Highbank’s Swamp Point North Aggregate Project NoW Application

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Information about Highbank’s Swamp Point North Aggregate Project NoW Application
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Published on February 28, 2014

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Highbank’s Swamp Point North Aggregate Project Notice of Work Application

Highbank Resources Ltd. Swamp Point North Aggregate Project Notice of Work Application October 29, 2013 SUITE 205 - 750 WEST PENDER STREET, VANCOUVER, BRITISH COLUMBIA, CANADA V6C 1G8 Telephone (1) (604) 647 6463 Fax (1) (604) 647 6455

Page Table of Contents 1.0 EXECUTIVE SUMMARY ...........................................................................................1 2.0 INTRODUCTION .........................................................................................................2 3.0 LAND USE.....................................................................................................................3 4.0 CULTURAL HERITAGE RESOURCES AND FIRST NATIONS ENGAGEMENT ...........................................................................................................3 4.1 ARCHAEOLOGICAL OVERVIEW ASSESSMENT ...............................................3 4.2 FIRST NATION ENGAGEMENT .............................................................................3 5.0 BARGE LANDING AND FORESHORE DEVELOPMENT...................................4 5.1 BARGE LOAD-OUT .................................................................................................4 5.2 CONSTRUCTION AND OPERATIONS EQUIPMENT AND SUPPLIES ACCESS...................................................................................................5 5.3 FISHERIES AND OCEANS CANADA (DFO) AUTHORIZATION.......................5 5.4 NAVIGABLE WATERS ............................................................................................6 6.0 MINE PLAN ..................................................................................................................7 6.1 MINE CROSS-SECTIONS AND PLANS .................................................................7 6.2 DISTURBED AREA PROJECTIONS .......................................................................7 6.3 MINING ......................................................................................................................7 6.3.1 Site Roads and Ditches........................................................................................7 6.3.2 Clearing, Stripping and Soil Stockpiling ............................................................8 6.3.3 Production Methods and Development Plan .......................................................8 7.0 CRUSHING, SCREENING AND WASH PLANT (CSWP) .....................................9 8.0 WATER MANAGEMENT ........................................................................................10 8.1 WATER BALANCE.................................................................................................11 9.0 CAMP AND SAFETY PROVISIONS ......................................................................13 10.0 SURFACE EROSION PREVENTION AND SEDIMENT CONTROL ..................................................................................................................13 11.0 RECLAMATION PLAN ............................................................................................15 12.0 MANAGEMENT SYSTEM AND PLANS ...............................................................16 13.0 OTHER PERMIT REQUIREMENTS .....................................................................17 14.0 REFERENCES ............................................................................................................18 ii

Page List of Tables Table 11.1 Reclamation Cost Estimate .....................................................................................16 List of Figures Figure 2.1 Project Location .........................................................................................................2 Figure 5.1 Supply and Equipment Landing Ramp ......................................................................5 Figure 6.1 Typical Road and Ditch Cross-Section* ...................................................................8 Figure 8.1 Water Balance ..........................................................................................................12 Figure 10.1 Settling Pond at Barge Load-out ...........................................................................14 Figure 10.2 Erosion Control Features Map ...............................................................................15 Drawings Project Location DRAWING 1 Site Location and General Arrangement at Closure DRAWING 2 Sections A, B and C DRAWING 3 Sections D, E and LL DRAWING 4 Mine Workings Year 1 DRAWING 5 Mine Workings Year 2 DRAWING 6 Mine Workings Year 3 DRAWING 7 Mine Workings Year 4 DRAWING 8 Mine Workings Year 5 Process Plant General Arrangement Layout iii

Page Appendices APPENDIX 1 Archaeology Reconnaissance Study APPENDIX  2    Nisga’a  Correspondence APPENDIX 3 Management Plans EHSMS – Environmental, Health & Safety Management System A - Occupational Health and Safety Plan B – Mine Emergency Response Plan C – Sediment and Erosion Control Plan D – Hazardous Materials Handling Plan E – Fuel Management and Spill Contingency Plan F – Water Management Plan G – Waste Management Plan H – Reclamation Plan I – Road Design J – Mine Development Plan K – Traffic Plan L – Invasive Species Management Plan M – Barge Load-out and Marine Safety Plan N – Chance Find Procedure O – Wildlife Management Plan APPENDIX 4 Notice of Work Application Form iv

1.0 EXECUTIVE SUMMARY Highbank Resources Ltd. (Highbank) is proposing to develop the Swamp Point North Aggregate project located on the east side of the Portland Canal, approximately 65 km south of Stewart, BC. The small aggregate operation will seasonally produce 235,000 t/y over a five year mine life. A 200 t/h capacity crushing, screening and wash plant will be constructed to wash product, or product will be shipped out as run-of-mine without washing. The product will be transferred via an upgraded existing road to a conveyor and barge loadout facility at the existing barge landing site. The Project includes the following components: • • • • • • • • • • • • Sand and gravel quarry Crushing, screening, wash plant Wash plant settling ponds Topsoil and rejects stockpile Camp Generators Upgraded onsite road Laydown and product storage area Fuel storage tanks Conveyor Barge load-out facility Landing ramp This report provides the project design and development details and management plans to support this BC Mine Act, Notice of Work application. 1

2.0 INTRODUCTION The Swamp Point North Aggregate / Portland Canal Aggregates property is located in northwestern British Columbia ( on the east side of the Portland Canal, immediately north of Swamp Point and the mouth of Donahue Creek (see Figure 2.1 and Location Map in the drawings at the end of this report). The property consists of a 51.3 ha uplands Licence of Occupation (#636317, expiry March 5, 2017) and a 7 ha foreshore Licence of Occupation (#636316, expiry March 5, 2017). Drawing 1 (at the end of this document) shows the outline of the licence areas. Figure 2.1 Project Location This report provides all necessary details to support the Notice of Work Application in response to the deficiencies letter from the Ministry of Energy and Mines as noted in the March 15, 2013 report from Jill Pardoe, P.Geo, Sr. Inspector, Permitting. This current document provides updated designs and additional details that supersedes all previous project development designs. 2

