November 1, 1999 

David E. Fennell
Chairman and CEO
Cambiex Exploration Inc.
8101 East Printice Ave, 
Suite 800
Englewood CO 80111

RE: NWB Permit No. NWB2WOL9800

Dear Mr. Fennell:

	Please find attached permit no.  NWB2WOL9800 issued by the Nunavut Water Board pursuant to its authority under Article 13 of the Agreement between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in Right of Canada.  The terms and conditions of the attached permit related to water use and waste disposal are an integral part of this approval.

Sincerely,

Philippe di Pizzo
Executive Director

Enclosure: Permit No. NWB2WOL9800

cc:	S. Pagotto, Indian and Northern Affairs Canada
Kitikmeot Inuit Association
J. Ahmad, Nunavut Impact Review Board
C. Ogilivie, Environment Canada
M. Keast, Fisheries and Oceans
C. Nichols, Sustainable Development

WATER USE AND WASTE DISPOSAL PERMIT

Pursuant to Article 13 of the Agreement Between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in right of Canada, the Nunavut Water Board, hereafter referred to as the Board, hereby grants to Cambiex Exploration Inc. authorization to use and dispose of waste in conjunction with exploratory drilling near Wolverine Lake, subject to the terms and conditions outlined in Kitikmeot Inuit Association Land Use Permit No. I97C141 .

PERMIT NO:	NWB2WOL9800	
PERMITTEE:	Cambiex Exploration Inc.
8101 East Printice Ave, 
Suite 800
Englewood CO 80111
Tel.: (303) 694-4936   Fax: (303) 773-0733	
START DATE:	February 23, 1998
Ammended: February 26, 1998
Date of Decision: October 27, 1999	
Date of Assignment: Refer to Part 2, Item 1	
COMPLETION DATE:	February 14, 2000	
PURPOSE:	Water Use and Waste Disposal associated with Exploration Drilling.     	
LOCATION:	Hope Bay Belt
General Latitude: 68°02' N     Longitude: 106°35' W 	

This permit issued and recorded at Gjoa Haven includes and is subject to the annexed conditions.

                                                                     
Philippe di Pizzo
							Executive Director

1.	SCOPE:

1.	Compliance with the terms and conditions of this permit does not absolve the permittee from responsibility for compliance with all applicable Federal, Territorial and Municipal legislation, as well as terms and conditions contained in applicable land use permits.

2.	This permit is issued subject to the conditions contained herein with respect to the taking of water and the depositing of waste of any type in any waters or in any place under any conditions where such waste or any other waste that results from the deposits of such waste may enter any waters.

2. 	GENERAL CONDITIONS:

1.		The assignment is effective when all the following conditions are met:
i.			the transaction between BHP Diamonds Inc. and Cambiex Exploration Inc. is formally completed; and  
ii.			a satisfactory agreement with respect to access and use of Inuit-owned lands is entered between the Kitikmeot Inuit Association and Cambiex Exploration Inc.
 
2.		The permittee shall maintain a copy of this permit at the site of operation at all times.

3.		The permittee shall file a report with the Board no later than March 31 of the year following the calendar year reported, which shall contain the following information:
i.			A list of unauthorized discharges and a summary of follow-up actions taken;
ii.			Any other details on water use or waste disposal requested by the Board by November 1 of the year being reported.

4.	The NWB shall be notified of any changes in operating plans or conditions associated with this water use activity.

5.		The permittee shall not erect camps or store material on the surface ice of streams or lakes except that which is for immediate use.

6.		With respect to access road construction, pad construction or other earthworks, the deposition of debris or sediment into any water body is prohibited. These materials shall be disposed of above the high water mark in such a fashion that they do not enter the water.

7.	Winter lake and stream crossings shall be constructed entirely of ice and snow materials; stream crossings shall be removed or notched prior to spring breakup.
8.		Upon expiration of the authorization, the permittee shall submit to the Nunavut Water Board, within thirty (30) days, a summary report of the water use and waste disposal activities, abandonment and restoration of the site, and list of unauthorized spills and follow-up action taken.

3.	CONDITIONS APPLYING TO WATER USE:

1.	The permittee shall obtain all fresh water needed for domestic use from Wolverine Lake, using the Water Supply Facilities outlined in the application or as otherwise approved by the Board.

2.		The permittee shall provide the Board with a monthly water sampling report to ensure that freshwater obtained from Wolverine Lake meets the requirements of the Guidelines for Canadian Drinking Water Quality. 

3.		The water intake hose used on the water pumps shall be equipped with a screen with a mesh size sufficient to ensure no entrainment of fish. 

4. 	CONDITIONS APPLYING TO DRILLING OPERATIONS:

1.		No land-based drilling shall be done within thirty (30) metres of the high water mark of any water body or watercourse.  Drilling wastes from land-based drilling shall be disposed of in a sump such that they do not enter any water body.

