APPENDIX N HYDROGEOLOGY STUDY

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1 APPENDIX N HYDROGEOLOGY STUDY

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3 Golder Associates Inc. 44 Union Boulevard, Suite 300 Lakewood, CO USA Telephone: (303) Fax: (303) SOLEDAD MOUNTAIN PROJECT HYDROGEOLOGY STUDY Submitted to: Golden Queen Mining Company, Ltd Imperial Avenue West Vancouver, BC V7W2J5 CANADA Submitted by: Golder Associates Inc. 44 Union Boulevard, Suite 300 Lakewood, Colorado Distribution: 3 Copies Golden Queen Mining Company, West Vancouver, BC 1 Copy Golder Associates Inc., Denver, CO March 8, 2007 Project No A Rev. May 2, 2007 OFFICES ACROSS AFRICA, ASIA, AUSTRALIA, EUROPE, NORTH AMERICA AND SOUTH AMERICA

4 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, i A TABLE OF CONTENTS EXECUTIVE SUMMARY...ES INTRODUCTION Location Regulatory Requirements Demonstrate an Adequate Understanding of the Site Hydrogeology before Discharging Develop an Approved Groundwater Sampling and Analysis Program before Discharging Develop a Groundwater Monitoring System for the Phase 2 Heap Leach Pad LIMITATIONS PHYSIOGRAPHIC AND GEOGRAPHIC SETTING BENEFICIAL GROUNDWATER USES PREVIOUS STUDIES ON GROUNDWATER CONDITIONS Regional Groundwater Studies Local Groundwater Studies GEOLOGY AND HYDROGEOLOGY Regional Geologic Conditions Regional Hydrogeologic Conditions Local Geologic Conditions Local Hydrogeologic Conditions Groundwater Flow Directions GROUNDWATER QUALITY Constituents of Concern Concentration Limits INFORMATION STILL NEEDED CONCLUSIONS USE OF THIS REPORT REFERENCES...26 I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

5 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, ii A LIST OF TABLES Table 1 Summary of Existing Water Well Data Table 2 Additional Data for Existing Water Wells Table 3 Water Levels at Monitoring Wells 1, 2, and 3 Table 4 Mean and Standard Deviation of Background Concentrations of COCs in Monitoring Wells Table 5 Median of Background Concentrations of COCs in Monitoring Wells Table 6 Range of Background Concentrations of COCs in Monitoring Wells Table 7 Number of Data Points and Non-Detects for Each COC Table 8 Upper Tolerance Limits of COCs LIST OF FIGURES Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Site Map Groundwater Basins and Sub-basins Map of Existing Wells within One Mile of the Project Site Map of Wells in the Vicinity of the Project Site Geologic Cross Section Location Map Geologic Cross Section A-A Geologic Cross Section B-B Geologic Cross Section C-C Regional Groundwater Contours Piper Diagram of Soledad Mountain Groundwater Map of Proposed Monitoring Wells LIST OF APPENDICES Appendix A Appendix B Appendix C Appendix D Well Logs Analytical Results from Groundwater Sampling Well Construction Diagrams Additional Groundwater Measurements in Vicinity of Project I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

6 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, 2007 ES A EXECUTIVE SUMMARY Soledad Mountain is a somewhat isolated mountain located in a broad expanse of otherwise flat-lying lands of the western Mojave Desert in southern California. The area is arid; very hot, and dry. Soledad Mountain is comprised of a core of Tertiary and Pre-tertiary volcanic and metavolcanic rocks. The surrounding desert is comprised of sedimentary sequences consisting of clays, silts, sands, and gravels and, in some places, it is capped with dune deposits. As a region, this broad expanse of desert is wedge-shaped and bounded to the northwest and southwest by mountain ranges that are recharge areas for groundwater in the alluvial aquifers beneath the desert floor. There is neglible localized groundwater recharge at Soledad Mountain; the recharge to aquifers originates from mountains to the west, northwest, and southwest. The most important source for groundwater in the area of Soledad Mountain is the alluvial aquifer developed in the Fremont Valley drainage basin, which includes both the Gloster and Chaffee subunits. Alluvial groundwater flow at Soledad Mountain is west to east, from the mountain fronts to the dry lake beds. In the vicinity of Soledad Mountain, flow in the alluvial aquifer bifurcates in order to flow around the relatively impermeable bedrock of the mountain itself. Numerous groundwater studies have been conducted in the area, both regionally and site-specifically. Site-specific studies have demonstrated that groundwater in the alluvial sediments is deep, 150 to 300 feet below ground surface. Aquifer tests have also shown the aquifer material itself to have relatively low permeability; on the order of 1 x 10-4 centimeters per second (cm/s). The groundwater quality in the area is poor. It is typically calcium bicarbonate near the mountain fronts and sodium bicarbonate or sodium sulfate in character in the central part of the basin. Many of the naturally-occurring groundwater parameters exceed safe drinking water criteria. This Hydrogeologic Study has been prepared by Golder Associates Inc. (Golder) at the direction of Golden Queen Mining Company (GQM). This Study has been prepared as an appendix to a larger report, The Report of Waste Discharge (ROWD) (GQM, 2007) for the Soledad Mountain Project (the Project). Recommendations are put forth in this report to install a monitoring well at a strategic, down-gradient location near the northeast corner of the Phase 1 heap leach pad, prior to active mining on Soledad Mountain. There are also recommendations for additional monitoring wells when and/or if the future potential Phase 2 heap leach pad becomes operational. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

7 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, 2007 ES A From the data reviewed in preparing this report, it is apparent that the potential for an operating mine to adversely impact the groundwater at Soledad Mountain is minimal. There are too many mitigating factors that minimize this possibility. These include the considerable depth to groundwater, the lack of local groundwater recharge, the lack of surface water, the low permeability of the silt and clay aquifer materials and the high evaporation rates in this part of the Mojave Desert. In addition, the heap leach pad design includes a composite liner system with a leachate collection system above the composite liner to minimize head on the liner. Vadose zone monitoring and leak detection systems are included in the heap leach facility design to provide additional protection and advance warning of any potential impacts to groundwater. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

8 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 1.0 INTRODUCTION Golden Queen Mining Company (GQM) is planning on developing and operating a mine on the north and west slopes of Soledad Mountain. In this report, the mine and appurtenances are referred to as the Soledad Mountain Project, or simply, the Project. In the process of permitting the Project, GQM has prepared a comprehensive ROWD (GQM, 2007). This Hydrogeologic Study Report, prepared by Golder, is included as an appendix to the ROWD. The purpose of this hydrogeologic study is to present a summary of the regional, sub-regional and site-specific hydrogeology of the Project. Numerous site-specific studies have been completed over the last 10 to 15 years, each having differing investigative goals and objectives. This study builds on the work of previous investigations (both public and private) and adds to that understanding with additional data from more recent studies. 1.1 Location The site is located on Soledad Mountain, in southeastern Kern County, California. The area is part of the western Mojave Desert, which is a wedge-shaped, expansive area bordered by mountain ranges on the west, southwest and northwest sides (Dibblee, 1967). The production facilities are located on the northern and western flanks of Soledad Mountain and occupy Section 6 of Township 10 North, Range 12 West (abbreviated as T10N, R12W), Section 1 of T10N, R13W, and the southern part of Section 31, T11N, R12W (San Bernardino base and meridian, SBB&M). Figure 1 presents a map of the site and surrounding area. 1.2 Regulatory Requirements There are regulatory requirements that must be met before the Project can begin mine operations. The major components of these requirements are summarized below. The intent of the regulatory requirements are to make sure that measures have been taken to safeguard the receiving waters of the state (surface water and groundwater) while the mine is operating and following closure. Individual requirements are presented below. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

9 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Demonstrate an Adequate Understanding of the Site Hydrogeology before Discharging A number of previous studies have been conducted on the Soledad Mountain Project and the data presented relate directly to characterizing the hydrogeology of the site and surrounding areas. Much of this data is presented in the sections to follow. In particular, Sections 6.0 and 7.0 of this report present an overview of the site and regional geologic and hydrogeologic conditions and existing groundwater quality, respectively Develop an Approved Groundwater Sampling and Analysis Program before Discharging Groundwater sampling and analysis has been ongoing at the Soledad Mountain Project intermittently for over 10 years. Section 7.0 of the ROWD (GQM, 2007) presents a detailed sampling and analysis program for the Project. The section includes details of the proposed monitoring program to be implemented before the start of mine operations, and during operations. Specifics presented in Section 7.0 include field, custody, and analytical procedures; analytical suites; sampling frequencies; and reporting limits Develop a Groundwater Monitoring System for the Phase 2 Heap Leach Pad Currently, there are no groundwater monitoring wells located in the area of the Phase 2 heap leach pad. Our analysis of regional groundwater data indicates that recharge to the alluvial groundwater aquifer in the Project area is principally from the Tehachapi and San Gabriel mountains located many miles west, southwest, and northwest of Soledad Mountain. Groundwater flowing eastward through the alluvium bifurcates to the north and south around Soledad Mountain (including the Phase 2 heap leach pad).. In contrast to the surrounding alluvium, Soledad Mountain is comprised of bedrock which is comparatively impermeable and creates a localized barrier to groundwater flow. The groundwater in the alluvium must flow around the mountain to continue flowing down-gradient. In the event that the Phase 2 heap leach pad is constructed, this understanding of the hydrogeologic conditions will be used to develop the groundwater monitoring system for the pad. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

