North American Emerald Mine Permit Mod 102605

October 26, 2005
Certified Mail
Return Receipt Requested
7002 3150 0003 7053 8099
Mr. William Duncan
North American Emerald Mines, Inc.
531 Duncan Lane
Hiddenite, North Carolina 28636
RE: Permit No. 02-06
North American Emerald Mine
Alexander County
Yadkin River Basin
Dear Mr. Duncan:
Your recent request to have the above referenced mining permit modified has been
approved. The modification is to amend the Blasting Conditions of Mining Permit No. 02-06 to
limit ground vibration to twenty-five per cent of Operating Condition No. 8A and to require pre -
blast warning signal to the two adjacent property owners nearest the blasting. A copy of the
modified permit is enclosed. Other conditions of the permit, including the expiration date, mine
name, permitted acreage and permit number, remain the same as before the modification.
Please review the modified permit and contact Ms. Judy Wehner, Assistant Mining
Specialist, at [phone] should you have any questions concerning this matter.
Sincerely,
Floyd R. Williams, PG, CPG, CPESC
State Mining Specialist
Land Quality Section
FRW/jw
Enclosures
CC' Mr. Zahid Kahn
Ms. Shannon Deaton - WRC, w/enclosure
Mr. Bradley Bennett - DWQ, w/enclosure
Mr. William Gerringer-Mine and Quarry Bureau, w/o enclosure
Mr. Douglas Eisele, Esq. — Eisele, Ashburn, Greene, & Chapman, PA, PO Box 1108,
Statesville, NC 28687-1108, w/ enclosure
Ms. Anita LeVeaux, Esq. — Attorney General's Office, w/ enclosure

DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES
DIVISION OF LAND RESOURCES
LAND QUALITY SECTION
PERMIT
for the operation of a mining activity
In accordance with the provisions of G.S. 74-46 through 68, "The Mining
Act of 1971," Mining Permit Rule 15A NCAC 5 B, and other applicable
laws, rules and regulations
Permission is hereby granted to:
North American Emerald Mines, Inc.
North American Emerald Mine
Alexander County - Permit No. 02-06
for the operation of a
Gemstone Mine
which shall provide that the usefulness, productivity and scenic values of
all lands and waters affected by this mining operation will receive the
greatest practical degree of protection and restoration.
MINING PERMIT EXPIRATION DATE: March 15, 2010

Page 2
In accordance with the application for this mining permit, which is hereby approved by the
Department of Environment and Natural Resources hereinafter referred to as the Department,
and in conformity with the approved Reclamation Plan attached to and incorporated as part of
this permit, provisions must be made for the protection of the surrounding environment and for
reclamation of the land and water affected by the permitted mining operation. This permit is
expressly conditioned upon compliance with all the requirements of the approved Reclamation
Plan. However, completed performance of the approved Reclamation Plan is a separable
obligation, secured by the bond or other security on file with the Department, and may survive
the expiration, revocation or suspension of this permit.
This permit is not transferable by the permittee with the following exception: If another
operator succeeds to the interest of the permittee in the permitted mining operation, by virtue
of a sale, lease, assignment or otherwise, the Department may release the permittee from the
duties imposed upon him by the conditions of his permit and by the Mining Act with reference
to the permitted operation, and transfer the permit to the successor operator, provided that
both operators have complied with the requirements of the Mining Act and that the successor
operator agrees to assume the duties of the permittee with reference to reclamation of the
affected land and posts a suitable bond or other security.
In the event that the Department determines that the permittee or permittee's successor is not
complying with the Reclamation Plan or other terms and conditions of this permit, or is failing
to achieve the purposes and requirements of the Mining Act, the Department may give the
operator written notice of its intent to modify, revoke or suspend the permit, or its intent to
modify the Reclamation Plan as incorporated in the permit. The operator shall have right to a
hearing at a designated time and place on any proposed modification, revocation or
suspension by the Department. Alternatively and in addition to the above, the Department
may institute other enforcement procedures authorized by law.
Definitions
Wherever used or referred to in this permit, unless the context clearly indicates otherwise,
terms shall have the same meaning as supplied by the Mining Act, N.C.G.S. 74-49.
Modifications
March 13, 2002: This permit has been modified to allow blasting activities at this site.
October 27, 2004: This permit has been modified to increase the permitted acreage to 94.6
acres and the affected acreage at this site to 15.1 acres. The modification includes the
addition of a haul road and overburden disposal area as indicated on the mine maps received
by the Land Quality Section on September 23, 2002.
March 4, 2005: This permit has been modified to clarify the request to operate a rock crusher
at the site in order to crush rock into gravel. The modification includes contingencies to the
approval that include any necessary approvals from the Division of Air Quality to operate said
equipment be obtained and no off -site generated rock material shall be brought on the site
without prior approval from the Department.