The Swamp Point North Aggregate Project is described as a glacial outwash complex. Drilling, test pitting and computer modelling completed by Associated Geosciences in 2007 has shown the glacial outwash unit to range in thickness from 2 m to 90 m with an average thickness of about 37 m. Drill logs and sampling analyses indicate that this unit is composed primarily of gravel and sand, with minor amounts of silt, clay, and water-bearing layers. 3.0 LAND USE Highbank’s  Swamp   Point North Aggregate project is located north of Donahue Creek. The Swamp Point aggregates mine property, owned by Ascot Resources Ltd., was partially constructed in 2007 and 2008 and shipped approximately 145,000 t of aggregate by barge in 2007. The Ascot property is located at Swamp Point south of Donahue Creek. The Swamp Point North Aggregate project area was previously logged. Harvested logs were transported offsite using the small gravel road and barge landing. In 2005 and 2006, Portland Canal Aggregates Corporation completed an aggregate exploration program on the property. There have been no other industrial uses at the site. 4.0 4.1 CULTURAL HERITAGE RESOURCES AND FIRST NATIONS ENGAGEMENT ARCHAEOLOGICAL OVERVIEW ASSESSMENT An archaeological Preliminary Field Reconnaissance was completed in July 2013 by Kleanza Consulting Ltd. The July 26th site visit conducted by Stephanie Huddlestan (Kleanza, Field Director),   Colleen   Wesley   (Metlakatla   representative),   Anthony   Moore   (Nisga’a   representative), Gary Musil (Highbank Resources) and Jim Place (Highbank Resources). No archaeological materials, features or areas of archaeological potential were observed during the Preliminary Field Reconnaissance and the site was deemed to have low archaeological potential. The full report is included in Appendix 1. No further surveys or monitoring were recommended; however, a chance find procedure is required for the Licence of Occupation and is included in the management procedures in Appendix 3. 4.2 FIRST NATION ENGAGEMENT Highbank Resources Ltd., the operating company for Portland Canal Aggregates Corporation, signed a Co-operation Agreement on November 5, 2012 with the Metlakatla First Nation and the Metlakatla Development Corporation in the development of the Swamp Point North Aggregate project. 3

The Agreement provided the Metlakatla with the opportunity to participate in the economic benefits arising from the development of the property within their traditional territory. In the Agreement, the Metlakatla undertakes and do not object or oppose regulatory applications or approvals, Federal or Provincial sought by Highbank with respect to the Swamp Point North Aggregate operations. The other First Nations in the Swamp Point North area who have aboriginal rights for hunting and  fishing,  are  the  Nisga’a.    Discussions  have  been  taking  place  over  the   years  to   ensure they are fully aware of the plans for development of the area. A larger production rate project  was  discussed  with  the  Nisga’a  in  2007. The most recent correspondence with  the  Nisga’a regarding the current project plans were in relation to the recent renewal for the Licence of Occupation, which outlined the development plans for the small quarry operation presented in this Notice of Work application. The Nisga’a   issued   a   letter   on   August   2,   2013   listing   their   concerns   regarding   the   current   proposed development plan, to which Highbank responded. Copies of these letters are included in Appendix 2. 5.0 5.1 BARGE LANDING AND FORESHORE DEVELOPMENT BARGE LOAD-OUT The barge load-out has been designed by other consultants in consultation with Highbank. The facility will consist of a shore located hopper into which the material will be placed by front-end loader. From the hopper the conveyor will run over water for approximately 69 metres to the discharge point which will dump through a retractable, flexible chute. The conveyor will be covered with hemispherical covers to prevent dust losses and have a solid apron to collect any spillage. Any accumulated spillage will be reclaimed onto the conveyor, as required. The conveyor system will be equipped with an emergency trip cord and guarded in accordance with the latest safety regulations. Barges of up to 5,000 tonne capacity will be positioned alongside five strategically placed mooring dolphins using tugs and at a sufficient depth to accommodate all tidal fluctuations. Empty barges will be positioned at the same time as the loaded barges are removed for transportation. Barges to be loaded will be winched between five dolphins during loading to ensure uniform distribution of the product. Barge loading and unloading will not proceed if weather conditions preclude safe operations. Highbank and contract personnel will be trained in all aspects of docking procedures for loading gravel. The barge load-out area will be provisioned with life buoys, crew flotation vests, life preserver rings, poles and ropes for rescuing anyone who is working near water and be in compliance with Part 3.3.3 of the BC Health, Safety and Reclamation Code (HSRC). Spill kits will also be provided. Signs indicating restricted public access and associated hazards will be posted. 4

5.2 CONSTRUCTION AND OPERATIONS EQUIPMENT AND SUPPLIES ACCESS Construction and operations equipment and supplies will be brought in using landing craft or small ramp barges and tugs. A small spur road and ramp will be constructed off the existing road at an angle that allows craft to be manoeuvred into position for loading and unloading (Figure 5.1). A spill kit will be located adjacent to this ramp. Fuel (diesel) and fluids will be transported by licensed operators who will comply with all applicable Provincial and Federal fuel handling legislation and procedures for off-loading on site. Fuel, lubricants, hydraulic fluids, food and water for the camp and all supplies will be delivered mainly by boat transportation from Stewart or Prince Rupert, to the landing ramp. “Hot  shot”  and  other  urgent  deliveries  may  be  transported  by  floatplane. Figure 5.1 Supply and Equipment Landing Ramp Landing ramp 5.3 FISHERIES AND OCEANS CANADA (DFO) AUTHORIZATION The load out facility will include dolphins with pilings driven into the seabed and the landing ramp will enter into the intertidal zone. Barge loading will occur offshore where it will not disturb habitat and the conveyor will be designed to catch any conveyor spillage. Pilings provide cover, additional substrate and increase the complexity of the marine habitat. Overall, there is expected to be a net gain in fish habitat. Highbank has contacted DFO to initiate project review and obtain a Habitat Alteration, Disruption or Destruction (HADD) Authorization. 5

The landing ramp will be used only at sufficient tide heights that allow adequate depth for loading and unloading of equipment and supplies with minimal impact to the intertidal zone. 5.4 NAVIGABLE WATERS Highbank has contacted Navigable Waters Protection, Transport Canada to obtain authorization for the proposed barge load-out facility. This type of facility has been constructed for previous projects on the coast and no issues have been identified to date. 6

