1039-00003 · Torchlight Mining Corp · Corporate Authorizations & Closing

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RESOLUTIONS OF THE BOARD OF DIRECTORS OF TORCHLIGHT MINING CORP.

Adopted at a Duly Called Special Meeting Held on February 10, 2025

Torchlight Mining Corp. A corporation incorporated under the Canada Business Corporations Act (R.S.C. 1985, c. C-44) (the "CBCA")

1800 Bayfield Tower, 401 Bay Street Toronto, Ontario M5H 2Y4, Canada

TSX: TRC

PREAMBLE AND RECITALS

The Board of Directors (the "Board") of Torchlight Mining Corp. ("TMC" or the "Corporation") convened a duly called special meeting (the "Meeting") on February 10, 2025, at 9:00 a.m. Eastern Standard Time, at the principal offices of the Corporation located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada, with certain directors participating via secure videoconference in accordance with the Corporation's by-laws and applicable provisions of the CBCA. A quorum of directors was present in person or by electronic means throughout the entirety of the Meeting in accordance with the Corporation's articles of incorporation, by-laws, and the CBCA. Notice of the Meeting, together with an agenda and all supporting materials described herein, was duly given to all directors in accordance with the Corporation's by-laws not less than ten (10) days prior to the date of the Meeting.

The Chair of the Board called the Meeting to order and confirmed that proper notice had been provided, that a quorum was present, and that the Meeting had been duly convened. The Chair stated that the principal purpose of the Meeting was to consider and, if thought advisable, to authorize the Corporation's entry into a consent decree and related instruments in connection with certain environmental enforcement proceedings pending in the United States District Court for the District of Montana, as more particularly described below.

After full discussion and deliberation, and upon motion duly made, seconded, and carried, the following recitals were noted and the following resolutions were unanimously adopted:

WHEREAS:

A. The Corporation and Its Subsidiaries. TMC is the ultimate parent corporation of several United States operating subsidiaries, through which the Corporation conducts mining, chemical processing, and related operations in the States of Montana, Nevada, and West Virginia (collectively, the "U.S. Operations"). The Corporation's principal U.S. subsidiaries relevant to the matters addressed by these resolutions include:

(i) Torchlight Mining (U.S.) Inc. ("TM(US)"), a corporation organized and existing under the laws of the State of Delaware (Employer Identification Number: 83-2047156), which serves as the primary U.S. holding company for the Corporation's domestic operations;

(ii) Torchlight Specialty Chemicals, Inc. ("TSC"), a corporation organized and existing under the laws of the State of Delaware (Employer Identification Number: 47-3819204), which is a direct, wholly owned subsidiary of TM(US) and operates the Corporation's chemical processing facilities;

(iii) Ridgecrest Mine Holdings, LLC ("RMH"), a limited liability company organized under the laws of the State of Montana (Montana Secretary of State ID: E1042738), which is a direct, wholly owned subsidiary of TM(US) and holds the Corporation's mining interests at the Ridgecrest Copper-Molybdenum Mine in Granite County, Montana; and

(iv) Bonanza Creek Mining, LLC ("BCM"), a limited liability company organized under the laws of the State of Nevada (Nevada Secretary of State Entity No.: E0518294731), which is a direct, wholly owned subsidiary of TM(US) and holds the Corporation's mining interests at the Bonanza Creek Gold Mine in Lander County, Nevada.

TM(US), TSC, RMH, and BCM are collectively referred to herein as the "U.S. Subsidiaries." TMC and the U.S. Subsidiaries are collectively referred to herein as the "Torchlight Parties."

B. The Enforcement Action. The United States of America, acting through the United States Environmental Protection Agency (the "EPA") and the United States Department of Justice, Environment and Natural Resources Division (the "DOJ ENRD"), together with the State of Montana (acting through the Montana Department of Environmental Quality), the State of Nevada (acting through the Nevada Division of Environmental Protection), and the State of West Virginia (acting through the West Virginia Department of Environmental Protection) as co-plaintiffs (collectively, the "Government Plaintiffs"), filed a civil complaint (the "Complaint") on January 18, 2024, bearing Civil Action No. 9:24-cv-00087-DWM, in the United States District Court for the District of Montana, Missoula Division, before the Honorable Donald W. Molloy, Senior United States District Judge (the "Court"), captioned United States of America and State of Montana et al. v. Torchlight Mining Corp. et al. (the "Action").

The Complaint alleges that the Torchlight Parties committed multiple violations of federal and state environmental statutes at four facilities operated or formerly operated by the U.S. Subsidiaries, including violations of:

(i) Section 301 of the Clean Water Act ("CWA"), 33 U.S.C. § 1311, for the discharge of pollutants into navigable waters of the United States without a valid National Pollutant Discharge Elimination System ("NPDES") permit or in violation of the terms of existing permits;

(ii) Sections 3004 and 3005 of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6924 and 6925, for the storage, treatment, and disposal of hazardous waste at unpermitted or improperly managed facilities;

(iii) Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9607, for liability as owners, operators, and arrangers for the release or threatened release of hazardous substances at and from the facilities; and

(iv) The Migratory Bird Treaty Act ("MBTA"), 16 U.S.C. §§ 703–712, for the unpermitted take of migratory birds in connection with open-pit mining operations and tailings storage facilities.

The four facilities that are the subject of the Action are:

(a) Ridgecrest Copper-Molybdenum Mine, located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832 (the "Ridgecrest Site");

(b) Gallatin Chemical Works, located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714 (the "Gallatin Site");

(c) Bonanza Creek Gold Mine, located at County Road 447, Mile Marker 12, Lander County, Nevada 89820 (the "Bonanza Creek Site"); and

(d) Kanawha Bend Chemical Plant, located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112 (the "Kanawha Bend Site").

The Ridgecrest Site, the Gallatin Site, the Bonanza Creek Site, and the Kanawha Bend Site are collectively referred to herein as the "Sites."

C. Negotiation History. The procedural history and negotiation of the proposed resolution of the Action are summarized as follows:

(i) TMC, on behalf of the Torchlight Parties, filed an answer to the Complaint on March 5, 2024, denying all material allegations and asserting various affirmative defenses;

(ii) On April 22, 2024, the parties entered into a Tolling Agreement with respect to all applicable statutes of limitation and statutes of repose, which tolling agreement remains in effect as of the date hereof;

(iii) Court-ordered mediation was conducted before Magistrate Judge Clara Finnegan of the United States District Court for the District of Montana, commencing on May 15, 2024, and continuing through multiple sessions during the spring and summer of 2024;

(iv) On July 30, 2024, following extensive mediation, the parties reached an agreement in principle with respect to a framework for resolving the Action through a consent decree, memorialized in a term sheet executed by all parties;

(v) On October 21, 2024, the Corporation formally engaged Calderwood & Harkness LLP ("C&H") as lead outside counsel for the consent decree negotiations and related matters (C&H Matter No. 1039-00003), under the supervision of Harrison Wexford, Partner, Environmental Enforcement and Compliance Practice Group;

(vi) From October 2024 through early February 2025, the parties conducted extensive negotiations over the specific terms and conditions of the consent decree, exchanging multiple marked and redlined drafts and engaging in numerous telephone conferences and in-person meetings; and

(vii) On February 3, 2025, the parties reached agreement on a substantially final text of the consent decree (the "Decree"), which has been circulated to and reviewed by the Board in advance of this Meeting.

D. Consent Decree Terms — Financial Obligations. The Decree provides for the following material financial obligations on the part of the Torchlight Parties, as more particularly described in the Decree (attached hereto as Exhibit A) and in the summary materials provided to the Board (attached hereto as Exhibit B):

(i) Remediation Obligations. Total remediation obligations in the nominal aggregate amount of Three Hundred Forty-Three Million Five Hundred Thousand Dollars ($343,500,000), consisting of the following site-specific remediation programs:

(a) Ridgecrest Site: One Hundred Ninety-Eight Million Six Hundred Thousand Dollars ($198,600,000) in remediation costs to be incurred over a thirty (30)-year remediation period. This figure was negotiated as a compromise between the Corporation's internal estimate of $187,500,000 and the EPA's estimate of $224,000,000, reflecting agreed-upon adjustments to the scope of groundwater treatment, tailings cap construction, and long-term monitoring requirements;

(b) Gallatin Site: Forty-Two Million Eight Hundred Thousand Dollars ($42,800,000) in remediation costs to be incurred over a fifteen (15)-year remediation period, encompassing soil removal, groundwater extraction and treatment, and facility decommissioning;

(c) Bonanza Creek Site: Sixty-Three Million Two Hundred Thousand Dollars ($63,200,000) in remediation costs to be incurred over a twenty (20)-year remediation period, encompassing pit-lake treatment, heap-leach pad closure, and riparian habitat restoration along Bonanza Creek; and

(d) Kanawha Bend Site: Thirty-Eight Million Nine Hundred Thousand Dollars ($38,900,000) in remediation costs to be incurred over a twenty (20)-year remediation period, encompassing soil and sediment remediation, groundwater monitoring, and off-site disposal of contaminated materials.

