Contract analysis

I. INTRODUCTION The United States of America ("United States"), on behalf of the United States Environmental Protection Agency ("EPA"), together with co-plaintiffs the State of Montana, the State of Nevada, and the State of West Virginia (collectively, "Plaintiffs"), respectfully moves this Court, pursuant to 28 U.S.C. § 1651 and the Court's inherent authority to approve consent decrees, to enter the Consent Decree (

II. PROCEDURAL HISTORY A. The Complaint and Answer On January 18, 2024, the United States, acting on behalf of EPA, filed the Complaint in this action on behalf of itself and the State of Montana, alleging violations of CWA § 301, 33 U.S.C. § 1311; RCRA §§ 3004 and 3005, 42 U.S.C. §§ 6924, 6925; and CERCLA § 107, 42 U.S.C. § 9607, arising from Defendants' operations at the four identified facilities. ECF No. 1. The C

III. BACKGROUND A. The Defendants Torchlight Mining Corp. ("TMC") is a corporation organized under the Canada Business Corporations Act, dual-listed on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol "TRC." TMC is headquartered at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada, with United States headquarters at 750 Copper Ridge Boulevard, Suite 200, Helena, M

1. Ridgecrest Copper-Molybdenum Mine. The Ridgecrest Copper-Molybdenum Mine is located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832. The mine occupies approximately 3,200 acres of active mine footprint within a total controlled property of approximately 8,700 acres. The site is situated in the Flint Creek Valley, approximately twelve miles south of the Town of Drummond. The Ridgecrest Mine i

2. Gallatin Chemical Works. The Gallatin Chemical Works is located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714. The facility occupies approximately 145 acres and is situated within the Belgrade industrial corridor, approximately seven miles west of the City of Bozeman. The Gallatin Chemical Works is a specialty chemical manufacturing facility that produces flotation reagents, including sodi

3. Bonanza Creek Gold Mine. The Bonanza Creek Gold Mine is located off County Road 447, Mile Marker 12, in Lander County, Nevada 89820. The mine occupies approximately 5,600 acres of active mine footprint within a total controlled property of approximately 12,400 acres, situated in the high desert terrain of central Nevada, approximately thirty miles south of the Town of Battle Mountain. The Bonanza Creek Mine is an

4. Kanawha Bend Chemical Plant. The Kanawha Bend Chemical Plant is located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112. The facility occupies approximately 78 acres in the Kanawha River Valley, within the area historically known as "Chemical Valley," approximately nine miles northwest of Charleston, West Virginia. The Kanawha Bend facility manufactures leaching agents and performs sul

IV. TERMS OF THE CONSENT DECREE The Consent Decree contains detailed provisions governing remediation, civil penalties, cost reimbursement, supplemental environmental projects, independent monitoring, financial assurance, stipulated penalties, force majeure, dispute resolution, and termination. The principal terms are summarized below. A. Remedial Action Requirements The Consent Decree requires Defendants to perform

I. Dispute Resolution The Consent Decree establishes a three-tier dispute-resolution mechanism for resolving disagreements between the parties regarding the interpretation or implementation of the Decree: Tier 1: Informal Negotiation. The disputing parties shall first attempt to resolve any dispute through informal negotiation for a period of thirty days following written notice of the dispute. Tier 2: Formal EPA Dec

V. LEGAL STANDARD FOR ENTRY OF A CONSENT DECREE A. General Standard A consent decree in a federal environmental enforcement action should be entered by the court if the proposed decree is "fair, reasonable, and adequate" and is "consistent with the objectives of the governing statutes." United States v. Cannons Eng'g Corp., 899 F.2d 79, 85 (1st Cir. 1990); see also United States v. Montrose Chem. Corp. of Cal., 50 F.

