San Juan Mining Corporation Operations Plan San Juan Ridge Mine Nevada County, California
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San Juan Mining Corporation Operations Plan San Juan Ridge Mine Nevada County, California January 2012 Prepared by: P.O. Box 1945 Nevada City, CA 95959
GENERAL INFORMATION Location and Access The San Juan Ridge Mine property is located approximately 17 miles north of the town of Nevada City, Nevada County, California, and 0.3 miles south of the former mining town of North Columbia (Figure 1). Nevada City is approximately 55 miles north east of Sacramento, California. Access to the property from Nevada City is via State Highway 49 for nine miles to Tyler-Foote Crossing, then east on Tyler-Foote Crossing Road for eight miles to North Columbia. The property is transected by the Fire Access Road (Jackass Flat Road). See Figure 1 General Site Condition The San Juan Gold property is situated in a topographically high area known as San Juan Ridge, which is 700 to 900 feet above and between the Middle Yuba and South Yuba Rivers. The elevation of the property is between 2,600 and 3,000 feet above sea level. Annual precipitation averages 5 2 inches of which approximately 90 percent f alls during a six month period between November and April. Snow is sporadic during winter months, b u t should not affect operations.
Property Description The following A.P. numbers identify the entire property. Zoning is FR-40-ME. • 61-140-42, • 61-140-47, • 61-140-48, • 62-050-40, • 61-130-03, • 61-130-04, • 61-130-10, • 61-130-19, • 61-260-17, • 62-050-41, • 61-130-22, • 61-110-04, • 61-120-01, • 61-120-02, • 61-120-04, • 62-060-02, • 62-070-02 The San Juan property consists of approximately 1,700 acres of patented land. This property was acquired in 2 0 1 1 by San Juan Mining Company
Project Summary The San Juan Ridge Mine property consists of approximately 1,700 acres of patented land located in Nevada County, California. The property was first mined during t h e California Gold Rush as an open pit hydraulic mine. This method was used until the Sawyer Decision of 1886 prohibited a n y further unrestricted use. The San Juan Ridge deposit was last mined in the early to mid 1990’s as an underground room and pillar operation. San Juan Mining Corporation desires to reopen the San Juan Ridge Mine and resume mining activities while utilizing current advancements in technology, equipment, and computer modeling to reduce environmental impacts, promote a safe working atmosphere and increase the efficiency of the operation. Underground mining and processing will be accomplished by well proven methods using standard mining equipment and simple gravity extraction to remove gold. The project will span approximately 11 years after rehabilitation of the site and underground workings. Concurrent reclamation methods will be utilized to limit disturbed areas as mining progresses. The after mine land use will not be affected, but some improvements, i.e., power transmission lines, roads, and buildings will be left in place.
GENERAL MINE DESCRIPTION Start-Up and Surface Rehabilitation Conditional Use Permit (CUP) approval would initiate a 17 month rehabilitation campaign to reopen the San Juan Ridge Mine. During this time, CUP conditions will be addressed/mitigated and final project engineering completed. Project financing will be finalized and long lead time equipment will be purchased. All final site drawings will be completed, accessory permits obtained and any “outside” contracting finalized. San Juan Mining Corporation’s internal staff will accomplish the majority of the site rehabilitation work. Initial project staff, approximately 20 employees, will be hired and trained prior to the beginning of this period. The mine rehabilitation period will begin with the restoration and improvement of existing access roads. Approximately six (6) miles of existing roads will be upgraded and left in place as property improvements after closure. Existing 12 KV transmission lines necessary for the project, originally installed by Pacific Gas & Electric, will be repaired and inspected. It is planned to leave these transmission lines intact as property improvements after closure. A dedicated easement to Pacific Gas & Electric will insure the improvement. Specific power distribution systems will be rehabilitated by a certified electrical contractor. Project lighting around surface stationary and mobile structures will be designed to be low intensity, downward-facing and installed only in locations that will improve the safety and security of the site. Rehabilitation of mine facilities such as offices, shop, storage, change house, freshwater distribution, sewage disposal systems, surface plant, and refinery will be completed during this period. Construction of surface mobile structures and the mine dewatering network will also take place during this period By the end of the rehabilitation phase of the San Juan Ridge Mine re-opening all project personnel will have been hired and trained. Approximately 78 employees will be employed at project initiation. . Underground Rehabilitation The ore body was previously accessed by an 1,800 linear foot decline grading at -10%. The dimensions of the decline are approximately 14 feet high by 14 feet wide. The decline was installed at the Southeast property boundary to allow construction in bedrock rather than gravels. At the terminus of the decline, previous development work included the construction of openings required for the underground screening operation, muck bays, and access to the main ore deposit. Approximately 1,400
linear feet of excavations along the ore body were created in the defined ore zone by the previous operator. Rehabilitation of the underground workings will require re-accessing the decline which is currently sealed. Underground excavations will require preliminary inspections and additional ground control to insure the safety of the underground work area. The underground processing plant, water and electric utilities, and the ventilation network will also be installed during the rehabilitation phase. The excavations surrounding the underground plant location will also be rehabilitated and used again to stockpile mined material. A 1,000 cubic yard stockpile was created to accommodate a decoupling of the mining/processing cycle in the event either operation suffers an unexpected breakdown. At selected intervals throughout the mine’s operating life, new underground plant and surface plant stations will be created and the equipment relocated. Advancing the plant locations to the West in concert with mining activities will mitigate haulage distances underground. See Figure 2 for a map of existing surface and subsurface infrastructure.