6.0 MINE PLAN Mine design was completed by DMT Geosciences Ltd. 6.1 MINE CROSS-SECTIONS AND PLANS The mine has been designed to extract approximately of 109,000 m3 (235,000 t) of run of mine sand and gravel per year over the five year period covered by the Notice of Work. Drawing 1 (included at the end of this report) shows the extent of mine workings after five years, highlighting the sloped areas and the final benches. Drawings 2 and 3 show crosssections across and along the mine at each annual stage of development, and Drawings 4 to 8 show the extent of mining in annual increments. 6.2 DISTURBED AREA PROJECTIONS The total area of disturbance is estimated at 6.6 ha. Existing disturbance of the camp and road area estimated at 1.1 ha. The first year of operations is estimated to disturb 3.9 ha, followed by 0.4 ha of new disturbance in each of the subsequent four years of operations. 6.3 6.3.1 MINING Site Roads and Ditches The existing access road from the foreshore barge load out site to the pit area, of approximately 750 m, will be widened and re-habilitated to meet the BC Code for a truck haul road. The width over the haul section will be increased to 7.8 m plus a roadside ditch. Bank sloping will widen the road width, and a Code-compliant safety berm will be built on the outside edge. The haul road will exceed the guidance gradient of 5% given in the Health Safety and Reclamation Code, and will therefore require run-out lanes. These are shown on Drawing 4 to 8 at the end of this report. The road will be surveyed as the project moves into construction. Any design revisions to meet Code will be detailed at that time and as built drawings will be kept on site and filed with BC Mines if and as required. For approximately 250 m from the plant, the roadside ditch gradient will be about 12%. The lower portion of the ditch, approximately 500 m, will have a gradient of 6%. As appropriate, ditch erosion will be minimized with silt fences, straw bales, settling ponds, and possibly heavy duty polyethylene sheeting held in place with wooden stakes on steeper sections. Thousand-year return, maximum 24-hour precipitation at Stewart is 177 mm (Ascot, 2005). The drainage area for the road ditch ranges from close to zero at the exit of the pit and wash plant area to approximately 5.5 ha at tidewater. Maximum discharge therefore is estimated to be 0.114 m3/s. The ditch will be constructed to pass 110% of peak flows (Figure 6.1). 7

Figure 6.1 Typical Road and Ditch Cross-Section* *Note: Not to scale 6.3.2 Clearing, Stripping and Soil Stockpiling Initial clearing will fell trees and brush, salvaging as much timber as possible. A Special Use permit or Licence to Cut will be obtained from BC Ministry of Forests prior to any clearing. Dozers and backhoes will be used to strip the cover soils and load trucks and move the cover soils to the stockpile (location indicated in Drawing 1). The soil stockpile will be sloped and seeded to prevent as much run-off as possible, although it will be added to as mining progresses. As and when possible over the life of the mine, cover soil will be spread on the cut slopes and the slopes seeded. Tree planting will wait until final closure. The depth of stripping is expected to average less than 0.25 m across the site; drilling results indicate very shallow cover soils. The cover soil volume anticipated totals about 14,000 bcm. The stockpile as designed will accommodate 18,000 bcm. 6.3.3 Production Methods and Development Plan The initial Year 1 pit will generate the largest disturbance because a combination of the pit location and the rising topography requires a long back-slope to achieve the desired slope gradients of 2H:1V (27°). This slope gradient will ensure permanent stability and eliminate the need for re-sloping during reclamation. The back-slope ends within the northern limit of the current licence area, which was the major factor in determining the location of the pit. Vegetation will be removed 2 m back from the edge of excavations for safety. The pit will be developed from the top down in 5 m high lifts with a 2H:1V back slope to the east and day-lighting the bench to the west. A berm will be retained at the edge of the bench to prevent debris from falling down the outside slope while machinery is working close to the edge and subsequently removed and a new berm formed as each bench is taken down. Mining excavations will be carried out by conventional mining equipment consisting of a D9/D10 dozer, excavator, front-end loaders and 35/40 tonne rear dump trucks. A dozer will grade the back-slope to the current bench where it will be lifted by the loaders in 2.5 m 8

flitches either into a truck or directly to the wash-plant hopper. The maximum height of any vertical face will be 2.5 m. All mobile equipment will be locked out at the end of each shift. As the working level descends, a 10 m wide haul road will be established at a gradient of 10% from the working level to the wash plant with a side safety berm to meet Code requirements. Safety berms will also be constructed on each bench to a height of at least 1.5 times the radius of the largest tyre in use, on site. The relatively slow rate of production will allow aggregate to be loaded directly by loader from the pit to the wash-plant hopper, or taken by a single truck to a small stockpile for re-handling into the plant. The western run-out lane will eventually be lost to the extraction in the later stages. In lieu of a run-out lane, a median berm will be installed to provide for arresting of a truck in the event of brake failure. 7.0 CRUSHING, SCREENING AND WASH PLANT (CSWP) The installation of a crushing, triple deck screen and washing plant (CSWP) is proposed to prepare saleable product from the mined aggregate. The CSWP is rated at 200 tonnes per hour raw feed through the plant, estimated to produce 128 tonnes of gravel, 72 tonnes of sand and silt per hour. Silt will be mixed with soil in the stockpile and used for reclamation. The CSWP will be located on the 70 m bench along with the settling and clarification ponds, which will supply the water required. Water pumped from sumps on the descending levels will be pumped up to the settling pond. Portable pumps will be installed as required to prevent any uncontrolled flooding. Some product may be shipped without washing if sufficient water is unavailable during short periods of time and if acceptable to clients. Product will be stored as it is produced at a stockpile adjacent to the barge load-out to maintain adequate space around the plant. The water balance calculated for the wash-plant (see subsequent section) shows that the raw feed moisture into the plant plus a make-up of 3.3 m3/h equals the moisture shipped with the product. The washing and screening process uses 17.9 m3/h of water and the settling and clarification ponds will provide a residence time of more than 24 hours with the wash water usage at a maximum, plus flood storage and freeboard. A berm will be constructed around the stockpiled material such that any drainage will either exfiltrate through the gravel or divert into the settling ponds. A dedicated diesel generator will power the CSWP. All diesel storage will be in double walled tanks within a bermed containment area and monitored daily for leakage. A spill kit for handling any loss of diesel will be located adjacent to the tank and generator. The mine and plant will operate in daylight hours only, up to 12 hours per day, 6 days per week for up to eight months of the year. The camp facilities and fuel tanks will be drained and mothballed during the winter months. Given the remote location and the fact that 9