10 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 2.0 LIMITATIONS This study is based on information provided by GQM and information obtained from the references listed in Section No additional field investigations were completed as part of this study. Thus, data and observations presented in this study are based on the data presented in previous investigations. Site-specific hydrogeologic information presented in this report is based on groundwater data from wells in the vicinity of the site. The site-specific information has been merged with more current, regional information to form a more cohesive understanding of the local hydrogeology. Golder has prepared this study in accordance with generally accepted methods and standards of professional practice. No warranties, either expressed or implied, are made regarding the findings or conclusions presented here. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

11 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 3.0 PHYSIOGRAPHIC AND GEOGRAPHIC SETTING The project area is located in a large, triangular expanse of the western Mojave Desert. This triangular expanse encompasses several hundred square miles and is bordered by the Tehachapi Mountains and Garlock Fault zone on the northwest and the San Gabriel Mountains and the San Andreas Fault zone on the southwest. The eastern side of this triangular wedge is open to the much larger expanse of lower-lying Mojave Desert stretching eastward and northeastward toward Nevada. The project area is located at elevations ranging from approximately 2,700 feet above mean sea level (MSL) at the desert floor to approximately 4,190 feet above MSL at the summit of Soledad Mountain. The surface of the desert floor generally slopes from west to east across the region, with the exception of low bedrock outcrops protruding from the alluvial valley floor. There are two regional drainage basins in this western portion of the Mojave Desert; the Antelope Valley drainage basin and the Fremont valley drainage basin. The Rosamond Hills and Bissell Hills create a groundwater divide that separates groundwater flow in the Antelope Valley drainage basin from the Fremont Valley drainage basin to the north. The Rosamond Hills and Bissell Hills are comprised of intrusive igneous quartz monzonite, which is relatively impermeable compared to the surrounding alluvium on the desert floor. The Soledad Mountain Project is located within the Fremont Valley drainage basin, as shown on Figure 2. The Antelope Valley drainage basin to the south has been developed extensively for agricultural, industrial, and domestic purposes and serves the larger population centers located approximately 30 miles south of Soledad Mountain. Soledad Mountain is located in an extremely arid area of California. According to Bloyd (1967), losses from surface flow under these dry conditions are so great that stream flow in this region rarely occurs at elevations less than 3,500 feet above MSL. Precipitation on the desert floor is usually subjected immediately to high losses from evaporation and transpiration. Nevertheless, runoff occasionally originates on or crosses the desert floor and sometimes reaches the dry lake beds or playas following high intensity rainfall events. Nearly all of the water that reaches the playas is eventually lost to evaporation, as the playas are not areas of aquifer recharge. Because the project area is located in the rain shadow of the Tehachapi and San Gabriel Mountain ranges, the average annual precipitation for the western Mojave is sparse; about 4 inches (Londquist, 1995). At the Mojave weather station, located approximately 5 miles north of the site, the average I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

12 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A annual rainfall is 5.74 inches (U.S. Weather Bureau, 1982). The bulk of precipitation in the valley occurs between December and March. However, cyclonic storms in the fall and convectional storms in the summer occur infrequently (Blodgett, 1995). Temperatures in the project area commonly exceed 100 F in summer months, and drop below freezing in winter months, occasionally causing precipitation to fall as snow. For the nearby Mojave weather station, the warmest month is July, with an average high temperature of 96.8 F, and the coldest month is December, with an average low temperature of 32.7 F (Western Regional Climate Center, 2006). Diurnal temperature changes in the Mojave Desert commonly exceed 50 F throughout the year (BSK & Associates, Inc. [BSK], 1998). The average annual evaporation rate for the Mojave weather station is 80.0 inches, which exceeds precipitation by a multiple of nearly 14. The maximum evaporation has been documented to occur in July (12.32 in), and the minimum evaporation has been documented to occur in December (1.23 in) by the National Oceanic and Atmospheric Administration (NOAA, 1982). Vegetation in the western Mojave Desert consists primarily of sagebrush that is scattered across the landscape. Joshua trees are common along sandy flats and alluvial slopes between 2,800 and 4,000 feet above MSL. After unusually heavy winter rains, grasses and flowering annuals may grow in the spring (Dibblee, 1967). I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

13 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 4.0 BENEFICIAL GROUNDWATER USES In the Basin Plan, the Lahontan Regional Water Quality Control Board (LRWQCB) identifies four beneficial uses for groundwater in the Project area: municipal and domestic supply, agricultural supply, industrial service supply, and freshwater replenishment (California Regional Water Quality Control Board Lahontan Region, 1994). The LRWQCB defines municipal and domestic supply as waters used for community, military, or individual water supply systems, including, but not limited to, drinking water supply. Most wells in the vicinity of the project site are small-diameter and are used for domestic supply. Most of them are shallow and are only capable of producing 20 to 40 gallons per minute (gpm) (WZI, 1996b). The majority of the wells located in the Project area are no longer in service. Several of them are historical and can no longer be located. The LRWQCB defines agricultural supply as waters used for farming, horticulture, or ranching, but not limited to, irrigation, stock watering, and support of vegetation for range grazing. Despite the appearance of numerous wells in the Project area, groundwater in the area has historically been relatively undeveloped. Approximately 4 miles northeast of Soledad Mountain, wells in the Jameson Ranch area provided water for alfalfa farming from approximately (WZI, 1996b). This area is no longer used to grow alfalfa. Industrial service supply is defined by the LRWQCB as waters used for industrial activities that do not depend primarily on water quality, including, but not limited to, mining, cooling water supply, geothermal energy production, hydraulic conveyance, gravel washing, fire protection, and oil well repressurization. GQM will use groundwater for mining operations once the mine is active. Freshwater replenishment is defined by the LRWQCB as waters used for natural or artificial maintenance of surface water quantity or quality. In the vicinity of the Project area, no known uses of groundwater exist for freshwater replenishment. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

14 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 5.0 PREVIOUS STUDIES ON GROUNDWATER CONDITIONS A number of studies have been conducted on the hydrogeology of the western Mojave Desert as well as the site-specific hydrogeology. Several of these studies were water-resource related studies by the U.S. Geological Survey (USGS), and data from these reports were used in preparing this report. In the discussions that follow, the information is first presented from a regional perspective and then from a Project, site-specific viewpoint. 5.1 Regional Groundwater Studies Studies of the regional groundwater date back to the early 1900s, with early studies consisting mainly of water supply investigations completed by the USGS (Johnson, 1911 and Thompson, 1929). These early studies provide overviews of climate, natural resources, geology, and water resources for the western Mojave Desert region. The reports identify the alluvium as the main water-bearing formation and that the principal source of groundwater to the region is runoff from the adjacent mountains. Surface water in perennial streams percolates rapidly once the streams reach the valley alluvium. Because of the very high evaporation rates, precipitation falling in the valley makes a negligible contribution to the groundwater supply. According to Bloyd (1967), precipitation falling in the valley comprises at most, five percent of the total aquifer recharge. In the 1960s to 1980s, several regional studies were completed, most notably, a USGS Water Resources Report for the Antelope Valley East Kern Water Agency by Bloyd (1967), and a USGS report on the geology of the western Mojave Desert, by Dibblee (1967). Bloyd has interpreted that areas of consolidated rock and/or faults have created a groundwater divide that separates the western Mojave Desert into two groundwater basins, the Antelope Valley and Fremont Valley basins. The two basins are separated by the Rosamond Hills and the Bissell Hills. The project area, according to Bloyd, is located in the Gloster sub-basin of the Fremont Valley basin. 5.2 Local Groundwater Studies Recently, three groundwater studies have been completed for the site and surrounding area: Hydrology Study Summary for the Soledad Mountain Project, prepared for P.M. DeDycker and Associates in 1990 (Water, Waste & Land, Inc., 1990); Groundwater Supply Evaluation, Soledad I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

