Introduction

The Marlin Project is a gold/silver mining and processing project located in Western Guatemala. The project is owned by Montana Exploradora de Guatemala S. A. (Montana), the startup date being late summer of 2005.The project is partially financed by The International Finance Corp (IFC). A requirement of the World Bank/IFC guidelines related to participation in projects, such as the Marlin Project, is the performance of an environmental audit at a minimum of once per year. This environmental audit is to be performed by Dorey & Associates, an international environmental and engineering consulting firm, in conjunction with, and under the direction of Patricia Acker Consulting for the year 2004.

Project and Activities

The project will involve the simultaneous mining of the ore, by underground and open pit methods, at a combined rate of approximately 5000 tonnes per day (tpd). Ore will be hauled approximately 2 km from the mine areas to a crushing and grinding circuit.

The ground ore will be then processed in tanks by an agitated leach in weak cyanide solution. The resulting tailings product will be passed through a counter current decant (CCD) system. Gold and silver will be recovered from solution by zinc precipitation/ Merryl-Crowe system. The tailings from the CCD will be treated to detoxify the residual cyanide in the supernatant solution prior to disposal in a tailings storage facility (TSF). Mine waste rock and sub-economic ore material will be disposed of in an area adjacent to and north of the mine. The waste rock facility (WRF) lies in the headwaters of the drainage that contains the TSF.

Environmental Management Plans

The EIA&S contains a list and general description of nearly a dozen environmental management plan components which are required to be developed and applied at the project. These include: Environment, Health and Safety Organization Plan, Forestry Management Plan. Wildlife Management Plan, Water Management Plan, Acid Rock Drainage Management Plan, Surface Water Management Plan, Cyanide Management Plan, Waste Management Plan, Environmental Monitoring Plan, Contingency Plan and Closure & Reclamation Plan.

Monitoring & Compliance

On-Site Monitoring

Review of the records of on-site monitoring by project personnel indicates that a routine monitoring and data recording procedure has not currently been established. In December 2004, these stations were re-established and the data recording devices commissioned so that ongoing data could be recorded.

As identified in the following section related to the field audit, the performance of the environmental department in enforcing environmental management procedures over both Montana personnel and the contractors performing the construction activity has been limited.

Off-Site Monitoring

During 2004, CTA performed a number of discreet project monitoring events which included surface water, groundwater, meteorology/climate, air quality, and general observation. Review of the data indicates that no detectable impacts have occurred to the receiving environment based upon the items monitored by CTA.

Field Audit

The following sections, by the very nature of the audit, identify such issues. In general, however, the current conditions at the site are, for the most part, good; and do not show conditions that are significantly different from large construction projects of this nature.

Original Office Complex

A temporary fueling station and vehicle maintenance shop exists in the original office complex area, in addition to the laydown and equipment yards which have been used by various drilling contractors. Observation of the storage and management of hydrocarbons in this area indicate that additional management is required. Oil spills and petroleum product releases to the ground were observed.

Waste Dump Area

The majority of the material excavated from the crushing and grinding and process area has been deposited in a controlled manner in the valley to the south of the mill site. At the time of the audit, work had been initiated on providing erosion control for the slope, including the establishment of sediment berms and revegetation activities. This slope, however, will present a significant source of sediment until a stable slope surface has been established.

Solid Waste

A number of pits have been excavated on the east abutment of the TSF area. These pits were described as being temporary in nature; and are being used for disposal of construction debris, packaging, and other solid waste materials generated at the site. Prior to the establishment of a permanent solid waste disposal area, the material in these pits is periodically burnt.

Montana has reportedly identified the permanent location for the project’s solid waste landfill which will be available in the first quarter of 2005.

General Site Area

It must be recognized that the general site area lies within an area of relatively dense population. Assessment of these peripheral areas is beyond the scope of this audit. A philosophy of proactive management that will engender better housekeeping on the project needs to be established.

Off-Site Impacts

The off-site impacts currently occurring are primarily related to sediment migration. Stabilization and the localized removal of sediment which has migrated into drainages outside of the immediate work areas should be performed prior to the next rainy season.

Corrective Action Plan

Environmental Management Structure

The current organizational structure for environmental management and compliance at the project needs to be modified to allow the appropriate performance of the environmental management plans and compliance issues related to the project. The monitoring plans require an extensive amount of data collection and observation which involves all parts of the mining activities. It is recommended that a broadbased environmental committee be established which would include senior managers, or their representatives, from all of the project components.

Environmental Management Plans

Development and finalization of the various environmental management plans should be given high priority. The status of each plan should be assessed, and each plan’s priority should be established. Once the status of the plans has been assessed, it is recommended that the appropriate resources, either in-house or from external sources like corporate environmental management personnel or outside consultants qualified in this area of work be assigned so that the plan development can be expedited.

General Environmental Management

It is recommended that the project establish a specific role for the environmental management team to perform regular compliance reviews of specific project areas. Also it is recommended to develop a mechanism to penalize or reward contractors.

Mitigation of Dust Emissions

Dust emissions is one of the most apparent environmental issues at the project. It affects visual and health & safety aspects. Surface stabilization using chemicals and/or permanent road surfaces not subject to dust emissions should be implemented.

Sediment Control

Sediment control is second most significant issue at the project, and is related to the erosion and sediment migration from disturbed areas. The implementation of best management practices to alleviate the migration of sediment should be performed. In areas where sediment has entered the natural drainage systems of the project area, stabilization of the sediment and selective removal of sediment from the drainages should be performed.

Montana has already taken several actions to alleviate the above said issues and initiated necessary corrective actions. Broadly speaking current conditions at the site do not pose a significant environmental risk and, rather, are related to management issues.