The net present value of the total remediation obligations, discounted at a rate of three percent (3%) per annum, is approximately Two Hundred Forty-Five Million One Hundred Thousand Dollars ($245,100,000).

(ii) Civil Penalties. Aggregate civil penalties in the amount of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000), allocated among the Sites as follows:

(a) Ridgecrest Site: Fourteen Million Two Hundred Thousand Dollars ($14,200,000);

(b) Gallatin Site: Five Million Eight Hundred Thousand Dollars ($5,800,000);

(d) Kanawha Bend Site: Three Million Six Hundred Thousand Dollars ($3,600,000).

The civil penalties are payable in four (4) equal quarterly installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each, with the first installment due thirty (30) days after the Effective Date of the Decree and subsequent installments due at twelve (12), twenty-four (24), and thirty-six (36) months after entry of the Decree by the Court.

(iii) EPA Past-Costs Reimbursement. Payment of Eighteen Million One Hundred Thousand Dollars ($18,100,000) to the United States in reimbursement of costs incurred by the EPA pursuant to CERCLA Section 107, consisting of Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for EPA removal actions conducted at the Ridgecrest Site and Three Million Eight Hundred Thousand Dollars ($3,800,000) for EPA emergency response actions conducted at the Kanawha Bend Site, payable in accordance with the schedule set forth in the Decree.

(iv) Supplemental Environmental Projects. The Torchlight Parties shall undertake and fund three Supplemental Environmental Projects ("SEPs") with a combined value of Twelve Million Dollars ($12,000,000):

(a) Flint Creek Watershed Restoration Project (Montana): Five Million Five Hundred Thousand Dollars ($5,500,000), to fund restoration activities in the Flint Creek watershed in Granite County, Montana, including streambank stabilization, native riparian revegetation, and water quality monitoring;

(b) Battle Mountain Community Drinking Water Improvement Project (Nevada): Three Million Five Hundred Thousand Dollars ($3,500,000), to fund the design, construction, and commissioning of improved drinking water infrastructure serving the community of Battle Mountain in Lander County, Nevada, including a new water treatment facility and upgraded distribution lines; and

(c) Institute Community Air Quality Monitoring Network (West Virginia): Three Million Dollars ($3,000,000), to fund the installation, operation, and maintenance of a network of ambient air quality monitoring stations in and around the community of Institute, Kanawha County, West Virginia, including continuous monitors for particulate matter, volatile organic compounds, and hazardous air pollutants.

(v) Independent Monitor Costs. The estimated cost of the independent environmental monitor required by the Decree is Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year period, or approximately Nine Hundred Sixty Thousand Dollars ($960,000) per year.

(vi) Grand Total. The grand total of the estimated obligations under the Decree, on a nominal basis, is Four Hundred Nine Million Nine Hundred Thousand Dollars ($409,900,000), consisting of remediation ($343,500,000), civil penalties ($31,500,000), EPA past-costs reimbursement ($18,100,000), SEPs ($12,000,000), and independent monitor costs ($4,800,000). The grand total, on a net present value or cash-equivalent basis, is approximately Three Hundred Eleven Million Five Hundred Thousand Dollars ($311,500,000).

A detailed breakdown of the financial obligations by category and by site is set forth in Exhibit B and Exhibit D hereto.

E. Stipulated Penalties and Key Compliance Terms. In addition to the financial obligations described above, the Decree contains the following key compliance and enforcement provisions:

(i) Stipulated Penalties. The Decree provides for stipulated penalties for failure to comply with the remediation obligations and other requirements of the Decree, at the following rates: One Thousand Five Hundred Dollars ($1,500) per day per violation for the first thirty (30) days of noncompliance; Three Thousand Dollars ($3,000) per day per violation for days thirty-one (31) through sixty (60) of noncompliance; and Five Thousand Five Hundred Dollars ($5,500) per day per violation for each day of noncompliance thereafter;

(ii) Force Majeure. The Decree contains a force majeure provision that excuses noncompliance caused by circumstances entirely beyond the control of the Torchlight Parties, provided that written notice of a force majeure event is provided to the EPA and the relevant state co-plaintiff within fifteen (15) calendar days of the date on which the Torchlight Parties first knew or should have known of the event;

(iii) Dispute Resolution. The Decree establishes a three-tier dispute resolution mechanism consisting of: (a) informal negotiation between the parties for a period of thirty (30) days; (b) a formal written decision by EPA, to be issued within thirty (30) days after the conclusion of informal negotiations; and (c) judicial review by the Court, upon a petition filed by any party within thirty (30) days after issuance of EPA's formal decision;

(iv) Site-by-Site Termination. The Decree provides that the Torchlight Parties may seek termination of the Decree with respect to individual Sites upon certification by EPA that all remedial construction, operation and maintenance, and monitoring obligations have been completed and all applicable performance standards have been achieved at such Site, provided that no termination shall be effective sooner than five (5) years after completion of remedial construction at the applicable Site; and

(v) Effective Date. The Decree shall become effective thirty (30) days after entry of the Decree by the Court (as set forth in Section IV of the Decree). The parties anticipate seeking entry of the Decree by the Court on or about May 15, 2025, which would result in an Effective Date of approximately June 14, 2025.

F. Financial Assurance Obligations. The Decree requires the Torchlight Parties to provide financial assurance in the aggregate amount of Two Hundred Forty-Five Million Dollars ($245,000,000) to secure the remediation obligations under the Decree. The financial assurance is to be provided through the following instruments:

(i) Surety Bond. A surety bond in the face amount of One Hundred Sixty-Five Million Dollars ($165,000,000) to be issued by Ironbark Surety of America, Inc., an insurance company licensed and authorized to conduct business in the States of Montana, Nevada, and West Virginia and acceptable to EPA (Bond No. ISA-ENV-2025-08934). The annual premium for the surety bond will be one and eighty-five hundredths percent (1.85%) of the face amount, or Three Million Fifty-Two Thousand Five Hundred Dollars ($3,052,500) per year; and

(ii) Environmental Remediation Trust Fund. An environmental remediation trust fund in the initial funded amount of Eighty Million Dollars ($80,000,000), to be established with Larchfield Trust Company, N.A. as trustee pursuant to a Remediation Trust Agreement (Trust Agreement No. LTC-REM-2025-1177), with David Henshaw serving as Trust Officer. The trust fund will be invested in accordance with the investment policy set forth in the Trust Agreement and will be available to fund remediation activities at the Sites as directed by the Corporation and approved by EPA.

The deadline for the Torchlight Parties to establish the remediation trust fund and post the surety bond is September 12, 2025, being ninety (90) days after the anticipated Effective Date of the Decree. A summary of the financial assurance arrangements is set forth in Exhibit C hereto.

G. Independent Monitor. The Decree provides for the appointment of a court-appointed independent environmental auditor and compliance monitor (the "Independent Monitor"). Following consultation among the parties and with the Court, Verdant Analytics, Inc., an Oregon corporation headquartered at 1550 NW Couch Street, Suite 400, Portland, Oregon 97209, has been selected to serve as the Independent Monitor, with Dr. Kamal Osei, Senior Managing Director, serving as the lead engagement director. The Independent Monitor will perform quarterly compliance audits at each of the four Sites and will prepare and submit annual public reports to the Court, the EPA, and the state co-plaintiffs regarding the Torchlight Parties' compliance with the Decree.

H. Legal Counsel and Advisors. The Corporation is advised by the following counsel and professional advisors in connection with the Action and the Decree:

(i) Calderwood & Harkness LLP (Harrison Wexford, Responsible Partner, Environmental Enforcement and Compliance Practice Group), as lead outside counsel for the consent decree negotiations and all federal court proceedings;

(ii) Holcroft, Dane & Weiss LLP (Russell Dane, Lead Partner), as Montana local counsel for proceedings and filings in the State of Montana;

(iii) sagebrush Law Group, PLLC (Denise Quartaro, Lead Partner), as Nevada local counsel for proceedings and filings in the State of Nevada;

(iv) Baxter, Tully & Crane PLLC (Nathan Tully, Lead Partner), as West Virginia local counsel for proceedings and filings in the State of West Virginia;

(v) Pinnacle Creek Environmental, LLC (Dr. Astrid Bergmann, P.E., Senior Principal), as environmental remediation consultant, providing technical analysis of remediation costs, cleanup standards, remedial alternatives, and engineering feasibility assessments; and

(vi) Northspire Capital Markets, Inc. (Vivian Okafor, Managing Director), as financial advisor, providing financial impact analysis, insurance recovery estimates, and assistance with the financial assurance program.