Figure 2-Existing Surface and Subsurface Infrastructure
Production-Years 1 to 10 Annual Surface Definition Drilling An ongoing drilling program, conducted from the surface, will provide sampling points in the ore horizon to better define the extent of the mineable ore body. Although a vast amount of definition drill has already been performed on the San Juan Deposit, it will be necessary to incorporate additional geostatistical information to improve the accuracy of the operation as mining advances. It is anticipated that only 25 definition drilling holes will be required per year to better define the ore boundaries. Hole depth will vary from 300 to 500 feet depending on the surface drilling location. Only the bottom 40 feet of the hole will be sampled. Samples will be collected for each 5 foot interval over the bottom 40 feet of the hole. Drilling ventilation holes and secondary escapeways as per Mine Safety & Health (MSHA) and California Division of Occupational Health and Safety (CalOSHA) requirements will also be required. These holes could range from 30 to 120 inches in diameter to provide adequate ventilation to underground employees.
Annual Development Work Two parallel development entries will be excavated in the approximate center of the defined ore body and progress Westerly to the terminus of the outlined ore zone. They will be separated by a 30 foot wide pillar of in-situ rock with cross cuts connecting them on 230 foot centers. The amount of development work will change yearly as a function of the ore body width. It is expected that 20-40% of the total mine production will be from development excavation. Figure 3-Development Mining Mining New mining activities will commence at the Western extent of the current excavation and progress Westerly along the defined ore body. Two parallel development entries will be driven along the gravel channel with intersecting crosscuts on 230 foot centers. Production panels will be excavated in general North and South directions from the development entries and extend to the defined boundary of the gold bearing channel gravels. The panels will be mined using a “leap frog” technique where a solid block of in-situ material will remain between two excavations. Oversized material from the underground screening plant will be backfilled into the two excavated panels and allowed to solidify. After the backfilled material has congealed the block of in-situ material original left between them will then be extracted. By using this technique the amount of open excavated ground will be reduced and the global ground support of the mine improved. During the first year of production an estimated 122,000 bank cubic yards (BCY) of material will be mined, at an average daily production of 622 BCY. This represents a reduced mining rate from the anticipated 1,000 BCY per day for the remainder of the operational life (196,000 BCY per year). This was done to allow for both site and equipment familiarization of the mine personnel and to gain experience with the deposit. These production volumes are anticipated to be
obtained during a four day work week operating two, 10 hour shifts per day. It may be necessary throughout the life of the operation to increase the work schedule to accommodate for non-production days due to mechanical breakdown, inclement weather or other unforeseen occurrences. Figure 4-Panel Mining It is anticipated that the full extraction method planned for the deposit will be a workable solution, giving consideration to: 1. The structural behavior of the cemented gravels and their ability to stand intact over relatively long periods of time 2. The proposed backfilling activity wherein oversized material from the underground screening plant will be returned to the excavations, thereby reducing the span of open ground at one particular time It is assumed that 15% of the resource will remain in the mine was un-minable pillars, either because of the need for special ground support or because the gold content of the pillar does not warrant the associated costs or removal. Approximately 60% of the mined gravel is forecast to be larger than ¼ inch in size; this will constitute the screen reject fraction to be used as backfill. In the late 1960’s the U.S. Geological Survey performed testing on the Badger Hill property (a Northwestern extension to that portion of the channel assessed in the report) with the following results:
Size Fraction % of Total Material +64 mm 13 4-64 mm 56 1/16-4mm 28 -1/16 mm 3 100 Subsequent drilling and testing by private corporations, conducting exploration on the San Juan deposit proper, indicated that the distribution of the particle sizes within the higher grade gravel section (the material scheduled for underground mining) would be closer to a 60/40 split at the ¼ inch target size. The ¼ inch fraction is deemed important at this property because testing has shown that very little gold occurs in particles larger than this dimension. Screen undersize ( the – ¼ inch fraction) will be collected underground and pumped to the surface as a slurry through a lined borehole. From there it will pass through the gold recovery plant. As the plant is periodically repositioned underground, so too will be the pumping station. A new borehole will be drilled from the surface each time, and the surface plant will be relocated correspondingly to reduce pumping costs. Once full production starts in Year 2, ore will be processed at a rate of 196,000 BCY per year until the deposit is exhausted in Year 10. The remainder of Year 10 will allow for production loss makeup and initial reclamation. The total volume produced is estimated to be 1,869,896 BCY. As stated previously, an estimated 15% of the ore body will remain in-situ as additional ground support or low grade pillars. A second assumption is that dilution will average 12%. The average height of the mine horizon is expected to be 16.7 feet, and up to 26 feet in some zones.
Figure 5-Yearly Mine Production
Mineral Recovery Process Processing of the ore will be by attrition scrubbing to liberate the free gold particles followed by gravity methods for their concentration and recovery. The scrubbing and initial screening will be done underground to minimize the amount of material transported to the surface. Material – ¼ inch in size will be transported to the surface as a water slurry for initial concentrating. Initial concentration on the surface plant will be done with a vibratory screen and centrifugal concentrator, with the oversized material (- ¼ inch to +2 Tyler mesh) discharging into a course gold sluice. The – ¼ inch waste from the concentrator will be de-slimed by an oversized sand screw with the slimes going to a settling pond and the – ¼ solids being stacked for disposal. This plant will be covered for noise attenuation purposes. No chemicals or toxic substances will be used in the recovery process. All the proposed processing equipment relies completely on water and gravity separation methods.
Figure 6-Underground Processing Plant
Figure 7-Surface Processing Plant
Final Concentrate Processing Product from the centrifugal concentrator will be collected and transported to the refinery. The refinery will be a permanent enclosed structure located near the main office/main gate for security purposes. Final gold concentration will include a smaller centrifugal concentrator, shaking tables and rotary wheels. Dore will be produced by furnace melting of the final recovered free gold. If final mineral concentrate contains metals at toxic levels, they will be treated as a hazardous material. Concentrates are frequently a saleable product because of the presence of certain metals. The minerals will either be disposed of as a hazardous waste or sold as a product. Mineral concentrates are expected to be generated at a maximum rate of 1,440 pounds per day or 90 tons per year. Storage for disposal will not exceed 90 days. Concentrates will be stored in accordance with applicable local, State, and Federal regulations. Concentrate materials are excluded from federal hazardous waste regulations under 40CFR 261.4 (b)(7). Therefore, EPA hazardous waste generator registration will not be required. No chemical or toxic substances will be used in the final recovery circuit.