15 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Mountain Project, prepared for GQM in 1996 (WZI, 1996b); and Summary of Hydrogeological Conditions in the Vicinity of the Soledad Mountain Project, prepared for GQM in 1998 (BSK, 1998). In the 1990 report, Water, Waste & Land (WWL) studied local groundwater conditions as an initial step to determine the optimum location for a well with an adequate production rate for mine use. Data collected during the study showed that to achieve high production rates, a well would need to be located a sufficient distance from the bedrock outcrop to provide an adequate thickness of saturated alluvium. Wells were installed in Section 36, T11N, R13W, northwest of Soledad Mountain, with total depths of over 600 feet and initial water levels of approximately 300 feet below natural ground level (NGL). Aquifer testing results showed the wells were capable of producing up to 750 gpm (Gaines, 1990). Another significant finding from the WWL report, described groundwater flow in the immediate vicinity of the site as poorly defined due to Soledad Mountain and the absence of existing well information on the west side of the mountain. WWL suggests that regional easterly groundwater flow-paths in the alluvium are disrupted on the west side of Soledad Mountain and take a more northerly or southerly direction as groundwater flows bifurcate around the bedrock barrier. In 1996, WZI Inc. (WZI) installed three monitoring wells (MW-1, MW-2, and MW-3) on the north side of the proposed Phase 1 heap leach pad at the approximate locations shown in Figures 3 and 4 (WZI, 1996a). Following installation of the monitoring wells, WZI submitted a report to GQM which evaluated the groundwater supply potential of a production well located northeast of the monitoring wells (WZI, 1996b). Production well PW-1 was drilled in October, 1996, in Section 31, T11N, R12W, at the approximate location shown in Figures 3 and 4. The 300-foot deep well was drilled to the top of bedrock and completed with 115 feet of well screen. Well logs and completion diagrams for PW-1 and the monitoring wells are included in Appendices A and C, respectively. On October 11, 1996, WZI performed a step-rate pumping test in production well PW-1 to evaluate aquifer characteristics. Based on a total saturated aquifer thickness of 140 feet, the permeability was determined to be 5.87 darcies (or 5.67 X 10-4 cm/s). WZI determined that three wells would be the minimum number required to sustain the 650 gpm pumping rate needed by GQM for a 10-year operation. Pumping each well at one-third their maximum production rate would be much more effective and efficient than pumping one well at a rate of 650 gpm. BSK prepared a report for GQM in May 1998, summarizing the hydrogeologic conditions in the vicinity of the Soledad Mountain Project. BSK reviewed groundwater levels in the three GQM-owned monitoring wells installed in 1996 (MW-1, MW-2, and MW-3), a GQM-owned I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

16 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A production well (PW-1), and an unused, nearby private domestic well (the Peltier well) and concluded that the groundwater flow direction beneath the site is northwest at a gradient of approximately feet/feet. In 2005, a second production well, PW-2, was installed approximately 100 feet east of Gold Town Road in Section 32, T11N, R12W, approximately 150 feet north of PW-1 (WZI, 2005). The well was completed to a total depth of 285 feet, with 170 feet of slotted casing. In June 2005, American Well Technologies, Inc. conducted a production test. Based on the production test data, WZI determined that PW-2 is capable of sustaining a production rate of 200 to 300 gpm. The well log and construction diagram for PW-2 are included in Appendices A and C, respectively. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

17 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 6.0 GEOLOGY AND HYDROGEOLOGY In the discussions that follow, the regional geology is presented first, followed by a discussion of the regional hydrogeology. The regional geology and hydrogeology are followed by a summary of the local geology and hydrogeology in the vicinity the Project. 6.1 Regional Geologic Conditions According to Dibblee (1967), rocks in the western Mojave Desert region are grouped into three main categories: (1) Crystalline rocks of pre-tertiary age, (2) sedimentary and volcanic rocks of Tertiary age, and (3) unconsolidated sediments and local basalt flows of Quaternary age. The unconsolidated Quaternary alluvium of the western Mojave Desert are primarily alluvial fan deposits and consist of poorly sorted gravel, sand, silt, and clay of igneous origin. The unconsolidated alluvium of the western Mojave Desert has been deposited in alluvial fans extending from the source areas along the basin boundary and from the igneous outcrops that are located throughout the valley. The deposition of sediments within alluvial fans can vary considerably. However, the alluvial fan deposits typically occur as wedges of sediment that have been shed off of the higher bedrock areas and have been transported from the source areas by a combination of gravity, water, and wind. Sediment transport by water is the major source of the alluvial deposits. The alluvial fan deposits are generally composed of a number of these sedimentary wedges stacked upon each other. The fan deposits typically form as fining-upward sequences wherein the coarsest sediment has been deposited near the source area. This deposition of the coarsest sediment fraction near the source area results when the velocity of the water flowing from the bedrock areas lessens and is unable to support the coarser sediment load. Finer-grained material continues to be deposited further away from the source areas as the water velocity declines. A succession of these fining-upward sequences is typically seen when looking at cross-sections through the alluvium. However, during storm events, surface water forms braided streams that migrate across the surface of the fans. These streams may erode and partially remobilize the sediments, disrupting the typical fining-upward sequences. The Quaternary alluvium locally overlies older fan deposits of Tertiary rocks, on which an erosional surface of considerable relief has developed. Investigations have shown, however, that unconsolidated deposits range in thickness from 0 to more than 1,900 feet throughout the basin I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

18 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A (Dibblee, 1967). These deposits are mostly older alluvium underlying a veneer of younger alluvium of varying thickness. Numerous faults have been mapped throughout the western Mojave Desert over the past few decades. The major fault systems include the Garlock Fault zone and the San Andreas Fault zone. The Garlock fault zone separates the Tehachapi Mountains from the Western Mojave Basin. The San Andreas Fault zone forms the boundary between the San Gabriel Mountains and the southern Mojave Basin. Both faults are the result of major tectonic events and extend for over several hundred miles each. The nearest fault with documented Holocene movement is the Garlock Fault, located approximately 9 miles northwest of the Project area. The next closest Holocene fault is the San Andreas (Carrizo segment), located approximately 25 miles southwest of the Project area (USGS, 2006; California Geological Survey, 2001). Several smaller-scale faults have been mapped by previous investigators in the region. These include the Muroc Fault, located a dozen miles northeast of the Project area, the Rosamond Fault, mapped in the Rosamond Hills less than 10 miles south of the Project area, the southwest-northeast trending Randsburg-Mojave Fault, located a half-dozen miles west of the Project, and the small-scale Gloster Fault, mapped just east-southeast of Soledad Mountain. None of these smaller-scale faults have confirmed Holocene movement. Some of these faults have little, if any, surface expression, but have been mapped in the field because they form hydraulic barriers that can cause abrupt changes in water levels at-depth. Near-vertical faults can significantly alter groundwater flow dynamics such that water levels on either side of the fault differ by several hundred feet. One of the better-documented instances of this occurrence is with the Muroc Fault located northeast of the Project (Dibblee, 1967). 6.2 Regional Hydrogeologic Conditions In the western Mojave Desert, the primary source of groundwater recharge is from precipitation falling on the bordering Tehachapi and San Gabriel mountains. At the mountain front, coalesced alluvial fans (termed a bajada) act as the area of recharge; receiving surface water runoff from the higher mountains. Surface drainage from the mountains infiltrates rapidly upon encountering the alluvium on the desert floor. As the groundwater flows from west to east, faults and bedrock outcrops act as barriers to groundwater flowing through the alluvium. These flow barriers contributed to the demarcation of groundwater basin and sub-basin divisions developed by Bloyd (1967) and Thayer I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

19 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A (1946). Soledad Mountain is located near the center of the Gloster sub-basin, which is bordered by the Chaffee sub-basin to the north. The basin and sub-basin boundaries are shown in Figure 2. The Quaternary age alluvial sediments and the Tertiary age fan deposits form the primary groundwater aquifers in the Mojave Desert. Pre-Tertiary crystalline rocks and Tertiary volcanics, conglomerates, sandstones, shales, and carbonates, form localized barriers to groundwater movement through the alluvium. Wells installed in these units may yield at rates of tens of gallons per minute, at best. The largest well yields in the Mojave Desert, from several hundred to several thousand gallons per minute, occur in confined layers of sand or gravel in the alluvium that thin out into impervious clay near the lowest parts of the internally-drained valleys (Bloyd, 1967). The movement of groundwater in the Gloster sub-basin (south of the Chaffee sub-basin) is predominantly eastward (Bloyd, 1967). However, east of Soledad Mountain, groundwater in the Gloster sub-basin flows northeastward into the Chaffee sub-basin. The groundwater moves east across the Muroc fault into the California City sub-basin and further down-gradient to Koehn Lake, a dry lake bed. Koehn Lake, at an elevation of 1,940 feet above MSL, is the lowest point in the Fremont Valley drainage basin. According to Bloyd (1967), the estimated annual recharge to the Fremont Valley groundwater basin is 18,000 acre-feet. As a means of comparison, the much larger Antelope Valley to the south receives 58,000 acre-feet in annual recharge. It is estimated that only 5 percent of the total precipitation that falls in the basins infiltrates into the alluvium and reaches the aquifer. The majority of the precipitation is lost through evaporation. A fraction of the groundwater volume is expended for consumptive use. The Antelope Valley to the southeast of Soledad Mountain has been the subject of numerous studies related to declining water levels, diminishing water quality and land subsidence, especially in the areas near Edwards Air Force (Londquist, 1995). The causes for the declining water levels have been related to population increases and agricultural usage. Similar problems have not been observed in the Fremont Basin in the vicinity of Soledad Mountain and the town of Mojave. According to Bruce Gaines of the Mojave Public Utilities District (personal communication, 2006), water levels in wells in the surrounding areas near the town of Mojave have remained relatively static for the past two decades. The area near Soledad Mountain and the town of Mojave have not experienced the population gains and industrial or agricultural developments seen elsewhere in the Mojave Desert. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