I. Financial Considerations. The Board has reviewed and considered the following financial information in connection with the proposed Decree:

(i) Existing Environmental Remediation Reserve. The Corporation's environmental remediation reserve as of the third quarter of fiscal year 2024 (as reported in the Corporation's Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission and the corresponding filing with the Ontario Securities Commission) is Three Hundred Forty Million Canadian Dollars (C$340,000,000), which is approximately Two Hundred Fifty-One Million Four Hundred Thousand United States Dollars (US$251,400,000) at the applicable exchange rate of C$1.00 = US$0.7394 as of the date of the Board materials;

(ii) Shortfall. The shortfall between the nominal grand total obligation under the Decree (US$409,900,000) and the existing environmental remediation reserve (US$251,400,000) is approximately One Hundred Fifty-Eight Million Five Hundred Thousand United States Dollars (US$158,500,000). This shortfall will need to be addressed through a combination of additional reserve charges, insurance recoveries, operating cash flows, and, if necessary, borrowings under the Corporation's existing credit facility;

(iii) Credit Facility Covenants. The Corporation's existing Seven Hundred Fifty Million Canadian Dollar (C$750,000,000) syndicated revolving credit facility (the "Credit Facility"), for which Harborstone National Bank, N.A. serves as administrative agent, with a maturity date of March 15, 2027, contains an environmental liability covenant that limits the Corporation's aggregate environmental liabilities to twenty-five percent (25%) of consolidated net tangible assets ("CNTA"). As of the end of the third quarter of fiscal year 2024:

(a) CNTA was C$3,920,000,000;

(b) The twenty-five percent (25%) covenant threshold was C$980,000,000;

(c) The Corporation's current total environmental liabilities, including the obligations contemplated by the Decree, were approximately C$554,400,000; and

(d) The resulting covenant headroom was approximately C$425,600,000, providing a substantial cushion relative to the covenant threshold.

(iv) CFO Presentation. The Corporation's Chief Financial Officer, Carolyn Bracebridge, has presented a detailed financial impact analysis to the Board, addressing the expected cash flow effects, balance sheet impacts, and earnings per share dilution (if any) resulting from the Decree obligations, and has confirmed the Corporation's ability to fund the obligations under the Decree from available cash, operating cash flows, and the Credit Facility without triggering any covenant default or requiring any capital markets transaction;

(v) Auditor Consultation. Ridgeline Accounting Partners LLP (Frances Whitmore, CPA, CA, Engagement Partner), the Corporation's independent external auditor, has been consulted regarding the appropriate accounting treatment of the Decree obligations under Accounting Standards Codification Topic 450 (Contingencies) and International Accounting Standard 37 (Provisions, Contingent Liabilities and Contingent Assets), and has provided preliminary guidance regarding the expected financial statement presentation, including the adequacy of the Corporation's existing environmental remediation reserve and the anticipated additional provision to be recorded upon execution of the Decree.

J. Insurance Coverage. The Board has been informed of the following insurance coverage matters:

(i) Pollution Legal Liability Policy. The Corporation maintains a Pollution Legal Liability ("PLL") insurance policy with Meridian Environmental Insurance Company (Policy No. MEI-ENV-2021-04738), providing a per-occurrence limit of Fifty Million Dollars ($50,000,000) and an aggregate limit of Seventy-Five Million Dollars ($75,000,000), subject to a self-insured retention ("SIR") of Five Million Dollars ($5,000,000) per occurrence;

(ii) Coverage Determinations. Coverage under the PLL policy has been denied by the insurer for the Ridgecrest Site and the Kanawha Bend Site on the basis that the alleged contamination at those sites predates the policy period and/or arises from conditions known to the Corporation prior to the policy inception date. Coverage has been acknowledged by the insurer, subject to the SIR, for the Gallatin Site and the Bonanza Creek Site;

(iii) Estimated Recovery. Based on the analysis provided by Northspire Capital Markets, Inc., the estimated insurance recovery under the PLL policy is in the range of Forty-Five Million Dollars ($45,000,000) to Fifty-Five Million Dollars ($55,000,000), subject to resolution of the coverage dispute with respect to the Ridgecrest Site and the Kanawha Bend Site;

(iv) Directors and Officers Coverage. The Corporation also maintains Directors and Officers Liability insurance through Clearwater Mutual Insurance, Ltd. (Policy No. CMI-DO-2023-10221), and notice of circumstances has been provided to the insurer with respect to the Action and the transactions contemplated by these resolutions.

K. Board Determination. The Board has reviewed and considered the detailed presentations and memoranda provided by management — including the Vice President, Environmental Health & Safety, Gareth Linford, and the General Counsel, Miriam Soo-Hwan Park — as well as presentations from C&H, Pinnacle Creek Environmental, LLC, and Northspire Capital Markets, Inc. The Board has carefully weighed the following factors, among others:

(i) The scope and severity of the regulatory exposure facing the Corporation and the U.S. Subsidiaries in the Action, including the potential for substantially greater penalties, remediation costs, and reputational harm in the event of an adverse judgment after trial;

(ii) The costs, uncertainties, and duration of continued litigation, including the risk of additional enforcement actions and the potential for individual director and officer liability;

(iii) The environmental and public health benefits of the Supplemental Environmental Projects and the remediation program contemplated by the Decree;

(iv) The importance of maintaining the Corporation's social license to operate in the communities where the Sites are located and in the mining industry generally;

(v) The advice of outside counsel, environmental consultants, and the financial advisor regarding the reasonableness of the Decree terms relative to comparable consent decrees in the mining and chemical industries; and

(vi) The Corporation's financial capacity to fund the obligations under the Decree without material adverse impact on the Corporation's ongoing operations or capital programs.

Based on the foregoing considerations, the Board has determined that entering into the Decree and the related ancillary instruments described herein is in the best interests of the Corporation and its shareholders and constitutes a prudent exercise of the Board's fiduciary duties under the CBCA and applicable law.

OPERATIVE RESOLUTIONS

NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED AS FOLLOWS:

Resolution 1 — Approval of the Consent Decree

RESOLVED, that the Consent Decree in Civil Action No. 9:24-cv-00087-DWM, United States of America and State of Montana et al. v. Torchlight Mining Corp. et al., pending in the United States District Court for the District of Montana, Missoula Division, substantially in the form presented to the Board at this Meeting and attached hereto as Exhibit A (the "Decree"), be, and it hereby is, approved, adopted, and authorized in all respects.

The Board acknowledges that the Decree provides for aggregate obligations estimated at Four Hundred Nine Million Nine Hundred Thousand Dollars ($409,900,000) on a nominal basis, consisting of the following components: remediation obligations of Three Hundred Forty-Three Million Five Hundred Thousand Dollars ($343,500,000); civil penalties of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000); EPA past-costs reimbursement of Eighteen Million One Hundred Thousand Dollars ($18,100,000); Supplemental Environmental Projects of Twelve Million Dollars ($12,000,000); and independent monitor costs of approximately Four Million Eight Hundred Thousand Dollars ($4,800,000). The Board further acknowledges that the grand total on a net present value basis is approximately Three Hundred Eleven Million Five Hundred Thousand Dollars ($311,500,000).

Resolution 2 — Authorization of Officers to Execute the Consent Decree

RESOLVED, that Douglas K. Prennell, Chief Executive Officer of the Corporation, and Miriam Soo-Hwan Park, General Counsel of the Corporation, are each hereby individually authorized, empowered, and directed, on behalf of Torchlight Mining Corp., to negotiate, finalize, execute, and deliver the Consent Decree, together with any and all amendments, modifications, supplements, or side agreements thereto, in each case in substantially the form presented to the Board or with such changes, modifications, additions, or deletions as the executing officer may approve (such approval to be conclusively evidenced by the execution thereof), and to take all actions necessary or appropriate in connection therewith.

FURTHER RESOLVED, that Douglas K. Prennell and Miriam Soo-Hwan Park are each hereby individually authorized, in their respective capacities as officers and/or directors of the Corporation's U.S. Subsidiaries — namely, Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC — to negotiate, finalize, execute, and deliver the Consent Decree, and any and all amendments, modifications, supplements, or side agreements thereto, on behalf of each such U.S. Subsidiary, and to take all actions necessary or appropriate in connection therewith.

Resolution 3 — Authorization of Financial Assurance Instruments

RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to negotiate, execute, and deliver the following financial assurance instruments in connection with the Decree:

(a) The surety bond application, indemnity agreement, and all related documents with Ironbark Surety of America, Inc. for the issuance of a surety bond in the face amount of One Hundred Sixty-Five Million Dollars ($165,000,000) (Bond No. ISA-ENV-2025-08934), with an annual premium of One and Eighty-Five Hundredths Percent (1.85%) of the face amount, or Three Million Fifty-Two Thousand Five Hundred Dollars ($3,052,500) per year, together with such collateral agreements, pledge agreements, and other security instruments as may be required by Ironbark Surety of America, Inc.;

(b) The Remediation Trust Agreement with Larchfield Trust Company, N.A. (Trust Agreement No. LTC-REM-2025-1177), establishing an environmental remediation trust fund with an initial deposit of Eighty Million Dollars ($80,000,000), together with the trust indenture, investment policy statement, and all ancillary trust documents, and the officers are further authorized to direct the transfer of funds to the trust account in the amount of $80,000,000 or such greater amount as may be required under the Decree;

(c) The Escrow Agreement for stipulated penalty deposits with Larchfield Trust Company, N.A. as escrow agent, together with all ancillary escrow documents, on such terms and conditions as the officers of the Corporation deem necessary or appropriate to comply with the requirements of the Decree; and

(d) Such other financial assurance instruments, including letters of credit, guarantees, or deposit agreements, as may be necessary or appropriate to satisfy the financial assurance requirements of the Decree in the aggregate amount of Two Hundred Forty-Five Million Dollars ($245,000,000), consisting of the surety bond of $165,000,000 and the remediation trust fund of $80,000,000.