nothing of value will remain at the camp, full-time security will not be provided, but ad hoc inspections will be carried out. 8.0 WATER MANAGEMENT Average annual precipitation in Stewart is 1867 mm (Canadian Climate Norms 1981-2010). Thousand-year return period, maximum 24-hour precipitation at Stewart is 177 mm (Ascot, 2005). A 2005/2006 exploration drilling program comprising 10 cored drill holes showed groundwater present in all of the holes. Piezometers were also installed in some of the holes to determine the ground water interface. The working face of the gravel pit will no doubt have ground water seeps throughout the excavation area and this water will be channeled through the work area into ad hoc sumps on the pit floor. A drainage collection ditch and pond will be constructed at the 35 m elevation to collect water that can be pumped up to the wash plant settling ponds for make-up water as needed or drain downslope where it will be intercepted by the road ditch system. The water collection ditch may be lined, would only need to be constructed once for all five years of pit development and would provide an added buffer for stormwater runoff from the pit. A ditch and collection pond will also be constructed on the west side of the road leading from the camp to the wash plant. Collected water may be pumped to the wash plant settling ponds for make-up water or exfiltrate from the pond. No creeks will be diverted or used by the mine development. Start-up and makeup water for the plant will be obtained from site runoff and groundwater seeps collected in the ditches, collection ponds and wash plant settling ponds. Once the wash plant is operating, the only water requirement will be that associated with the shipped products, a net loss in the system of 3.3 m3/hr. If there is insufficient water for washing operations then the plant will produce unwashed aggregate or be shut down until sufficient quantities of water have been restored. If dry screened product only is required then the wash plant settling ponds water will overflow after clarification into the road drainage ditch. The washing and screening process uses 17.9 m3/h of water and the settling and clarification ponds will provide a residence time of more than 24 hours with the wash water usage at a maximum, plus flood storage and freeboard. The sediment control pond at the barge load-out will discharge to the environment. It is the only proposed settling pond on the property that discharges to a water body with aquatic life. Water contaminants associated with construction and operation of an aggregates operation are generally restricted to suspended sediments assuming effective implementation of a 10

hydrocarbon spill prevention and response plan. Turbidity (<15 NTU) is proposed as the monitoring parameter target to ensure compliance and protection of the receiving environment. A Waste Management Act permit will be obtained for the project discharge. Receiving water quality objectives, discharge criteria and a monitoring program are presented in the Water Management Plan in Appendix 3. It is proposed to use groundwater from the existing drill holes to provide a water supply for camp water (toilets and showers). 8.1 WATER BALANCE Figure 8.1 presents the site water balance. Wash water requirements are estimated at 17.9 m3/h with 2.1 m3/h makeup water expected to be collected from site runoff. 11

Figure 8.1 Water Balance SWAMP POINT NORTH - WATER BALANCE RUN OF PIT MATERIAL 205 Tonnes / Hr @ 5% moisture Water 10.8 m3 / hr JAW CRUSHER Minus 50mm Oversize +300 mm CONE CRUSHER Wash Water 17.9 m3 /hr TRIPLE DECK WASH SCREEN COARSE To barge loader AGGREGATE & CHIPS +3.00 mm 128 tonnes / hr @ 5% H2 O SAND - 3.00 mm 72 tonnes / hr @ 9% H2 O = 6.4 m3 /hr contained Site Reclaim = 6.5 m3 /hr contained Stockpile Drainage Stockpile Drainage 3 2.1 m / hr PROCESS WATER POND FROM STOCKPILES SPRAY WASH WATER SITE WATER COLLECTION DITCHES + SILT @ 2.5 tph max Re-cycle water CLARIFICATION POND vnb 20/08/2013 Rev 4 235,000 tpa 12 To barge loader

9.0 CAMP AND SAFETY PROVISIONS During the initial preparation of the site, the old camp will be refurbished and established for occupation. A dedicated generator will be provided, with a double lined fuel tank with integral berm provided to eliminate any possibility of spillage. Propane will be used for heating and cooking. Spill kits will be located at the camp. The camp will include a first aid room and a first-aid trained worker will be present on site at all times that the camp is occupied, following the Code. A satellite phone will be provided for remote communication. Handheld radios will be used for site communication and traffic control on site. Camp water will be from the existing drill holes. In the initial construction period, potable water may have to be shipped in by boat on a temporary basis until the site water supply is operational. Grey-water and sewage will report to a septic tank and septic field. Recyclable waste will be kept separate and periodically hauled off-site to recycling facilities. Putrescible waste will be stored in wildlife-proof garbage bins and periodically hauled offsite to the landfill in Prince Rupert. Inert, non-recyclable waste will be disposed of in a small landfill at the laydown area. A suitable area for a heli-pad will be staked out and marked according to legislated requirements and a helicopter operator contracted to provide emergency evacuation services for medical emergencies. A boat capable of evacuating the entire complement of the camp will be on stand-by at the barge load-out at all times that the camp is occupied. Details of the Occupational Health and Safety Plan, Emergency Response Plan, Fuel Management and Spill Contingency Plan, Traffic Plan and Barge Loadout and Marine Safety Plan are presented in Appendix 3. 10.0 SURFACE EROSION PREVENTION AND SEDIMENT CONTROL Initial work on the property will include road rehabilitation, including the provision of drainage ditches and culverts required to control the flow of surface water and maintain road surfaces. Silt fences and straw bales will be used to slow down the water flow in the ditches. Settling ponds will be constructed in all locations at the termination of collection ditches, with a two-cell settling pond (Figure 10.1) at the last ditch before entering the marine environment. The settling ponds associated with the plant site will be filled either from surface run-off or through groundwater percolation. It will be necessary to have sufficient water in these ponds at start-up, if washed gravel production is required. If dry screened product only is required then the collection pond water will overflow after clarification into the road drainage ditch. 13

As a part of the normal site and plant maintenance, any accumulations of fine silt/sediment will be regularly cleaned out of all settling and polishing ponds. In addition to road rehabilitation, secondary growth logging, removal of scrub and removal of the surface cover soils to a stockpile will be carried out. Erosion of the soil/overburden stockpiles will be controlled by grading and sloping the stockpiled material to a 2H:1V (27°) slope and seeding with grass. Run-off from the soil stockpile will flow to the established drainage ditch to exfiltrate into the gravel substrate or the final settling pond. The mine open cut has been designed so that the slope crest coincides with the crest of the NW/SE ridgeline. The combination of topography and slope crest ensures that precipitation will flow away from the cut naturally. Diversion ditches are, therefore, not expected to be required, but if field conditions dictate, a perimeter ditch will be constructed, excavated in sand and gravel and equipped with silt fences and straw bales to control water flow, as noted above. Each of the benches will be sloped into the cut face as they are developed so that no water escapes the pit. Entrained water will flow to the south-east end of the pit where it will flow into an ad hoc sump and exfiltrate into the gravel or be pumped as make-up water to the wash plant ponds on the 70 m level. A colluvial clay glacial till up to 2.0 m in thickness is found on the property in patches. Moderately impervious, it may be used to line the diversion ditches, ponds and embankment foundations. Figure 10.1 Settling Pond at Barge Load-out 14

Figure 10.2 Erosion Control Features Map 11.0 RECLAMATION PLAN The end land use objective is wildlife habitat and forestry. The existing forest is dominated by Western Hemlock and Sitka Spruce. A summary of reclamation plans and costs are presented below, with additional detail presented in the management plans in Appendix 3. At the end of mining, the wash plant and camp site facilities will be dismantled and removed from site. Hazardous materials and residual fuels and tanks will be removed from site and sold or transferred to other sites. Hazardous wastes and any contaminated soils will be removed from site and disposed of at appropriate hazardous waste facilities. Existing heavy equipment on site will be used for regrading slopes. Water management structures such as culverts, ponds, and ditches will be removed, graded and revegetated to allow for long-term stable drainage of the site. 15

