[sheet: Summary]

Item	Value
Prepared by	Calderwood & Harkness LLP
Matter Number	1039-00003
Date	November 12, 2024
Prepared for	Torchlight Mining Corp.
Client Contact — General Counsel	Miriam Soo-Hwan Park
Client Contact — VP, EH&S	Gareth Linford
Client Contact — CFO	Carolyn Bracebridge
Responsible Partner	Harrison Wexford
Lead Associate	Elliot Nguyen
Working Associate	Grace Nakamura
Civil Action No.	9:24-cv-00087-DWM
Court	U.S. District Court for the District of Montana, Missoula Division
Judge	Hon. Donald W. Molloy
Plaintiffs	United States (EPA/DOJ), State of Montana, State of Nevada, State of West Virginia
Defendants	Torchlight Mining Corp.; Torchlight Mining (U.S.) Inc.; Torchlight Specialty Chemicals, Inc.; Ridgecrest Mine Holdings, LLC; Bonanza Creek Mining, LLC
Applicable Statutes	CWA § 309(d); RCRA § 3008(a)-(g); CERCLA § 107
EPA Penalty Policies Applied	CWA Civil Penalty Policy (2022 rev.); RCRA Civil Penalty Policy (2003, as adjusted for inflation); CERCLA § 107 cost recovery (penalty not applicable — addressed separately)

NEGOTIATED PENALTY SUMMARY

Ridgecrest Copper-Molybdenum Mine	$14,200,000
Gallatin Chemical Works	$5,800,000
Bonanza Creek Gold Mine	$7,900,000
Kanawha Bend Chemical Plant	$3,600,000
Total Negotiated Civil Penalty	$31,500,000

PAYMENT SCHEDULE

Installment 1 — 30 days after entry (25%)	$7,875,000
Installment 2 — 12 months after entry (25%)	$7,875,000
Installment 3 — 24 months after entry (25%)	$7,875,000
Installment 4 — 36 months after entry (25%)	$7,875,000
Expected Entry Date	May 15, 2025
Effective Date (30 days after entry)	June 14, 2025
First Installment Due (30 days after Effective Date)	July 14, 2025

NOTE: EPA past-costs reimbursement under CERCLA § 107 ($18.1M total: $14.3M Ridgecrest + $3.8M Kanawha Bend) is addressed separately from the civil penalty calculation.

[sheet: Ridgecrest — CWA & RCRA]

Penalty Component / Factor	Statute	Description	Violation Count	Per-Violation Statutory Max ($)	Gravity Base ($)	Gravity Adjustment Factor	Adjusted Gravity ($)	Economic Benefit ($)	Total Preliminary Penalty ($)	Litigation Risk Adjustment (%)	Ability to Pay Adjustment (%)	Settlement Adjustment (%)	Final Penalty Range — Low ($)	Final Penalty Range — High ($)	Notes
CWA § 301 — Unpermitted Discharge (AMD to Flint Creek)	CWA § 309(d)	Unpermitted discharge of acid mine drainage containing dissolved copper (avg. 47 mg/L vs. MT surface-water standard 0.0087 mg/L), molybdenum (avg. 1.2 mg/L), selenium (avg. 0.082 mg/L), sulfate (avg. 3,400 mg/L) from tailings impoundment (425 acres) seepage to Flint Creek. Active discharges documented 2019–2023.	1 (continuing)	$64,618/day (inflation-adjusted)	8500000	1.25	10625000	2800000	13425000	-5%	0%	-10%	11411250	13425000	Gravity elevated due to severity (copper >5,000× standard), duration (multi-year), ecological harm to Flint Creek fishery. Mine ceased active operations Dec. 2019 but discharges continued through closure phase.
CWA § 301 — Stormwater Discharge Violations	CWA § 309(d)	Failure to implement stormwater management controls at waste rock dumps and haul roads resulting in sediment-laden runoff to Flint Creek tributaries. Turbidity exceedances documented at four outfalls (2020–2023).	4	$64,618/violation	1800000	1.10	1980000	450000	2430000	-5%	0%	-10%	2065500	2430000	Four outfalls each treated as separate violation. Gravity base $450K/outfall × 4. Stormwater permit No. MTR100342.
RCRA § 3004 — Mismanagement of Hazardous Waste (SX/EW circuit)	RCRA § 3008(a)	Mismanagement of hazardous waste from solvent-extraction/electrowinning (SX/EW) circuit. Improper storage and disposal of spent electrolyte and organic solvents without RCRA permit or interim status.	3	$70,117/day (inflation-adjusted)	3200000	1.10	3520000	950000	4470000	-5%	0%	-10%	3799500	4470000	Three distinct waste-management violations identified during EPA inspection. Violations ceased upon mine closure but corrective action not completed.
RCRA § 3004 — Inadequate Tailings Impoundment Liner Monitoring	RCRA § 3008(a)	Failure to maintain and monitor liner system integrity at the 425-acre tailings impoundment per RCRA corrective action requirements. Leak detection system inoperable for 14 months (Jan. 2021–Feb. 2022).	1 (continuing)	$70,117/day (inflation-adjusted)	1500000	1.05	1575000	350000	1925000	-5%	0%	-10%	1636250	1925000	Liner monitoring failure contributed to AMD seepage to Flint Creek. Corrective action plan submitted Oct. 2023.
Economic Benefit Subtotal — Ridgecrest	—	Avoided costs: delayed wastewater treatment system installation, avoided RCRA closure costs, avoided monitoring expenditures. Calculated using BEN model.	—	—	—	—	—	3750000	—	—	—	—	—	—	Economic benefit assessed separately across all Ridgecrest violations. BEN model inputs: $12.4M delayed capital cost, 4.5-year deferral, 7% discount rate.
Subtotal — CWA Violations	CWA § 309(d)	—	—	—	10300000	—	12605000	3250000	15855000	—	—	—	13476750	15855000
Subtotal — RCRA Violations	RCRA § 3008(a)	—	—	—	4700000	—	5095000	1300000	6395000	—	—	—	5435750	6395000
TOTAL — RIDGECREST (Preliminary Range)	—	—	—	—	—	—	—	—	22250000	—	—	—	15210750	17895000	Range before final settlement negotiation adjustment. Note: Low = sum of individual violation lows after applying litigation risk (-5%) and settlement adjustment (-10%) = preliminary × 0.85. High = unadjusted preliminary totals. Aggregated range reflects combined adjustments.
NEGOTIATED PENALTY — RIDGECREST	—	Final negotiated amount per consent decree	—	—	—	—	—	—	14200000	—	—	—	14200000	14200000	Negotiated below the preliminary range low; reflects credit for remediation commitments ($198.6M over 30 years), SEP (Flint Creek Watershed Restoration, $5.5M), cooperation, and CERCLA § 107 reimbursement ($14.3M). AOC Docket No. CERCLA-08-2022-0039. EPA Project Coord.: Dr. Samuel Tesfaye.

