Geological Engineering Slope Stability Rock Mechanics

Tel: (520) 670-9774 Fax: (520) 670-9251 E-Mail: cni@cnitucson.com

2475 N. Coyote Drive Tucson, Arizona 85745 U.S.A.

M E M O R A N D U M

To: Mr. Fermin Samorano / Rosemont Copper Company Mr. Rod Pace / Rosemont Copper Company

From: Mr. Robert Pratt, P.E. / Call & Nicholas, Inc. Mr. Dave Nicholas, P. E. / Call & Nicholas, Inc.

Date: 19 June 2009

Subject: Preliminary Findings from Slope Stability Review

1.0 INTRODUCTION

This memorandum presents a summary to date of the findings from an update to Call &

Nicholas, Inc.s (CNI) 2008 geotechnical feasibility study of the proposed Rosemont openpit

copper mine. In addition, a discussion is presented regarding design criteria selection for the

northwest wall.

The feasibility study was published as CNIs report titled Feasibility-Level Geotechnical

Study for the Rosemont Deposit dated February 2008. The report outlined the following issues

that require more study:

1. Stability of the northwest wall

2. Stability of annual phases

3. Flat-bedding-dip anomaly

Since the feasibility study, Rosemont Copper Company (RCC) has conducted additional

drilling. Based on the results of this drilling, RCC has revised the geologic interpretation of the

Rosemont deposit. In addition, geomechanical data have been logged for core holes drilled since

the study. This information, in addition to annual mine plans developed by RCC, provides the

basis for reviewing conclusions made in the study. CNI proposes a meeting to discuss slope

stability issues noted in the following section.

CALL & NICHOLAS, INC. Principals P. F. Cicchini, P.E. T. M. Ryan, P.E. R. C. Barkley, P.E. E. C. Wellman, P.E.D. E. Nicholas, P.E.

Rosemont Copper Company / F. Samorano, R. Pace 19 June 2009 Preliminary Findings from Slope Stability Review Page 2

CALL & NICHOLAS, INC.

2.0 SLOPE STABILITY ISSUES

2.1 Risk Level Appropriate for the Northwest Wall

Based on the revised geologic model, the unconformable contact between the Cambrian

Bolsa quartzite and Precambrian granite is daylighted in the final pit (year 19), as shown in

Figure 1 and Section NW Lower in Figure 2. Mining of the final wall in this area starts in year 6

with the unconformity being daylighted by year 10. Due to the dip of this contact and its

exposure in the final pit, the contact has the potential to act as a viable failure plane, as indicated

by the results of preliminary slope stability analyses.

CNIs past experience with geologic contacts of this nature indicates that these geologic

features typically act as planes of weakness that contribute to slope instability. Failure along this

contact could potentially result in a partial failure of the ridgeline immediately to the west, as

shown in Figure 2.

The appropriate pit slope angle and pit configuration in this area will depend on the

degree of risk deemed appropriate by RCC personnel. The appropriate level of risk can be

categorized as one of the following:

1. Typical Mining Risk This risk level is defined by a factor of safety (FOS) of 1.1 to 1.3

with a probability of failure in the range of 10 to 30 percent. This criterion allows for the

steepest design of openpit slopes. It is presumed that, at this level of risk, some degree of

slope instability will occur. However, through proper slope management practices slopes

designed to this criterion can be successfully mined, resulting in a net savings on

stripping costs.

2. Low Risk Level This criterion is defined by a FOS from 1.3 to approximately 1.5 with a

probability of failure of less than 10 percent. This criterion results in a low-level risk of

slope failure. This design criterion accounts for the possibility of the near-worst

geologic, hydrologic, and rock-mass strength conditions in addition to the time-dependent

nature of slope failures. As time increases, the strength of a slope can decrease, resulting

in an increase in the potential for long-term instability. To account for long-term slope

stability issues, as the design life required for the slope increases the appropriate level of

risk should be decreased accordingly.

