Contract analysis

I. EXECUTIVE SUMMARY This memorandum is prepared for the purpose of advising Torchlight Mining Corp. ("TMC") management and in-house counsel on the consent-decree requirements governing the selection of a court-appointed independent environmental monitor, setting forth our proposed qualifications criteria for such a monitor, presenting our evaluation of finalist candidate firms, and ultimately recommending the appoin

II. CONSENT DECREE REQUIREMENTS FOR THE INDEPENDENT MONITOR A. Governing Provisions The Consent Decree contains detailed provisions governing the appointment, duties, term, and compensation of the Independent Monitor. These provisions are set forth principally in Section XII (Independent Environmental Monitor) of the draft Consent Decree, with cross-references to the remediation performance standards in Sections VII

III. QUALIFICATIONS CRITERIA In order to ensure that the Independent Monitor possesses the capabilities necessary to fulfill the demanding scope of duties described above, Calderwood & Harkness has developed a comprehensive set of qualifications criteria. These criteria are designed to identify candidates who possess the technical expertise, organizational resources, independence, and credibility required for this en

IV. CANDIDATE EVALUATION A. Candidate Identification Process Calderwood & Harkness, in consultation with TMC's Vice President of Environmental Health & Safety, Gareth Linford, and TMC's environmental remediation consultant, Pinnacle Creek Environmental, LLC (Dr. Astrid Bergmann), undertook a systematic process to identify qualified candidate firms for the Independent Monitor role. We began by compiling an initial lis

1. United States v. Consolidated Copper Corp., Civil Action No. 2:17-cv-00459 (D. Ariz.) — Independent monitor for a copper mine Superfund site in southern Arizona involving acid mine drainage, tailings impoundment remediation, and RCRA corrective action compliance. Dr. Osei served as engagement lead. Engagement duration: 2017–2023 (six years). All quarterly audits and annual reports were completed on time and accept

2. United States v. Allegheny Chemical Partners, LP, Civil Action No. 1:19-cv-01234 (S.D.W.V.) — Independent monitor for a chemical manufacturing facility in West Virginia involving RCRA corrective action, DNAPL remediation, and groundwater treatment system optimization. Dr. Osei served as engagement co-lead. Engagement duration: 2019–2024 (five years). This engagement is particularly relevant given the similarity to

3. United States and State of Nevada v. Great Basin Resources, Inc., Civil Action No. 3:20-cv-00678 (D. Nev.) — Independent monitor for a gold mining operation in northern Nevada involving heap-leach pad closure, WAD cyanide management, and surface water discharge compliance under the CWA. Engagement duration: 2020–present (ongoing). Dr. Osei serves in a supervisory capacity; the day-to-day engagement lead is a senio

V. RECOMMENDATION A. Recommended Monitor: Verdant Analytics, Inc. Based on the comprehensive evaluation described above, Calderwood & Harkness recommends that TMC nominate Verdant Analytics, Inc., with Dr. Kamal Osei, Senior Managing Director, as the engagement lead, for appointment as the Independent Environmental Monitor under the Consent Decree. Verdant is the strongest candidate across all evaluation criteria for

VI. KEY TERMS FOR THE INDEPENDENT MONITOR AGREEMENT This section summarizes the key terms that we anticipate incorporating into the Independent Monitor Agreement between the parties and Verdant Analytics. The agreement will be subject to negotiation with the government and will require Court approval. The terms described below are based on our review of comparable monitor agreements in prior consent decree matters an

1. Ridgecrest Copper-Molybdenum Mine — 14200 Ridgecrest Mine Road, Drummond, Montana 59832

2. Gallatin Chemical Works — 8800 Industrial Park Lane, Belgrade, Montana 59714

3. Bonanza Creek Gold Mine — County Road 447, Mile Marker 12, Lander County, Nevada 89820

4. Kanawha Bend Chemical Plant — 2200 Chemical Valley Road, Institute, West Virginia 25112 Each quarterly audit will include on-site inspection, review of remediation progress against the applicable Statement of Work, evaluation of compliance with performance standards and environmental milestones, assessment of monitoring well and sampling data, and identification of any areas of concern or non-compliance. Annual Pu

VII. BUDGET AND FINANCIAL IMPACT ANALYSIS This section provides context for the Monitor costs within the broader financial framework of the Consent Decree and TMC's environmental liability reserves. Monitor Costs Within the Consent Decree. The total estimated cost of the Independent Monitor engagement is $4.8 million over five years (approximately $960,000 per year). This figure is included within the grand total Con