Resolution 4 — Authorization of Civil Penalty Payments

RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to make civil penalty payments in the aggregate amount of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000) to the United States and the co-plaintiff States, in four (4) equal installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each, with the first installment due thirty (30) days after entry of the Decree by the Court, the second installment due twelve (12) months after entry, the third installment due twenty-four (24) months after entry, and the fourth and final installment due thirty-six (36) months after entry, in accordance with the payment terms and wire transfer instructions set forth in the Decree.

Resolution 5 — Authorization of EPA Past-Costs Reimbursement

RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to make payment of Eighteen Million One Hundred Thousand Dollars ($18,100,000) to the United States of America in reimbursement of past costs incurred by the EPA pursuant to Section 107 of CERCLA, consisting of Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for EPA removal actions conducted at the Ridgecrest Site and Three Million Eight Hundred Thousand Dollars ($3,800,000) for EPA emergency response actions conducted at the Kanawha Bend Site, in accordance with the payment schedule and wire transfer instructions set forth in the Decree.

Resolution 6 — Authorization of Supplemental Environmental Projects

RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to undertake, implement, and fund three (3) Supplemental Environmental Projects, as required by the Decree, with a combined value of Twelve Million Dollars ($12,000,000), as follows:

(a) Flint Creek Watershed Restoration Project (Montana): Five Million Five Hundred Thousand Dollars ($5,500,000), to be implemented in coordination with the Montana Department of Environmental Quality and in accordance with the SEP Completion Plan to be submitted to EPA;

(b) Battle Mountain Community Drinking Water Improvement Project (Nevada): Three Million Five Hundred Thousand Dollars ($3,500,000), to be implemented in coordination with the Nevada Division of Environmental Protection and the Lander County Water District; and

(c) Institute Community Air Quality Monitoring Network (West Virginia): Three Million Dollars ($3,000,000), to be implemented in coordination with the West Virginia Department of Environmental Protection and the Kanawha-Charleston Health Department.

The officers are further authorized to negotiate, execute, and deliver all contracts, subcontracts, work orders, and grant agreements necessary to implement the SEPs, and to submit all reports, certifications, and other documentation required by the Decree in connection therewith.

Resolution 7 — Authorization of Independent Monitor Agreement

RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to negotiate, execute, and deliver the Independent Monitor Agreement (the "Monitor Agreement") with Verdant Analytics, Inc. (Dr. Kamal Osei, Senior Managing Director), providing for quarterly compliance audits at each of the four Sites and annual public reports to the Court, the EPA, and the co-plaintiff States, at an estimated cost of Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year period, or approximately Nine Hundred Sixty Thousand Dollars ($960,000) per year, on such terms and conditions as the officers of the Corporation deem necessary or appropriate to comply with the requirements of the Decree.

Resolution 8 — Authorization of Ancillary Documents and Instruments

RESOLVED, that the officers of the Corporation and of the U.S. Subsidiaries are each hereby authorized, empowered, and directed to negotiate, execute, and deliver any and all ancillary agreements, instruments, certificates, filings, notices, reports, plans, applications, and other documents as may be necessary, appropriate, or desirable to effectuate the Consent Decree and the transactions contemplated by these resolutions, including, without limitation:

(a) Remediation work plans and remediation schedules for each of the four Sites, including Remedial Design/Remedial Action work plans, operation and maintenance plans, and long-term monitoring plans;

(b) Sampling and monitoring plans, including groundwater monitoring well installation plans, surface water sampling protocols, air quality monitoring programs, and ecological risk assessments;

(c) SEP compliance plans, reporting schedules, and completion certifications for each of the three Supplemental Environmental Projects;

(d) Officer's certificates, secretary's certificates, and incumbency certificates required in connection with the Decree and the financial assurance instruments;

(e) State co-plaintiff joinder documents, coordination agreements, and intergovernmental agreements with the States of Montana, Nevada, and West Virginia;

(f) State environmental permit applications, permit modifications, and variance requests filed with the Montana Department of Environmental Quality, the Nevada Division of Environmental Protection, and the West Virginia Department of Environmental Protection;

(g) Correspondence with the EPA, the DOJ ENRD, the Montana Department of Environmental Quality, the Nevada Division of Environmental Protection, the West Virginia Department of Environmental Protection, and the Court, including status reports, compliance certifications, force majeure notices, and dispute resolution correspondence;

(h) Financial statements, footnotes, management discussion and analysis disclosures, and other public filings and disclosures related to the Decree obligations, including filings with the U.S. Securities and Exchange Commission, the Ontario Securities Commission, and the Toronto Stock Exchange;

(i) Covenant compliance certificates under the Corporation's C$750,000,000 syndicated revolving credit facility with Harborstone National Bank, N.A. as administrative agent, including certifications of compliance with the environmental liability covenant and notifications to the lender group;

(j) Insurance coverage demands, proof of loss submissions, notices of claim, reservation of rights responses, and related correspondence with Meridian Environmental Insurance Company (Policy No. MEI-ENV-2021-04738) and Clearwater Mutual Insurance, Ltd. (Policy No. CMI-DO-2023-10221); and

(k) Such other documents and instruments as may be required or requested by the Court, the EPA, the DOJ ENRD, or the co-plaintiff States in connection with the Decree.

Resolution 9 — Ratification of Prior Acts

RESOLVED, that all actions heretofore taken by the officers, employees, agents, and representatives of the Corporation and the U.S. Subsidiaries in connection with the negotiation and preparation of the Consent Decree, the engagement of Calderwood & Harkness LLP (Matter No. 1039-00003), Holcroft, Dane & Weiss LLP, sagebrush Law Group, PLLC, Baxter, Tully & Crane PLLC, Pinnacle Creek Environmental, LLC, and Northspire Capital Markets, Inc., and all preliminary steps taken toward executing the financial assurance instruments and preparing for the implementation of the remediation program, are hereby ratified, approved, and confirmed in all respects as the authorized acts and deeds of the Corporation.

Resolution 10 — Delegation of Authority

RESOLVED, that any one of Douglas K. Prennell, Chief Executive Officer, or Miriam Soo-Hwan Park, General Counsel, acting alone and without requiring co-signatures, shall have full power and authority to take any and all actions, and to negotiate, execute, and deliver any and all documents and instruments, as contemplated by these resolutions, and each such officer is hereby further authorized to delegate signing authority with respect to specific documents and instruments to officers, directors, or authorized signatories of the U.S. Subsidiaries, as such officer may deem necessary or appropriate to effectuate the purposes of these resolutions, provided that any such delegation shall be evidenced by a written instrument signed by the delegating officer and filed with the Corporate Secretary of the Corporation.

Resolution 11 — General Authorization

RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to take any and all further actions, to incur any and all further expenses, and to negotiate, execute, and deliver any and all further documents and instruments of any kind or nature as may be necessary, appropriate, or advisable, in the sole judgment of the officers of the Corporation, to carry out the intent and purposes of each and all of the foregoing resolutions, and to consummate the transactions contemplated hereby, and any and all such actions, expenses, documents, and instruments are hereby authorized, approved, ratified, and confirmed in all respects.

CERTIFICATION

I, the undersigned, being the duly appointed and acting Corporate Secretary of Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), do hereby certify as follows:

1. The foregoing is a true, complete, and correct copy of the resolutions duly adopted by the Board of Directors of Torchlight Mining Corp. at a special meeting of the Board of Directors held on February 10, 2025, at the principal offices of the Corporation located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada.

2. A quorum of the Board of Directors was present, in person or by electronic means, throughout the entirety of the Meeting, in accordance with the Corporation's articles of incorporation, by-laws, and the CBCA.

3. The resolutions were duly moved, seconded, and adopted by unanimous vote of the directors present and voting at the Meeting.

4. The foregoing resolutions have not been modified, amended, rescinded, or revoked in any respect and remain in full force and effect as of the date of this certification.

5. The undersigned is authorized to execute this certification and to affix the corporate seal of the Corporation hereto.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of Torchlight Mining Corp. as of the date set forth below.

TORCHLIGHT MINING CORP.

By: ________

Name: Priya Chandrashekaran

Title: Corporate Secretary

Date: ________

[CORPORATE SEAL]

EXHIBITS

EXHIBIT A.