Rosemont Copper Company / F. Samorano, R. Pace 19 June 2009 Preliminary Findings from Slope Stability Review Page 3

CALL & NICHOLAS, INC.

Before selecting the appropriate risk level, the design life of the west wall should be

established: whether stability is required for the duration of mining only or will be required

indefinitely in consideration of the ridgelines stability.

2.1.1 Shear Strength of the Contact Surface

The appropriate slope design for the area where the unconformity daylights primarily

depends on the strength of the contact. The contacts strength is defined by the character of the

rock in the vicinity of the contact and the large-scale contact geometry. Information regarding

the character of the rock surrounding the contact has been obtained from seven drill holes

(Table 1) that pierce the unconformity, one of which is in the area of interest (hole AR-2059

shown in Figure 3). The drill-hole intercepts indicate that the rock at the contact interface is of

moderate strength.

The unknown issue regarding the contacts strength is the large-scale contact geometry.

Mapped exposures of the unconformity along the ridgeline indicate that locally there is evidence

of faulting along the contact. Although evidence of faulting is not seen in the core-hole

intercepts, evidence of faulting on the surface may indicate that the contact could possibly be a

continuous planar surface, which is the worst-case scenario with respect to pit slope stability.

There is also the possibility that metamorphic activity that has impacted Paleozoic rocks in the

area may have contributed to healing and fusing of the contact, resulting in an increase in

strength.

Due to the difficulty of determining the large-scale geometry of the contact, an

appropriate degree of conservatism should be incorporated into the slope design. This degree of

conservatism will depend on the risk level deemed appropriate by RCC personnel as described

previously and any additional information regarding the geometry of the unconformity that can

be provided to CNI.

2.2 Low RQD Zone in the Northwest Wall

Figure 4 shows the RQD block model projected onto the final pit (year 19). The RQD

model shown is based on the latest drilling database and includes data from holes drilled since

the feasibility study. This figure shows the presence of a low to moderate RQD zone in the

northwest wall. This zone was identified in the original feasibility study, and the revised RQD

Rosemont Copper Company / F. Samorano, R. Pace 19 June 2009 Preliminary Findings from Slope Stability Review Page 4

CALL & NICHOLAS, INC.

model confirms its presence. The recommended slope configuration in this area is a 42-degree

interramp slope angle (ISA) with 50-foot single benches compared to neighboring design sectors

where the recommended ISA is 48 to 50 degrees and 100-foot double benches are recommended.

2.3 Stability Issues with Mining Phases

As part of this review, the annual pit phases were projected onto the geologic and RQD

cross sections, as shown in Figure 5. The cross sections were constructed to identify potential

slope stability issues for mining phases leading up to the year 19 final pit.

For the majority of the sections, design considerations controlling the final pit slope

design adequately account for potential slope stability issues within the phases with the

exception of Section NWSE. In this section, the relatively flat fault at the base of the Mesozoic

section is daylighted and forms a nearly 400-foot-high, circular-shaped failure geometry, as

shown in Figure 6. Preliminary analyses show that this fault forms an unstable geometry in the

year 4 pit. To avoid this type of slope failure, CNI will likely recommend mining out the

Scherrer and Concha Formations down to the 4750 level in year 4.

2.4 Flat-Bedding-Dip Anomaly

At the time of the feasibility study, anomalously flat bedding dips were identified by the

data from oriented-core hole AR-2052. ISAs were decreased to 45 degrees in the design sectors

near this core hole to account for the relatively flat bedding dip. In comparison, a 48-degree ISA

is recommended for neighboring design sectors (Figure 7).

The bedding dips indicated were in the range of 20 to 50 degrees, whereas bedding dips

in other oriented-core holes were in the range of 40 to 90 degrees (CNI feasibility study, Chapter

5.0). Due to the presence of numerous fault blocks near oriented-core hole AR-2052, it is

possible that the flat-bedding-dip anomaly is related to a rotated fault block. To resolve this

issue, CNI recommends additional oriented-core drilling to confirm and define the extents of this

anomaly.