Beak Report

Beak's report, which includes co-operative input from Global Tox International Consultants Inc., addresses not only the potential impacts of the site contamination defined by Trow, but also addresses a number of environmental/occupational health and safety issues associated with the office and laboratory buildings.

Beak has completed a very detailed site-specific risk assessment (SSRA), the assumptions of which we have not reviewed in detail. My understanding is that this risk assessment has not been filed with the Ministry of the Environment which de facto means that the purchaser must not only remediate the site, but complete the administrative aspects of the site decommissioning.

These include public consultation, registration of the property on title, administrative land use control, municipal concurrence, etc. In this specific case, the costs of completing these administrative assignments might actually exceed the clean-up costs.

A major question from my perspective is the ownership and rights to the Beak report. A condition of sale should be the right TO use these reports. Otherwise, the site-specific risk assessment will need to be re-done.

With regard to Beak's major findings on environmental and human health risks, they concluded that:

• the groundwater loadings would not cause an appreciable increase in the concentrations in Cobalt Lake which is already impaired;

• the TTL wastes represent a minor potential health risk to utility or construction workers, which was due mainly due to arsenic exposure via dermal sorplion; and

• existing site conditions represent an unacceptable health risk to children due to ingestion and skin absorption of arsenic and lead.

The risk assessment was carried out in accordance with USEPA guidance documents. Although, the SSRA has no founding in Provincial statue, the scientific principals are sound, and would likely be acceptable to MOE subject to peer view. The broad remedial strategy supported by Beak's SSRA is to "encapsulate the contaminated soils".

A number of "other" environmental/occupational health and safety issues were flagged by Beak during what would be considered a Phase I building audit. These include lead based paints and metal contaminated dust. Beak's recommendations are well founded and the costs of remediating the building to address the requirements under the Occupational Health and Safety Act (OHSA) should be considered in your bid for the facility.

Regulatory Issues

I have opted to address some of the intangible aspects of your proposed remediation strategy for the site (i.e. excavation and processing the waste as product), as well as some hidden costs under this sub-section.

Based on my review of the metals content data presented in Trow's report, the economic viability of processing the "wastes" on-site is ill-founded. As such. MOE may consider this to be "waste processing'* versus "materials recovery". This is somewhat administrative semantics, but I have seen far too many projects blind sided by these interpretative issues during my 16 years with MOE and eight years as a consultant.

The TTL is not licensed to process hazardous materials, of which by Regulatory definition these materials are. MOE might well require you to licence the facility as such. Therefore, if you do proceed with your bid, keep you options open.

Reading between the lines, Bob Rice does seem to recognize that the facility will need to be up-graded with regard to air emissions. Both the capital and approvals to do so will be costly.

In summary, although the face value costs of remediating the site by encapsulation appear to relatively minor (400 m, of asphalt and soil cover), the administrative costs associated with meeting MOE's Guidelines for Use are likely in the order of $ 10K (and this assumes you are buying the rights to Beak's report). I do not have an estimate for the costs of remediating the interior of the building to meet the OHSA, but an allowance of $ 50 to 100K is not unreasonable.

I forwarded my review comments in draft (without the tables) given your time constraints. Please contact me if you have any questions or concerns.