Page 3
October 26, 2005: This permit has been modified to amend the Blasting Conditions of Mining
Permit No. 02-06. The modification includes limit ground vibration to twenty-five per cent of
Operating Condition No. 8A and require pre -blast warning signal to two property owners.
Expiration Date
This permit shall be effective from the date of its issuance until March 15, 2010.
Conditions
This Permit shall be subject to the provisions of the Mining Act, N.C.G.S. 74-46, et. seq., and
to the following conditions and limitations:
OPERATING CONDITIONS:
Wastewater and Quarry Dewatering
A. Any wastewater processing or mine dewatering shall be in accordance with the
permitting requirements and rules promulgated by the N.C. Environmental
Management Commission.
B. Any storm water runoff from the affected areas at the site shall be in accordance
with any applicable permit requirements and regulations promulgated by the
Environmental Protection Agency and enforced by the N.C. Environmental
Management Commission. It shall be the permittee's responsibility to contact
the Water Quality Section, Division of Water Quality, to secure any necessary
storm water permits or other approval documents.
2. Air Quality and Dust Control
A. Any mining related process producing air contaminant emissions including
fugitive dust shall be subject to the requirements and rules promulgated by the
N.C. Environmental Management Commission and enforced by the Division of
Air Quality.
B. During processing operation, water trucks or other means that may be necessary
shall be utilized to prevent dust from leaving the permitted area.
3. Buffer Zones
A. Any mining activity affecting waters of the State, waters of the U. S., or wetlands
shall be in accordance with the requirements and regulations promulgated and
enforced by the N. C. Environmental Management Commission.

Page 4
B. Sufficient buffer (minimum 100 foot undisturbed) shall be maintained between
any affected land and any adjoining waterway or wetland to prevent
sedimentation of that waterway or wetland from erosion of the affected land and
to preserve the integrity of the natural watercourse or wetland.
4. Erosion and Sediment Control
A. Adequate mechanical barriers including, but not limited to diversions, earthen
dikes, silt check dams, silt retarding structures, rip rap pits, or ditches shall be
provided in the initial stages of any land disturbance and maintained to prevent
sediment from discharging onto adjacent surface areas or into any lake, wetland
or natural watercourse in proximity to the affected land.
B. All mining activities shall be conducted as indicated by the Erosion and
sedimentation Control Plan last revised December 22, 1999 and the
supplemental Erosion and Sedimentation Control Narrative and design
calculations.
C. Mining activities associated with the addition of the haul road and overburden
disposal area, including the installation and maintenance of all associated
erosion and sediment control measures, shall be conducted as indicated on the
mine maps received by the Land Quality Section on September 23, 2002.
5. Markina Boundaries
All affected area boundaries (15.1 acres) shall be permanently marked at the site on
100 foot intervals unless the line of sight allows for larger spacing intervals.
6. Graded Sloaes and Fills
The angle for graded slopes and fills shall be no greater than the angle which can be
retained by vegetative cover or other adequate erosion control measure, structure, or
device. In any event, exposed slopes or any excavated channels, the erosion of which
may cause off -site damage because of siltation, shall be planted or otherwise provided
with groundcover, devices or structures sufficient to restrain such erosion.
7. Surface Drainaae
The affected land shall be graded so as to prevent collection of pools of water that are,
or likely to become, noxious or foul. Necessary structures such as drainage ditches or
conduits shall be constructed or installed when required to prevent such conditions.

