Mongolia

BGC has the necessary environmental permits and licenses for the Boroo mine. Boroo‘s Environmental Impact Assessment and Environmental Monitoring and Protection Plans have been approved by the Mongolian government. Some of the permits that have been issued for the Boroo mine are for the forecast mine life, others are for three years and others have to be renewed annually.

BGC has developed an Environment Management System to address the impacts of the Boroo operation on the environment and to monitor compliance with the various permits issued by the state and provincial authorities. The system provides scheduled monitoring, engineering controls and reporting on the following areas: tailings management facility; mill site and mine waste dumps effluents; acid generation potential testing; dust control; spill incidents on site and off site; hazardous materials handling; environment impact monitoring; planning for site decommissioning and rehabilitation; potable water treatment system; sewage operation; and landfill operation and inventory.

DECOMMISSIONING AND RECLAMATION

A decommissioning plan estimating the cost of closing operations in a safe and environmentally responsible manner has been prepared for the operation by North American consultants. The plan is now being revised to meet the requirements of Mongolian regulators, and will be submitted soon to the Mongolian authorities for approval.

The initial estimate of the costs of decommissioning and reclamation for the Boroo mine is $3.5 million. Since developing the mine decommissioning plan the company has commenced a program of accrual for mine closure based on the ounces of gold poured.

A reclamation trust fund has not yet been established but we have commenced discussions with government authorities about putting such an arrangement in place that would be funded from gold sales of about $500,000 per year.