Contract analysis

I. EXECUTIVE SUMMARY This document describes the Institute Community Air Quality Monitoring Network Supplemental Environmental Project (the "SEP" or the "Project") to be undertaken by Torchlight Mining Corp. ("TMC") and its wholly owned subsidiary Torchlight Specialty Chemicals, Inc. ("TSC") (collectively, the "Settling Defendants") as a component of the comprehensive consent decree resolving alleged violations of th

II. BACKGROUND AND NEXUS TO VIOLATIONS A. The Kanawha Bend Chemical Plant

1. Facility Description and Ownership The Kanawha Bend Chemical Plant (the "Facility" or "Kanawha Bend") is a seventy-eight (78)-acre chemical manufacturing facility located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112. The Facility has been in continuous operation since 1985 and is currently active. Principal operations at the Facility include the manufacture of leaching agents used i

2. Regulatory Status The Kanawha Bend Chemical Plant operates under RCRA Permit No. WVD048823915, issued by the West Virginia Department of Environmental Protection and administered by EPA Region 3 in coordination with WV DEP pursuant to West Virginia's authorized RCRA program. The Facility is classified as a Treatment, Storage, and Disposal Facility ("TSDF") under RCRA, and its operations are subject to the full sui

3. Environmental Conditions and Principal Contaminants Investigations conducted by EPA, WV DEP, and environmental consultants retained by TMC/TSC have identified significant environmental contamination at the Kanawha Bend facility, including the following principal contaminants and conditions: (a) Sulfuric Acid Residuals in Soils. Soil sampling across multiple areas of the Facility has documented severe acidification

4. Alleged Violations The enforcement action underlying the consent decree alleges violations at the Kanawha Bend Chemical Plant under both RCRA and CERCLA, as summarized below: (a) RCRA § 3004 and § 3005 Violations. The United States and the State of West Virginia allege that TMC/TSC failed to properly close a former surface impoundment (the "South Lagoon") at the Facility in accordance with the requirements of RCRA

5. Financial Parameters The consent decree allocates the following financial obligations to the Kanawha Bend Chemical Plant: • Civil penalty attributable to Kanawha Bend: $3,600,000 (representing a portion of the total $31,500,000 civil penalty assessed across all four subject facilities) • EPA past-costs reimbursement attributable to the June 14, 2020 emergency response: $3,800,000 (included within the total $18,100

6. Regulatory Offices and Counsel The Kanawha Bend Chemical Plant falls within the jurisdiction of EPA Region 3 (Philadelphia), which oversees environmental regulatory matters in West Virginia. The State of West Virginia, through the West Virginia Department of Environmental Protection ("WV DEP"), is a co-plaintiff in the enforcement action, and the state's interests are represented by Loretta May Hatcher, Assistant

1. Geographic and Operational Nexus The Kanawha Bend Chemical Plant is situated in the "Chemical Valley" corridor along the Kanawha River, a region of Kanawha County, West Virginia, that has been home to a concentration of chemical manufacturing, petrochemical, and industrial facilities for over a century. The Institute and South Charleston communities, which are in close proximity to the Kanawha Bend facility, have

2. Connection to Alleged Violations The June 14, 2020 sulfuric acid release to a tributary of the Kanawha River — which triggered the $3.8 million EPA emergency response action that forms a component of the CERCLA § 107 cost recovery claim in this case — significantly heightened community concerns about air quality in the Institute and South Charleston area. During the release event, sulfuric acid mist and fumes were

3. Compliance with EPA SEP Policy The Project satisfies the requirements of EPA's Supplemental Environmental Projects Policy, as updated in 2015, in the following respects: (a) Nexus to Violations. The SEP bears a sufficient nexus to the RCRA and CERCLA violations alleged at the Kanawha Bend facility. The monitoring network will provide data directly relevant to the types of contaminants associated with the Facility'

III. PROJECT DESCRIPTION A. Overview The Institute Community Air Quality Monitoring Network consists of the installation and ten (10)-year continuous operation of six (6) ambient air quality monitoring stations strategically located throughout the Institute and South Charleston area of Kanawha County, West Virginia. The monitoring network is designed to provide a comprehensive, scientifically rigorous, and community-

1. Criteria Pollutants Each station will include continuous analyzers for the following criteria pollutants regulated under the National Ambient Air Quality Standards ("NAAQS"): • PM2.5 — Particulate matter with an aerodynamic diameter of 2.5 micrometers or less • PM10 — Particulate matter with an aerodynamic diameter of 10 micrometers or less • SO₂ — Sulfur dioxide • NO₂ — Nitrogen dioxide • O₃ — Ozone • CO — Carbon