[sheet: Gallatin — CWA & RCRA]

Penalty Component / Factor	Statute	Description	Violation Count	Per-Violation Statutory Max ($)	Gravity Base ($)	Gravity Adjustment Factor	Adjusted Gravity ($)	Economic Benefit ($)	Total Preliminary Penalty ($)	Litigation Risk Adjustment (%)	Ability to Pay Adjustment (%)	Settlement Adjustment (%)	Final Penalty Range — Low ($)	Final Penalty Range — High ($)	Notes
RCRA §§ 3004/3005 — Unpermitted Hazardous Waste Storage Unit	RCRA § 3008(a)	Operation of unpermitted hazardous-waste storage unit at Gallatin Chemical Works facility (145 acres). Failure to obtain RCRA Part B permit for storage of CS₂-contaminated wastes.	1 (continuing)	$70,117/day	2100000	1.05	2205000	680000	2885000	-5%	0%	-10%	2452250	2885000	RCRA Permit No. MTD098712456. Three SWMUs identified. CS₂ in groundwater max 890 µg/L vs. MCL 10 µg/L.
RCRA §§ 3004/3005 — Failure to Perform Corrective Action at SWMUs	RCRA § 3008(a)	Failure to perform corrective action at three solid waste management units (SWMUs) as required under RCRA corrective action obligations. Xanthate decomposition products and VOCs (toluene, xylene) in subsurface soils.	3	$70,117/day	1200000	1.00	1200000	420000	1620000	-5%	0%	-10%	1377000	1620000	Three SWMUs each treated as a separate violation for gravity calculation. SWMU-1: former solvent storage area; SWMU-2: waste lagoon; SWMU-3: drum storage pad.
CWA § 301 — MPDES Effluent Limit Exceedances	CWA § 309(d)	14 exceedances of MPDES permit effluent limits for CS₂ and total suspended solids between January 2021 and June 2024.	14	$64,618/violation	1680000	1.10	1848000	350000	2198000	-5%	0%	-10%	1868300	2198000	14 separate discharge events. Gravity base calculated per event ($120K/event × 14). Facility currently active; ongoing compliance improvements required. MPDES Permit No. MT0030457.
Economic Benefit Subtotal — Gallatin	—	Avoided costs: delayed RCRA corrective action at SWMUs, avoided wastewater treatment upgrades. Calculated using BEN model.	—	—	—	—	—	1450000	—	—	—	—	—	—	Economic benefit assessed across all Gallatin violations. BEN model inputs: $5.8M delayed capital, 3-year deferral, 7% discount rate.
Subtotal — RCRA Violations	RCRA § 3008(a)	—	—	—	3300000	—	3405000	1100000	4505000	—	—	—	3829250	4505000
Subtotal — CWA Violations	CWA § 309(d)	—	—	—	1680000	—	1848000	350000	2198000	—	—	—	1868300	2198000
TOTAL — GALLATIN (Preliminary Range)	—	—	—	—	—	—	—	—	6703000	—	—	—	5697550	6703000	Range before final settlement negotiation adjustment.
NEGOTIATED PENALTY — GALLATIN	—	Final negotiated amount per consent decree	—	—	—	—	—	—	5800000	—	—	—	5800000	5800000	Within preliminary range. Reflects remediation commitment ($42.8M over 15 years) and active facility compliance upgrades.

