Hg Recoveries Pty Ltd A Member of the UNEP Global Mercury Partnership Partnership Areas: Mercury in Gold Mining, Mercury Supply and Storage, Mercury Air Transport and Fate, Mercury in Products.

Heavy Metal Specialists (ABN 87 144 752 885) (ACN 144 752 885)

Date: File:

20/8/2014 7688

Ms Kylie White - DSDBI Ms Rosemary Lester - DOH Mr Tony Robinson - VicEPA, Mr John Mitas - DSDBI Dear Responsible Regulators,

Mandalay Resources Costerfield (Vic) Earlier this week, lawyers acting for Mandalay Resources in the VCAT matters pertaining to the raising of the “Bombay” and “Brunswick” tailings dam embankments, provided a report by GHD to the objectors. This report is authored by a Mr David Machin from GHD. Mr Machin has in the past worked at the Mt Polley mine in Canada where there was a major tailings dam failure two weeks ago. As is usual, Mr Machin has only relied on data supplied to him by the proponent to form the basis of this report coupled with a one day site visit. For the first time, there is an admission in this document of the range of “production additives” used in the mines treatment plant, (viz. appendix B). The range of production additives includes: Magnaflock – Anionic Polyacrylamide; Lead Nitrate solution – a class 6 toxic, class 5.1 oxidising agent, soluble in water, is categorised as probably carcinogenic to humans by the IARC. Consequently, it must be handled and stored with the appropriate safety precautions to prevent inhalation, ingestion and skin contact. Due to its hazardous nature, the limited applications of lead(II) nitrate are under constant scrutiny. Lead Nitrate is suspected of causing neurological impairment in children and may cause harm to the unborn child, and a possible risk of infertility; Alkyl Aryl Ester - irritant to nose throat etc, explosive in confined spaces; Sodium dibutyl dithiophosphate – Organophosphate – almost identical to many globally banned pesticides, Class 8 Dangerous goods, Hazchem 2R – decomposes to sodium hydroxide or hydrogen sulphide, pH of 13; Xanthate solution (Potassium Amyl Xanthate) contact with acid yields toxic gas, Corrosive class 8, Toxic class 6, danger of serious damage to health by prolonged exposure via inhalation. So, it is asked, just how much of each of these chemicals turns up in the tailings ponds, and how much escapes into the air when the ponds dry out? The Machin report indicates that the Bombay Tailings pit is going to be allowed to dry out for two years prior to construction of the wall raise – where is the associated risk management plan for toxic offgassing? How do we know that these toxic chemicals do not and or did not get into the so called “groundwater” that has been dumped at the Heathcote pit or that they will eventually end up in Splitters Creek evaporation terraces and/or the local environment via mist evaporation? As Mr Machin has correctly identified, the Brunswick Tailings Storage Facility is not fully lined and in fact is probably not lined at all, and may well be open to the subsurface aquifers and naturally occurring fracture and fault planes. Registered Office: Level 13, 350 Collins Street, Melbourne ,Victoria Australia 30000 Landline + 61 3 56 22 00 40 Mobile 0448 500 222 Page 1 Document 7688 Rev 2. 20/8/2014

