included here for comparison.

6. What is meant by “model without dispersion”? How was this implemented in

the MODFLOW transport model? For the model runs without dispersion, the dispersion package in MT3D was not included, and dispersivity was neither assigned as a model property nor accounted for in the transport simulations. For the sensitivity runs with dispersion, the

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dispersivity was assigned with values of 25 m (horizontal), 2.5 m (transverse horizontal) and 1 m (vertical) for the 25 x 25 m grid cells.

7. I do not understand why in the footprint of the TSF, if maximum concentrations are plotted, all the footprint is not assigned a concentration of 1.0 (eg. Figure 40). The model predicts groundwater discharge into the facility driven by the adjacent uplands (e.g. along the northeast valley wall) and as such, the assigned concentration of 1.0 is diluted by the inflowing groundwater.

8. Please clarify the calculated vertical extent of the solute plume. How far does it move down into the flood basalts? In the model the flood basalts are represented by model Layers 2-3 which extend from below the glacial till (5 – 30 m thickness) to 100 m below ground. For the predicted solute concentration at the end of Year 100 (shown in Figure 42), the maximum solute concentrations are predicted in Layer 3 which represents 50 – 100 m below ground. These results are consistent with particle tracking results from the larger scale model.

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3.0 CLOSURE

BGC Engineering Inc. (BGC) prepared this document for the account of Knight Piesold Ltd. The material in it reflects the judgment of BGC staff in light of the information available to BGC at the time of document preparation. Any use which a third party makes of this document or any reliance on decisions to be based on it is the responsibility of such third parties. BGC accepts no responsibility for damages, if any, suffered by any third party as a result of decisions made or actions based on this document.

As a mutual protection to our client, the public, and ourselves, all documents and drawings are submitted for the confidential information of our client for a specific project. Authorization for any use and/or publication of this document or any data, statements, conclusions or abstracts from or regarding our documents and drawings, through any form of print or electronic media, including without limitation, posting or reproduction of same on any website, is reserved pending BGC’s written approval. If this document is issued in an electronic format, an original paper copy is on file at BGC and that copy is the primary reference with precedence over any electronic copy of the document, or any extracts from our documents published by others.

Yours sincerely,

BGC ENGINEERING INC. per:

ORIGINAL SIGNED BY

Katherine Johnston, M.Sc., P.Eng., P.Geo. Hydrogeological Engineer

Reviewed by:

ORIGINAL SIGNED BY

Trevor Crozier, M.Eng., P.Eng. Senior Hydrogeological Engineer

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REFERENCES

BGC Engineering Inc. (BGC 2012a). New Prosperity Gold-Copper Project – Numerical Hydrogeologic Analysis. Report prepared for Taseko Mines Limited c/o Knight Piesold Ltd. August 2012.

BGC Engineering Inc. (BGC 2012b). New Prosperity Gold-Copper Project – Baseline Groundwater Hydrology Assessment. Report prepared for Taseko Mines Limited c/o Knight Piesold Ltd. August 2012.

Knight Piesold Ltd. (KP 2012a). Baseline Watershed Model for New Prosperity Project. Report prepared for Taseko Mines Limited. August 2012.

Knight Piesold Ltd. (KP 2012b). Report on Preliminary Design of the Tailings Storage Facility. Report prepared for Taseko Mines Limited. August 2012.

Prudic, DE, LF Konikow, and ER Banta, 2004. A New Streamflow-Routing (SFR1) Package to Simulate Stream-Aquifer Interaction with Modflow-2000. U.S. Geological Survey Open File Report 2004-1042, 104 p.

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www.kn igh tp ieso ld .com

Knight Piésold Ltd. | Suite 1400 – 750 West Pender St, Vancouver, BC Canada V6C 2T8 | p. +1.604.685.0543 f. +1.604.685.0147

July 9, 2013

Mr. Scott Jones Vice President - Engineering Taseko Mines Limited

Dear Scott,

Re: Response to Questions of Clarification from Dr. Leslie Smith (CEAR #579)

On June 25, 2013, the Federal Review Panel for the New Prosperity Gold-Copper Project requested Taseko Mines Limited to respond to inquiries from independent experts retained by the Panel. The following letter contains responses to questions of clarifications from Dr. Leslie Smith pertaining to the Knight Piésold Ltd. (KPL) report entitled “Report on Preliminary Design of the Tailings Storage Facility” (VA101-266/27-3); Appendix 2.2.4-D of the EIS/Application) as well as the PowerPoint presentation entitled “Hydrogeological Modelling, NRCan Meeting, April 25, 2013” (CEAR #489).

