Slide 1: Restore the Site
RESTORE THE SITE Valley County, Idaho September 2020 MAX.TSX MDRPF.OTCQX
Slide 2: Financial Assurance 101
FINANCIAL ASSURANCE 101
Slide 3: What Is Financial Assurance? What Is a Reclamation Bond?
FINANCIAL ASSURANCE 101 WHAT IS FINANCIAL ASSURANCE? WHAT IS A RECLAMATION BOND? Financial Assurance • A form of guaranteed funds that ensure completion of a specific objective. • A financial instrument that a company provides to ensure resources are available to pay for closure, post- closure care,
Slide 4: What Does Financial Assurance Cover?
FINANCIAL ASSURANCE 101 WHAT DOES FINANCIAL ASSURANCE COVER? • Federal and state regulations require mine operators to provide comprehensive and conservative financial assurance for all likely contingencies based on agency costs to implement, manage, and complete reclamation of sites requiring gover
Slide 5: Financial Assurance Must Be Provided Before Mining Can Start
FINANCIAL ASSURANCE 101 FINANCIAL ASSURANCE MUST BE PROVIDED BEFORE MINING CAN START • The Forest Service and Idaho regulations will require Midas Gold to provide financial assurance for the Stibnite Gold Project before mining can start. • The financial assurance will provide the Forest Service and
Slide 6: FA Instruments Provide Agencies Readily Accessible Funds
FINANCIAL ASSURANCE 101 FA INSTRUMENTS ARE STRUCTURED TO PROVIDE AGENCIES WITH READILY ACCESSIBLE FUNDS Examples of acceptable financial assurance instruments 1. Cash 2. U.S. Treasury bills, notes, and bonds whose principal and interest is unconditionally guaranteed by the U. S. Government • Typical
Slide 7: Today's Mines Won't Become Tomorrow's Problems
FINANCIAL ASSURANCE 101 ENVIRONMENTAL REGULATIONS AND FINANCIAL ASSURANCE GUARANTEE TODAY’S MINES WON’T BECOME TOMORROW’S PROBLEMS Most environmental problems occur at mines operated and closed decades before the enactment of modern environmental regulations or financial assurance requirements Most
Slide 8: Chronology of Enactment of Federal Environmental Laws
Decade Enacted Partial List of Federal Environmental Laws 1960s National Historic Preservation Act Air Quality Act National Environmental Policy Act Wilderness Act Solid Waste Disposal Act 1970s Federal Water Pollution Control Act Amendments Clean Air Act Clean Water Act Clean Water Act Amendments C
Slide 9: Dates When Mining Started at Some Western Mining Districts
DATES WHEN MINING STARTED AT SOME WESTERN MINING DISTRICTS
Slide 10: Modern Regulations Protect the Environment
Hardrock Mines on the NPL By Year Operations Began 60 59 55 50 45 40 MODERN REGULATIONS AND 35 FINANCIAL ASSURANCE 30 REQUIREMENTS PROTECT THE 25 ENVIRONMENT AND ELIMINATE 20 21 TAXPAYER-FUNDED 15 13 15 ENVIRONMENTAL CLEANUPS 10 9 6 5 5 3 3 2 2 1 0 0 0
Slide 11: EPA & Today's Mines
EPA & TODAY’S MINES EPA RECENTLY DETERMINED MODERN ENVIRONMENTAL REGULATIONS & FINANCIAL ASSURANCE REQUIREMENTS PROTECT THE ENVIRONMENT AT TODAY’S MINES EPA’s CERCLA 108(b) 2018 rulemaking concluded that environmental regulations and financial assurance requirements for metal mines provide effective
Slide 12: Standardized Reclamation Cost Estimator (SRCE)
STANDARDIZED RECLAMATION COST ESTIMATOR (SRCE) SRCE CALCULATES COMPREHENSIVE RECLAMATION COSTS • Midas Gold, the Forest Service and IDL will use the SRCE software tool to determine the required financial assurance amount for the Stibnite Gold Project. • EPA’s 2018 rulemaking found SRCE-calculated fi
Slide 13: SRCE Direct Costs
SRCE DIRECT COSTS CONSERVATIVE FACTORS ARE USED TO CALCULATE DIRECT OPERATION & MANAGEMENT COSTS Direct Operating & Management Costs Conservative Factors (Labor, Equipment and Materials) Earthworks and recontouring Government contract labor & equipment rental rates, annually updated cost data, publi
Slide 14: SRCE Indirect Costs
SRCE INDIRECT COSTS (AGENCY MARK-UP) COSTS ADD ABOUT 30% – 40% TO A BOND Indirect Agency Mark-Up Costs Percentage of Operating & Management Costs Engineering design and construction plan 8% if O&M < $1,000,000 6% if O&M < $25,000,000 4% if O&M > $25,000,000 Contingency 10% if O&M < $500,000 8% if O&
Slide 15: Idaho Update
aN IDAHO UPDATE #
Slide 16: Intermission: Questions
INTERMISSION: QUESTIONS
Slide 17: Stibnite Gold Project Financial Assurance Approach
STIBNITE GOLD PROJECT FINANCIAL ASSURANCE APPROACH
Slide 18: Financial Assurance: Making Sure Funding for Restoration Is Available
18 FINANCIAL ASSURANCE MAKING SURE FUNDING FOR RESTORATION IS AVAILABLE 1. Laws have recently changed; projects must now provide funding for reclamation based on the actual cost of reclamation and closure Before mining can which includes on site-specific conditions and third-party contractor costs.