Consent Decree — Substantially Final Agreed Text (dated February 3, 2025)

Civil Action No. 9:24-cv-00087-DWM United States of America and State of Montana et al. v. Torchlight Mining Corp. et al. United States District Court for the District of Montana, Missoula Division

[Full text of the Consent Decree is incorporated herein by reference and attached separately as a stand-alone document of approximately 185 pages, together with all appendices, attachments, and exhibits thereto.]

EXHIBIT B.

Summary of Financial Obligations Under the Consent Decree (Nominal Basis)

Note: The net present value of the total obligations, discounted at 3% per annum, is approximately $311,500,000. The NPV of the remediation component alone is approximately $245,100,000. See Exhibit D for site-by-site NPV figures.

EXHIBIT C.

Financial Assurance Term Sheet

Deadline to establish trust fund and post surety bond: September 12, 2025 (90 days after anticipated Effective Date of June 14, 2025).

EXHIBIT D.

Remediation Cost Summary by Site (Nominal and Net Present Value)

Note: NPV figures are estimates based on the projected timing of expenditures as set forth in the remediation schedules attached to the Consent Decree and a uniform discount rate of 3% per annum. Actual expenditure timing may vary, which would affect NPV calculations. Figures have been reviewed by Northspire Capital Markets, Inc. and Pinnacle Creek Environmental, LLC.

[End of Resolutions and Exhibits]

Category	Amount (US$)
Remediation Obligations (Nominal, All Sites)	$343,500,000
Civil Penalties (Aggregate)	$31,500,000
EPA Past-Costs Reimbursement (CERCLA § 107)	$18,100,000
Supplemental Environmental Projects (3 SEPs)	$12,000,000
Independent Monitor Costs (Est., 5 Years)	$4,800,000
Grand Total (Nominal)	$409,900,000
Instrument	Provider	Reference No.	Amount (US$)	Key Terms
Surety Bond	Ironbark Surety of America, Inc.	Bond No. ISA-ENV-2025-08934	$165,000,000	Annual premium: 1.85% ($3,052,500/yr); renewable annually; subject to indemnity agreement
Environmental Remediation Trust Fund	Larchfield Trust Company, N.A. (David Henshaw, Trust Officer)	Trust Agreement No. LTC-REM-2025-1177	$80,000,000	Initial deposit of $80,000,000; invested per trust investment policy; disbursements subject to EPA approval
Total Financial Assurance	$245,000,000
Site	Nominal Cost (US$)	Remediation Period	NPV at 3% discount Rate (US$)
Ridgecrest Copper-Molybdenum Mine (Drummond, MT)	$198,600,000	30 years	$132,400,000
Gallatin Chemical Works (Belgrade, MT)	$42,800,000	15 years	$34,200,000
Bonanza Creek Gold Mine (Lander County, NV)	$63,200,000	20 years	$46,900,000
Kanawha Bend Chemical Plant (Institute, WV)	$38,900,000	20 years	$31,600,000
Total — All Sites	$343,500,000	—	$245,100,000