Reclamation will comprise of the spreading of topsoil on cut slopes and benches, seeding with an approved seed mix and tree planting (pre-mining species of Western Hemlock and Sitka Spruce). As and when possible over the life of the mine, cover soil will be spread on the cut slopes and the slopes seeded. Road and camp areas would be scarified and seeded to grass with trees planted. An invasive species management plan is included in Appendix 3. The five year mine development plan has been divided into yearly phases and a reclamation cost estimated for each phase, as if the mine had to be reclaimed at that time is presented in Table 11.1. The equipment on site will be used to reclaim the land and no additional equipment will have to be brought in. The total area required to be tree-planted is 5.5 ha. Targeting 1200 saplings/ha gives 6,600 saplings at about $0.90 including labour and accommodation costs (at the camp). The processing facility, camp and mobile equipment will be moved off site. Demobilisation costs are estimated at $25,000. The total reclamation cost after five years, including de-mobilisation and a 15% contingency is estimated at $75,000. Table 11.1 Reclamation Cost Estimate Area Hectares (approx) Camp & Common Areas Year 1 Disturbance Year 2 Disturbance Year 3 Disturbance Year 4 Disturbance Year 5 Disturbance 1.1 3.9 0.4 0.4 0.4 0.4 Reclaim to Seed @ $5,000/ha $5,500 $19,500 $2,000 $2,000 $2.000 $2,000 Sapling and Labour Cumulative Total 1320 4680 480 480 480 480 $1,188 $4,212 $432 $432 $432 $432 $6,688 $30,400 $32,832 $35,264 $37,696 $40,128 $25,000 $9,770 Equipment Removal 15% Contingency Trees $65,128 $74,898 In the event of temporary shut-down, the site will be suspended by draining fuel tanks and locking out all equipment and vehicles left on site. This will be the same procedure used each year prior to winter. 12.0 MANAGEMENT SYSTEM AND PLANS Appendix 3 includes the following management plans: 16

EHSMS Framework A - Occupational Health and Safety Plan B – Mine Emergency Response Plan C – Sediment and Erosion Control Plan D – Hazardous Materials Handling Plan E – Fuel Management and Spill Contingency Plan F – Water Management Plan G – Waste Management Plan H – Reclamation Plan I – Road Design J – Mine Development Plan K – Traffic Plan L – Invasive Species Management Plan M – Barge Load-out and Marine Safety Plan N – Chance Find Procedure O – Wildlife Management Plan As much information as possible is included for this application; however, the plans will be reviewed and updated as necessary as the project moves into construction. Highbank’s   objective for the overall project will maintained. The objective is to develop, operate and close the operation in a safe, efficient manner that provides a favourable return to shareholders, protects the environment, complies will all provincial and federal legislation and benefits local First Nations and communities. In general, the mine management procedures will follow the Aggregate Operators Best Management Practices Handbook for BC (MEM, 2002). 13.0 OTHER PERMIT REQUIREMENTS Highbank’s  project  is  below the production threshold of 500,000 t/y and therefore it is not a reviewable project under the BC Environmental Assessment Act. Expected permit requirements based on the details of the proposed project described herein: Ministry of Energy and Mines, Mines Act, Notice of Work (this application) Navigable Waters Protection, Transport Canada Authorization DFO Habitat Alteration, Disruption or Destruction (HADD) Authorization Waste Management Act permit for surface water runoff, sediment control ponds Ministry of Forests, Licence to Cut permit for timber clearing Ministry of Environment, Waste Management permit for inert waste landfill Health Permit for camp operations 17

Discussions have been initiated with some of these permitting agencies and will continue to ensure all required permits are in place prior to construction. 14.0 Ascot Resources Ltd., www.eao.bc.ca. 2005. REFERENCES Environmental Assessment Certificate Application. BC Ministry of Energy and Mines, 2002. Aggregate Operators Best Management Practices Handbook for British Columbia. Volume 1, Introduction and Planning. Volume 2, Best Management Practices. http://www.em.gov.bc.ca/ . 18

DRAWINGS Project Location DRAWING 1 Site Location and General Arrangement at Closure DRAWING 2 Sections A, B and C DRAWING 3 Sections D, E and LL DRAWING 4 Mine Workings Year 1 DRAWING 5 Mine Workings Year 2 DRAWING 6 Mine Workings Year 3 DRAWING 7 Mine Workings Year 4 DRAWING 8 Mine Workings Year 5 Process Plant General Arrangement Layout