Slide 19: Reclamation Restoration
Financial Assurance must be calculated by state and federal regulators based on the approved Reclamation and Closure Plan. The Stibnite Gold Reclamation and Closure Plan includes all aspects of restoration and enhancement. RECLAMATION RESTORATION Meadow Creek, ID Meadow Creek, ID
Slide 20: Permitting
PERMITTING NOA for EIS Project DEIS In Federal Pre-work & Alternatives & Submittal Administrative Initiation & Register We are Planning Environmental Prepare here of PRO Approval Public Scoping Q1/Q2 Analysis Draft EIS 9/2016 12/2016 Q2/Q3 2017 2017 DEIS Comment Period Financial Assurance Calculated
Slide 21: Agencies Requiring Financial Assurance
AGENCIES REQUIRING FINANCIAL ASSURANCE Amount to stabilize, rehabilitate, and reclaim area of operations. Bond sufficient to “reclaim the lands.” Financial Cyanide facilities closure bond must be Assurance approved by IDEQ prior to issuance of Cyanidation Permit. Tailings dam bond amount must be app
Slide 22: Standardized Reclamation Cost Estimator (SRCE)
STANDARDIZED RECLAMATION COST ESTIMATOR (SRCE) • Useful for both mine operators and regulatory agencies • Life-of-Mine, Asset Retirement Obligation, or Financial Assurance • Commonly used in most western states, including Idaho • Standardizes inputs and calculation methodologies • Basic formula: Uni
Slide 23: Stibnite Project Phases
STIBNITE PROJECT PHASES SRCE CALCULATIONS FINANCIAL ASSURANCE encompass all phases of the estimates could be developed project: for five timesteps: Pre-mining construction End of construction 3-year timesteps throughout Operation mine operations Closure Post-Closure
Slide 24: Project Phases & Financial Assurance Scenario Timesteps
PROJECT PHASES & FINANCIAL ASSURANCE SCENARIO TIMESTEPS Hypothetical Premature End of Mining; Agencies Assume Responsibility for Site SCENARIO EOY-1 EOY3 EOY6 EOY9 EOY12 Construction Operation Reclamation and Closure Post-Closure 3 years Planned 12 years; 13 years snapshots of the PRO at 3- Reclamat
Slide 25: Direct Costs
DIRECT COSTS
Slide 26: SRCE Direct Costs
SRCE DIRECT COSTS ‘A. EarthworkRecontouring Labor Ema a eee at a st = re 3 a Gednacandonrias za Structure, Equipment and Facility Removal, and Misc. Labor Total Fees oe Foundation & Buildings Areas rn ‘sal ra ry Sia Roam ‘a ther Demolition ‘0 sol 0 r a Equipment Removal $0) $0] $0] Feder Dalia me za
Slide 27: SRCE Unit Costs for Labor
SRCE UNIT COSTS FOR LABOR 1. Davis-Bacon labor rates • U.S. Government publication • Updated regularly • Specific to heavy construction industry • Localized by county • Includes zone pay for remote site • Includes base pay and fringe benefits 2. Equipment operators, truck drivers, laborers, project
Slide 28: SRCE Unit Costs for Equipment
SRCE UNIT COSTS FOR EQUIPMENT 1. Equipment costs include: • Rental costs • Preventative maintenance costs • Wear costs for replacing ground-engaging-tools • Tire replacement costs • Assembly and disassembly costs 2. These costs are converted to a per-hour-of-operation unit cost 3. Equipment producti
Slide 29: SRCE Unit Costs for Materials
SRCE UNIT COSTS FOR MATERIALS EXAMPLE MATERIALS EXAMPLE MISC COSTS Revegetation materials Monitoring Mulch and soil amendments Waste Disposal Well abandonment materials Demolition of buildings & foundations Fuel Removal of fences & pipes Stormwater controls
Slide 30: EOY3 Backfill Scenario
EOY3 BACKFILL SCENARIO PRO EOY3 Fiddle DRSF & YPP PRO EOY3 YPP Backfill Scenario Provided by Midas Gold 1/29/19 Provided by Midas Gold 1/29/19 Backfill volume required at EOY3 to allow EFSFSR restoration = 7,600,000 m 3
Slide 31: Direct Costs Proportions