Page 5
8. Blasting
The operator shall monitor each blast with a seismograph located at a distance
no farther than the closest off site regularly occupied structure not owned or
leased by the operator. A seismographic record including peak particle velocity, air
overpressure, and vibration frequency levels shall be kept for each blast (except as
provided under Sections 8B. and 8D. of this permit). The following blasting conditions
shall be observed by the mine operator to prevent hazard to persons and adjacent
property from surface blasting:
A. Ground Vibration With Monitoring:
In all blasting operations, the maximum peak particle velocity of any component
of ground motion shall not exceed twenty-five per cent of Figure 1 (below) at the
immediate location of any regularly occupied building outside of the permitted
area such as a dwelling house, church, school, or public, commercial or
institutional building.
�u
a
2-O
v
07
iq ❑ . 6
3: 4.5
o_ d
� o_s
a.�
Blast Vihratian F�regLJe4-1cy, FEx
1} 1
2.0
1 -.S
�.6
o.s
a.:11
9-2
Figure 7 Alfernative blaW-eng ietir-f critsrra
'SOurce rn-O<fifrear from frg"r-e a- 1. Sureau of illfrru-s R?0507)
B. Ground Vibration Without Monitorina:
In the event of seismograph malfunction or other condition which prevents
monitoring, blasting shall be conducted in accordance with the following
formulas:
W = (D/Ds)2 Ds = D
W 1 i2
V = 160(Ds)-1.6

Page 6
W = Maximum charge weight of explosives per delay period of 8.0 milliseconds
or more (pounds).
D = Distance from the blast site to the nearest inhabited building not owned or
leased by the mine operator (feet).
Ds = Scaled distance factor.
V = Peak Particle Velocity (inches per second).
C. Air blast With Monitorina:
Air blast overpressure resulting from surface blasting shall not exceed 129
decibels linear (dBL) as measured at the immediate location of any regularly
occupied building not owned or leased by the operator outside of the permitted
area such as a dwelling house, church, school, or public, commercial or
institutional building, unless an alternate level based on the sensitivity of the
seismograph microphone as specified below is being used:
Lower Frequency Limit of Max Level,
Measuring System, in Hz in dBL
0.1 Hz or lower -flat response 134 peak
2.0 Hz or lower -flat response 133 peak
6.0 Hz or lower -flat response 129 peak
D. Air blast Without Monitori
In the event of seismograph malfunction or other condition which prevents
monitoring, blasting shall be conducted in accordance with the following
formulas:
To convert U (psi) to P (dBL):
U = 82 (D/W0.33)-1.2
P = 20 x log (U/2.9x10-9)
Confined Air blast/Overpressure (dBL)
for quarry situation:
A=P-35
U = Unconfined air overpressure (pounds per square inch).
W = Maximum charge weight of explosives per delay period of 8.0 milliseconds
or more (pounds).
D = Distance from the blast site to the nearest inhabited building not owned or
leased by the mine operator (feet).
P = Unconfined air overpressure (decibels).
A = Air blast or air overpressure for typical quarry situations (decibels).

Page 7
The air blast/overpressure shall not exceed 129 decibels, for the purposes of this
Section.
E. Record Keeping:
The operator shall maintain records on each individual blast describing: the total
number of holes; pattern of holes and delay of intervals; depth and size of holes;
type and total pounds of explosives; maximum pounds per delay interval; amount
of stemming and burden for each hole; blast location; distance from blast to
closest offsite regularly occupied structure; and weather conditions at the time of
the blast. Records shall be maintained at the permittee's mine office and copies
shall be provided to the Department upon request.
F. Excessive Ground Vibration/Air blast Reporting:
If ground vibration or Air blast limits are exceeded, the operator will immediately
report the event with causes and corrective actions to the Department. Use of
explosives at the blast site that produced the excessive reading shall cease until
corrective actions approved by the Department are taken. However, blasting
may occur in other approved areas within the permitted boundary. Authorization
to blast at the blast site may be granted at the time of the verbal reporting of the
high ground vibration or high air blast reading if the circumstances justify verbal
approval. Failure to report will constitute a permit violation.
G. Flyrock Prevention:
The operator shall take all reasonable precautions to ensure that flyrock is not
thrown beyond areas where the access is temporarily or permanently guarded by
the operator. Failure to take corrective measures to prevent flyrock and
repeated instances of flyrock shall be considered a violation of the Mining Permit.
H. Flyrock Reporting:
Should flyrock occur beyond the permitted and guarded areas, the operator shall
immediately report the incident to the Department. Further use of explosives on
the mine site shall be suspended until the following actions have been taken:
A thorough investigation as to the cause(s) of the incident shall be
conducted.
2. A report detailing the investigation shall be provided to the Department
within 10 days of the incident. The report shall, at a minimum, document
the cause(s) of the incident along with technical and management actions
that will be taken to prevent further incidents. The report shall meet with
the approval of the Department before blasting may resume at the mine
site.