Question B-1:

“I have not been able to locate a conceptual design drawing for the seepage collection ponds located beyond the main and south embankments. Is one available?”

Response:

Conceptual design locations of the seepage collection ponds located downstream of the Main and South embankments are shown on Figure 1.2, in Appendix 2.7.2.4A-B of the EIS/Application. A summary of the design requirements for the seepage collection ponds is included in the KPL report “Water Management Plan” (VA101-266/27-2); Appendix 2.7.2.4A-B of the EIS/Application. The relevant section on page 15 is reproduced below for a complete response:

3.3.4 Seepage Collection and Recycle Ponds

Seepage collection and recycle ponds will be constructed prior to construction of the TSF embankments to prevent discharge of surface water runoff during construction. These ponds will be situated downstream of the TSF embankments at topographic low points along the embankment toe and will collect surface runoff from the embankments and seepage through the embankments.

Seepage collection and recycle ponds will be designed to provide seven days of storage from seepage inflows, in addition to containment of runoff from the 1 in 200 year 24 hour precipitation event, with a 1 m freeboard allowance. The pumping systems will be designed to restore the pond level to normal operating conditions within 21 days.

Question B-2:

“As stated in the EIS and in the KP 2D seepage analysis report (page B-4), four seepage collection ponds located downstream of the embankments will collect approximately 50% of the seepage losses through the foundations. Also, the groundwater depressurization wells combined with the seepage recovery ponds are

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reported to capture 60% of the lost seepage from the main embankment. My interpretation is that in the KP report, these are given as assumptions, not calculations. Is this correct?”

Response:

The seepage pond collection efficiency of 50% is an assumed value for shallow foundation capture. The assumed 50% seepage collection efficiency is supported by the results of the KPL 2D seepage model where seepage flux lines cut at a number of locations in the 2D section were used to estimate the rate at which seepage may be recovered. The resulting value is that 50% of seepage in the near surface foundation will be recovered to a seepage collection pond. The Figure 1 shows a simplified diagrammatic breakdown of overall seepage flows and the collection efficiencies applied.

Figure 1 Simplified Breakdown of Seepage Flow and Collection Efficiency

For clarity of discussion there are two lines of wells at the Tailings Storage Facility: the up gradient line of wells are depressurisation wells; the down gradient line of wells are groundwater pump back wells. The depressurisation wells are located at the toe of the Stage 1 Tailings Storage Facility embankment, these are primarily a dam safety feature and any seepage recovery effects are an additional benefit, no specific seepage capture rate has been applied to the depressurisation wells and their effect will be in addition to the 50% seepage collection efficiency for shallow foundation seepage capture as shown on Figure 1. The down gradient line of wells are the groundwater pump back wells, these are located downstream of the seepage collection ponds. The groundwater pump back wells are intended to intercept water passing the seepage collection ponds and have a calculated recovery efficiency of 60%. The recovery efficiency is an assumed factor used to account for flow system heterogeneity. In practice, during the initial implementation of the groundwater seepage recovery system (if it is determine that one is required) the installation and testing of seepage pumpback wells would continue until an acceptable level of seepage interception is achieved. The measure of "acceptable level of interception" would be driven by down-gradient water quality in the receiving environment, and ideally would be risk based.

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Question B-3:

“I would like to have confirmed the basis for each number in the flow sheet, and whether it is based on a model calculation, and if so, which model, or is it an assumption based on flow splitting.”

Response:

Tables 1 to 3 below highlight the sources of seepage values included in the EIS Appendices (Appendix 2.7.2.4.A-C and Appendix 2.2.4-D) and in the PowerPoint Presentation entitled “Hydrogeological Modelling from the NRCAN meeting in April 2013” (CEAR # 489).

Table 1 – Seepage from TSF Embankments

Location Seepage Rate

(l/sec) Source of Seepage Rate

West Embankment

3 2-D model from KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D).

Main Embankment

28.1 2-D model from KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D).

South Embankment

23.9 2-D model from KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D).

TSF Basin 15 3D model from BGC report entitled “Numerical Hydrogeological Analysis” (Appendix 2.7.2.4A-C).