[sheet: Bonanza Creek — CWA & RCRA]

Penalty Component / Factor	Statute	Description	Violation Count	Per-Violation Statutory Max ($)	Gravity Base ($)	Gravity Adjustment Factor	Adjusted Gravity ($)	Economic Benefit ($)	Total Preliminary Penalty ($)	Litigation Risk Adjustment (%)	Ability to Pay Adjustment (%)	Settlement Adjustment (%)	Final Penalty Range — Low ($)	Final Penalty Range — High ($)	Notes
CWA § 301 — Unpermitted Discharge (Heap-Leach Releases)	CWA § 309(d)	Three documented unpermitted discharges of process solution from heap-leach pad to ephemeral tributary of Reese River via torn liner: (1) March 17, 2022; (2) August 9, 2022; (3) January 22, 2023. WAD cyanide 0.62 mg/L vs. discharge limit 0.022 mg/L; mercury avg. 12.4 µg/L vs. WQ criterion 0.77 µg/L.	3	$64,618/violation/day	4500000	1.30	5850000	1200000	7050000	-5%	0%	-10%	5992500	7050000	High gravity factor reflects cyanide/mercury contamination, repeated violations over 10-month span, proximity to Reese River. Mine area ~5,600 acres; total property ~12,400 acres.
RCRA § 3004 — Management of Spent Heap-Leach Ore	RCRA § 3008(a)	Management of spent heap-leach ore as hazardous waste without proper characterization and disposal. Selenium in pit-lake water at 0.34 mg/L vs. MCL 0.05 mg/L. Inadequate waste characterization per RCRA §§ 3004/3001.	1 (continuing)	$70,117/day	1400000	1.05	1470000	480000	1950000	-5%	0%	-10%	1657500	1950000	Active mining ongoing. Waste characterization deficiencies identified by EPA Region 9 (Project Coordinator: Jennifer Whitfield).
MBTA — Avian Mortalities at Solution Ponds	Migratory Bird Treaty Act	17 documented avian mortalities in solution ponds between 2021 and 2023. Species affected include American avocet (6), northern shoveler (4), cinnamon teal (3), western grebe (2), and others (2). Addressed via civil consent decree rather than separate criminal referral, per DOJ enforcement policy.	17	$15,000/violation (civil)	450000	1.15	517500	—	517500	0%	0%	-15%	439875	517500	Resolved civilly. TMC agreed to install netting/deterrent systems over solution ponds as part of remediation plan ($63.2M over 20 years). Settlement credit applied.
Economic Benefit Subtotal — Bonanza Creek	—	Avoided costs: delayed liner repair, avoided heap-leach ore reclassification/disposal costs, avoided water treatment. Calculated using BEN model.	—	—	—	—	—	1680000	—	—	—	—	—	—	Economic benefit assessed across all Bonanza Creek violations. BEN model inputs: $7.2M delayed capital, 3.5-year deferral, 7% discount rate.
Subtotal — CWA Violations	CWA § 309(d)	—	—	—	4500000	—	5850000	1200000	7050000	—	—	—	5992500	7050000
Subtotal — RCRA Violations	RCRA § 3008(a)	—	—	—	1400000	—	1470000	480000	1950000	—	—	—	1657500	1950000
Subtotal — MBTA Violations	MBTA	—	—	—	450000	—	517500	—	517500	—	—	—	439875	517500
TOTAL — BONANZA CREEK (Preliminary Range)	—	—	—	—	—	—	—	—	9517500	—	—	—	8089875	9517500	Range before final settlement negotiation adjustment.
NEGOTIATED PENALTY — BONANZA CREEK	—	Final negotiated amount per consent decree	—	—	—	—	—	—	7900000	—	—	—	7900000	7900000	Below preliminary range low. Reflects credit for Battle Mountain Community Drinking Water Improvement SEP ($3.5M), remediation commitment ($63.2M over 20 years), and voluntary bird deterrent measures.

[sheet: Kanawha Bend — RCRA & CERCLA]