Studies:
The operator shall provide to the Department a copy of the findings of any
seismic studies conducted at the mine site in response to an exceedence of a
level allowed by these blasting conditions. The operator shall make every
reasonable effort to incorporate the studies' recommendations into the
production blasting program.
J. Notice:
The operator shall, when requested by the Department, give 24-hour
advance notice to the Land Quality Section Regional Office prior to any
blast during a period for which notice is requested.
2. Warning of mine blasting shall be given 30 minutes prior to blasting so
that the warning will be perceived by the nearest two property owners to
the site of the blasting.
9. Visual Screenin
Existing vegetation shall be maintained between the mine and public thoroughfares to
screen the operation from the public. Additional screening methods, such as
constructing earthen berms, shall be employed as deemed appropriate by the
Department.
10. Adjacent Property Buffers
Sufficient buffer (minimum of 50 foot undisturbed) shall be maintained between any
excavation and any mining permit boundary or right-of-way to protect adjacent property.
11. Highwall Barriers
A physical barrier consisting of a fence or earthen berm, etc., shall be maintained
around the perimeter of any highwall.
12. Refuse Disposal
A. No on -site disposal of refuse or other solid waste that is generated outside of the
mining permit area shall be allowed within the boundaries of the mining permit
area unless authorization to conduct said disposal has first been obtained from
both the Division of Waste Management and the Land Quality Section,
Department of Environment and Natural Resources. The method of disposal
shall be consistent with the approved reclamation plan.

Page 9
B. Mining refuse as defined by G.S. 74-49 (14) of The Mining Act of 1971
generated on -site and directly associated with the mining activity may be
disposed of in a designated refuse area. All other waste products must be
disposed of in a disposal facility approved by the Division of Waste
Management. No petroleum products, acids, solvents or their storage containers
or any other material that may be considered hazardous shall be disposed of
within the permitted area.
C. For the purposes of this permit, the Division of Land Resources considers the
following materials to be "mining refuse" (in addition to those specifically listed
under G.S. 74-49 (14) of the N.C. Mining Act of 1971):
1. on -site generated land clearing debris
2. conveyor belts
3. wire cables
4. v-belts
5. steel reinforced air hoses
6. drill steel
D. If mining refuse is to be permanently disposed within the mining permit
boundary, the following information must be provided to and approved by the
Division of Land Resources prior to commencement of such disposal:
1. the approximate boundaries and size of the refuse disposal area;
2. a list of refuse items to be disposed;
3. verification that a minimum of 4 feet of cover will be provided over the
refuse;
4. verification that the refuse will be disposed at least 4 feet above the
seasonally high water table; and
5. verification that a permanent vegetative groundcover will be established
13. Annual Reclamation Report
An Annual Reclamation Report shall be submitted on a form supplied by the
Department by February 1 of each year until reclamation is completed and approved.
14. Plan Modification
The operator shall notify the Department in writing of the desire to delete, modify or
otherwise change any part of the mining, reclamation, or erosion/sediment control plan
contained in the approved application for a mining permit and any approved revisions to
it. Approval to implement such changes must be obtained from the Department prior to
on -site implementation of the revisions.