The values for embankment seepage were calculated in a Seep/W model for inclusion in the KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D). The TSF Basin seepage was calculated in the BGC report entitled “Numerical Hydrogeological Analysis” (Appendix 2.7.2.4A-C).

Table 2 – Recovered Seepage

Location Seepage Rate

(l/sec) Source of Seepage Rate

Main Embankment

pond 18

Calculations and assumptions from KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D). Seepage collection for Main Embankment is actually to be split between two collection ponds. Pond 1 has an inflow rate of 11.57 l/sec (50% of the total seepage from the Main Embankment (18.25 l/sec), and 25% of the determined “unrecoverable” seepage (9.75 l/sec)). Pond two has similar inflows to Pond 1, with the addition of the inflows from the Main Embankment Groundwater Wells (3.6 l/sec), resulting in total inflows of 13.17 l/sec.

South Embankment

Pond 20

Calculations and assumptions from KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D). This number comprises of total seepage through the South Embankment (15.54 l/sec) and 50% of the “unrecoverable” seepage (50% of 8.37 l/sec) for the south dam, giving a total inflow to the South Embankment Seepage Pond of approx. 19.8 l/sec. The proportion of recoverable to unrecoverable seepage applied to the South Embankment is that which was calculated for the Main Embankment.

Main Embankment Groundwater

Wells

3.6

This number is based on the 60% recovery rate of the groundwater wells as estimated by BGC. The total seepage inflow to the wells is derived from the 50% of the “unrecoverable” seepage (9.75 l/sec) from the Main Embankment (KP assumption) and 7% of TSF Basin seepage (1.05 l/sec) based on the BGC 3D model.

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Location Seepage Rate

(l/sec) Source of Seepage Rate

Unrecoverable

Main Embankment

Seepage

4.9 This number is 50% of the “unrecoverable” seepage from the Main Embankment (9.75 l/sec) that is captured between the two Main Embankment collection ponds.

West Embankment

pond 2.4

Calculations and assumptions from KPL report entitled “Report on Preliminary Design of the Tailings Storage Facility” (Appendix 2.2.4-D). This number comprises of 65% total seepage through West Embankment (3 l/sec) and 50% of the “unrecoverable” seepage (35% of 3 l/sec) for the west dam, giving a total inflow to the West Embankment Seepage Pond of approx. 2.48 l/sec. The proportion of recoverable to unrecoverable seepage applied to the South Embankment is that which was calculated for the Main Embankment.

Table 3 – Seepage Loss (Unrecovered Seepage)

Location Seepage Rate

(l/sec) Source of Seepage Rate

Seepage Loss to Fish Lake

2.4

This number is derived from the total seepage loss from the Main Embankment and the TSF Basin seepage. The seepage includes sources feeding into Tributary 1 and Upper Fish Creek which report to Fish Lake. The percentages of Basin Seepage reporting to the Fish Lake tributaries has been determined by BGC (see Table 2).

Seepage Loss to Wasp Lake

4.5

This number is derived to calculate the total seepage reporting to Wasp Lake. The total seepage inflow comprises of 50% of the “unrecoverable” seepage (8.37 l/sec) from the South Embankment (KP seepage value discussed in response to question B-2) and 2% of TSF Basin seepage (1.05 l/sec) based on the BGC 3D Numerical Groundwater model.

Seepage Loss to Big Onion

Lake 0.7

This number is derived to calculate the total seepage reporting to Big Onion Lake. The total seepage inflow comprises of 50% of the “unrecoverable” seepage (1.05 l/sec) from the West Embankment (KP seepage value discussed in response to question B-2) and 1% of TSF Basin seepage (1.05 l/sec) based on the BGC 3D Numerical Groundwater model.

Seepage Loss to Deep

Groundwater 13.5

The distribution of basin seepage has been determined by BGC based on the 3D model (see Table 2).

Unrecovered seepage loss was determined using a combination of informed assumptions from the KPL 2D seepage modeling to develop flow diagrams for near surface seepage, and calculations on Basin Seepage by BGC.

The assumption made by KPL for near surface seepage is that all unrecovered seepage from the embankments contributed to one of Fish Lake, Wasp Lake or Big Onion Lake. The distribution of seepage from the TSF Basin to the Fish Lake tributaries, Wasp Lake and Big Onion Lake, and to Deep Groundwater was based on the 3D groundwater flow model by BGC.