20 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Thus, the alluvial aquifer in the area north of Soledad Mountain is not being overdrawn and therefore should be able to provide sufficient water resources to support an operational mine. 6.3 Local Geologic Conditions Soledad Mountain is an intrusive mass consisting of quartz latite, rhyolite, felsite and porphyritic felsite, tuff and tuff breccia, and basalt. The word Soledad is Spanish for solitude. Soledad Mountain is penetrated by vertical and near-vertical veins and dikes that are oriented just west of north and were conduits for hydrothermal fluids that resulted in the economic mineralization in the deposit (Dibblee, 1967). The ore occurs in epithermal fissures and veins that occupy brecciated and sheared zones in the intrusive host rock. The flanks of Soledad Mountain are covered with a wedge of sediments (colluvium) consisting of boulders, rock fragments, cobbles, gravel, sand, silt, and clay. The colluvium (talus, scree, and slopewash) is found on steeper slopes of the mountain and eventually flattens out and merges downslope into the alluvial fan deposits near the base of the mountain. The older alluvium, the principal aquifer in the area, is widely distributed and, in most places, is of considerable thickness. The older alluvium has a moderate permeability and, where 200 to 500 feet of the older alluvium are saturated, wells may yield 500 to 2,000 gpm (Bloyd, 1967). The younger alluvium, mainly of Recent age, consist of unconsolidated sand and angular boulders, cobbles and gravel, with small quantities of silt, clay, and fine to medium windblown sand. These materials are widespread, particularly in the basin areas, but are generally less than 150 feet thick (Bloyd, 1967). In drill cuttings, it is very difficult to differentiate these deposits from older, underlying alluvium. The younger alluvium and dune sand, where saturated, will yield water to wells. However, in the Antelope Valley-East Kern area, these deposits are usually situated above the water table and are not important water-bearing units. Interbedded Quaternary colluvial and alluvial deposits lie beneath shallow surface soils in the area beneath the Phase I heap leach pad (Figure 1). Golder has reproduced three geologic cross-sections from an earlier report (WZI, 1997). The three cross-sections (A-A, B-B, and C-C ) bisect the location of the future Phase I heap leach pad. In general, the borehole data indicates discontinuous stratified deposits of sandy gravel, silty sand, sandy silt, and clayey sand. The locations of the geologic cross-sections are shown in Figure 5 and the cross-sections are shown in Figures 6, 7, and 8. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

21 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Figure 6 is a cross-section trending east-west across a distal area of the alluvial fan deposits. The surface slopes gently northwest in this area. The primary sources of data for this cross-section are existing monitoring wells MW-3 and MW-2. Although the distance between the monitoring wells is approximately 600 feet, only a few of the individual subsurface units can be correlated laterally across the distance. This cross-section serves to highlight the lateral (and vertical) heterogeneity of the alluvial materials on the distal flanks of Soledad Mountain. The sedimentary units can be grouped into depositional packages based on sediment types and differing hydraulic conditions as the alluvial fans built out from the mountain. Silty sand with gravel predominates the cross-section and no obvious lacustrine or playa deposits are evident. In the upper portions of MW-3, between 60 and 120 feet below NGL, there is significant clay content in the sand. These materials were probably deposited along the distal portion of the alluvial fan where the velocity of water has decreased to a point where the water can only transport silt and clay. The overall grain size decreases from east to west and further out on the alluvial fan. The sandy gravel lenses noted in the upper 50 feet of monitoring well MW-3 are probably remnants of braided stream deposits that were laid down during large desert storms, where a coarser-grained bed load could be sustained further out onto the fan. Monitoring well MW-2 intersected bedrock at a depth of approximately 230 feet below NGL. First groundwater was detected at a depth of approximately 260 feet below NGL in monitoring well MW-3. Not enough data exists from hydraulic tests to determine if this is a water table aquifer or a semi-confined aquifer. Despite the interpreted slight westward dip of the beds in this cross-section, the static water table in this area is virtually flat. Figure 7 is a cross-section that includes all three existing monitoring wells. The cross-section is oriented sub-parallel to the alluvial fan that extends out from the northwestern edge of Soledad Mountain. The lateral distance on this cross-section is approximately 2,600 feet. Again, the interpreted dip of the various subsurface units is westward, but the lateral continuity of the units would appear to be more readily apparent than in the previous cross-section. The apparent lateral continuity appears to be an artifact of the more generalized characterization of the subsurface units and the scale used to represent them in this cross-section. At MW-1, the quartz latite bedrock of Soledad Mountain was encountered at depth. Groundwater was encountered in the clay horizons immediately above the bedrock. The clay is interpreted as the weathering product of the latite. Previous investigators correlated the water level in monitoring well MW-1 with the water levels in the other two monitoring wells as one continuous static water table. The current interpretation is that the occurrence of groundwater in MW-1, just above the bedrock surface, is entrapped groundwater held I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

22 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A tightly in localized clay lenses and is separate from the more regional, alluvial aquifer system. The groundwater level at MW-1 is discussed in more detail in Section 7.5. The third cross-section to be discussed here, Figure 8, has a general south to north orientation with the view looking west. Because this cross-section is more than 6,000 feet long and contains a limited number of data points, subsurface relationships presented here are tenuous. The overall dip of the beds in this cross-section is northward, mimicking the overall interpreted declining bedrock surface. With increased distance from Soledad Mountain, an overall fining is apparent in the subsurface materials. Coarser materials are closer to Soledad Mountain in the southern portion of the cross-section and more sand and clay are present in the northern portion of the cross-section. As previously mentioned, however, the clay at the bottom of monitoring well MW-1 appears to be the near-surface, in-place chemical weathering of the bedrock quartz latite. 6.4 Local Hydrogeologic Conditions Information on groundwater wells in the vicinity of the Project site is summarized in Table 1. Additional, more-specific information for those wells within one mile of the site is provided in Table 2. The approximate locations of the wells are shown in Figures 3 and 4. The data on Tables 1 and 2 show that the depths to water in the vicinity of the site range from approximately 150 to 300 feet below NGL, with most water levels between 200 and 250 feet below NGL. Most wells in the area are domestic supply wells and have low yields (below 50 gpm). The well with the highest reported yield is the Jameson Ranch Irrigation Well in Section 26, T11N, R12W (approximately 5 miles northeast of the Project), which was used to irrigate alfalfa from approximately According to Perennial Yield Assessment of Chaffee Subunit in the Fremont Valley Groundwater Basin by Slade (1994), the average withdrawal rate of the Jameson Ranch wells was approximately 2,500 gpm. The Mojave Public Utility District wells in Section 22, T11N, R12 W (approximately 2 miles northeast of the Project), reportedly tested at rates from 250 to 1,000 gpm, and the Gillis well, located nearby in Section 36, T11N, R13W (approximately 0.25 miles north-northwest of the Project), was reportedly tested at rates of 750 to 900 gpm (WZI 1996b). To determine the relative stability of groundwater levels in the project area, Golder reviewed historic groundwater levels for wells in T11N R13W, T11N R12W, T10N R13W, and T10N R12W. For the five wells with water level data from (wells numbered 3, 5, 29, 31, and 35 in Figure 4), water levels varied less than 10 feet over the 20-year period. Four of the five wells had decreasing I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