Figure 8-Gold Refinery
Mine Closure- Year 10 and Year 11 When the deposit is depleted in Year 10, all machinery and infrastructure will start to be removed from the underground areas. The workings will be thoroughly inspected for trash, scrap and other debris before the dewatering system is shut down and removed. The decline portal, ventilation, escapeways and other accesses into the mine will be sealed as per Federal, State and Local regulations. All surface equipment, except permanent roads, permanent buildings and power transmission lines will be dismantled and stored at the shop area until they are sold. Mobile mining equipment will be refurbished at the shop area and stored until sold. All process piping will be cleaned and stored. Power distribution systems will be dismantled and stored. All surface areas for mine facilities that are dismantled will be reclaimed. Final reclamation of all disturbed areas will be completed per the Reclamation Plan. Temporary Mine Closure A temporary closure could result for one of several conditions beyond the operator’s control. Among other things, this could be caused by a depression in gold prices, an act of nature, civil unrest or labor shortages because of war. Temporary closure will be defined as: 1. Any stoppage of work exceeding 90 days in length but limited to 5 yaers. 2. The reduction employment by 75% over the amount employed during the previous six month period. 3. A temporary mine closure can only occur during the production years 1-10. 4. Will not constitute part of the 11 year mine life. In the event of a temporary closure, disturbed areas will be reclaimed per the Reclamation Plan. Waste areas will be re-contoured to prevent erosion and re-vegetated. Temporary erosion control measures will be implemented per the Reclamation Plan when and where needed. Mine dewatering would continue as designed. Underground mining equipment would be removed and stored at the shop area. A small maintenance crew would take care of dewatering activities and any reclamation/erosion maintenance required.
GENERAL MINE DESIGN All operation plans were designed to minimally impact the environment and community. All stationary surface machinery will be covered and located as to minimize noise. There will be minimal off site visual impacts. Waste disposal areas were specifically designed to negligibly alter the site topography during and after mining. A mine life total of 162 acres will be disturbed. This will include area needed for surface storage of oversized material from the mine, tailings from the gold recovery process, and site locations for the mobile surface plant. Concurrent reclamation will limit the maximum disturbed area at any one time to 32 acres with about 28% of this occupied by mine operation facilities and access roads. Surface storm runoff will be collected and channeled to minimize off site turbidity. No operations will be conducted in the perennial stream areas except for access road crossings. Excess mine water will be returned to the ground via an infiltration system. Settling Ponds-Design During the previous operation of the San Juan Ridge mine two settling ponds were created with finished full poll dimensions of 2.3 acres and were used to remove slimes from process water. One pond was utilized by the prior operator and has subsequently been reclaimed. The second pond is in usable condition and will be utilized as the first settling pond for process water under the proposed project. Subsequent ponds will be of similar dimension and design. The 48 acre/feet ponds will provide enough retention time to clarify the process water. Initial process water, estimated 24 million gallons, will be pumped from existing wells. Any make-up water required will also be pumped from wells and/or be taken from the mine dewatering network. The ponds have been over designed by 20 percent, plus enough freeboard to contain 2-100 year 24 hour storms. The integrity of the ponds are ensured by excavation in native sediments, without any embankment (fills) below the “full pond” levels. Additional ponds will need to be constructed as mining progresses Westerly along the gravel channel. It is estimated that 10-12 additional ponds of similar size will need to be created over the life of the project.
Figure 9-Settling Pond Design (Plan View)
Figure 10-Settling Pond Design (Cross Section)
Blasting Proposed mining equipment consists of an electrically powered continuous mining machine that will be used to break the cemented gravel deposit. Using this system a majority of the deposit can be mined without the use of explosives. If a section of rock is encountered that has a uniaxial compressive strength which exceeds the capabilities of the continuous mining machine, it will be necessary to use explosives to remove the hardened zone. Based upon previous monitoring at the site, blasts will not be perceptible from the surface. Underground Secondary Escapeway Federal and state mine safety orders require underground mines to provide an alternative means of access/escape in the event of a surface or underground emergency. The number of, size, and type of construction are determined by the agencies for each specific mine. Two shafts have already been excavated into the mine horizon and will be utilized as secondary escapeways under the proposed project. As mining progresses it will be necessary to excavate additional shafts to accommodate applicable orders. An additional 3-5 shafts will be required, spaced approximately 3,000 feet apart, ranging in size from 36 inches to 120 inches in diameter. Ventilation Federal and state mine safety orders require that fresh air be provided to miners underground at the rate of 200 cubic feet per minute (CFM) per person. The regulations also require that fresh air be provided at the rate of 100 CFM per horsepower for diesel equipment operating underground. Initially during the rehabilitation of the access decline and existing underground workings, fresh air will be forced underground via a 40 horsepower (hp) and 200 hp fans through 28” ventilation tubing. Fans will be underground from the start of the rehabilitation effort. Once production has commenced, fans will be moved to the two installed ventilation shafts, thus “sucking” fresh air down the decline and exhausting it through the vertical shafts to the surface. These shafts are also intended to be used as secondary escape ways from the underground workings. Mine Pumping System A main underground sump will be re-established underground and a multistage turbine pump capable of discharging 500-1,600 gallons per minute (gpm) at a 350 foot head. An 8 inch pipeline will be established underground that will receive water from additional sumps near the production areas as the
mine advances. The 8 inch line will carry water to the main sump for discharge to the surface. On the surface the mine discharge water will flow into a settling pond through a similar pipe network. Water infiltration/settling ponds were created during the previous operation of the mine and with minimal rehabilitation may be used again under the proposed project. These ponds were designed to provide a minimum 4 hour retention time plus contain a 24 hour, 100 year storm event. Water from the settling pond will flow through an 8 inch overflow pipe to an infiltration pond. The infiltration pond will be an additional clarifier and also prevent direct discharge to surface waters. Soil mantle and percolations tests were completed by Dale Huber Engineering.