RESOLUTIONS OF THE BOARD OF DIRECTORS OF TORCHLIGHT MINING CORP.
Adopted at a Duly Called Special Meeting Held on February 10, 2025
Torchlight Mining Corp. A corporation incorporated under the Canada Business Corporations Act (R.S.C. 1985, c. C-44) (the "CBCA")
1800 Bayfield Tower, 401 Bay Street Toronto, Ontario M5H 2Y4, Canada
TSX: TRC | NYSE: TRC
PREAMBLE AND RECITALS
The Board of Directors (the "Board") of Torchlight Mining Corp. ("TMC" or the "Corporation") convened a duly called special meeting (the "Meeting") on February 10, 2025, at 9:00 a.m. Eastern Standard Time, at the principal offices of the Corporation located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada, with certain directors participating via secure videoconference in accordance with the Corporation's by-laws and applicable provisions of the CBCA. A quorum of directors was present in person or by electronic means throughout the entirety of the Meeting in accordance with the Corporation's articles of incorporation, by-laws, and the CBCA. Notice of the Meeting, together with an agenda and all supporting materials described herein, was duly given to all directors in accordance with the Corporation's by-laws not less than ten (10) days prior to the date of the Meeting.
The Chair of the Board called the Meeting to order and confirmed that proper notice had been provided, that a quorum was present, and that the Meeting had been duly convened. The Chair stated that the principal purpose of the Meeting was to consider and, if thought advisable, to authorize the Corporation's entry into a consent decree and related instruments in connection with certain environmental enforcement proceedings pending in the United States District Court for the District of Montana, as more particularly described below.
After full discussion and deliberation, and upon motion duly made, seconded, and carried, the following recitals were noted and the following resolutions were unanimously adopted:
WHEREAS:
A. The Corporation and Its Subsidiaries. TMC is the ultimate parent corporation of several United States operating subsidiaries, through which the Corporation conducts mining, chemical processing, and related operations in the States of Montana, Nevada, and West Virginia (collectively, the "U.S. Operations"). The Corporation's principal U.S. subsidiaries relevant to the matters addressed by these resolutions include:
(i) Torchlight Mining (U.S.) Inc. ("TM(US)"), a corporation organized and existing under the laws of the State of Delaware (Employer Identification Number: 83-2047156), which serves as the primary U.S. holding company for the Corporation's domestic operations;
(ii) Torchlight Specialty Chemicals, Inc. ("TSC"), a corporation organized and existing under the laws of the State of Delaware (Employer Identification Number: 47-3819204), which is a direct, wholly owned subsidiary of TM(US) and operates the Corporation's chemical processing facilities;
(iii) Ridgecrest Mine Holdings, LLC ("RMH"), a limited liability company organized under the laws of the State of Montana (Montana Secretary of State ID: E1042738), which is a direct, wholly owned subsidiary of TM(US) and holds the Corporation's mining interests at the Ridgecrest Copper-Molybdenum Mine in Granite County, Montana; and
(iv) Bonanza Creek Mining, LLC ("BCM"), a limited liability company organized under the laws of the State of Nevada (Nevada Secretary of State Entity No.: E0518294731), which is a direct, wholly owned subsidiary of TM(US) and holds the Corporation's mining interests at the Bonanza Creek Gold Mine in Lander County, Nevada.
TM(US), TSC, RMH, and BCM are collectively referred to herein as the "U.S. Subsidiaries." TMC and the U.S. Subsidiaries are collectively referred to herein as the "Torchlight Parties."
B. The Enforcement Action. The United States of America, acting through the United States Environmental Protection Agency (the "EPA") and the United States Department of Justice, Environment and Natural Resources Division (the "DOJ ENRD"), together with the State of Montana (acting through the Montana Department of Environmental Quality), the State of Nevada (acting through the Nevada Division of Environmental Protection), and the State of West Virginia (acting through the West Virginia Department of Environmental Protection) as co-plaintiffs (collectively, the "Government Plaintiffs"), filed a civil complaint (the "Complaint") on January 18, 2024, bearing Civil Action No. 9:24-cv-00087-DWM, in the United States District Court for the District of Montana, Missoula Division, before the Honorable Donald W. Molloy, Senior United States District Judge (the "Court"), captioned United States of America and State of Montana et al. v. Torchlight Mining Corp. et al. (the "Action").
The Complaint alleges that the Torchlight Parties committed multiple violations of federal and state environmental statutes at four facilities operated or formerly operated by the U.S. Subsidiaries, including violations of:
(i) Section 301 of the Clean Water Act ("CWA"), 33 U.S.C. § 1311, for the discharge of pollutants into navigable waters of the United States without a valid National Pollutant Discharge Elimination System ("NPDES") permit or in violation of the terms of existing permits;
(ii) Sections 3004 and 3005 of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6924 and 6925, for the storage, treatment, and disposal of hazardous waste at unpermitted or improperly managed facilities;
(iii) Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9607, for liability as owners, operators, and arrangers for the release or threatened release of hazardous substances at and from the facilities; and
(iv) The Migratory Bird Treaty Act ("MBTA"), 16 U.S.C. §§ 703–712, for the unpermitted take of migratory birds in connection with open-pit mining operations and tailings storage facilities.
The four facilities that are the subject of the Action are:
(a) Ridgecrest Copper-Molybdenum Mine, located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832 (the "Ridgecrest Site");
(b) Gallatin Chemical Works, located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714 (the "Gallatin Site");
(c) Bonanza Creek Gold Mine, located at County Road 447, Mile Marker 12, Lander County, Nevada 89820 (the "Bonanza Creek Site"); and
(d) Kanawha Bend Chemical Plant, located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112 (the "Kanawha Bend Site").
The Ridgecrest Site, the Gallatin Site, the Bonanza Creek Site, and the Kanawha Bend Site are collectively referred to herein as the "Sites."
C. Negotiation History. The procedural history and negotiation of the proposed resolution of the Action are summarized as follows:
(i) TMC, on behalf of the Torchlight Parties, filed an answer to the Complaint on March 5, 2024, denying all material allegations and asserting various affirmative defenses;
(ii) On April 22, 2024, the parties entered into a Tolling Agreement with respect to all applicable statutes of limitation and statutes of repose, which tolling agreement remains in effect as of the date hereof;
(iii) Court-ordered mediation was conducted before Magistrate Judge Clara Finnegan of the United States District Court for the District of Montana, commencing on May 15, 2024, and continuing through multiple sessions during the spring and summer of 2024;
(iv) On July 30, 2024, following extensive mediation, the parties reached an agreement in principle with respect to a framework for resolving the Action through a consent decree, memorialized in a term sheet executed by all parties;
(v) On October 21, 2024, the Corporation formally engaged Calderwood & Harkness LLP ("C&H") as lead outside counsel for the consent decree negotiations and related matters (C&H Matter No. 1039-00003), under the supervision of Harrison Wexford, Partner, Environmental Enforcement and Compliance Practice Group;
(vi) From October 2024 through early February 2025, the parties conducted extensive negotiations over the specific terms and conditions of the consent decree, exchanging multiple marked and redlined drafts and engaging in numerous telephone conferences and in-person meetings; and
(vii) On February 3, 2025, the parties reached agreement on a substantially final text of the consent decree (the "Decree"), which has been circulated to and reviewed by the Board in advance of this Meeting.
D. Consent Decree Terms — Financial Obligations. The Decree provides for the following material financial obligations on the part of the Torchlight Parties, as more particularly described in the Decree (attached hereto as Exhibit A) and in the summary materials provided to the Board (attached hereto as Exhibit B):
(i) Remediation Obligations. Total remediation obligations in the nominal aggregate amount of Three Hundred Forty-Three Million Five Hundred Thousand Dollars ($343,500,000), consisting of the following site-specific remediation programs:
(a) Ridgecrest Site: One Hundred Ninety-Eight Million Six Hundred Thousand Dollars ($198,600,000) in remediation costs to be incurred over a thirty (30)-year remediation period. This figure was negotiated as a compromise between the Corporation's internal estimate of $187,500,000 and the EPA's estimate of $224,000,000, reflecting agreed-upon adjustments to the scope of groundwater treatment, tailings cap construction, and long-term monitoring requirements;
(b) Gallatin Site: Forty-Two Million Eight Hundred Thousand Dollars ($42,800,000) in remediation costs to be incurred over a fifteen (15)-year remediation period, encompassing soil removal, groundwater extraction and treatment, and facility decommissioning;
(c) Bonanza Creek Site: Sixty-Three Million Two Hundred Thousand Dollars ($63,200,000) in remediation costs to be incurred over a twenty (20)-year remediation period, encompassing pit-lake treatment, heap-leach pad closure, and riparian habitat restoration along Bonanza Creek; and
(d) Kanawha Bend Site: Thirty-Eight Million Nine Hundred Thousand Dollars ($38,900,000) in remediation costs to be incurred over a twenty (20)-year remediation period, encompassing soil and sediment remediation, groundwater monitoring, and off-site disposal of contaminated materials.
The net present value of the total remediation obligations, discounted at a rate of three percent (3%) per annum, is approximately Two Hundred Forty-Five Million One Hundred Thousand Dollars ($245,100,000).
(ii) Civil Penalties. Aggregate civil penalties in the amount of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000), allocated among the Sites as follows:
(a) Ridgecrest Site: Fourteen Million Two Hundred Thousand Dollars ($14,200,000);
(b) Gallatin Site: Five Million Eight Hundred Thousand Dollars ($5,800,000);
(c) Bonanza Creek Site: Seven Million Nine Hundred Thousand Dollars ($7,900,000); and
(d) Kanawha Bend Site: Three Million Six Hundred Thousand Dollars ($3,600,000).
The civil penalties are payable in four (4) equal quarterly installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each, with the first installment due thirty (30) days after the Effective Date of the Decree and subsequent installments due at twelve (12), twenty-four (24), and thirty-six (36) months after entry of the Decree by the Court.
(iii) EPA Past-Costs Reimbursement. Payment of Eighteen Million One Hundred Thousand Dollars ($18,100,000) to the United States in reimbursement of costs incurred by the EPA pursuant to CERCLA Section 107, consisting of Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for EPA removal actions conducted at the Ridgecrest Site and Three Million Eight Hundred Thousand Dollars ($3,800,000) for EPA emergency response actions conducted at the Kanawha Bend Site, payable in accordance with the schedule set forth in the Decree.
(iv) Supplemental Environmental Projects. The Torchlight Parties shall undertake and fund three Supplemental Environmental Projects ("SEPs") with a combined value of Twelve Million Dollars ($12,000,000):
(a) Flint Creek Watershed Restoration Project (Montana): Five Million Five Hundred Thousand Dollars ($5,500,000), to fund restoration activities in the Flint Creek watershed in Granite County, Montana, including streambank stabilization, native riparian revegetation, and water quality monitoring;
(b) Battle Mountain Community Drinking Water Improvement Project (Nevada): Three Million Five Hundred Thousand Dollars ($3,500,000), to fund the design, construction, and commissioning of improved drinking water infrastructure serving the community of Battle Mountain in Lander County, Nevada, including a new water treatment facility and upgraded distribution lines; and