23 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A water levels, decreasing an average of 5 feet over the 20-year period. One well (well number 35) had an increasing trend in water levels, most likely due to groundwater recovery after nearby irrigation for alfalfa farming ceased in Irrigation water was supplied from well number 13, the Jameson Ranch well. Water levels for the three monitoring wells onsite (MW-1, MW-2, and MW-3) are shown in Table 3. From the time of installation in December 1996, to the present, water levels in the three onsite monitoring wells have remained relatively constant, with the water level in each well varying by 6 feet or less. Aquifer testing has been completed in the Project area. Specifically, slug tests were conducted in monitoring wells MW-2 and MW-3 (Earth Systems, 1997) and step-rate pumping tests were conducted in pumping well PW-1 in 1996 and in PW-2 in 2005 (WZI, 1996b; WZI, 2005). All of the tests indicated a relatively low permeability for the area. Both monitoring wells MW-2 and MW- 3 were very slow to respond to the inserted solid slug and exhibited little recovery within 3 hours. Representative permeability values for such protracted responses in these wells likely fall in the range of approximately 10-5 to 10-6 cm/s. The aquifer test in PW-1 yielded a somewhat comparable value of 5.67 x 10-4 cm/s. 6.5 Groundwater Flow Directions In May 1998, BSK consulted Mr. Wallace Spinarski, General Manager of the Antelope Valley East Kern Water Agency (AVEK), regarding groundwater conditions in the vicinity of the site. According to Mr. Spinarski, the primary groundwater flow direction in the Fremont Valley is generally eastward from the mountains toward the central valley areas and then northeast toward Koehn Lake (dry), an evaporative sump located 30 miles northeast of Soledad Mountain. WWL (1990) also described groundwater flow directions in the Fremont Valley as generally east, then northeast towards Koehn Lake. Locally, groundwater flow directions are complicated by the impermeable mass that is Soledad Mountain. As the eastward-flowing groundwater reaches Soledad Mountain, groundwater must flow north or south around the bedrock. Regional groundwater contours generated by WZI (1997) are shown in Figure 9. Based on groundwater levels in MW-1, MW-2, MW-3, PW-1, and the Peltier Well, BSK (1998) determined that groundwater flow at the site is generally northwest, at a gradient of approximately A key data point in this flow direction interpretation was the water level in MW-1, which was (and still is) approximately 40 feet higher than the other wells. Monitoring well MW-1 is located I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

24 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A laterally across the slope from wells MW-2 and MW-3 and a simple three-point solution of their respective water levels can lead to an erroneous interpretation. Based on the data on the MW-1 boring log and lithologies of the saturated zone at that location, water in MW-1 is most likely not hydraulically connected with groundwater in the other wells in the area. MW-1 is completed in a saturated sandy-clay/clayey-sand, which is situated directly upon the quartz latite bedrock of Soledad Mountain. The clay lens is a local feature and is not laterally continuous. Therefore, Golder does not interpret the groundwater in MW-1 as being hydraulically connected with the groundwater in MW-2 and MW-3. Monitoring wells MW-2 and MW-3 are completed in saturated sandy-gravel and sand with gravel, including volcanic rock fragments. Based on the groundwater data from the three monitoring points, a continuous piezometric surface does not exist across the area. Cross-sections showing the monitoring wells and their inferred stratigraphy are presented in Figures 5 through 8 and the well logs are contained in Appendix A. In addition to the discussion in the preceding paragraph, the large difference in hydraulic head (between MW-1 and the other two monitoring wells) and the amount of precipitation required to sustain that head also substantiates the interpretation that the gradient proposed by previous investigators is not accurate. If the groundwater table were laterally continuous between the three monitoring wells, an unrealistic amount of direct precipitation would be required on the northern flank of Soledad Mountain to sustain the 40 feet higher groundwater elevation at MW-1 than at MW-2 and MW-3. As discussed previously, Soledad Mountain is not a recharge area, both because of the limited precipitation in the valley and also the high evaporation rates. Therefore, groundwater flow directions at the Soledad Mountain Project should not be interpreted using data from monitoring well MW-1. In all likelihood, groundwater flow at the base of Soledad Mountain in the alluvial aquifer system follows the regional trend and is west to east-northeast, not northwest (against the regional gradient), as interpreted by others. Additional monitoring wells would be required to establish the specific gradient and direction of groundwater flow in areas immediately north of the Project. Water levels in area wells are all within a few feet, demonstrating that the aquifer in the area is generally flat-lying. The water levels have remained relatively static since the inception of waterlevel monitoring at the Project. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

25 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 7.0 GROUNDWATER QUALITY According to Duell (1987), the predominate type of groundwater in the region is typically calcium bicarbonate near the Tehachapi mountains and sodium bicarbonate or sodium sulfate character in the central part of the Antelope Valley basin. More specifically, Duell describes water-quality types in the Willow Springs, Gloster, and Chaffee subunits as sodium and calcium bicarbonate and calcium sulfate. Groundwater quality generally improves from east to west, with lower concentrations of dissolved solids near the mountains, where recharge occurs. High concentrations of nitrate and boron have been measured in groundwater in the region (Kennedy/Jenks Consultants, 1995). High concentrations of boron are expected, as the Mojave Desert is a well-known source for borax. In addition, groundwater in Kern County is known to have high levels of naturally occurring arsenic (Pipes, 2005). As shown in Table 2, wells 39, 40, and 45 have documented, high concentrations of arsenic; 0.12 milligrams per liter (mg/l), 0.06 mg/l, and 0.30 mg/l, respectively. Groundwater at the site has been analyzed regularly since installation of the three monitoring wells in September Earth System Consultants conducted groundwater sampling of the three monitoring wells in December 1996, and in March, June, and September BSK conducted groundwater sampling 20 times between June 1998 and December PW-1 was sampled once by Bryant Pump and Supply following installation in September 1996 and PW-2 was sampled once by WZI following a pumping test in June Based on data collected from the sampling events described above, the groundwater chemistries at MW-2 and MW-3 are similar, but differ greatly from MW-1. MW-1 has ph values ranging from 8 to 11, and higher sulfate, calcium, and potassium concentrations than those observed in groundwater samples from MW-2 and MW-3. The different chemistry in MW-1 is most likely attributable to its hydraulic isolation and close proximity to weathered bedrock. Groundwater chemistries at MW-2 and MW-3 are similar, with ph generally between 8 and 9. Arsenic concentrations in samples from monitoring wells MW-2 and MW-3 are consistently above the California maximum contaminant level (MCL) of 10 micrograms per liter (μg/l). In monitoring well MW-3, arsenic concentrations have been recorded as high as 399 μg/l. PW-1 and PW-2 arsenic concentrations were also above the MCL, with concentrations of 48 and 75 μg/l, respectively. Fluoride concentrations in MW-2 and MW-3 are near the MCL of 2 mg/l, with reported concentrations at MW-3 as high as 1.85 mg/l. Additional analytical laboratory results are included in Appendix B. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

26 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Figure 10 shows a Piper plot of the groundwater chemistries for MW-1, MW-2, and MW-3. MW-1 has calcium sulfate type groundwater, MW-2 is sodium sulfate or sodium bicarbonate type, and MW-3 is sodium sulfate type. As shown in the figure, MW-1 groundwater chemistry differs significantly from MW-2 and MW-3. However, all of the water-quality types found in the monitoring wells are consistent with the types presented by Duell for the Antelope Valley Basin and Willow Springs, Gloster, and Chaffee sub-basins. 7.1 Constituents of Concern The proposed list of constituents of concern (COCs) for the Project was developed based on the use of cyanide, the anticipated mining processes, and the existing groundwater quality in the area. Monitoring wells will be sampled and analyzed for the COCs according to an approved sampling protocol which will include methods for sample collection, sample preservation and shipment, analytical procedures, and chain of custody control. The proposed COCs are the following: ph, total dissolved solids, total cyanide, weak acid-dissociable (WAD) cyanide, and arsenic. The sections below provide rationale for including each analyte as a COC and the methods used to determine the concentration limit for each COC. ph The groundwater ph could be changed by a leak in the leach pad which could release high ph solution. Because ph is a relatively straightforward water quality indicator, it is included in the list of COCs. Total Dissolved Solids Total dissolved solids (TDS) is another straightforward water quality indicator parameter and is included in this list for completeness. Cyanide and WAD Cyanide The process solution will contain cyanide. In the event of a leak in the pad liner system, cyanide would be released to the alluvium beneath the heap leach pad. Analyses of cyanide levels include tests for WAD cyanide (used during the course of operations and at closure) and total cyanide (used at closure). I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