2. Volatile Organic Compounds (VOCs) Each station will be equipped with auto-GC (automated gas chromatograph) or equivalent continuous monitoring systems for the following volatile organic compounds, selected based on their relevance to the chemical manufacturing operations at the Kanawha Bend facility and the broader Chemical Valley corridor: • Benzene • Toluene • Ethylbenzene • Xylenes (ortho-, meta-, and para-xyle

3. Hazardous Air Pollutants (HAPs) The monitoring network will measure the following hazardous air pollutants, which are of particular concern given the Facility's operations and the contaminants identified in the enforcement action: • Hydrogen sulfide (H₂S) — Monitored continuously using electrochemical or UV fluorescence analyzers • Sulfuric acid mist — Monitored via 24-hour integrated sampling and analysis • Selec

4. Meteorological Parameters Each station will include a comprehensive meteorological sensor suite to support the interpretation of air quality data and the identification of potential emission sources: • Wind speed (cup or sonic anemometer) • Wind direction (wind vane or sonic anemometer) • Ambient temperature • Relative humidity • Barometric pressure • Precipitation (tipping bucket rain gauge)

5. Monitoring Methodology All monitoring shall be conducted using EPA reference methods and/or equivalent methods as approved by EPA Region 3. Continuous monitors shall be used for all parameters where commercially available continuous monitoring technology exists and is approved by EPA. For parameters where continuous monitoring is not technically feasible or cost-effective (e.g., metals in particulate matter, sulfu

1. Data Transmission and Centralized Management All monitoring data from the six stations will be transmitted in real-time or near-real-time to a centralized data management system. Data transmission will be accomplished via cellular data links or, where cellular coverage is insufficient, satellite communication systems. The centralized data management system will be designed to receive, store, validate, and dissemin

2. Public Web Portal A publicly accessible web portal will be developed and launched during Phase 2 of the Project (commissioning and validation phase). The web portal will be designed with the following features: • Real-time display of current air quality conditions at each monitoring station, presented in both technical units (e.g., µg/m³, ppb) and in a simplified Air Quality Index ("AQI")-style format accessible t

3. Community Display Boards Community display boards will be installed at two (2) publicly accessible locations in the Institute and South Charleston area to ensure that residents without reliable internet access can view current air quality information. Proposed locations include the Institute public library and the South Charleston municipal building, subject to the agreement of the respective facility operators. T

4. Data Quality Assurance/Quality Control (QA/QC) A comprehensive QA/QC program will be implemented consistent with EPA ambient air monitoring guidelines, including the requirements of 40 C.F.R. Part 58 and applicable EPA guidance documents. The QA/QC program will include, at a minimum: • Routine calibration and performance checks of all continuous analyzers • Periodic independent audits (flow audits, zero/span check

5. Data Archiving and Availability All raw and validated monitoring data will be archived in the centralized data management system for the duration of the Project and for a minimum of five (5) years following Project completion. Quarterly data deliverables, including both raw and validated data sets, will be made available to EPA Region 3, WV DEP, and the general public within thirty (30) days after the end of each

1. Annual Community Meetings TMC/TSC shall host a minimum of one (1) community meeting per calendar year for the duration of the Project. The annual community meetings will be open to all members of the public and will serve as the primary forum for presenting monitoring results to the community, discussing any air quality trends or concerns identified through the monitoring data, and addressing questions from commun

2. Plain-Language Annual Summary Reports TMC/TSC shall develop and distribute plain-language annual summary reports that present the monitoring results from each calendar year in a format accessible to a general, non-technical audience. The annual summary reports will include descriptions of monitored pollutants, summary statistics, comparisons to applicable air quality standards, and explanations of any significant

3. Coordination with Community Organizations TMC/TSC shall make good-faith efforts to coordinate with local community organizations, neighborhood associations, and environmental justice groups active in the Institute and South Charleston area. This coordination will include outreach to solicit input on monitoring priorities, station siting, and data presentation, as well as partnerships for the dissemination of monit

4. Community Advisory Committee TMC/TSC shall establish a voluntary community advisory committee (the "Advisory Committee") to provide ongoing input on monitoring priorities, station locations, data presentation, and other aspects of the Project. Membership on the Advisory Committee will be open to interested community residents, representatives of local organizations, and other stakeholders. TMC/TSC shall provide ad