2.		The permittee shall follow the Interim Guidelines for On-Ice Drilling in the NWT for all on-ice drilling operations.  These are:

i.	All drill cuttings shall be removed from the ice surface.
ii.	The release of total suspended solids in the receiving environment shall be in compliance with the Guidelines for Total Suspended Solids contained in the Canadian Council of Ministers of the Environment’s (CCME) Canadian Water quality Guidelines, Chapter 3 - Freshwater Aquatic Life.
iii.	For kimberlite targets, non-toxicity must be demonstrated; toxicity testing shall be done on the effluent from the drilling operation and the results shall be submitted to the Board.

3.	
Drilling additives or muds shall not be used in connection with holes drilled through the lake ice unless they are re-circulated or contained such that they do not enter the water, or are demonstrated to be nontoxic. 

4.		Drill sludges shall be disposed of on shore at a site where direct flow into a water body is not possible.
5.		If artesian flow is encountered, drill holes shall be plugged and permanently sealed upon project termination.

5. 	CONDITIONS APPLYING TO WASTE DISPOSAL:

1.	Disposal of all sewage shall be in a sump located a minimum of thirty (30) metres from the normal high water mark and such that they do not enter any water body.

2.		The permittee shall not discharge or deposit any refuse substances or other waste materials in any body of water, or on the banks thereof, which will impair the quality of the waters of the natural environment.

3.		The permittee shall dispose of all septic sewage into latrine pits and treated with a bacterial additive to facilitate breakdown of solids. 

4.		During the open water season, flow from the latrine area into Wolverine Lake shall be sampled and analysed monthly for the following parameters: BOD, TSS, Faecal Coliform, Oil/Grease, and  pH. The results shall be submitted to NWB for review, thirty (30) days following the date of sampling.

5.	The permittee shall dispose of non septic sewage/grey water to a sealed tank downslope of the camp.  Final discharge shall be to a location uphill of the camp approximately 105 metres from the shore of Wolverine Lake.   

6.		Once a month during the open water season, the permittee shall sample and analyse flow at a location where grey waters enter Windy lake for the following parameters: BOD, TSS, pH, Faecal Coliform, and Oil/Grease.  The results shall be submitted to the NWB for review thirty (30) days following the sampling date. 

7.		All non-combustible waste shall be disposed of in a manner approved by the Board.

8.		The permittee shall incinerate all combustible and food waste to eliminate attraction of and reduce impacts on wildlife.

9.		Any areas designated for waste disposal shall not be located within thirty (30) metres of the ordinary high water mark of any body of water, unless otherwise approved by the Board.

6.	CONDITIONS APPLYING TO SPILL PREVENTION AND CONTINGENCY PLANNING:

1.		The permittee shall submit a contingency plan to the Board for approval by March 31, 1998.  The plan shall be in accordance with the Northwest Territories Water Board’s “Guidelines for Contingency Planning” (1987). 

2.		If, during the duration of this permit, an unauthorized discharge of waste occurs, or if such a discharge is foreseeable, the permittee shall:

i.	Employ the Contingency Plan;
ii.	Report the incident immediately to the 24-Hour Spill Line at (867) 920-8130; and 
iii.			Submit to the Inspector a detailed report on each occurrence no later than thirty (30) days after initially reporting the event.

3.	The permittee shall ensure that any chemicals, fuel, or wastes associated with the project do not enter waters frequented by fish.  All sumps and fuel caches shall be located a minimum of thirty (30) metres from the normal high water mark and in such a manner that no fuel can enter any such water body.

GENERAL CONDITIONS FOR THE ADMINISTRATION OF PERMITS
ISSUED BY THE NUNAVUT WATER BOARD (NWB)

The following conditions form an integral part of Permit No. NWB2WOL9800 :

1.	At the time of issuance, a copy of the Permit is placed on the Water Register in the NWB Head Office in Gjoa Haven. Documents in the Register are available to the public.

2.	If the permittee contemplates the renewal of Permit No. NWB2WOL9800, it is its responsibility to apply to the NWB for its renewal. The past performance of the permittee, new documentation and information, and issues raised during a public hearing, if the NWB is required to hold one, will be used to determine the terms and conditions of the  Permit renewal.  Note that if the permit expires before the NWB issues a new one, then water use and waste disposal must cease, or the permittee will be in contravention of the Nunavut Land Claims Agreement.  The NWB recommends that an application for the renewal of Permit No. NWB2WOL9800 be filed at least three months before the Permit’s expiry date. 

3.	If Permit No. NWB2WOL9800  requires amendment, then a public hearing may be required. The permittee should submit applications for amendment as soon as possible to give the NWB sufficient time to go through the amendment process. The process may vary depending on  the scope of the amendment requested.

4.	Any communication with respect to this permit shall be made in writing to the attention of:

				Philippe di Pizzo 
	Executive Director 
	Nunavut Water Board 
	P. O. Box 119 
	Gjoa Haven, NT.  X0E 1J0
Telephone No:	(867) 360-6338
Fax No: 	(867) 360-6369

5.	The permittee shall submit all reports, studies, and plans to the Board in three copies. Reports or studies submitted to the Board by the permittee shall include a detailed executive summary in Inuktitut.