27 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Arsenic Naturally-occurring arsenic is known to occur in the groundwater in the area. 7.2 Concentration Limits The determination of the concentration limit for each COC was conducted using several different statistical analyses as defined in Title 27 CCR, Section (formerly Title 23 CCR, Section ). The statistical analysis of the analytical results and the corresponding discussion were provided by Arcadis (2006). The objective of this statistical analysis was to obtain a concentration limit greater than background (CLGB) for each of the COCs for the Project. The CLGB was calculated using 10 years of analytical results (up to 25 sampling events, depending on analyte). Determination of a proposed concentration limit for total cyanide is not included because monitoring for total cyanide in monitoring wells was not initiated until May The COC datasets that report threshold values (data below a laboratory reporting limit [RL]) are considered censored data for the purposes of statistical analyses. Many of the datasets have more than one RL due to different laboratories performing the analyses and due to changing methods. To calculate the mean and standard deviation of the datasets, threshold values were divided by 2. The mean and standard deviation were calculated for each well for each of the proposed COCs and other parameters collected during the characterization period. The results of this analysis on the proposed COCs are presented in Table 4. In addition, the median of the data is presented in Table 5, and the range of the data for each proposed COC (minimum and maximum) is detailed in Table 6. All potential outliers in the background data set were included in the statistical analysis because of the present inability to appropriately exclude any values. Additionally, Table 7 presents, for each well, the number of data points for each proposed COC, including the number of non-detects for each. Establishment of CLGBs from Background Values for COCs According to 27 CCR paragraph (e)(10), background values for COCs may be established based upon reference to historical data ( (e)(10)(a)). Tables 4 through 7, described above, provide a summary of the historical data from December 26, 1996 through May 2, The historical data were used to compute the upper tolerance limit of the background values, or the concentration limit greater than background. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

28 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Because much of the data for WAD cyanide consists of non-detects (Table 7), the U.S. Environmental Protection Agency (EPA) recommends that for data sets with >70% non-detects, the maximum detected concentration should be used as the background concentration (EPA, 2006b). The maximum detected amount was thus used as the tolerance limit for the concentration greater than background for data that fit this criterion (listed in Table 7). The majority of the data for WAD Cyanide fit this criterion. For the remaining data that did not fit the >70% non-detect criteria, the Shapiro-Wilk test was used to test if the data were normally distributed (Gilbert, 1987). The distribution of the data (normal, log-normal, or neither), determined the suitability of parametric or non-parametric statistical analyses for the background data. All of the data were tested using this method and the following data sets were found to be normal or log-normal: Arsenic for monitoring well MW-1; ph and Arsenic for MW-3. As recommended by EPA, the normal 95% upper tolerance limit (UTL) is given by the following equation (EPA, 2006a): UTL = x + K * s Where s = standard deviation, K = K(n, α, p) is the tolerance factor and depends upon the sample size, n, confidence coefficient = (1 - α), and the coverage proportion = p (90%). The UTL given by the above, with α = 0.05, represents a 95% confidence interval for the 90 th percentile of the underlying normal distribution. The values of the tolerance factor, K, were obtained from a standard statistics table provided in Hahn and Meeker, Five data sets remained for which the maximum detect values were not appropriate for the CLGB, and were not parametric. These data sets were assumed to be normal and the UTL was calculated as described above. The results of the statistical analyses are presented in Table 8, with superscripts provided to indicate which method was used to derive the CLGB. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

29 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Determination of a Measurably Significant Release According to 27 CCR paragraph (e)(8), the statistical analysis of the data presented above provides for the establishment of a Tolerance Interval (paragraph (e)(8)(a)). This upper tolerance limit will be used to define when a release has occurred. Monitoring data will be collected and if a COC is detected above the upper confidence limit concentration specified in Table 8 then the value will be flagged for retest. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

30 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 8.0 INFORMATION STILL NEEDED Additional information would aid in assessing the hydrogeologic conditions in the vicinity of Soledad Mountain. GQM installed a meteorological station in September After sufficient data collection, the site-specific meteorological data will help in developing a more refined water balance for the site. In the event that the Phase 2 heap leach pad becomes a planned component, new monitoring wells in the pad area would aid in refining the understanding of local hydrogeologic conditions in that area. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

31 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 9.0 CONCLUSIONS The probability of water or process solutions from the Project adversely affecting groundwater quality in the vicinity of the site is low. This low probability is due to numerous mitigating factors. First and foremost among these is the arid climate. The arid climate in the vicinity of the site results in annual evaporation totals that are over ten times the annual precipitation totals. These conditions prevent aquifer recharge from occurring on site, with the nearest recharge occurring near the base of the Tehachapi Mountains, approximately five miles northwest of the site. Second, the depth to water in the site vicinity also limits the ability of releases from the mining operation to impact groundwater. Within the Project site and surrounding area (within one mile of the site), depths to groundwater range from 150 to 300 feet. In the unlikely event that surface or process waters were to reach groundwater, the greater depths to groundwater would result in considerably more time and more soil available for natural treatment and attenuation processes. However, given the arid environment, no recharge is expected because most water will readily evaporate. Lastly, the aquifer may contain horizontal, clay-rich lake bed or playa layers of lower permeability, which could greatly impede vertical flow into the groundwater. In addition, the heap leach pad design includes a composite liner system with a leachate collection system above the composite liner to minimize head on the liner. The composite liner system will consist of a one-foot thick compacted low-permeability soil layer and overlying geomembrane liner. Vadose zone monitoring and leak detection systems are included in the heap leach facility design to provide additional protection and advance warning of any potential impacts to groundwater. More details of these components are provided in the Revised Geotechnical Design Report (Golder, 2006) located in Appendix 2.0 of the ROWD. Given these conditions, mine operations are not anticipated to impact groundwater. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

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33 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A 11.0 REFERENCES Arcadis, 2006, Statistical Analysis of Soledad Mountain Background Monitoring Well Data, December 8 prepared for internal ROWD use. Blodgett, James C., 1995, Precipitation Depth-Duration and Frequency Characteristics for Antelope valley, Mojave Desert, California. U.S. Geological Survey Water-Resources Investigations Report Bloyd, R.M., Jr. 1967, Water Resources of the Antelope Valley East Kern Water Agency Area, California. USGS Water Resources Division, Open File Report BSK & Associates, 1998, Summary of Hydrogeological Conditions in the Vicinity of the Soledad Mountain Project, BSK Job , May 28. California Geological Survey, 2001, GIS Files of the Official Alquist-Priolo Earthquake Fault Zones, Southern Region, CD California Regional Water Quality Control Board Water Quality Control Plan for the Lahontan Region, October Dibblee, Thomas W., Jr. 1967, Areal Geology of the Western Mojave Desert California. U.S. Geological Survey Professional Paper 522. Duell, L.F.W., Jr., 1987, Geohydrology of the Antelope Valley Area, California, and Design for a Groundwater Quality Monitoring Network. USGS Water Resources Investigations Report Earth Systems Consultants, Southern California, 1997, Monitoring Well Installation and Groundwater Quality Assessment Report. SG-4754-L01. EPA, 2006a, ProUCL Version 4.0 Technical Guide. Las Vegas, NV: United States Environmental Protection Agency. April 2006, EPA/600/R04/079. EPA, 2006b, On the Computation of a 95% Upper Confidence Limit of the Unknown Population Mean Based Upon Data Sets with Below Detection Limit Observations. Las Vegas, NV: United States Environmental Protection Agency. March 2006, EPA/600/R-06/022. Gaines, Bruce, 1990, Personal Communication, Mojave Public Utilities District, Mojave, CA, April. Gaines, Bruce, 2006, Personal Communication, Mojave Public Utilities District, Mojave, CA, November. Gilbert, R.O Statistical Methods for Environmental Pollution Monitoring. Van Nostrand Reinhold, New York. Golden Queen Mining Company, 2007, Report of Waste Discharge. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

34 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A Golder Associates, Inc. (Golder), Soledad Mountain Project Heap Leach Facility Revised Geotechnical Design Report, prepared for Golden Queen Mining Co. Ltd., December, Hahn, J. G. and Meeker, W.Q., 1991, Statistical Intervals. A Guide for Practitioners. John Wiley. Johnson, Harry R., 1911, Water Resources of Antelope Valley, California. U.S. Geological Survey Water Supply Paper 278. Kennedy/Jenks Consultants, 1995, Antelope Valley Water Resources Study, prepared for the Antelope Valley Water Group, November Kunkel, Fred, and others, 1957, Data on Water Wells in the Willow Springs, Gloster, and Chaffee Areas, Kern County, California. U.S. Geological Survey, California Department of Water Resources Leighton, D.A. and Phillips, S.P., 2003, Simulation of Ground-Water Flow and Land Subsidence in the Antelope valley Ground-Water Basin, California, U.S. Geological Survey, Water- Resources Investigations Report Londquist, C.J., 1995, Hydrogeology and land subsidence, Antelope Valley, California, in Prince, K.R., Galloway, D.L., and Leake, S.A., eds., U.S. Geological Survey Subsidence Interest Group Conference, Edwards Air Force Base, Antelope Valley, California, November 18-19, 1992, Abstracts and Summary: U.S. Geological Survey Open-File Report NOAA, 1982, Mean Monthly, Seasonal, and Annual Pan Evaporation for the United States, U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Weather Service, December Pipes, William, 2005, GRA s Arsenic in Groundwater Symposium Tales of Trial, Tribulation, and Treatment, HydroVisions Volume 14, No. 1, Groundwater Resources Association of California, Spring Slade, R.C., 1994, Perennial Yield Assessment of Chaffee Subunit in the Fremont valley Groundwater Basin, Richard C. Slade & Associates, Report. Sneed, Michelle and Galloway, D.L., 2000, Aquifer-System Compaction: Analyses and Simulations The Holly Site, Edwards Air Force Base, Antelope Valley, California, U.S. Geological Survey, Water-Resources Investigations Report Thayer, W.N., 1946, Geologic features of Antelope Valley, California: Los Angeles County Flood Control District. Thompson, D.G., 1929, The Mojave Desert Region, California, U.S. Geological survey Water-Supply Paper 578. U.S. Department of Agriculture, 1981, Soil Survey of Kern County California, Southeastern Part. Soil Conservation Service, in cooperation with the University of California Agricultural Experiment Station. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