Penalty Component / Factor	Statute	Description	Violation Count	Per-Violation Statutory Max ($)	Gravity Base ($)	Gravity Adjustment Factor	Adjusted Gravity ($)	Economic Benefit ($)	Total Preliminary Penalty ($)	Litigation Risk Adjustment (%)	Ability to Pay Adjustment (%)	Settlement Adjustment (%)	Final Penalty Range — Low ($)	Final Penalty Range — High ($)	Notes
RCRA §§ 3004/3005 — Failure to Close Surface Impoundment	RCRA § 3008(a)	Failure to properly close former surface impoundment. Sulfuric acid residuals in soils (pH as low as 1.8); heavy metals: lead max 4,200 mg/kg, arsenic max 890 mg/kg in subsurface soils near former waste lagoon.	1 (continuing)	$70,117/day	1600000	1.15	1840000	520000	2360000	-5%	0%	-10%	2006000	2360000	RCRA Permit No. WVD048823915. Facility active (78 acres). State coordination through Loretta May Hatcher (WV AG's Office) and local counsel Baxter, Tully & Crane PLLC (Nathan Tully).
RCRA §§ 3004/3005 — Unpermitted Treatment of Listed Hazardous Wastes	RCRA § 3008(a)	Unpermitted treatment of listed hazardous wastes K062 (spent pickle liquor from steel finishing) and D002 (corrosive waste) at Kanawha Bend. DNAPL (chlorinated solvents) detected in fractured bedrock aquifer.	2	$70,117/day	1100000	1.10	1210000	380000	1590000	-5%	0%	-10%	1351500	1590000	Two waste codes (K062, D002) each counted as separate violation. DNAPL plume approximately 800 ft long in bedrock fracture zone.
Economic Benefit Subtotal — Kanawha Bend	—	Avoided costs: delayed surface impoundment closure, avoided RCRA corrective action at lagoon, deferred groundwater monitoring. Calculated using BEN model.	—	—	—	—	—	900000	—	—	—	—	—	—	Economic benefit assessed across Kanawha Bend RCRA violations. BEN model inputs: $3.6M delayed capital, 3-year deferral, 7% discount rate.
CERCLA § 107 — EPA Emergency Response Cost Recovery	CERCLA § 107	Cost recovery for $3.8M EPA emergency response conducted June 14, 2020 after sulfuric acid release to Kanawha River tributary. NOT a civil penalty — listed here for completeness; addressed in consent decree as separate reimbursement obligation.	N/A	N/A — cost recovery	N/A	N/A	N/A	N/A	3800000	—	—	—	3800000	3800000	Reimbursement, not penalty. Combined with Ridgecrest CERCLA past costs ($14.3M) = total $18.1M past-costs reimbursement. Excluded from civil penalty total.
Subtotal — RCRA Violations	RCRA § 3008(a)	—	—	—	2700000	—	3050000	900000	3950000	—	—	—	3357500	3950000
TOTAL — KANAWHA BEND (Preliminary Penalty Range, excl. CERCLA cost recovery)	—	—	—	—	—	—	—	—	3950000	—	—	—	3357500	3950000	Range before final settlement negotiation adjustment. CERCLA cost recovery ($3.8M) excluded.
NEGOTIATED PENALTY — KANAWHA BEND	—	Final negotiated amount per consent decree (penalty only; CERCLA reimbursement is separate)	—	—	—	—	—	—	3600000	—	—	—	3600000	3600000	Within preliminary range. Reflects remediation commitment ($38.9M over 20 years), Institute Community Air Quality Monitoring Network SEP ($3.0M), and CERCLA cost reimbursement ($3.8M separate).

[sheet: Consolidated Penalty Summary]

Site	State	EPA Region	Applicable Statutes	Preliminary Penalty Range — Low ($M)	Preliminary Penalty Range — High ($M)	Negotiated Civil Penalty ($M)	Negotiated as % of Range Midpoint (%)	SEP Credit Applicable	Remediation Commitment — Nominal ($M)	Remediation Commitment — NPV at 3% ($M)	CERCLA Past-Costs Reimbursement ($M)	Notes
Ridgecrest Copper-Molybdenum Mine	Montana	Region 8	CWA § 301; RCRA § 3004; CERCLA § 107	15.211	17.895	14.200	85.8%	Flint Creek Watershed Restoration — $5.5M	198.600	134.900	14.300	Ridgecrest negotiated remediation: midpoint of TMC est. ($187.5M) and EPA est. ($224.0M) = $205.75M; negotiated to $198.6M. NPV = $198.6M × 0.6795 = $134.9M. AOC Docket No. CERCLA-08-2022-0039. EPA Project Coord.: Dr. Samuel Tesfaye.
Gallatin Chemical Works	Montana	Region 8	RCRA §§ 3004/3005; CWA § 301	5.698	6.703	5.800	93.5%	N/A (no site-specific SEP)	42.800	34.100	0.000	Active facility. RCRA Permit No. MTD098712456. 14 MPDES effluent exceedances (Jan 2021–Jun 2024). CS₂ max 890 µg/L vs. MCL 10 µg/L. Remediation NPV = $42.8M × 0.7969 ≈ $34.1M.
Bonanza Creek Gold Mine	Nevada	Region 9	CWA § 301; RCRA § 3004; MBTA	8.090	9.518	7.900	89.7%	Battle Mountain Community Drinking Water — $3.5M	63.200	47.100	0.000	Active mine. Three heap-leach releases (Mar 2022, Aug 2022, Jan 2023). 17 avian mortalities. Cyanide WAD 0.62 mg/L vs. 0.022 mg/L limit. Mercury 12.4 µg/L vs. 0.77 µg/L. NPV = $63.2M × 0.7454 ≈ $47.1M. EPA Coord.: Jennifer Whitfield.
Kanawha Bend Chemical Plant	West Virginia	Region 3	RCRA §§ 3004/3005; CERCLA § 107	3.358	3.950	3.600	98.5%	Institute Community Air Quality Monitoring — $3.0M	38.900	29.000	3.800	Active facility. RCRA Permit No. WVD048823915. Sulfuric acid release June 14, 2020. EPA emergency response $3.8M. NPV = $38.9M × 0.7454 ≈ $29.0M.
TOTAL — ALL SITES	—	—	—	32.357	38.066	31.500	89.4%	Total SEPs: $12.0M	343.500	245.100	18.100	Negotiated total of $31.5M is below the low end of the preliminary range ($32.4M), reflecting overall settlement credit for comprehensive remediation, SEP commitments, cooperation, and CERCLA reimbursement.