Appendix 1 Archaeological Reconnaissance Study Kleanza Consulting

Kleanza Consulting Ltd. 5520 Kleanza Drive, Terrace, BC, V8G 0A7 Phone 250-638-8970 Fax 250-638-8940 August 16, 2013 Mr. Victor Bryant President and CEO Highbank Resources #600- 625 Howe Street Vancouver, BC, V6C 2T6 RE: Preliminary Field Reconnaissance of Portland Canal, Swamp Point North, Proposed Aggregate Quarry 1.0 Introduction This letter report presents the results of an archaeological Preliminary Field Reconnaissance (PFR) of the Phase 1 development area for the proposed Swamp Point North aggregate project (the project area). This PFR assessed the Phase 1 location specifically, and did not include survey of the larger License of Occupation (LOC). Kleanza Consulting (Kleanza) completed this field reconnaissance, at the request of Highbank Resources, on July 26th, 2013. The project area lies within the traditional territory of the Nisga’a and Metlakatla First Nations. The project area was examined by pedestrian reconnaissance. The objective of the PFR was to assess the archaeological site potential of the project area, and to determine if the proposed developments required further archaeological work in the form of an Archaeological Impact Assessment (AIA). The Archaeological potential of the project area was evaluated based on a desktop review of the proposed Phase 1 location and nearby region, as well as thorough observations made during the field reconnaissance. No archaeological materials, features or areas of archaeological potential were identified within the project area. No further archaeological survey or monitoring work is recommended for the proposed development area, provided the proponent does not significantly amend the development area boundaries. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. 2.0 Archaeological Assessment and Review Process The Archaeology Branch, Ministry of Forests, Lands and Natural Resource Operations, the provincial government agent responsible for the management of archaeological sites in BC, has established an Archaeological Impact Assessment (AIA) process for industry development and research proponents to evaluate and mitigate the impacts to heritage resources (Archaeology Branch, 1998). There are three main stages in the AIA process: a) Overview: The overview is intended to identify areas of archaeological potential and is generally a mapping exercise and desktop review of previous assessments for a proposed development area. Sometimes a PFR, or reconnaissance level survey, is conducted to verify the validity of an overview and from there recommendations are made with regard to further archaeological impact assessment studies. This study constituted a PFR. b) Impact Assessment: The AIA focuses on inventory, or identification and evaluation of archaeological resources within a proposed development area. An AIA includes both PFR level survey, subsurface shovel testing, and the sampling of trees conducted under a Section 14, Heritage Inspection Permit, issued by the Archaeology Branch. c) Impact Management or Mitigation: Impact management usually involves the reduction of adverse impacts to archaeological sites as a result of development, and typically includes site protection (avoidance) by project redesign. In rare cases, sites cannot be avoided and systematic data recovery or site mitigation is conducted. All sites located in the province that pre-date AD 1846 are protected by the Heritage Conservation Act (HCA), and can only be altered under a Section 12 Alteration Permit issued by the Archaeology Branch (Archaeology Branch, 2009). 3.0 Project Area Background The proposed Phase 1 development area is located on the eastern shore of the Portland Canal near Swamp Point, approximately 35 km west of Kitsault, BC. Donahue Creek is located approximately 300 m south of the project area (Photo 1, Figure 1). This PFR assessed the Phase 1 location specifically, and did not include survey of the larger License of Occupation (LOC). 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. Photo 1: View north to the project area. Mouth of Donahue Creek flowing into the Portland Canal pictured in foreground. The project area lies at an elevation between 0 to 84 meters asl 1 and falls within the Coastal Western Hemlock Biogeoclimatic Zone. Western hemlock, western red cedar and Sitka spruce trees are common throughout the Costal Western Hemlock Zone (Egan 1999). Other trees include amabilis fir, yellow cedar, Douglas fir, grand fir, lodgepole pine, black cottonwood, western white pine, big leaf maple and red alder. The understory is characterized by a blanket of moss, interspersed with a variety of flowers, fungi and shrubs. The project area is located along the north coast of BC, and would have been affected by glacial and sealevel histories. The north coast of BC was beneath 1,500 - 2,000 m of glacial ice during the Late Wisconsinan glacial maximum approximately 16,000 years ago. By 15,000 to 14,500 years ago, deglaciation was occurring rapidly at the mouth of the Skeena River, as ice was broken up by rising sea levels (Clague, 1985; Fladmark, 2001). It is generally accepted that the outer coast was essentially icefree and habitable by humans by about 13,000 years ago, with the Prince Rupert area being ice free by sometime prior to approximately 12,700 +/- BP 2 (Clague, 1985; Fladmark, 2001). Major sea level changes affected the coastal portions of BC following the last glaciations. A combination of eustatic, isostatic, and tectonic factors has created complex, regionally specific sea level histories for coastal regions (Clague et al., 1982). Immediately following deglaciation, relative sea levels were higher than present levels in the north coast mainland region, and proceeded to fall, to reach close to modern 1 2 Above Sea Level Before Present (1950) 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. levels around 8,000 BP (Clague et al., 1982). However, sea level and environmental stabilization of the North Coast mainland region did not occur until approximately 5000 BP (Fladmark, 1975; 2001). This history of changing sealevels indicates a possibility for raised shoreline archaeological sites within the project area, in areas that are now above the current sea level. 3.1 Development The proposed development consists of construction of an aggregate quarry. Anticipated impacts to the project area include the mining of aggregate material utilizing dozers , excavators, dump trucks and other heavy machinery. 4.0 Methodology 4.1 Background Review Prior to the field visit, basic background information relating to the project area was reviewed. This included a review of the Provincial Heritage Register, using the Remote Access to Archaeological Data (RAAD) application, to determine if any previously recorded sites were located within or adjacent to the project area. Topographic maps and development plans of the project area were also reviewed. 4.2 Field Methods The field assessment was limited to a visual inspection of the project area to assess archaeological potential. A crew of 3 people, spaced 10 to 20 m apart conducted judgmental pedestrian traverses throughout the project area. Please see Figure 2 for the location of these transects. These transects focused on terrain features associated with archaeological potential, such as streams, ridges, and breaks in slope. Terrain features were examined for archaeological potential. The ground surface was inspected for evidence of cultural materials or features, such as trails or cultural depressions. Mature trees were examined for any evidence of cultural modification, such as bark-stripping, tool marks, or test holes. Natural exposures, such as tree throws and road cutbanks, were examined for evidence of buried cultural deposits. The location of field traverses were marked on field maps and recorded by GPS track logs. Field notes were kept, detailing the overall terrain, vegetation, and archaeological potential of the project area. The project area was also viewed from a low-flying float plane to provide the crew with an overview of terrain features. 5.0 Results 5.1 Background Review Ethnographic Background As previously stated, the project lies within the traditional territory of the Metlakatla First Nation (Coast Tsimshian) and the Nisga’a Nation. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. Detailed historical and ethnographic accounts of the Tsimshian can be found in Beynon (1941) Garfield (1939), Duff (1964), and others, and are nicely summarized by Halpin & Seguin (1990). The Tsimshian are geographically located on the northwest coast, along the Nass and Skeena Rivers, and along the inlets and islands along the estuaries extending south to Milbanke Sound (Halpin & Seguin 1990). The Nisga’a are culturally similar to the Tsimshian peoples; however, they are distinctive both geographically and linguistically (Halpin & Seguin 1990). Located in the Nass valley, the Nisga’a are geographically divided into the lower Nass (Gitkateen and Gitgigenik) and the upper Nass (Gitwunksithk and Gitlakdamiks). The upper Nass groups traditionally moved downriver during peak eulachon fishing times, usually in late winter or early spring (Halpin & Seguin 1990). The Nisga’a’s social organization is based on four clans: wolf, raven, eagle, and killer whale. The Nisga’a of the upper Nass had more focus on land mammal hunting than their coastal neighbours. The Tsimshian and Nisga’a annual subsistence round has been well documented by Boas (1916) and summarized by Halpin & Seguin (1990). Winter consisted of eulachon fishing along the Nass and Skeena Rivers with the remainder of the winter spent in the winter villages along the coast (Halpin & Seguin 1990). In the springtime, people gathered seaweed, halibut, herring eggs, cedar bark, and the inner cambium of several trees species (hemlock, spruce, and lodgepole pine). In early June, the eggs of seagulls and oyster catchers were gathered, and abalone was gathered from the beaches at lower tides (Halpin & Seguin 1990). Salmon were gathered and processed at traditional fishing sites where seasonal camps were maintained. Women harvested berries and crabapples, and cranberries were stored for later use in the fall (Halpin & Seguin 1990). Various roots and shoots were also collected for consumption during the summer months. In the early fall, people concentrated on the collection and preservation of salmon, which was smoked and dried in great quantities (Halpin & Seguin 1990). After the salmon season, the hunting of other large game and sea mammals was undertaken. Shellfish was also collected and consumed throughout the winter months (Halpin & Seguin 1990). A majority of the material culture used by the Tsimshian and Nisga’a was made of organic materials that does not preserve well in inland archaeological sites, such as bone, antler, shell, and wood. In a boreal forest environment with acidic soils, bone preservation is generally poor, and only the burning of bones in a campfire or deposition within a matrix of shell aids in its preservation. Therefore, archaeological site visibility in the northwest coast region largely depends on the accumulation of lithic materials from stone tool use, or the remains of other physical features such as noticeable depressions in the ground, trails, CMTs, petroforms, and rock art sites. The greatest concentration of lithics result from butchering and processing of fish, meat, and hides in proximity to habitation structures at major camps, whereas the procurement of plant resources, smaller mammals and birds, or kill sites of individual large game animals leave little to no archaeological evidence. Round pits excavated into the ground for storage, also referred to as cache pits, and were often located in the vicinity of fishing villages. These pits were used to store large quantities of salmon and other foods for later use during the winter. Over time large accumulations of shell and bone often formed on coastal village sites, known as shell middens. These middens are still visible today, and are an important identifier of habitation sites along the coast. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. Archaeological Background According to the Provincial Heritage Register (accessed via Remote Access to Archaeological Data) there is one previously recorded site within approximately 5 km of the project area (Figure 1). GjTm-1 is located approximately 5 km north of the project area, and consists of 90 Culturally Modified Trees (CMTs), including 2 aboriginally logged stumps, 70 tapered bark-stripped CMTs, 7 rectangular barkstripped CMTs and 11 girdled bark-stripped CMTs (Cooper et al. 2004). GjTm-1 was recorded by Millennia Research Ltd., during an archaeological assessment of a proposed forestry block. Expected archaeological site types within the project area included pre-contact CMTs, sub-surface deposits and raised beach or shell midden sites. 5.2 Field Reconnaissance Results The PFR was conducted on July 26th by Stephanie Huddlestan (Kleanza, Field Director), Colleen Wesley (Metlakatla representative) and Anthony Moore (Nisga’a representative). Gary Musil (Highbank Resources) and Jim Place (Highbank Resources) also accompanied the crew during the PFR. 5.2.1 Project Area Description An old access/logging road connects the beach to the project area. It is still in good condition but has aspens overgrowing on both sides. The southern and eastern portion of the development area is gently undulating, with an overall aspect toward the west. Areas of poorly drained ground are located throughout the project area. A road cutbank exposure was examined, and displays stratigraphy consisting of a thin humic layer (dark brown organic silt) underlain by a mixture of light brown sand and poorly sorted rounded to sub-rounded gravels, pebbles, cobbles and boulders ( Photo 2). The vegetation observed from this portion of the survey consist primarily of hemlock with very few standing cedars. The understory is dense consisting of aspen, blueberry, huckleberry, false azalea and a variety of fern species (Photo 3). Skunk cabbage and sphagnum moss are also present within the poorly drained areas. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. Photo 2: Example of exposed stratigraphy examined in the road cut-bank The vegetation and terrain remained the same throughout the northern and western portion of the development area. Geotechnical test pits excavated during 2007-08 were also identified during the survey. Evidence of recent and historic logging is present throughout the project area including chainsaw cut logs and stumps. The western portion of the development area is located on steep side slopes (<30%). Hemlock is the dominant tree species along the side slopes. No archaeological materials, features or areas of archaeological potential were observed during the PFR. Photo 3: Typical vegetation within the project area 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. 5.2.2 Potential Assessment The project area is considered to have low archaeological potential, due to the terrain being relatively featureless and undulating, or steeply sloping and/or poorly drained. No landforms with the potential to contain subsurface sites were identified. The project area has low potential for pre-1846 AD CMTs due to the lack of mature cedar trees, and the extent of historical-era and recent logging activity. 6.0 Recommendations and Further Work No areas of archaeological potential, or any archaeological materials or features, were identified within the project area. It is considered unlikely that undiscovered subsurface materials are present in this area. No further archaeological survey or monitoring work is recommended for the proposed project area, provided the proponent does not significantly amend the development area boundaries of the Phase 1 development. If future phases of development are proposed outside of Phase 1, we also recommend conducting an additional PFR of these areas. Additionally it is recommended that the proponent: Discuss with the involved First Nations any management concerns they may have in regards to the proposed development area; and, Recognize the possibility that additional, unidentified cultural heritage resources might be present in portions of the project area that were not traversed on-the-ground. 7.0 Unanticipated Cultural Materials and Study Limitations Every attempt was made to locate and record all archaeological sites within the development area boundaries; however, the possibility exists that some cultural materials or features may have been missed. If any unidentified archaeological or cultural heritage resources are encountered during construction, work in the nearby vicinity should stop and the Archaeology Branch, the Ministry of Forests, lands and Natural resource Operations, and a qualified archaeologist should be informed. 8.0 Closure This report was prepared for use by the proponent specified herein. Any third party use of this report is the responsibility of that third party. This study does not constitute a traditional use study, and was prepared without prejudice to First Nations Treaty Negotiations, aboriginal rights or aboriginal title. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. Signed by: Amanda Palmer, M.A., Operations Manager References Archaeology Branch (1998). Archaeological Impact Assessment Guidelines. On file with the Ministry of Forests, Lands and Natural Resource Operations , BC From http://www.tca.gov.bc.ca/archaeology/docs/impact_assessment_guidelines/index.htm Archaeology Branch (2009). Heritage Conservation Act (RSBC 1996): Chapter 187. On file with the Ministry of Forests, Lands and Natural Resource Operations. Victoria, BC. From http://www.bclaws.ca/Recon/document/freeside/--%20H%20-/Heritage%20Conservation%20Act%20%20RSBC%201996%20%20c.%20187/00_96187_01.xml Boas, F. (1916). Tsimshian Mythology. Based on texts recorded by Henry w. Tate. Pp 29-1037 in 31st Annual Report of the Bureau of American Ethnology for the Years 1909-1910. Washington. Beynon, W. (1941). Tsimshians of Metlakatla, Alaska. American Anthropologist 43(1): 83-88. Clague, J.J., J.R. Harper, R.J. Hebda, and D.E. Howes (1982). Late Quaternary sea levels and crustal movements, coastal British Columbia. Canadian Journal of Earth Sciences, 19: 597-618. Clague, J.J. (1985). Deglaciation of the Prince Rupert – Kitimat area, British Columbia. Canadian Journal of Earth Sciences, 22: 256-265. Cooper, D., J. Lindeberg, D. Owens and M. Eldridge. (2004) North Coast Forest District, Archaeological Impact Assessments Conducted Under Permit 2002-294, Final Report of the 2002-2003 Field Season. Unpublished repot on file with the Archaeology Branch, Ministry of Forests, Lands and Natural Resource Operations, Victoria, BC Duff, W. (1964). The Indian History of British Columbia. Vol. 1: The Impact of the White Man. Anthropology in British Columbia. Memoirs 5. Victoria. Egan, B. 1999 The Ecology of the Coast Western Hemlock Zone, Ministry of Forests, B.C. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