35 SOLEDAD MOUNTAIN HYDROGEOLOGY STUDY Rev. May 2, A U.S. Geological Survey National Earthquake Information Center, California and Preliminary Determination of Epicenters (PDE) catalogs < Accessed U.S. Weather Bureau, 1982, Climatology of the United States. Water, Waste & Land, Inc., 1990, Hydrology Study Summary for the Soledad Mountain Project. July. Western Regional Climate Center < Accessed October 4, WZI Inc., 1996a, Work Plan for Groundwater Monitoring Well Installation, Golden Queen Mining Company, Inc., Soledad Mountain Project, Kern County, California. November. WZI Inc., 1996b, Groundwater Supply Evaluation, Soledad Mountain Project. December. WZI Inc., 1997, Report of Waste Discharge for Soledad Mountain Project, Golden Queen Mining Company, June WZI Inc., 2005, Water Supply Well PW-2, Golden Queen Mine, Kern County, California. I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

36 TABLES I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

37 Table 1 Summary of Existing Water Well Data Map ID Location 1 Ground Depth to Northing 2 Easting 2 Source 3 Total Water 4 Ground- Surface Groundwater Yield Township Range Section/ UTM NAD27 UTM NAD27 Depth (ft) water date Elevation 5 Elevation (ft) (gpm) (ft) Quarter (ft) Comments 1 10N 13W 32M B Mar N 13W 19M A & B Oct N 12W 20C(1) B Mar N 12W 20C(2) B Mar N 12W 12K A & B Mar N 12W 9A B N 13W 36K B & E Mar destroyed 8 11N 13W 36L B & E Sep destroyed 9 11N 13W 36C B Apr destroyed 10 11N 13W 36B B Sep 'Gillis' well, destroyed 11 11N 13W 29M B Nov N 12W 29D B Nov Former Jameson Ranch 13 11N 12W 26J A & B Feb * irrigation well 14 11N 13W 24A B Feb N 13W 19C B Nov N 12W 14D B Feb N 12W 18B B Sep N 12W 12M B Feb N 12W 4(1) A terminated on 'hard rock' 20 10N 12W 4(2) A N 12W 4(3) A terminated on 'hard rock' 22 10N 12W 2B A & B terminated on 'granite' March 2007 Page 1 of 3 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsHydro Table 1 Golder Associates A

38 Table 1 Summary of Existing Water Well Data Location 1 Ground Depth to Map ID Northing 2 Easting 2 Source 3 Total Water 4 Ground- Surface Groundwater Yield Comments Township Range Section/ UTM NAD27 UTM NAD27 Depth (ft) water date Elevation 5 Elevation (ft) (gpm) (ft) Quarter (ft) 23 10N 12W A alluvium total depth 24 10N 12W 10(1) A alluvium total depth 25 10N 12W 10(2) A alluvium total depth 26 10N 12W 10(3) A N 12W 10(4) A N 12W 10(5) A N 12W 13H A & B Mar N 12W 15M B Jul N 12W 22J A & B Mar N 12W A pump limitation 33 11N 12W 33(1) A Fair 34 11N 12W 33(2) A terminated in 'bedrock' 35 11N 12W 22F A & B Mar N 12W 22(1) A Mojave P.U.D. well 37 11N 12W 22(2) A 'rock' at total depth 38 11N 12W 22(3) A Mojave P.U.D. well 39 11N 12W 32E(1) A N 12W 32E(2) A N 12W 32E(3) A N 12W 32R A N 13W A alluvium total depth 44 11N 13W A top 50 ft alluvium 45 10N 13W E N 12W 5B E Apr in Goldtown subdivision March 2007 Page 2 of 3 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsHydro Table 1 Golder Associates A

39 Table 1 Summary of Existing Water Well Data Location 1 Ground Depth to Map ID Northing 2 Easting 2 Source 3 Total Water 4 Ground- Surface Groundwater Yield Township Range Section/ UTM NAD27 UTM NAD27 Depth (ft) water date Elevation 5 Elevation (ft) (gpm) (ft) Quarter (ft) 47 11N 12W F Comments MW-1 10N 12W 6C D Mar Golden Queen Well MW-2 10N 12W 6D D Mar Golden Queen Well MW-3 10N 12W 6D D Mar Golden Queen Well Peltier Well 11N 12W C Mar PW-1 11N 12W 32M D Mar Golden Queen Well PW-2 11N 12W D May Golden Queen Well 1 Quarter locations are identified according to the California numbering system. Numbers in parentheses represent multiple wells with the same location. 2 Coordinates in italics are approximate locations. Coordinates not in italics are from either the California Department of Water Resources, or were surveyed by GQM. 3 A= WZI Inc., 1996, Groundwater Supply Evaluation, Soledad Mountain Project B= California Department of Water Resources C= BSK & Associates, 1998, Summary of Hydrogeological Conditions in the Vicinity of the Soledad Mountain Project, BSK Job D= Golden Queen Mining Company E= WZI Inc., 1997, Golden Queen Mining Company, Report of Waste Discharge for Soledad Mountain Project F= Personal communication with owner, Butch Robinson, Depth to water is from ground surface, unless the value is in bold, representing measurements from top of casing 5 Ground surface elevation, except values in bold, which are top of casing elevations Cells highlighted green indicate that groundwater measurements for additional dates are available in Appendix D. * 2500 gpm is the average pumping rate of all Jameson Ranch wells (Richard C. Slade & Associates, 1994, Perennial Yield Assessment of Chaffee Subunit in the Fremont valley Groundwater Basin) March 2007 Page 3 of 3 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsHydro Table 1 Golder Associates A

40 Table 2 Additional Data for Existing Water Wells Map ID Total Depth (ft) Casing Diameter (in) Drilling Method Screened Interval (ft) Owner Rotary -- destroyed Unused gpm, Greenshale at total depth Rotary -- destroyed Unused gpm (turbine) /8 Rotary (?) GWM Driller Bryant Pump and Drilling 1984 Domestic 0-50ft Coliform absent, Yes Dr. L. Schultz s Public Supply GWM Cable -- GWM Unused Domestic Unused Domestic Yield=40 gpm, 1972: TDS=376.1 mg/l, Arsenic=0.12 mg/l Yield=40 gpm, 1972: TDS=413.7 mg/l, Arsenic=0.06 mg/l gpm rate Rotary -- Verdi Development 1955 Unused Maintained by Darryl Westerfield alluvium total depth, 750 gpm yield Year Drilled Use of Well GQM Domestic Butch Robinson Domestic Seals Well Logs Available Additional Information TDS= 280 mg/l, Arsenic 0.3 mg/l, well deepened in 1988 reported by locals, contaminated with cyanide, no verification MW Mud rotary GQM MW Mud rotary GQM MW Mud rotary GQM Bryant Pump and Drilling Bryant Pump and Drilling Bryant Pump and Drilling Peltier Well PW Rotary GQM PW Mud rotary GQM Bryant Pump and Drilling RL RedFeairn Drilling 1996 Monitoring 1996 Monitoring 1996 Monitoring Modified from WZI Inc., 1997, Golden Queen Mining Company, Report of Waste Discharge for Soledad Mountain Project Unused Domestic Supply well for future mining Supply well for future mining 0-50ft, cement 0-70ft, cement 0-55ft, cement Lithologic, Appendix A Lithologic, Appendix A Lithologic, Appendix A Water Quality, Appendix B Water Quality, Appendix B Water Quality, Appendix B ft 0-55ft, cement Lithologic, Appendix A Lithologic, Appendix A Water Quality, Appendix B Water Quality, Appendix B March 2007 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsHydro Table 2 Golder Associates A