[sheet: Summary]
Item | Value
Prepared by | Calderwood & Harkness LLP
Matter Number | 1039-00003
Date | November 12, 2024
Prepared for | Torchlight Mining Corp.
Client Contact — General Counsel | Miriam Soo-Hwan Park
Client Contact — VP, EH&S | Gareth Linford
Client Contact — CFO | Carolyn Bracebridge
Responsible Partner | Harrison Wexford
Lead Associate | Elliot Nguyen
Working Associate | Grace Nakamura
Civil Action No. | 9:24-cv-00087-DWM
Court | U.S. District Court for the District of Montana, Missoula Division
Judge | Hon. Donald W. Molloy
Plaintiffs | United States (EPA/DOJ), State of Montana, State of Nevada, State of West Virginia
Defendants | Torchlight Mining Corp.; Torchlight Mining (U.S.) Inc.; Torchlight Specialty Chemicals, Inc.; Ridgecrest Mine Holdings, LLC; Bonanza Creek Mining, LLC
Applicable Statutes | CWA § 309(d); RCRA § 3008(a)-(g); CERCLA § 107
EPA Penalty Policies Applied | CWA Civil Penalty Policy (2022 rev.); RCRA Civil Penalty Policy (2003, as adjusted for inflation); CERCLA § 107 cost recovery (penalty not applicable — addressed separately)
NEGOTIATED PENALTY SUMMARY
Ridgecrest Copper-Molybdenum Mine | $14,200,000
Gallatin Chemical Works | $5,800,000
Bonanza Creek Gold Mine | $7,900,000
Kanawha Bend Chemical Plant | $3,600,000
Total Negotiated Civil Penalty | $31,500,000
PAYMENT SCHEDULE
Installment 1 — 30 days after entry (25%) | $7,875,000
Installment 2 — 12 months after entry (25%) | $7,875,000
Installment 3 — 24 months after entry (25%) | $7,875,000
Installment 4 — 36 months after entry (25%) | $7,875,000
Expected Entry Date | May 15, 2025
Effective Date (30 days after entry) | June 14, 2025
First Installment Due (30 days after Effective Date) | July 14, 2025
NOTE: EPA past-costs reimbursement under CERCLA § 107 ($18.1M total: $14.3M Ridgecrest + $3.8M Kanawha Bend) is addressed separately from the civil penalty calculation.
[sheet: Ridgecrest — CWA & RCRA]
Penalty Component / Factor | Statute | Description | Violation Count | Per-Violation Statutory Max ($) | Gravity Base ($) | Gravity Adjustment Factor | Adjusted Gravity ($) | Economic Benefit ($) | Total Preliminary Penalty ($) | Litigation Risk Adjustment (%) | Ability to Pay Adjustment (%) | Settlement Adjustment (%) | Final Penalty Range — Low ($) | Final Penalty Range — High ($) | Notes
CWA § 301 — Unpermitted Discharge (AMD to Flint Creek) | CWA § 309(d) | Unpermitted discharge of acid mine drainage containing dissolved copper (avg. 47 mg/L vs. MT surface-water standard 0.0087 mg/L), molybdenum (avg. 1.2 mg/L), selenium (avg. 0.082 mg/L), sulfate (avg. 3,400 mg/L) from tailings impoundment (425 acres) seepage to Flint Creek. Active discharges documented 2019–2023. | 1 (continuing) | $64,618/day (inflation-adjusted) | 8500000 | 1.25 | 10625000 | 2800000 | 13425000 | -5% | 0% | -10% | 11411250 | 13425000 | Gravity elevated due to severity (copper >5,000× standard), duration (multi-year), ecological harm to Flint Creek fishery. Mine ceased active operations Dec. 2019 but discharges continued through closure phase.
CWA § 301 — Stormwater Discharge Violations | CWA § 309(d) | Failure to implement stormwater management controls at waste rock dumps and haul roads resulting in sediment-laden runoff to Flint Creek tributaries. Turbidity exceedances documented at four outfalls (2020–2023). | 4 | $64,618/violation | 1800000 | 1.10 | 1980000 | 450000 | 2430000 | -5% | 0% | -10% | 2065500 | 2430000 | Four outfalls each treated as separate violation. Gravity base $450K/outfall × 4. Stormwater permit No. MTR100342.
RCRA § 3004 — Mismanagement of Hazardous Waste (SX/EW circuit) | RCRA § 3008(a) | Mismanagement of hazardous waste from solvent-extraction/electrowinning (SX/EW) circuit. Improper storage and disposal of spent electrolyte and organic solvents without RCRA permit or interim status. | 3 | $70,117/day (inflation-adjusted) | 3200000 | 1.10 | 3520000 | 950000 | 4470000 | -5% | 0% | -10% | 3799500 | 4470000 | Three distinct waste-management violations identified during EPA inspection. Violations ceased upon mine closure but corrective action not completed.
RCRA § 3004 — Inadequate Tailings Impoundment Liner Monitoring | RCRA § 3008(a) | Failure to maintain and monitor liner system integrity at the 425-acre tailings impoundment per RCRA corrective action requirements. Leak detection system inoperable for 14 months (Jan. 2021–Feb. 2022). | 1 (continuing) | $70,117/day (inflation-adjusted) | 1500000 | 1.05 | 1575000 | 350000 | 1925000 | -5% | 0% | -10% | 1636250 | 1925000 | Liner monitoring failure contributed to AMD seepage to Flint Creek. Corrective action plan submitted Oct. 2023.