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Yesterday, the Mine released the plans of the proposed construction of the roof over the crusher which is supposedly going to provide a solution to the present dust problem from the crusher. These igloo-type structures were primarily designed to provide cover for equipment repairs in the outback so that the workers could work in the shade – they were never designed as a cover for a crusher and, of more importance, they were never designed to cut down or eliminate dust generated from the crushing process! As the dust testing indicates high levels of silica emissions from the crusher, the crusher would have to be fully enclosed in just the same way that a granite crusher is. This enclosure should also be fitted with a bag house and operated at negative pressure and the crusher staff would be required to wear protective PPE because of the silica component generated in the dust when crushing this ore. The proposed igloo will just create a wind tunnel effect and in all probability will aid in mobilising dust from the crusher and not lessen this dust. I suspect that this igloo was in fact the lowest cost option to make it look like there was a legitimate solution being proposed to mitigate this issue. So now we have another set of toxic materials identified on the mine site and by now also probably in the Heathcote pit. This continued failure of mandatory regulatory supervision just demonstrates the problems with not following the proper procedures and in not developing a risk matrix with all known data before you set the hand picked chosen consultant loose on a very short leash. The Costerfield Community has been advised by the Health Department that there are no health risks to this community from mine operations based solely on very limited antimony testing and the reality is that this is not the case. How many residents have inhaled respirable silica from the mine? How many residents have been impacted by Lead Nitrate and or Sodium dibutyl dithiophosphate – both of which are used in mine processes? Not to mention antimony, arsenic, cadmium and lead or other heavy metals already identified as present at elevated levels and already in the wider community food chain via the fat lambs raised in the area? Need I remind you that as late as 2005 the approved variation to Workplan for Min 4644 on page 43, identified the levels of heavy metals in the waste rock – waste rock that will be used for the height extensions on the two tailings dams – antimony 50 mg/kg, arsenic 25 mg/kg, cadmium 1 mg/kg, chromium 45 mg/kg, lead 2 mg/kg. It is wise to remember that a solid cubic meter of this rock has a surface area of 6 m2 and when it is broken into 100 mm minus size by excavation it has a surface area of at least 600m2. So probably better than 100,000 tons of 100mm minus broken rock is going to be used for wall height extensions and is sitting in the weather oxidising its heavy metals and dumping contaminated water into the bund drains. As one of the reporters on the Canadian Mt Polley tailings dam disaster said, “We don’t need the fox and the watchdog interviewing each other to find out what happened to the chickens. We know what happened to the chickens. What we don’t know is why the watchdog failed to prevent it”. The residents have asked that you arrange for access to the mine site for myself and Mr Brown so the two tailings dams can be sampled; which would include the water, fines and slimes so they can then be tested for the presence of any toxic materials that might be present in these two tailings dams. Could Mr Mitas please advise a convenient date for this sampling to take place. One further point is that during the 7:30 Report on 15/08/2014, the Poisons Information Centre’s Dr Green from the Austin Hospital falsely implied that the sample containers used by the doctors who collected the original urine samples had “used incorrect, aka Sb contaminated bottles” during the entire urine sampling program! This is totally false and MUST be formally publically withdrawn by both Dr Green and the DoH since incorrect sample containers (viz., BD Vaccutainers Z No Additives) were substituted for the “doctors original uncontaminated specimen containers” by Dorevitch’s Melbourne Lab. The substituted BD Vaccutainers were contaminated by antimony from the plastic manufacturing process where Sb is used as catalyst. The original doctors specimen containers (yellow top plastic bottles) were not contaminated with Sb! As an important aside, antimony free sample containers have been available in South Australia (local manufacturer) prior to the commencement of the Costerfield Sb in Urine program! Has Dorevitch chosen to use the contaminated BD Vaccutainers just so it could “save money from lower airfreight charges by substituting the smaller (in size) contaminated BD Vaccutainers” prior to transporting these Registered Office: Level 13, 350 Collins Street, Melbourne ,Victoria Australia 30000 Landline + 61 3 56 22 00 40 Mobile 0448 500 222 Page 2 Document 7688 Rev 2. 20/8/2014

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samples to RPH in NSW? Had Dorevitch followed appropriate laboratory protocols it would have, prior to this fiasco, determined that BD Vaccutainers were in general, not suitable for heavy metal testing and particularly, not suitable for Sb testing! There are a number of serious breaches to Dorevitche’s NATA Certified Lab practices which are to be raised with NATA, as a result of Dorevitch substituting these unsuitable sample containers including, but not limited to loss of Chain of Custody for the original samples, failure by Dorevitch laboratory practices to have used sample containers that it had not previously determined were “fit for purpose”, prior to Dorevitch substituting the contaminated sample bottles! It is imperative that Dorevitch urgently carries out and pays for re-testing of all the people who had their urine samples subject to container swaps. Whilst this is being done, Dorevitch can also collect and pay for each individual to have their blood tested for the other heavy metals that turned up in the sheep (As, Cd, Pb). I am sure that I do not have to remind you that all the urine samples taken so far remain the joint property of the urine providers and Medicare. DOH has no legal authority to ask that these samples be destroyed or to try restrict the rights of RPA to disclose generic data on the number of samples or the range of readings in these samples. Additionally, DOH is further advised that Dorevitch cannot lawfully prevent any enquiries as to why these urine samples were sub sampled from their original containers into Antimony contaminated containers. The whole Dorevitch process does not pass the “honesty smell test”, the very fact that the labour cost of splitting the samples would be greater than the airfreight savings by at least an order of magnitude. A full and proper enquiry may find other reasons for the container switch such as, but not limited to, regulatory interference with the process so that another lab could check the samples. I would respectfully suggest that it might be appropriate for DoH to self report this matter to IBAC so as to demonstrate transparency in this matter. I look forward to your very prompt reply. Sincerely

Andrew G. Helps Managing Director. CC. Ian Brown Technical Director Hg Recoveries Pty Ltd.

Registered Office: Level 13, 350 Collins Street, Melbourne ,Victoria Australia 30000 Landline + 61 3 56 22 00 40 Mobile 0448 500 222 Page 3 Document 7688 Rev 2. 20/8/2014