Note:
All financial amounts expressed
throughout this report are in US dollars.

Environment

Water management

Responsible water management is a cornerstone of environmental responsibility. At Resolution Copper, water management requires a dual approach: responsibly managing water resources today, and ensuring that we can obtain and use renewable sources of water needed for our future mining operations without impacting the resources of local communities.

Dewatering efforts

The large copper resource we hope to reach lies more than a mile below the surface, adjacent to but deeper than a previous mine that was closed in the mid-1990s. To further explore and begin developing our mine, almost seven billion liters of water that have naturally accumulated in the empty mine must be removed. Additional water will also inflow to the site during the two to three year dewatering process, making the total amount of water that must be removed closer to nine billion liters. Our goal is to remove this water and to ensure it can be reused for beneficial purpose.

During 2008, we completed construction on a water treatment facility to prepare the water for discharge once it is pumped to the surface. The dewatering process in the old mine will begin in April 2009 and could take from two to three years. The larger challenge has been to determine where the removed, treated water should go in order to ensure the water resource in an arid Arizona landscape is fully utilized and the environment is not negatively impacted.

Resolution Copper is working with the New Magma Irrigation and Drainage District (NMIDD) to supply the extracted water for agricultural use in Arizona. The project involved construction of a 27-mile pipeline to transport the water from Resolution Copper's treatment facility in Superior to Magma Junction. NMIDD will combine this water with Central Arizona Project (CAP) water for use by farmers in irrigating crops. (CAP delivers renewable water from the Colorado River by canal to central and southern Arizona to help prevent depletion of groundwater sources by agricultural, municipal and industrial users.)

Securing water for future use

Our company is also working with the New Magma Irrigation and Drainage District and the Hohokam Irrigation and Drainage District to store water for processing ore and cooling our future mine. We've been purchasing and 'banking' excess CAP water with the irrigation districts since 2006 and plan to continue this process as long as CAP has excess water available. To date, we have purchased enough water to meet approximately six years' worth of mining production requirements. In 2009, Resolution Copper will purchase nearly five years of production requirements. Because excess CAP water will not always be available for purchase, we are also exploring additional long-term sources of sustainable water to meet our future operational needs.