Economic Benefit Subtotal — Ridgecrest | — | Avoided costs: delayed wastewater treatment system installation, avoided RCRA closure costs, avoided monitoring expenditures. Calculated using BEN model. | — | — | — | — | — | 3750000 | — | — | — | — | — | — | Economic benefit assessed separately across all Ridgecrest violations. BEN model inputs: $12.4M delayed capital cost, 4.5-year deferral, 7% discount rate.
Subtotal — CWA Violations | CWA § 309(d) | — | — | — | 10300000 | — | 12605000 | 3250000 | 15855000 | — | — | — | 13476750 | 15855000
Subtotal — RCRA Violations | RCRA § 3008(a) | — | — | — | 4700000 | — | 5095000 | 1300000 | 6395000 | — | — | — | 5435750 | 6395000
TOTAL — RIDGECREST (Preliminary Range) | — | — | — | — | — | — | — | — | 22250000 | — | — | — | 15210750 | 17895000 | Range before final settlement negotiation adjustment. Note: Low = sum of individual violation lows after applying litigation risk (-5%) and settlement adjustment (-10%) = preliminary × 0.85. High = unadjusted preliminary totals. Aggregated range reflects combined adjustments.
NEGOTIATED PENALTY — RIDGECREST | — | Final negotiated amount per consent decree | — | — | — | — | — | — | 14200000 | — | — | — | 14200000 | 14200000 | Negotiated below the preliminary range low; reflects credit for remediation commitments ($198.6M over 30 years), SEP (Flint Creek Watershed Restoration, $5.5M), cooperation, and CERCLA § 107 reimbursement ($14.3M). AOC Docket No. CERCLA-08-2022-0039. EPA Project Coord.: Dr. Samuel Tesfaye.
[sheet: Gallatin — CWA & RCRA]
Penalty Component / Factor | Statute | Description | Violation Count | Per-Violation Statutory Max ($) | Gravity Base ($) | Gravity Adjustment Factor | Adjusted Gravity ($) | Economic Benefit ($) | Total Preliminary Penalty ($) | Litigation Risk Adjustment (%) | Ability to Pay Adjustment (%) | Settlement Adjustment (%) | Final Penalty Range — Low ($) | Final Penalty Range — High ($) | Notes
RCRA §§ 3004/3005 — Unpermitted Hazardous Waste Storage Unit | RCRA § 3008(a) | Operation of unpermitted hazardous-waste storage unit at Gallatin Chemical Works facility (145 acres). Failure to obtain RCRA Part B permit for storage of CS₂-contaminated wastes. | 1 (continuing) | $70,117/day | 2100000 | 1.05 | 2205000 | 680000 | 2885000 | -5% | 0% | -10% | 2452250 | 2885000 | RCRA Permit No. MTD098712456. Three SWMUs identified. CS₂ in groundwater max 890 µg/L vs. MCL 10 µg/L.
RCRA §§ 3004/3005 — Failure to Perform Corrective Action at SWMUs | RCRA § 3008(a) | Failure to perform corrective action at three solid waste management units (SWMUs) as required under RCRA corrective action obligations. Xanthate decomposition products and VOCs (toluene, xylene) in subsurface soils. | 3 | $70,117/day | 1200000 | 1.00 | 1200000 | 420000 | 1620000 | -5% | 0% | -10% | 1377000 | 1620000 | Three SWMUs each treated as a separate violation for gravity calculation. SWMU-1: former solvent storage area; SWMU-2: waste lagoon; SWMU-3: drum storage pad.
CWA § 301 — MPDES Effluent Limit Exceedances | CWA § 309(d) | 14 exceedances of MPDES permit effluent limits for CS₂ and total suspended solids between January 2021 and June 2024. | 14 | $64,618/violation | 1680000 | 1.10 | 1848000 | 350000 | 2198000 | -5% | 0% | -10% | 1868300 | 2198000 | 14 separate discharge events. Gravity base calculated per event ($120K/event × 14). Facility currently active; ongoing compliance improvements required. MPDES Permit No. MT0030457.
Economic Benefit Subtotal — Gallatin | — | Avoided costs: delayed RCRA corrective action at SWMUs, avoided wastewater treatment upgrades. Calculated using BEN model. | — | — | — | — | — | 1450000 | — | — | — | — | — | — | Economic benefit assessed across all Gallatin violations. BEN model inputs: $5.8M delayed capital, 3-year deferral, 7% discount rate.
Subtotal — RCRA Violations | RCRA § 3008(a) | — | — | — | 3300000 | — | 3405000 | 1100000 | 4505000 | — | — | — | 3829250 | 4505000
Subtotal — CWA Violations | CWA § 309(d) | — | — | — | 1680000 | — | 1848000 | 350000 | 2198000 | — | — | — | 1868300 | 2198000
TOTAL — GALLATIN (Preliminary Range) | — | — | — | — | — | — | — | — | 6703000 | — | — | — | 5697550 | 6703000 | Range before final settlement negotiation adjustment.
NEGOTIATED PENALTY — GALLATIN | — | Final negotiated amount per consent decree | — | — | — | — | — | — | 5800000 | — | — | — | 5800000 | 5800000 | Within preliminary range. Reflects remediation commitment ($42.8M over 15 years) and active facility compliance upgrades.
[sheet: Bonanza Creek — CWA & RCRA]