Figure 1-General Site Water Balance
Mine Equipment Water and Potable Water Mine water and potable water will be pumped from one of the existing wells a 10,000 gallon storage facility from which it will be distributed to the mine, mine office, change house, main office and refinery. A pump will send water to the storage facility on a continuous basis, so the take should remain full or nearly full on a constant basis. PROJECT FEATURES Planned Schedule Site Rehabilitation Operating Shifts Shifts/Week Start Up & Rehabilitation General Site Rehabilitation 22 4 Electrical System Repair 15 4 Office and Shop Building Repair 20 4 Install Surface Mobile Equipment 45 4 * Decline Rehabilitation 135 4 Underground Ground Control, 91 4 * Equipment and Utilities The total duration of the Rehabilitation Phase is expected to take 17 months * Underground work i s expected to i ncrea s e to two s hi fts per da y a fter the i ni ti a l 12 weeks of decl i ne reha bi l i ta ti on
Staffing Requirements Employees Rehabilitation 20 Production Year 1-Year 2 78 Production Year 3-Year 4 82 Production Year 5 84 Production Year 6 86 Production Year 7-Year 8 90 Production Year 9-Year 10 92 Mine Closure 92 to 5 Estimated Annual Production Ore (BCY) -1/4) Waste BCY Rehabilitation 0 0 Production Year 1 122,500 49,000 Production Year 2-9 196,000 78,400 Production Year 10 179,396 71,758 Mine Closure 0 0 TOTAL 1,869,896 747,958 Consumable Supplies Diesel and gasoline will be used in surface and underground mobile equipment interan combustion engines. Fuel will be stored near the shop in above ground tanks with containment berms per applicable Federal, State, and Local regulations. A maximum of 10,000 gallons of diesel and 1,000 gallons of gasoline will be stored on site. An underground storage facility for diesel fuel and lubricants will also be constructed with a maximum size of 5,000-8,000 gallons. Lubricating oils and grease will be stored in their respective shipping contains until dispensed to surface and underground equipment. The containers will be stored in designated fire safe areas and/or flame resistant cabinets. Used lubricating oils will be stored in an above ground tank with containment and be disposed of through a licensed California waste oil recycler. Grease saturated rags and oily waste will be stored in a covered fire proof container for eventual approved storage. Oxygen and acetylene will be used for repair and fabrication on for all mining equipment. The cylinders will be stored in a designated area of the shop until used and in accordance with all MSHA and CalOSHA regulations.