August 16, 2013 Kleanza Consulting Ltd. Fladmark, K. (1975). A Paleoecological Model for Northwest Coast Prehistory. Mercury Series, Paper 43, Archaeological Survey of Canada. Ottawa: National Museum of Man. Fladmark, K. (2001). From Land to Sea: Late Quaternary Environments of the Northern Northwest Coast. In Perspectives on Northern Northwest Coast Prehistory, edited by Jerome S. Cybulski. Hull: Canadian Museum of Civilization, Archaeological Survey of Canada, Mercury Series Paper 160, pp. 25-47. Garfield, V. (1939). Tsimshian Clan and Society. University of Washington Publications in Anthropology, 7(3): 167-340. Seattle. Halpin M. & M. Seguin (1990). Tsimshian Peoples: Southern Tsimshian, Coast Tsimshian, Nishga, and Gitksan. In, Handbook of North American Indians, edited by Wayne Suttles, Volume 7, Northwest Coast, pp. 267-284. Washington: Smithsonian Institution. 5520 Kleanza Drive | Terrace, BC | V8G 0A7 | t. 250.638.8970 | f. 250.638.8940 |e. amanda@kleanza.com

hu na D o Surface Tenure LOC# 635857 e C re ek ^ GjTm-1 Foreshore Licence LOC# 635856 Swamp Point P or tl an d C an al ek re C o n Portland Canal be rs Figure 1 Archaeological Sites R ^ P ro j ec t A re a Lo c a ti o n o . Bonanza Lake Kleanza Consulting Ltd. 5520 Kleanza Drive Terrace, BC V8G 0A7 0 0.5 1 1.5 2 2.5 Kilometers 1:50,000 W:esridatadkmKleanzaPortland_CanalPortland_Canal_Fig1.mxd Maple Point

434500 6149500 434000 6150000 6150000 433500 6149500 433000 6149000 6149000 Surface Tenure LOC# 635857 6148500 6148500 Foreshore Licence LOC# 635856 . P ro j ec t A re a Lo c a ti o n Portland Canal 6148000 6148000 Swamp Point Figure 2 Survey Transect Centre Licence of Occupation Phase 1 Development Kleanza Consulting Ltd. 5520 Kleanza Drive Terrace, BC V8G 0A7 100 200 300 400 500 Meters 6147500 6147500 0 1:10,000 W:esridatadkmKleanzaPortland_CanalPortland_Canal_Fig2.mxd 433000 433500 434000 434500

Appendix 2 Nisga’a Correspondence

Highbank Resources Ltd. #600 – 625 Howe Street Vancouver, B.C. V6C 2T6 Ph: (604) 683-6648 Fax: (604) 683-1350 E-Mail: highbank@telus.net www.highbankresources.com Your  ref:  Nisga’a  Lisims,  letter  dated  August 2nd 2013 Dear Mr. Kiiskila, This letter is in response to your August 2, 2013 letter from Collier Azak, CEO of the Nisga’a  Lisims  Government.     For clarification, the original application for the Amended Licence of Occupation was at a time when Highbank Resources Ltd. was considering an alternative loadout location, approximately 1.5 km to the North of that proposed in the approved 51 ha Licence of Occupation area and included a larger area of sand and gravel extraction. The current application is to expand the Licence of Occupation area for the purposes of sand and gravel exploration. The currently proposed sand and gravel mining is only for a small portion of the deposit located in the existing licence area and uses the existing loadout and camp location. Further   to   this   clarification,   the   Nisga’a   Lisims   Government   concerns   and   questions   are   addressed as follows: 1) The expanded LOA application will be for sand and gravel exploration. All extraction and loading will take place within the licenced 51 ha area. 2) No new roads, camps or other construction activity will take place in the expanded area at this time. 3) It is expected that the validity of the approved application will be for the usual 5 years. A new licence and consultation would need to take place prior to any sand and gravel extraction in the new area. 4) The baseline studies in 2007 produced an ecosystem map and included a bird survey that confirmed the presence of Marbled Murrelet in the Donahue Creek estuary and oceanfront and indicated that they likely breed in the region (electronic copy of report with ecosystem map is attached). There is only a small area of old growth forest located in the expanded LOA; however,  Gartner  Lee’s  report  concluded  the  following:

“Marbled murrelets were detected on every Marine habitat survey during the breeding season and were the second most abundant marine bird after mew gulls. Based on the numbers of murrelets observed and the occurrence of suitable nesting habitat within the region, it is highly likely that the species is breeding in the RSA. “Nesting surveys for murrelets were not conducted as part of this assessment, and we therefore cannot conclude with certainty that the species is not nesting in the LSA. However; based on the small footprint of the proposed project and the Low and Very Low nesting suitability typically observed in mature forest stands of the LSA, the probability of murrelets nesting there is low. Based on the relatively small size of the proposed development footprint and the even smaller area of mature forest proposed to be removed, the amount of potential nesting habitat that would be impacted by development is small relative to both the total amount of habitat available in the RSA and habitat impacts from other resource development activities in the region, notably forest harvesting.” 5) Highbank does not intend to carry out any activity other than exploration in the requested expanded licence of occupation area. An environmental assessment under the BC Environmental Assessment Act, including full consultation requirements, would need to be completed if Highbank proposed to extract sand and gravel over the threshold production level of 1,000,000 metric tonnes over four years. Development plans would also need to be submitted and permitted, including consultation, for extraction less than this production threshold in the expansion area. The main purpose of the request for the expanded area is to consolidate the resource holdings of Highbank and ensure that any investment in the existing, already permitted area, can meet the usual financial hurdles in terms of project longevity and return to investors. Highbank trust that the above answers any questions regarding the expanded LOA request but would be pleased to address any further concerns. Yours truly, Vic Bryant President / CEO c.c. Mary Moran Jenifer Hill – Micon International Ltd. Attached: 2007 Baseline study

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