Penalty Component / Factor | Statute | Description | Violation Count | Per-Violation Statutory Max ($) | Gravity Base ($) | Gravity Adjustment Factor | Adjusted Gravity ($) | Economic Benefit ($) | Total Preliminary Penalty ($) | Litigation Risk Adjustment (%) | Ability to Pay Adjustment (%) | Settlement Adjustment (%) | Final Penalty Range — Low ($) | Final Penalty Range — High ($) | Notes
CWA § 301 — Unpermitted Discharge (Heap-Leach Releases) | CWA § 309(d) | Three documented unpermitted discharges of process solution from heap-leach pad to ephemeral tributary of Reese River via torn liner: (1) March 17, 2022; (2) August 9, 2022; (3) January 22, 2023. WAD cyanide 0.62 mg/L vs. discharge limit 0.022 mg/L; mercury avg. 12.4 µg/L vs. WQ criterion 0.77 µg/L. | 3 | $64,618/violation/day | 4500000 | 1.30 | 5850000 | 1200000 | 7050000 | -5% | 0% | -10% | 5992500 | 7050000 | High gravity factor reflects cyanide/mercury contamination, repeated violations over 10-month span, proximity to Reese River. Mine area ~5,600 acres; total property ~12,400 acres.
RCRA § 3004 — Management of Spent Heap-Leach Ore | RCRA § 3008(a) | Management of spent heap-leach ore as hazardous waste without proper characterization and disposal. Selenium in pit-lake water at 0.34 mg/L vs. MCL 0.05 mg/L. Inadequate waste characterization per RCRA §§ 3004/3001. | 1 (continuing) | $70,117/day | 1400000 | 1.05 | 1470000 | 480000 | 1950000 | -5% | 0% | -10% | 1657500 | 1950000 | Active mining ongoing. Waste characterization deficiencies identified by EPA Region 9 (Project Coordinator: Jennifer Whitfield).
MBTA — Avian Mortalities at Solution Ponds | Migratory Bird Treaty Act | 17 documented avian mortalities in solution ponds between 2021 and 2023. Species affected include American avocet (6), northern shoveler (4), cinnamon teal (3), western grebe (2), and others (2). Addressed via civil consent decree rather than separate criminal referral, per DOJ enforcement policy. | 17 | $15,000/violation (civil) | 450000 | 1.15 | 517500 | — | 517500 | 0% | 0% | -15% | 439875 | 517500 | Resolved civilly. TMC agreed to install netting/deterrent systems over solution ponds as part of remediation plan ($63.2M over 20 years). Settlement credit applied.
Economic Benefit Subtotal — Bonanza Creek | — | Avoided costs: delayed liner repair, avoided heap-leach ore reclassification/disposal costs, avoided water treatment. Calculated using BEN model. | — | — | — | — | — | 1680000 | — | — | — | — | — | — | Economic benefit assessed across all Bonanza Creek violations. BEN model inputs: $7.2M delayed capital, 3.5-year deferral, 7% discount rate.
Subtotal — CWA Violations | CWA § 309(d) | — | — | — | 4500000 | — | 5850000 | 1200000 | 7050000 | — | — | — | 5992500 | 7050000
Subtotal — RCRA Violations | RCRA § 3008(a) | — | — | — | 1400000 | — | 1470000 | 480000 | 1950000 | — | — | — | 1657500 | 1950000
Subtotal — MBTA Violations | MBTA | — | — | — | 450000 | — | 517500 | — | 517500 | — | — | — | 439875 | 517500
TOTAL — BONANZA CREEK (Preliminary Range) | — | — | — | — | — | — | — | — | 9517500 | — | — | — | 8089875 | 9517500 | Range before final settlement negotiation adjustment.
NEGOTIATED PENALTY — BONANZA CREEK | — | Final negotiated amount per consent decree | — | — | — | — | — | — | 7900000 | — | — | — | 7900000 | 7900000 | Below preliminary range low. Reflects credit for Battle Mountain Community Drinking Water Improvement SEP ($3.5M), remediation commitment ($63.2M over 20 years), and voluntary bird deterrent measures.
[sheet: Kanawha Bend — RCRA & CERCLA]
Penalty Component / Factor | Statute | Description | Violation Count | Per-Violation Statutory Max ($) | Gravity Base ($) | Gravity Adjustment Factor | Adjusted Gravity ($) | Economic Benefit ($) | Total Preliminary Penalty ($) | Litigation Risk Adjustment (%) | Ability to Pay Adjustment (%) | Settlement Adjustment (%) | Final Penalty Range — Low ($) | Final Penalty Range — High ($) | Notes
RCRA §§ 3004/3005 — Failure to Close Surface Impoundment | RCRA § 3008(a) | Failure to properly close former surface impoundment. Sulfuric acid residuals in soils (pH as low as 1.8); heavy metals: lead max 4,200 mg/kg, arsenic max 890 mg/kg in subsurface soils near former waste lagoon. | 1 (continuing) | $70,117/day | 1600000 | 1.15 | 1840000 | 520000 | 2360000 | -5% | 0% | -10% | 2006000 | 2360000 | RCRA Permit No. WVD048823915. Facility active (78 acres). State coordination through Loretta May Hatcher (WV AG's Office) and local counsel Baxter, Tully & Crane PLLC (Nathan Tully).