Cement will be used for concrete and shotcrete production to improve the stability and safety of underground openings. Cement will be delivered by bulk suppliers and stored in a 25-50 ton silo on the surface or near the warehouse area if delivered in 2,000 pound super-sacks. Explosives will be used exclusively underground to break hardened ore prior to processing. Blasting agents, dynamite, cast boosters, and non-electric blasting caps are the types of explosives that will be used. All explosives will be delivered to the job site by a supplier by transportation routes approved by the California Highway Patrol and other local agencies. Upon delivery all blasting agents will be transported and stored underground using company equipment outfitted with specific safety devices required for the transportation and storage of explosives. A maximum of 40,000 pounds of explosives will be stored on site. When the project is terminated or closed temporarily for any reason, all explosives will be returned to the supplier. Propane will be used for heating offices, shop, change house, refinery, and surface plant areas. Five 500 gallon tanks will be installed and serviced by a propane supplier. Material Used Quantities Used/Year Dynamite 50,000 lbs ANFO 300,000 lbs Diesel 500,000 gal Gasoline 20,000 gal Lubricating Grease 12,000 lbs Lubricating Oils 6,000 gal Hydraulic Oils 8,000 gal Cement 6,00 tons Oxygen 7,000 cuft Acetylene 5,000 cuft Propane 10,000 gal
PROJECT EQUIPMENT Annual Site General Condition Type Horsepower Hours Powerline, Substation, Switchgear Existing Domestic Water Existing Electric 20 NA Sewage Existing SUB TOTAL ELECTRIC HP 20 DIESEL HP 0 Annual Service and Ancillary Buildings Condition Type Horsepower Hours Main Office 24'x60' Existing Main Shop 40'x100' Existing Storage 40'x40' Existing Safety Equipment New Shop Compressor New Electric Compressor Building Existing Shop Tools & Crane New Electric Fueling Island Existing Cassette Truck New Diesel 148 1,500 RTV New Diesel 16 500 Pressurewasher New Diesel 25 70 Diesel Welder New Diesel 19 170 SUB TOTAL ELECTRIC HP 430 DIESEL HP 208
Annual Surface Equipment Condition Type Horsepower Hours Tractor Used Diesel 84 1,170 Dozer Used Diesel 145 340 Backhoe Used Diesel 98 1,170 Telehandler Used Diesel 125 340 Surface Foreman New Diesel 355 Truck 1,500 Surface Crew Truck New Diesel 355 500 Surface Buggy New Diesel 16 1,500 Water Truck Used Diesel 430 850 Dump Trailer New NA Skidsteer Used Diesel 45 340 Wheel Loader Used Diesel 145 670 Articulated Truck Used Diesel 265 670 Concrete Batch Plant Used Electric 150 500 Tripple Deck Screen Used Diesel 150 300 SUB TOTAL ELECTRIC HP 150 DIESEL HP 2213 Annual Underground Equipment Condition Type Horsepower Hours Tractor New Diesel 50 2,500 Tractor New Diesel 50 2,500 Tractor NEw Diesel 50 2,500 Tractor New Diesel 50 2,500 Crawler Dozer Used Diesel 85 1,170 LHD New Diesel 201 1,170 Excavator Used Diesel 57.6 500 Motor Grader New Diesel 48 2,000 Wheel Loader Used Diesel 145 2,500 Skidsteer Used Diesel 45 340 Tractor New Diesel 50 2,300 Scissor Lift Truck New Diesel 148 2,170 Telehandler Used Diesel 101 500 Roadheader New Electric 541 1,800 Scissor Lift Truck Used Diesel 148 1,670 Air Compressor Used Diesel 61 500 Shotcrete Aplicator New Diesel 148 2,000 Transmixer New Diesel 160 2,000 Transmixer New Diesel 160 2,000
Teledumpter New Diesel 400 3,400 Teledumpter New Diesel 400 3,400 Teledumpter New Diesel 400 3,400 Shotcrete Pump New Diesel 110 3,170 Crawler Dozer Used Diesel 85 3,170 LHD New Diesel 201 3,170 SUB TOTAL ELECTRIC HP 541 DIESEL HP 3354 Annual Ventilation & Pumping Condition Type Horsepower Hours Fan New Electric 200 4,704 Fan New Electric 40 4,704 Fan NEw Electric 30 2,352 Fan New Electric 30 2,352 Fan New Electric 30 2,352 Pump New Electric 250 8,760 Pump New Electric 150 8,760 Pump New Electric 6 8,760 Pump New Electric 6 9,490 Pump New Electric 6 10,220 Pump New Electric 6 10,220 Pump New Electric 15 8,760 Pump New Electric 15 8,760 Pump New Electric 15 9,490 Pump New Electric 15 8,760 SUB TOTAL ELECTRIC HP 814 DIESEL HP 0 Gold Recovery Annual Circuit Condition Type Horsepower Hours Underground Plant New Electric 500 Surface Plant New Electric 100 Gold Refinery Used Electric 50 SUB TOTAL ELECTRIC HP 650 DIESEL HP 0
TOTAL DIESEL HP 5,775 TOTAL ELECTRIC HP 2,605
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