41 Table 3 Water Levels at Monitoring Wells MW-1, MW-2, and MW-3 MW-1 TOC Elevation: ft MW-2 TOC Elevation: ft MW-3 TOC Elevation: Date Depth to Water (ft) Water Level Elevation (ft) Depth to Water (ft) Water Level Elevation (ft) Depth to Water (ft) Water Level Elevation (ft) 12/26/ /26/ /23/ /25/ /15/ /26/ /17/ /29/ /29/ /25/ /22/ /1/ /15/ /28/ /28/ /12/ /6/ /19/ /31/ /23/ /17/ /16/ /29/ /6/ /2/ TOC Elevation: Top of casing elevation above mean sea level, surveyed by Dewalt Corporation, 10/10/06 Water levels measured by BSK & Associates March 2007 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsHydro Golder Associates Table A

42 Table 4 Mean and Standard Deviation of Background Concentrations of COCs in Monitoring Wells (12/26/96 5/2/06)* Monitoring Well ph Total Dissolved Solids WAD Cyanide Arsenic ± ± ± ± ± ± ± ± ± ± ± ± *Threshold reporting limit values were substituted with ½ of the reporting limit; Statistical analyses provided by Arcadis, 2006 Values are mg/l (except for ph). Table 5 Median of Background Concentrations of COCs in Monitoring Wells (12/26/96 5/2/06)* Monitoring Well ph Total Dissolved Solids WAD Cyanide Arsenic *Threshold reporting limit values were substituted with ½ of the reporting limit; Statistical analyses provided by Arcadis, 2006 Values are mg/l (except for ph). March 2007 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsT4 & T5 Golder Associates A

43 Table 6 Range of Background Concentrations of COCs in Monitoring Wells (12/26/96-5/2/06)* Monitoring Well ph Total Dissolved Solids WAD Cyanide Arsenic < < < < * Statistical analyses provided by Arcadis, 2006 Values are mg/l (except for ph). Table 7 Number of Data Points and Non-detects for each COC (NDs, including % non-detects in data set).* Monitoring Well ph Total Dissolved Solids WAD Cyanide Arsenic NDs, % 0/0% 0/0% 24/100% 5/20% NDs, % 0/0% 0/0% 23/95.8% 0/0% NDs, % 0/0% 0/0% 24/100% 0/0% * Statistical analyses provided by Arcadis, 2006 March 2007 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsT6 & T7 Golder Associates A

44 Table 8 Upper Tolerance Limits of COCs Determined by Non-parametric Statistical Analysis of the Background Data Set* (These are the concentration limits greater than background (CLGB) selected for the COCs.) COC MW-1 MW-2 MW-3 ph Total dissolved solids WAD cyanide Arsenic Notes: 1 Threshold reporting limit. 2 Maximum detected concentration. 3 Upper tolerance limit determined from parametric data analysis of normal data. 4 Upper tolerance limit determined from parametric data analysis of non-normal data. * Statistical analyses provided by Arcadis, 2006 March 2007 I:\04\2299A\0400\HydrogeoRep-Fnl-Rev08Mar07\ A.Soledad Hydro Tables.FNL.08MAR07.xlsT8 Golder Associates A

45 FIGURES I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

46 Phase 1 Heap Leach Pad Waste Rock Future Phase 2 Heap Leach Pad Open Pit Open Pit Waste Rock LEGEND REFERENCE Heap Leach Pad Open Pit (Phases 1-5) Open Pit (Ultimate) Waste Rock One-Mile Buffer Contour intervals on topographic map: 20ft Proposed Site Location: Golden Queen Mining Company, 2006 USGS 7.5 Topographic Quadrangles drawn from TOPO!: Mojave, Soledad Mountain Projection: UTM NAD27 Zone 11N PROJECT TITLE Miles SCALE 1:35,000 GOLDEN QUEEN MINING CO., INC. SOLEDAD MOUNTAIN PROJECT - HYDROGEOLOGY STUDY MOJAVE, KERN COUNTY, CALIFORNIA SITE MAP PROJECT No A FILE No. 8-5x11_Soledad_Topo.mxd DESIGN GIS AJR IJH 11/02/ /05/2006 SCALE AS SHOWN REV 0 A CHECK REVIEW SED MJR 12/05/ /05/2006 FIGURE 1

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48 35 1 0"N "W "W "W "W "N PW "N PW "N Peltier Well MW-3 MW-2 MW "N "N "N "N "W LEGEND Well Location Proposed Project Facilities One-Mile Buffer "W PROJECT "W "W Miles SCALE 1:35,000 GOLDEN QUEEN MINING CO., INC. SOLEDAD MOUNTAIN PROJECT - HYDROGEOLOGY STUDY MOJAVE, KERN COUNTY, CALIFORNIA REFERENCE Well Locations: WZI, Inc, 1996, California Department of Water Resources, Golden Queen Mining Company Proposed Site Location: Golden Queen Mining Co USGS 7.5 Topographic Quadrangles drawn from TOPO!: Mojave, Soledad Mountain Projection: UTM NAD27 Zone 11N TITLE MAP OF EXISTING WELLS WITHIN ONE MILE OF PROJECT SITE PROJECT No A FILE No. WellFigure_Small.mxd DESIGN GIS AJR IJH 11/02/ /15/2006 SCALE AS SHOWN REV 0 A CHECK REVIEW SED MJR 11/15/ /05/2006 FIGURE 3

49 "W "W "N "N "N Peltier Well MW-3 MW-2 MW PW-2 PW "N "N "N "W LEGEND Well Location Proposed Project Facilities One-Mile Buffer PROJECT "W Miles SCALE 1:120,000 GOLDEN QUEEN MINING CO., INC. SOLEDAD MOUNTAIN PROJECT - HYDROGEOLOGY STUDY MOJAVE, KERN COUNTY, CALIFORNIA REFERENCE Well Locations: WZI, Inc, 1996, California Department of Water Resources, Golden Queen Mining Company Proposed Site Location: Golden Queen Mining Co USGS 100k Topographic Quadrangles drawn from TOPO!: Tehachapi, Lancaster Projection: UTM NAD27 Zone 11N TITLE MAP OF EXISTING WELLS IN VICINITY OF PROJECT SITE PROJECT No A FILE No. WellFigure_Large.mxd DESIGN GIS AJR IJH 11/02/ /15/2006 SCALE AS SHOWN REV 0 A CHECK REVIEW SED MJR 11/15/ /05/2006 FIGURE 4

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54 "W "W "N "N "N "N "W LEGEND Well Location Groundwater Contour Line Proposed Project Facilities PROJECT "W Miles SCALE 1:100,000 GOLDEN QUEEN MINING CO., INC. SOLEDAD MOUNTAIN PROJECT - HYDROGEOLOGY STUDY MOJAVE, KERN COUNTY, CALIFORNIA REFERENCE Well Locations: WZI, Inc, 1996, California Department of Water Resources, Golden Queen Mining Company Groudwater Contours: WZI Inc., 1990 Proposed Site Location: Golden Queen Mining Co USGS 100k Topographic Quadrangles drawn from TOPO!: Tehachapi, Lancaster Projection: UTM NAD27 Zone 11N TITLE REGIONAL GROUNDWATER CONTOURS PROJECT No A FILE No. 8-5x11_GWContours.mxd DESIGN GIS CHECK REVIEW AJR 11/02/2006 SCALE AS SHOWN REV 0 A IJH 12/01/2006 SED 12/05/2006 MJR 12/05/2006 FIGURE 9

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56 "W "W PW-2 PW-1 MW-3 MW-2 MW "N "N "N "N LEGEND REFERENCE Proposed Monitoring Well Existing Monitoring Well Existing Production Well Proposed Project Facilities "W Well Locations: WZI, Inc, 1996, California Department of Water Resources, Golden Queen Mining Company Proposed Site Location: Golden Queen Mining Co USGS 7.5 Topographic Quadrangles drawn from TOPO!: Mojave, Soledad Mountain Projection: UTM NAD27 Zone 11N PROJECT TITLE "W Miles SCALE 1:20,000 GOLDEN QUEEN MINING CO., INC. SOLEDAD MOUNTAIN PROJECT - HYDROGEOLOGY STUDY MOJAVE, KERN COUNTY, CALIFORNIA PROPOSED MONITORING WELLS PROJECT No A FILE No. 8-5x11_Sole_MonWells.mxd DESIGN GIS AJR IJH 11/02/ /05/2006 SCALE AS SHOWN REV 0 A CHECK REVIEW SED MJR 12/05/ /05/2006 FIGURE 11

57 APPENDIX A WELL LOGS I:\04\2299A\0400\HYDROGEOREP-FNL-REV02MAY07\ A.HYDROGEOREP.FNL-REV02MAY07.DOC Golder Associates

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