RCRA §§ 3004/3005 — Unpermitted Treatment of Listed Hazardous Wastes | RCRA § 3008(a) | Unpermitted treatment of listed hazardous wastes K062 (spent pickle liquor from steel finishing) and D002 (corrosive waste) at Kanawha Bend. DNAPL (chlorinated solvents) detected in fractured bedrock aquifer. | 2 | $70,117/day | 1100000 | 1.10 | 1210000 | 380000 | 1590000 | -5% | 0% | -10% | 1351500 | 1590000 | Two waste codes (K062, D002) each counted as separate violation. DNAPL plume approximately 800 ft long in bedrock fracture zone.
Economic Benefit Subtotal — Kanawha Bend | — | Avoided costs: delayed surface impoundment closure, avoided RCRA corrective action at lagoon, deferred groundwater monitoring. Calculated using BEN model. | — | — | — | — | — | 900000 | — | — | — | — | — | — | Economic benefit assessed across Kanawha Bend RCRA violations. BEN model inputs: $3.6M delayed capital, 3-year deferral, 7% discount rate.
CERCLA § 107 — EPA Emergency Response Cost Recovery | CERCLA § 107 | Cost recovery for $3.8M EPA emergency response conducted June 14, 2020 after sulfuric acid release to Kanawha River tributary. NOT a civil penalty — listed here for completeness; addressed in consent decree as separate reimbursement obligation. | N/A | N/A — cost recovery | N/A | N/A | N/A | N/A | 3800000 | — | — | — | 3800000 | 3800000 | Reimbursement, not penalty. Combined with Ridgecrest CERCLA past costs ($14.3M) = total $18.1M past-costs reimbursement. Excluded from civil penalty total.
Subtotal — RCRA Violations | RCRA § 3008(a) | — | — | — | 2700000 | — | 3050000 | 900000 | 3950000 | — | — | — | 3357500 | 3950000
TOTAL — KANAWHA BEND (Preliminary Penalty Range, excl. CERCLA cost recovery) | — | — | — | — | — | — | — | — | 3950000 | — | — | — | 3357500 | 3950000 | Range before final settlement negotiation adjustment. CERCLA cost recovery ($3.8M) excluded.
NEGOTIATED PENALTY — KANAWHA BEND | — | Final negotiated amount per consent decree (penalty only; CERCLA reimbursement is separate) | — | — | — | — | — | — | 3600000 | — | — | — | 3600000 | 3600000 | Within preliminary range. Reflects remediation commitment ($38.9M over 20 years), Institute Community Air Quality Monitoring Network SEP ($3.0M), and CERCLA cost reimbursement ($3.8M separate).
[sheet: Consolidated Penalty Summary]
Site | State | EPA Region | Applicable Statutes | Preliminary Penalty Range — Low ($M) | Preliminary Penalty Range — High ($M) | Negotiated Civil Penalty ($M) | Negotiated as % of Range Midpoint (%) | SEP Credit Applicable | Remediation Commitment — Nominal ($M) | Remediation Commitment — NPV at 3% ($M) | CERCLA Past-Costs Reimbursement ($M) | Notes
Ridgecrest Copper-Molybdenum Mine | Montana | Region 8 | CWA § 301; RCRA § 3004; CERCLA § 107 | 15.211 | 17.895 | 14.200 | 85.8% | Flint Creek Watershed Restoration — $5.5M | 198.600 | 134.900 | 14.300 | Ridgecrest negotiated remediation: midpoint of TMC est. ($187.5M) and EPA est. ($224.0M) = $205.75M; negotiated to $198.6M. NPV = $198.6M × 0.6795 = $134.9M. AOC Docket No. CERCLA-08-2022-0039. EPA Project Coord.: Dr. Samuel Tesfaye.
Gallatin Chemical Works | Montana | Region 8 | RCRA §§ 3004/3005; CWA § 301 | 5.698 | 6.703 | 5.800 | 93.5% | N/A (no site-specific SEP) | 42.800 | 34.100 | 0.000 | Active facility. RCRA Permit No. MTD098712456. 14 MPDES effluent exceedances (Jan 2021–Jun 2024). CS₂ max 890 µg/L vs. MCL 10 µg/L. Remediation NPV = $42.8M × 0.7969 ≈ $34.1M.
Bonanza Creek Gold Mine | Nevada | Region 9 | CWA § 301; RCRA § 3004; MBTA | 8.090 | 9.518 | 7.900 | 89.7% | Battle Mountain Community Drinking Water — $3.5M | 63.200 | 47.100 | 0.000 | Active mine. Three heap-leach releases (Mar 2022, Aug 2022, Jan 2023). 17 avian mortalities. Cyanide WAD 0.62 mg/L vs. 0.022 mg/L limit. Mercury 12.4 µg/L vs. 0.77 µg/L. NPV = $63.2M × 0.7454 ≈ $47.1M. EPA Coord.: Jennifer Whitfield.
Kanawha Bend Chemical Plant | West Virginia | Region 3 | RCRA §§ 3004/3005; CERCLA § 107 | 3.358 | 3.950 | 3.600 | 98.5% | Institute Community Air Quality Monitoring — $3.0M | 38.900 | 29.000 | 3.800 | Active facility. RCRA Permit No. WVD048823915. Sulfuric acid release June 14, 2020. EPA emergency response $3.8M. NPV = $38.9M × 0.7454 ≈ $29.0M.
TOTAL — ALL SITES | — | — | — | 32.357 | 38.066 | 31.500 | 89.4% | Total SEPs: $12.0M | 343.500 | 245.100 | 18.100 | Negotiated total of $31.5M is below the low end of the preliminary range ($32.4M), reflecting overall settlement credit for comprehensive remediation, SEP commitments, cooperation, and CERCLA reimbursement.

[sheet: Summary]

NEGOTIATED PENALTY SUMMARY

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