DIRECT COSTS PROPORTIONS Yellow Pine Pit (YPP) Backfill & Pit Safety Berms Tailings Storage Facility (TSF) PRO-Based Direct Cost Estimate ($) Development Rock Storage Facilities (DRSFs) Cover, GM, and Revegetation Maintenance Mobilization/Demobilization Monitoring & Maintenance During Reclamation Re
Slide 32: Indirect Costs
INDIRECLEOSTS’
Slide 33: Indirect Costs (Agency Mark-Up)
INDIRECT COSTS (AGENCY MARK-UP) COSTS ADD ABOUT 30% – 40% TO A FINANCIAL ASSURANCE COST • USFS and SRCE both offer guidance on indirect costs based on overall scale of project: • Cost to engineer and redesign • Costs for agencies to oversee and administer closure plan • Contractors’ costs (profit, o
Slide 34: SRCE Indirect Costs
SRCE INDIRECT COSTS (AGENCY MARK-UP) COSTS ADD ABOUT 30% – 40% TO A FINANCIAL ASSURANCE COST
Slide 35: Direct & Indirect Costs Proportions
DIRECT & INDIRECT COSTS PROPORTIONS PRO-Based Direct + Indirect Cost Estimate ($) Engineering, Design and Construction Plan Contract Administration Contractor Overhead and Profit Contingency Direct EOY-1 EOY3 EOY6 EOY9 EOY12 Timestep
Slide 36: Thank You
THANK YOU WWW.MIDASGOLDIDAHO.COM EMAIL: info@midasgoldinc.com PHONE: (208) 901-3060
Slide 37: How You Can Help
HOW YOU CAN HELP: Write a Letter Engage Your Network Show Support BEFORE OCT 28 DEADLINE SHARE PROUDLY SUPPORT Make it specific. Send an Email. Share on Social. Speak to your experience. Host a Get-Together. Talk to a reporter. Be respectful. Pick up a Letter Kit. Letter to the editor. Add Name/Addr
Slide 38: Forward Looking Statements
38 FORWARD LOOKING STATEMENTS Statements contained in this presentation that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities legislation and the United States
Slide 39: Compliance with NI 43-101
COMPLIANCE WITH NI 43-101 39 The technical information in this presentation (the “Technical Information”) has been approved by Stephen P. Quin, P. Geo., President & CEO of Midas Gold Corp. (together with its subsidiaries, “Midas Gold”) and a Qualified Person. Midas Gold’s exploration activities at S
Slide 40: The Stibnite Gold Project
THE STIBNITE GOLD PROJECT WWW.MIDASGOLDIDAHO.COM EMAIL: info@midasgoldinc.com PHONE: (208) 901-3060
Slide 41: Engineering & Contractor's Cost
ENGINEERING & CONTRACTOR’S COST Engineering Redesign Contractor's Cost 12% 35% 30% 10% 25% Percent of Direct Costs Percent of Direct Costs 8% 20% 6% 15% 4% 10% 2% 5% 0% 0% $1,000 $10,000 $100,000 $1,000,000 $10,000,000 $100,000,000 $1,000,000,000 $1,000 $10,000 $100,000 $1,000,000 $10,000,000 $100,0
Slide 42: Project Management
PROJECT MANAGEMENT Contract Administration Agency Administration 12% 8% 7% 10% 6% Percent of Direct Costs Percent of Direct Costs 8% 5% 6% 4% 3% 4% 2% 2% 1% 0% 0% $1,000 $10,000 $100,000 $1,000,000 $10,000,000 $100,000,000 $1,000,000,000 $1,000 $10,000 $100,000 $1,000,000 $10,000,000 $100,000,000 $1
Slide 43: Scope Contingency
SCOPE CONTINGENCY 35% Scope Contingency • Addresses the uncertainty inherent in producing a closure design 30% • Level of accuracy depends on stage 25% of project development Percent of Direct Costs 20% 15% 10% 5% 0% Plan of Operation Draft NEPA Document Mine Construction & Beginning of Reclamation
Slide 44: Bid Contingency
BID CONTINGENCY Bid Contingency • Addresses the cost uncertainty 25% inherent in actual closure 20% implementation of the project design Percent of Direct Costs 15% • E.g., adverse weather, material or supply shortages 10% • Depends on 5% • complexity and scope of closure • Amount of data available
Slide 45: Application of Indirect Cost Guidance
APPLICATION OF INDIRECT COST GUIDANCE USFS Guidance 2004 Indirect Cost Category SRCE Indirect Cost Category Anticipated Application of Guidance Engineering, Design and 1.4% to 2.0% Engineering Redesign Construction Plan weighted average depending on timestep A Profit & Overhead Contractor’s Costs Pe