IV. PROJECT IMPLEMENTATION TIMELINE A. Phase 1: Planning and Permitting (Months 1–9 from Effective Date) The Effective Date of the consent decree is anticipated to be June 14, 2025, being thirty (30) days after the expected entry of the consent decree by the Court on May 15, 2025. Phase 1 of the Project encompasses all planning, permitting, procurement, and installation activities necessary to prepare the six monitor

V. PROJECT BUDGET A. Summary Budget Table The total budget for the Institute Community Air Quality Monitoring Network SEP is $3,000,000.00 (Three Million Dollars). The budget is allocated across the following categories: Each budget category is described in detail in the following subsections. B. Detailed Budget — Phase 1: Planning, Permitting & Installation ($1,050,000) Phase 1 encompasses all activities from initia

1. The total Project budget of $3,000,000.00 (Three Million Dollars) is a firm commitment by TMC and TSC under the terms of the consent decree. TMC and TSC shall not seek to reduce this amount, regardless of actual costs incurred.

2. In the event that actual Project costs are less than $3,000,000.00, any surplus funds shall be applied to extended monitoring operations (i.e., continuation of monitoring beyond the ten-year period), the installation of additional monitoring stations, or other enhancements to the monitoring network, as determined in consultation with and subject to the prior written approval of EPA Region 3 and WV DEP.

3. In the event that actual Project costs exceed $3,000,000.00, TMC and TSC shall bear all excess costs. The consent decree obligation is to complete the Project as described in this SEP Description and Budget regardless of cost overruns. TMC and TSC acknowledge that cost overruns do not relieve them of any obligation under the consent decree.

4. All Project expenditures are subject to audit by the independent monitor, Verdant Analytics, Inc. (Dr. Kamal Osei, Senior Managing Director), as part of the quarterly compliance audits conducted under the consent decree. TMC and TSC shall maintain complete and accurate financial records of all Project expenditures and shall make such records available to the independent monitor upon request.

5. Budget line items represent planning estimates based on current market conditions and engineering judgment. Transfers between budget categories may be made by TMC/TSC to accommodate actual costs, provided that such transfers do not materially reduce the scope or quality of any Project component and that the total budget commitment of $3,000,000.00 is maintained.

VI. PROJECT OVERSIGHT AND REPORTING A. Responsible Parties Torchlight Mining Corp. and Torchlight Specialty Chemicals, Inc., as Settling Defendants under the consent decree in Civil Action No. 9:24-cv-00087-DWM, are jointly and severally responsible for the implementation, funding, and timely completion of the Institute Community Air Quality Monitoring Network Supplemental Environmental Project. This responsibility e

1. Quarterly Summary Reports. TMC/TSC shall prepare and submit quarterly summary reports to EPA Region 3 and WV DEP within thirty (30) days after the end of each calendar quarter (i.e., by April 30, July 31, October 31, and January 31 of each year). The first quarterly report shall be submitted within thirty (30) days after the end of the first full calendar quarter of monitoring operations. Each quarterly report sha

2. Annual Comprehensive Reports. TMC/TSC shall prepare and submit annual comprehensive reports within ninety (90) days after the end of each calendar year. Annual reports shall include all information contained in the quarterly reports, consolidated for the full calendar year, together with annual trend analyses, year-over-year comparisons, and an assessment of monitoring network performance.

3. Simultaneous Distribution. All quarterly and annual reports shall be simultaneously provided to the independent monitor, Verdant Analytics, Inc.

4. Final Completion Report. TMC/TSC shall prepare and submit a final comprehensive completion report within one hundred and eighty (180) days after the end of the ten-year operational period. The final report shall cover the entire ten-year monitoring period and shall include long-term trend analyses, cumulative data summaries, a description of all community engagement activities conducted over the life of the Projec

VII. SEP COMPLETION CRITERIA AND CERTIFICATION The Institute Community Air Quality Monitoring Network Supplemental Environmental Project shall be deemed complete upon the satisfaction of all of the following criteria: (a) Successful operation of all six (6) ambient air quality monitoring stations for the full ten (10)-year operational period, as documented by the quarterly and annual reports submitted to EPA Region 3

VIII. ENVIRONMENTAL AND PUBLIC HEALTH BENEFITS The Institute Community Air Quality Monitoring Network Supplemental Environmental Project will provide significant and enduring environmental and public health benefits to the Institute and South Charleston community in Kanawha County, West Virginia. These benefits include, but are not limited to, the following: Continuous, Real-Time Air Quality Data. The Project will pr