VI. THE CONSENT DECREE IS FAIR, REASONABLE, AND CONSISTENT WITH STATUTORY OBJECTIVES Applying the legal standards set forth above, the proposed Consent Decree satisfies each of the criteria for entry. The Decree was the product of procedurally fair negotiations; its terms are substantively fair and reasonable; and it is consistent with the objectives of the CWA, RCRA, CERCLA, and the MBTA. A. Procedural Fairness The

1. Remediation Obligations Are Comprehensive and Protective. The $343.5 million in total remediation obligations represents a comprehensive program of environmental cleanup and restoration across all four affected facilities. The remediation obligations are designed to address all identified contamination, achieve compliance with applicable environmental standards, and protect public health and the environment over t

2. Civil Penalties Are Appropriate. The $31.5 million total civil penalty was calculated in accordance with EPA's Civil Penalty Policies under the Clean Water Act and RCRA, as well as the general factors set forth in the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The penalty reflects a careful analysis of the following factors as to each site: • Gravity of the Violations. The violation

3. EPA Past Costs Are Fully Reimbursed. The $18.1 million in past-cost reimbursement fully compensates EPA for its documented response costs at the Ridgecrest and Kanawha Bend sites. The $14.3 million for Ridgecrest removal actions reflects the actual costs incurred by EPA between 2021 and 2023, including the installation and operation of a temporary water treatment system, the repair of a compromised diversion chann

4. SEPs Provide Meaningful Environmental Benefits. The three supplemental environmental projects totaling $12.0 million have a direct nexus to the violations alleged in this action and will provide meaningful, concrete environmental and public health benefits to the communities most affected by Defendants' operations. The Flint Creek Watershed Restoration Project ($5.5 million) directly addresses the watershed that h

5. Financial Assurance Ensures Performance. The $245.0 million in financial assurance provides a robust guarantee that the required remediation will be completed even in the event of Defendants' inability or unwillingness to perform. The financial assurance package consists of a $165.0 million surety bond issued by Ironbark Surety of America, Inc. — a creditworthy surety with an A.M. Best financial strength rating of

6. Independent Monitor Ensures Accountability. The appointment of Verdant Analytics, Inc. as independent monitor provides a layer of accountability and transparency that serves both the interests of the parties and the public interest. The monitor's quarterly audit authority ensures that compliance with the Decree is assessed on a regular and systematic basis, and the annual public reports provide transparency to aff

7. Stipulated Penalties Incentivize Compliance. The escalating stipulated penalty structure — $1,500 per day per violation for the first thirty days, $3,000 per day per violation for days thirty-one through sixty, and $5,500 per day per violation thereafter — provides a meaningful and progressively intensifying economic incentive for timely compliance with all Decree obligations. The penalty rates are consistent with

1. Clean Water Act. The Consent Decree is consistent with the objectives of the Clean Water Act, which are "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). The Decree eliminates the unpermitted discharges at the Ridgecrest, Gallatin, and Bonanza Creek sites by requiring comprehensive remediation, including the construction and operation of water t

2. Resource Conservation and Recovery Act. The Consent Decree is consistent with the objectives of RCRA, which include ensuring "that hazardous waste management practices are conducted in a manner which protects human health and the environment." 42 U.S.C. § 6902(b). The Decree requires comprehensive corrective action at all four sites, addresses the unpermitted storage and treatment of hazardous waste, and brings De

3. CERCLA. The Consent Decree is consistent with the objectives of CERCLA, which include ensuring "that those responsible for any damage, environmental harm, or injury from [releases of hazardous substances] bear the costs of their actions." S. Rep. No. 96-848, at 13 (1980). The Decree provides full reimbursement of EPA's past costs ($18.1 million) at the Ridgecrest and Kanawha Bend sites, and establishes a comprehen

4. Migratory Bird Treaty Act. The Consent Decree addresses the seventeen documented avian mortalities that occurred at the Bonanza Creek Gold Mine's solution ponds between 2021 and 2023, in violation of the Migratory Bird Treaty Act. The Decree's remediation program at the Bonanza Creek site includes the installation of wildlife deterrent systems — specifically, solution-pond netting and hazing devices — designed to

VII. RESPONSE TO PUBLIC COMMENTS A. Overview. As described above, the proposed Consent Decree was lodged with this Court on February 19, 2025, and a notice inviting public comment was published in the Federal Register on or about the same date. See 90 Fed. Reg. _ (Feb. 19, 2025). The thirty-day public comment period closed on March 21, 2025. During the comment period, the United States received fourteen comments from