Page 10
15. Bonding
LZ.
The security, which was posted pursuant to N.C.G.S. 74-54 in the form of a $59,000.00
Assignment of Savings Account, is sufficient to cover the operation as indicated in the
approved application. This security must remain in force for this permit to be valid. The
total affected land shall not exceed the bonded acreage.
16. Archaeological Resources
A. Authorized representatives of the Division of Archives and History shall be
granted access to the site to determine the presence of significant
archaeological resources.
a. Pursuant to NCGS 70 Article 3, "The Unmarked Human Burial and
Human Skeletal Remains Protection Act," should the operator or any person in
his employ encounter human skeletal remains, immediate notification shall be
provided to the county medical examiner and the chief archeologist, North
Carolina Division of Archives and History.

Page 11
APPROVED RECLAMATION PLAN
The Mining Permit incorporates this Reclamation Plan, the performance of which is a condition
on the continuing validity of that Mining Permit. Additionally, the Reclamation Plan is a
separable obligation of the permittee, which continues beyond the terms of the Mining Permit.
The approved plan provides:
Minimum Standards As Provided By G.S. 74-53
The final slopes in all excavations in soil, sand, gravel and other unconsolidated
materials shall be at such an angle as to minimize the possibility of slides and be
consistent with the future use of the land.
2. Provisions for safety to persons and to adjoining property must be provided in all
excavations in rock.
3. All overburden and spoil shall be left in a configuration which is in accordance with
accepted conservation practices and which is suitable for the proposed subsequent use
of the land.
4. No small pools of water shall be allowed to collect or remain on the mined area that are,
or are likely to become noxious, odious or foul.
5. The revegetation plan shall conform to accepted and recommended agronomic and
reforestation practices as established by the North Carolina Agricultural Experiment
Station and the North Carolina Forest Service.
6. Permittee shall conduct reclamation activities pursuant to the Reclamation Plan herein
incorporated. These activities shall be conducted according to the time schedule
included in the plan, which shall to the extent feasible provide reclamation simultaneous
with mining operations and in any event, provide reclamation at the earliest practicable
time after completion or termination of mining on any segment of the permit area and
shall be completed within two years after completion or termination of mining.
RECLAMATION CONDITIONS:
Provided further, and subject to the Reclamation Schedule, the planned reclamation
shall be to regrade and satisfactorily revegetate any disturbed areas..
2. The specifications for surface gradient restoration to a surface suitable for the planned
future use are as follows:
A. All sideslopes shall be graded to a 2 horizontal to 1 vertical or flatter slope.
B. Any settling ponds and sediment control basins shall be backfilled and stabilized.

Page 12
3
9
C. The processing, stockpile, and other disturbed areas neighboring the mine
excavation shall be leveled and smoothed.
D. Compacted surfaces shall be disced, subsoiled or otherwise prepared before
revegetation.
E. No contaminants shall be permanently disposed of at the mine site. On -site
disposal of waste shall be in accordance with Operating Conditions Nos. 12.A.
through D.
F. The affected land shall be graded to prevent the collection of noxious or foul
water.
Revegetation Plan:
After site preparation, all disturbed areas shall be revegetated as per the Revegetation
Plan approved by Mr. Dan McClure, District Conservationist with the Natural Resources
Conservation Service on June 14, 1999.
Whenever possible, disturbed areas should be vegetated with native warm season
grasses such as switch grass, Indian grass, bluestem and gamma grass.
In addition, the permittee shall consult with a professional wildlife biologist with the N.C.
Wildlife Resources Commission to enhance post -project wildlife habitat at the site.
Reclamation Plan:
Reclamation shall be conducted simultaneously with mining to the extent feasible. In
any event, reclamation shall be initiated as soon as feasible after completion or
termination of mining of any mine segment under permit. Final reclamation, including
revegetation, shall be completed within two years of completion or termination of
mining.
This permit, issued March 15, 2000 and modified March 13, 2002, October 27, 2004
and March 4, 2005, is hereby modified this 26t" day of October, 2005 pursuant to G.S.
74-52.
By:
James D. Simons, Director
Division of Land Resources
By Authority of the Secretary
Of the Department of Environment and Natural Resources