On July 27, 2012, the Company received the Operating Conditions from the Minister for Environment, Water for Western Australia (the "Minister") which, in general were consistent with the draft recommended conditions (the "Draft Recommended Conditions") for the Mine that were released by the Environmental Protection Authority of Western Australia ("EPA"). The Operating Conditions replace and supersede the Interim Implementation Conditions, which were issued on February 23, 2011 and the previous Ministerial Statements 559 and 783. See "New Operating Conditions" below.
Following the receipt of the Operating Conditions in the third quarter of 2012, the Company completed its internal planning process in preparation for the restart of operations, which included critical path planning, capital expenditure requirements and the identification of key recruitment milestones. The operations remained on care and maintenance for the remainder of 2012 and the first quarter of 2013. Consequently, there was no production or sales of lead carbonate concentrate in 2012 or the first quarter of 2013.
Principal activities during the first quarter of 2013 focused on completing activities required to restart the Mine. The Company completed construction of a hardstanding area at the Mine. In addition, in conjunction with work being completed by the road and rail contractor, the facilities at the Leonora rail yard were being upgraded to include a hardstanding area for the Company's containers. During the quarter, the Company completed maintenance work on the plant aimed to maximize plant availability during the restart period and substantially completed all recruitment required to restart operations. On March 28, 2013, the Company announced that it was recommencing operations at the Mine. In April 2013, mining, processing and transportation operations were recommenced at the Mine.
New Operating Conditions
On July 27, 2012, the Company received the Operating Conditions from the Minister which, in general, were consistent with the Draft Recommended Conditions for the Mine that were released by the EPA in 2011. The Operating Conditions preserve the strict auditing, monitoring and reporting requirements that were imposed on the Company pursuant to the Interim Implementation Conditions.
Pursuant to the Operating Conditions, the Company can ship lead carbonate concentrate through the Port of Fremantle for only five years from the date of issuance of the Operating Conditions. The Company is strongly committed throughout this five year period to demonstrating that containerized shipping of the Company's product is both safe and appropriate. As with its other regulatory compliance and approval processes, including maintaining current operating licenses and permits and obtaining approvals to expand or alter the Mine's operations, the Company will need to demonstrate its sound environmental performance to maintain current licenses and permits or obtain approvals for new licenses or renewals for existing licenses on reasonable terms. See "Risk Factors - Regulatory Compliance and Approvals" in the annual information form dated March 28, 2013 (the "2012 AIF").
In addition, the Operating Conditions require that certain actions be undertaken by the Company prior to the re-commencement of transportation of any lead carbonate concentrate from the mine site. In accordance with the Operating Conditions, the Company:
-- carried out a risk assessment ("Environmental Risk Assessment") of all key aspects of the operations regarding the potential pathways for lead carbonate concentrate contamination and submitted a report on such findings to the Chief Executive Officer ("CEO") of the of the OEPA;-- prepared and submitted to the CEO of the OEPA for approval (and on advice of the Department of Mines and Petroleum ("DMP") of Western Australia), an environmental management program ("Environmental Management Program") which among other things, documents standards, guidelines and codes of practice relating to management of lead carbonate concentrate and details procedures relating to mining, processing, storing, packaging and transport of lead carbonate concentrate;-- engaged a third party expert approved by the CEO of the OEPA to carry out an evaluation of the sampling methodology and analysis methodology ("Sampling Evaluation") for all rainwater tank, static dust, air, soil, drainage sump and benthic sediment sampling required under the Operating Conditions and reported to the CEO of the OEPA on its implementation of the recommendations in the Sampling Evaluation; and-- engaged the services of an independent inspector approved by the CEO of the OEPA to, among other things, visually inspect all sealed bags containing lead carbonate concentrate and established and documented the detailed roles and responsibilities of the inspector to the satisfaction of the CEO of the OEPA, in consultation with the Department of Environment and Conservation (the "DEC") and DMP (the "Inspector Report").