(c) Institute Community Air Quality Monitoring Network (West Virginia): Three Million Dollars ($3,000,000), to fund the installation, operation, and maintenance of a network of ambient air quality monitoring stations in and around the community of Institute, Kanawha County, West Virginia, including continuous monitors for particulate matter, volatile organic compounds, and hazardous air pollutants.
(v) Independent Monitor Costs. The estimated cost of the independent environmental monitor required by the Decree is Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year period, or approximately Nine Hundred Sixty Thousand Dollars ($960,000) per year.
(vi) Grand Total. The grand total of the estimated obligations under the Decree, on a nominal basis, is Four Hundred Nine Million Nine Hundred Thousand Dollars ($409,900,000), consisting of remediation ($343,500,000), civil penalties ($31,500,000), EPA past-costs reimbursement ($18,100,000), SEPs ($12,000,000), and independent monitor costs ($4,800,000). The grand total, on a net present value or cash-equivalent basis, is approximately Three Hundred Eleven Million Five Hundred Thousand Dollars ($311,500,000).
A detailed breakdown of the financial obligations by category and by site is set forth in Exhibit B and Exhibit D hereto.
E. Stipulated Penalties and Key Compliance Terms. In addition to the financial obligations described above, the Decree contains the following key compliance and enforcement provisions:
(i) Stipulated Penalties. The Decree provides for stipulated penalties for failure to comply with the remediation obligations and other requirements of the Decree, at the following rates: One Thousand Five Hundred Dollars ($1,500) per day per violation for the first thirty (30) days of noncompliance; Three Thousand Dollars ($3,000) per day per violation for days thirty-one (31) through sixty (60) of noncompliance; and Five Thousand Five Hundred Dollars ($5,500) per day per violation for each day of noncompliance thereafter;
(ii) Force Majeure. The Decree contains a force majeure provision that excuses noncompliance caused by circumstances entirely beyond the control of the Torchlight Parties, provided that written notice of a force majeure event is provided to the EPA and the relevant state co-plaintiff within fifteen (15) calendar days of the date on which the Torchlight Parties first knew or should have known of the event;
(iii) Dispute Resolution. The Decree establishes a three-tier dispute resolution mechanism consisting of: (a) informal negotiation between the parties for a period of thirty (30) days; (b) a formal written decision by EPA, to be issued within thirty (30) days after the conclusion of informal negotiations; and (c) judicial review by the Court, upon a petition filed by any party within thirty (30) days after issuance of EPA's formal decision;
(iv) Site-by-Site Termination. The Decree provides that the Torchlight Parties may seek termination of the Decree with respect to individual Sites upon certification by EPA that all remedial construction, operation and maintenance, and monitoring obligations have been completed and all applicable performance standards have been achieved at such Site, provided that no termination shall be effective sooner than five (5) years after completion of remedial construction at the applicable Site; and
(v) Effective Date. The Decree shall become effective thirty (30) days after entry of the Decree by the Court (as set forth in Section IV of the Decree). The parties anticipate seeking entry of the Decree by the Court on or about May 15, 2025, which would result in an Effective Date of approximately June 14, 2025.
F. Financial Assurance Obligations. The Decree requires the Torchlight Parties to provide financial assurance in the aggregate amount of Two Hundred Forty-Five Million Dollars ($245,000,000) to secure the remediation obligations under the Decree. The financial assurance is to be provided through the following instruments:
(i) Surety Bond. A surety bond in the face amount of One Hundred Sixty-Five Million Dollars ($165,000,000) to be issued by Ironbark Surety of America, Inc., an insurance company licensed and authorized to conduct business in the States of Montana, Nevada, and West Virginia and acceptable to EPA (Bond No. ISA-ENV-2025-08934). The annual premium for the surety bond will be one and eighty-five hundredths percent (1.85%) of the face amount, or Three Million Fifty-Two Thousand Five Hundred Dollars ($3,052,500) per year; and
(ii) Environmental Remediation Trust Fund. An environmental remediation trust fund in the initial funded amount of Eighty Million Dollars ($80,000,000), to be established with Larchfield Trust Company, N.A. as trustee pursuant to a Remediation Trust Agreement (Trust Agreement No. LTC-REM-2025-1177), with David Henshaw serving as Trust Officer. The trust fund will be invested in accordance with the investment policy set forth in the Trust Agreement and will be available to fund remediation activities at the Sites as directed by the Corporation and approved by EPA.
The deadline for the Torchlight Parties to establish the remediation trust fund and post the surety bond is September 12, 2025, being ninety (90) days after the anticipated Effective Date of the Decree. A summary of the financial assurance arrangements is set forth in Exhibit C hereto.
G. Independent Monitor. The Decree provides for the appointment of a court-appointed independent environmental auditor and compliance monitor (the "Independent Monitor"). Following consultation among the parties and with the Court, Verdant Analytics, Inc., an Oregon corporation headquartered at 1550 NW Couch Street, Suite 400, Portland, Oregon 97209, has been selected to serve as the Independent Monitor, with Dr. Kamal Osei, Senior Managing Director, serving as the lead engagement director. The Independent Monitor will perform quarterly compliance audits at each of the four Sites and will prepare and submit annual public reports to the Court, the EPA, and the state co-plaintiffs regarding the Torchlight Parties' compliance with the Decree.
H. Legal Counsel and Advisors. The Corporation is advised by the following counsel and professional advisors in connection with the Action and the Decree:
(i) Calderwood & Harkness LLP (Harrison Wexford, Responsible Partner, Environmental Enforcement and Compliance Practice Group), as lead outside counsel for the consent decree negotiations and all federal court proceedings;
(ii) Holcroft, Dane & Weiss LLP (Russell Dane, Lead Partner), as Montana local counsel for proceedings and filings in the State of Montana;
(iii) sagebrush Law Group, PLLC (Denise Quartaro, Lead Partner), as Nevada local counsel for proceedings and filings in the State of Nevada;
(iv) Baxter, Tully & Crane PLLC (Nathan Tully, Lead Partner), as West Virginia local counsel for proceedings and filings in the State of West Virginia;
(v) Pinnacle Creek Environmental, LLC (Dr. Astrid Bergmann, P.E., Senior Principal), as environmental remediation consultant, providing technical analysis of remediation costs, cleanup standards, remedial alternatives, and engineering feasibility assessments; and
(vi) Northspire Capital Markets, Inc. (Vivian Okafor, Managing Director), as financial advisor, providing financial impact analysis, insurance recovery estimates, and assistance with the financial assurance program.
I. Financial Considerations. The Board has reviewed and considered the following financial information in connection with the proposed Decree:
(i) Existing Environmental Remediation Reserve. The Corporation's environmental remediation reserve as of the third quarter of fiscal year 2024 (as reported in the Corporation's Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission and the corresponding filing with the Ontario Securities Commission) is Three Hundred Forty Million Canadian Dollars (C$340,000,000), which is approximately Two Hundred Fifty-One Million Four Hundred Thousand United States Dollars (US$251,400,000) at the applicable exchange rate of C$1.00 = US$0.7394 as of the date of the Board materials;
(ii) Shortfall. The shortfall between the nominal grand total obligation under the Decree (US$409,900,000) and the existing environmental remediation reserve (US$251,400,000) is approximately One Hundred Fifty-Eight Million Five Hundred Thousand United States Dollars (US$158,500,000). This shortfall will need to be addressed through a combination of additional reserve charges, insurance recoveries, operating cash flows, and, if necessary, borrowings under the Corporation's existing credit facility;
(iii) Credit Facility Covenants. The Corporation's existing Seven Hundred Fifty Million Canadian Dollar (C$750,000,000) syndicated revolving credit facility (the "Credit Facility"), for which Harborstone National Bank, N.A. serves as administrative agent, with a maturity date of March 15, 2027, contains an environmental liability covenant that limits the Corporation's aggregate environmental liabilities to twenty-five percent (25%) of consolidated net tangible assets ("CNTA"). As of the end of the third quarter of fiscal year 2024:
(a) CNTA was C$3,920,000,000;
(b) The twenty-five percent (25%) covenant threshold was C$980,000,000;
(c) The Corporation's current total environmental liabilities, including the obligations contemplated by the Decree, were approximately C$554,400,000; and
(d) The resulting covenant headroom was approximately C$425,600,000, providing a substantial cushion relative to the covenant threshold.
(iv) CFO Presentation. The Corporation's Chief Financial Officer, Carolyn Bracebridge, has presented a detailed financial impact analysis to the Board, addressing the expected cash flow effects, balance sheet impacts, and earnings per share dilution (if any) resulting from the Decree obligations, and has confirmed the Corporation's ability to fund the obligations under the Decree from available cash, operating cash flows, and the Credit Facility without triggering any covenant default or requiring any capital markets transaction;
(v) Auditor Consultation. Ridgeline Accounting Partners LLP (Frances Whitmore, CPA, CA, Engagement Partner), the Corporation's independent external auditor, has been consulted regarding the appropriate accounting treatment of the Decree obligations under Accounting Standards Codification Topic 450 (Contingencies) and International Accounting Standard 37 (Provisions, Contingent Liabilities and Contingent Assets), and has provided preliminary guidance regarding the expected financial statement presentation, including the adequacy of the Corporation's existing environmental remediation reserve and the anticipated additional provision to be recorded upon execution of the Decree.
J. Insurance Coverage. The Board has been informed of the following insurance coverage matters:
(i) Pollution Legal Liability Policy. The Corporation maintains a Pollution Legal Liability ("PLL") insurance policy with Meridian Environmental Insurance Company (Policy No. MEI-ENV-2021-04738), providing a per-occurrence limit of Fifty Million Dollars ($50,000,000) and an aggregate limit of Seventy-Five Million Dollars ($75,000,000), subject to a self-insured retention ("SIR") of Five Million Dollars ($5,000,000) per occurrence;
(ii) Coverage Determinations. Coverage under the PLL policy has been denied by the insurer for the Ridgecrest Site and the Kanawha Bend Site on the basis that the alleged contamination at those sites predates the policy period and/or arises from conditions known to the Corporation prior to the policy inception date. Coverage has been acknowledged by the insurer, subject to the SIR, for the Gallatin Site and the Bonanza Creek Site;
(iii) Estimated Recovery. Based on the analysis provided by Northspire Capital Markets, Inc., the estimated insurance recovery under the PLL policy is in the range of Forty-Five Million Dollars ($45,000,000) to Fifty-Five Million Dollars ($55,000,000), subject to resolution of the coverage dispute with respect to the Ridgecrest Site and the Kanawha Bend Site;
(iv) Directors and Officers Coverage. The Corporation also maintains Directors and Officers Liability insurance through Clearwater Mutual Insurance, Ltd. (Policy No. CMI-DO-2023-10221), and notice of circumstances has been provided to the insurer with respect to the Action and the transactions contemplated by these resolutions.
K. Board Determination. The Board has reviewed and considered the detailed presentations and memoranda provided by management — including the Vice President, Environmental Health & Safety, Gareth Linford, and the General Counsel, Miriam Soo-Hwan Park — as well as presentations from C&H, Pinnacle Creek Environmental, LLC, and Northspire Capital Markets, Inc. The Board has carefully weighed the following factors, among others:
(i) The scope and severity of the regulatory exposure facing the Corporation and the U.S. Subsidiaries in the Action, including the potential for substantially greater penalties, remediation costs, and reputational harm in the event of an adverse judgment after trial;
(ii) The costs, uncertainties, and duration of continued litigation, including the risk of additional enforcement actions and the potential for individual director and officer liability;
(iii) The environmental and public health benefits of the Supplemental Environmental Projects and the remediation program contemplated by the Decree;
(iv) The importance of maintaining the Corporation's social license to operate in the communities where the Sites are located and in the mining industry generally;
(v) The advice of outside counsel, environmental consultants, and the financial advisor regarding the reasonableness of the Decree terms relative to comparable consent decrees in the mining and chemical industries; and
(vi) The Corporation's financial capacity to fund the obligations under the Decree without material adverse impact on the Corporation's ongoing operations or capital programs.
Based on the foregoing considerations, the Board has determined that entering into the Decree and the related ancillary instruments described herein is in the best interests of the Corporation and its shareholders and constitutes a prudent exercise of the Board's fiduciary duties under the CBCA and applicable law.
OPERATIVE RESOLUTIONS
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED AS FOLLOWS:
Resolution 1 — Approval of the Consent Decree
RESOLVED, that the Consent Decree in Civil Action No. 9:24-cv-00087-DWM, United States of America and State of Montana et al. v. Torchlight Mining Corp. et al., pending in the United States District Court for the District of Montana, Missoula Division, substantially in the form presented to the Board at this Meeting and attached hereto as Exhibit A (the "Decree"), be, and it hereby is, approved, adopted, and authorized in all respects.
The Board acknowledges that the Decree provides for aggregate obligations estimated at Four Hundred Nine Million Nine Hundred Thousand Dollars ($409,900,000) on a nominal basis, consisting of the following components: remediation obligations of Three Hundred Forty-Three Million Five Hundred Thousand Dollars ($343,500,000); civil penalties of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000); EPA past-costs reimbursement of Eighteen Million One Hundred Thousand Dollars ($18,100,000); Supplemental Environmental Projects of Twelve Million Dollars ($12,000,000); and independent monitor costs of approximately Four Million Eight Hundred Thousand Dollars ($4,800,000). The Board further acknowledges that the grand total on a net present value basis is approximately Three Hundred Eleven Million Five Hundred Thousand Dollars ($311,500,000).
Resolution 2 — Authorization of Officers to Execute the Consent Decree
RESOLVED, that Douglas K. Prennell, Chief Executive Officer of the Corporation, and Miriam Soo-Hwan Park, General Counsel of the Corporation, are each hereby individually authorized, empowered, and directed, on behalf of Torchlight Mining Corp., to negotiate, finalize, execute, and deliver the Consent Decree, together with any and all amendments, modifications, supplements, or side agreements thereto, in each case in substantially the form presented to the Board or with such changes, modifications, additions, or deletions as the executing officer may approve (such approval to be conclusively evidenced by the execution thereof), and to take all actions necessary or appropriate in connection therewith.
FURTHER RESOLVED, that Douglas K. Prennell and Miriam Soo-Hwan Park are each hereby individually authorized, in their respective capacities as officers and/or directors of the Corporation's U.S. Subsidiaries — namely, Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC — to negotiate, finalize, execute, and deliver the Consent Decree, and any and all amendments, modifications, supplements, or side agreements thereto, on behalf of each such U.S. Subsidiary, and to take all actions necessary or appropriate in connection therewith.
Resolution 3 — Authorization of Financial Assurance Instruments
RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to negotiate, execute, and deliver the following financial assurance instruments in connection with the Decree:
(a) The surety bond application, indemnity agreement, and all related documents with Ironbark Surety of America, Inc. for the issuance of a surety bond in the face amount of One Hundred Sixty-Five Million Dollars ($165,000,000) (Bond No. ISA-ENV-2025-08934), with an annual premium of One and Eighty-Five Hundredths Percent (1.85%) of the face amount, or Three Million Fifty-Two Thousand Five Hundred Dollars ($3,052,500) per year, together with such collateral agreements, pledge agreements, and other security instruments as may be required by Ironbark Surety of America, Inc.;
(b) The Remediation Trust Agreement with Larchfield Trust Company, N.A. (Trust Agreement No. LTC-REM-2025-1177), establishing an environmental remediation trust fund with an initial deposit of Eighty Million Dollars ($80,000,000), together with the trust indenture, investment policy statement, and all ancillary trust documents, and the officers are further authorized to direct the transfer of funds to the trust account in the amount of $80,000,000 or such greater amount as may be required under the Decree;
(c) The Escrow Agreement for stipulated penalty deposits with Larchfield Trust Company, N.A. as escrow agent, together with all ancillary escrow documents, on such terms and conditions as the officers of the Corporation deem necessary or appropriate to comply with the requirements of the Decree; and
(d) Such other financial assurance instruments, including letters of credit, guarantees, or deposit agreements, as may be necessary or appropriate to satisfy the financial assurance requirements of the Decree in the aggregate amount of Two Hundred Forty-Five Million Dollars ($245,000,000), consisting of the surety bond of $165,000,000 and the remediation trust fund of $80,000,000.
Resolution 4 — Authorization of Civil Penalty Payments
RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to make civil penalty payments in the aggregate amount of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000) to the United States and the co-plaintiff States, in four (4) equal installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each, with the first installment due thirty (30) days after entry of the Decree by the Court, the second installment due twelve (12) months after entry, the third installment due twenty-four (24) months after entry, and the fourth and final installment due thirty-six (36) months after entry, in accordance with the payment terms and wire transfer instructions set forth in the Decree.
Resolution 5 — Authorization of EPA Past-Costs Reimbursement
RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to make payment of Eighteen Million One Hundred Thousand Dollars ($18,100,000) to the United States of America in reimbursement of past costs incurred by the EPA pursuant to Section 107 of CERCLA, consisting of Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for EPA removal actions conducted at the Ridgecrest Site and Three Million Eight Hundred Thousand Dollars ($3,800,000) for EPA emergency response actions conducted at the Kanawha Bend Site, in accordance with the payment schedule and wire transfer instructions set forth in the Decree.
Resolution 6 — Authorization of Supplemental Environmental Projects
RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to undertake, implement, and fund three (3) Supplemental Environmental Projects, as required by the Decree, with a combined value of Twelve Million Dollars ($12,000,000), as follows:
(a) Flint Creek Watershed Restoration Project (Montana): Five Million Five Hundred Thousand Dollars ($5,500,000), to be implemented in coordination with the Montana Department of Environmental Quality and in accordance with the SEP Completion Plan to be submitted to EPA;
(b) Battle Mountain Community Drinking Water Improvement Project (Nevada): Three Million Five Hundred Thousand Dollars ($3,500,000), to be implemented in coordination with the Nevada Division of Environmental Protection and the Lander County Water District; and
(c) Institute Community Air Quality Monitoring Network (West Virginia): Three Million Dollars ($3,000,000), to be implemented in coordination with the West Virginia Department of Environmental Protection and the Kanawha-Charleston Health Department.
The officers are further authorized to negotiate, execute, and deliver all contracts, subcontracts, work orders, and grant agreements necessary to implement the SEPs, and to submit all reports, certifications, and other documentation required by the Decree in connection therewith.
Resolution 7 — Authorization of Independent Monitor Agreement
RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to negotiate, execute, and deliver the Independent Monitor Agreement (the "Monitor Agreement") with Verdant Analytics, Inc. (Dr. Kamal Osei, Senior Managing Director), providing for quarterly compliance audits at each of the four Sites and annual public reports to the Court, the EPA, and the co-plaintiff States, at an estimated cost of Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year period, or approximately Nine Hundred Sixty Thousand Dollars ($960,000) per year, on such terms and conditions as the officers of the Corporation deem necessary or appropriate to comply with the requirements of the Decree.
Resolution 8 — Authorization of Ancillary Documents and Instruments
RESOLVED, that the officers of the Corporation and of the U.S. Subsidiaries are each hereby authorized, empowered, and directed to negotiate, execute, and deliver any and all ancillary agreements, instruments, certificates, filings, notices, reports, plans, applications, and other documents as may be necessary, appropriate, or desirable to effectuate the Consent Decree and the transactions contemplated by these resolutions, including, without limitation:
(a) Remediation work plans and remediation schedules for each of the four Sites, including Remedial Design/Remedial Action work plans, operation and maintenance plans, and long-term monitoring plans;
(b) Sampling and monitoring plans, including groundwater monitoring well installation plans, surface water sampling protocols, air quality monitoring programs, and ecological risk assessments;
(c) SEP compliance plans, reporting schedules, and completion certifications for each of the three Supplemental Environmental Projects;
(d) Officer's certificates, secretary's certificates, and incumbency certificates required in connection with the Decree and the financial assurance instruments;
(e) State co-plaintiff joinder documents, coordination agreements, and intergovernmental agreements with the States of Montana, Nevada, and West Virginia;
(f) State environmental permit applications, permit modifications, and variance requests filed with the Montana Department of Environmental Quality, the Nevada Division of Environmental Protection, and the West Virginia Department of Environmental Protection;
(g) Correspondence with the EPA, the DOJ ENRD, the Montana Department of Environmental Quality, the Nevada Division of Environmental Protection, the West Virginia Department of Environmental Protection, and the Court, including status reports, compliance certifications, force majeure notices, and dispute resolution correspondence;
(h) Financial statements, footnotes, management discussion and analysis disclosures, and other public filings and disclosures related to the Decree obligations, including filings with the U.S. Securities and Exchange Commission, the Ontario Securities Commission, and the Toronto Stock Exchange;
(i) Covenant compliance certificates under the Corporation's C$750,000,000 syndicated revolving credit facility with Harborstone National Bank, N.A. as administrative agent, including certifications of compliance with the environmental liability covenant and notifications to the lender group;
(j) Insurance coverage demands, proof of loss submissions, notices of claim, reservation of rights responses, and related correspondence with Meridian Environmental Insurance Company (Policy No. MEI-ENV-2021-04738) and Clearwater Mutual Insurance, Ltd. (Policy No. CMI-DO-2023-10221); and
(k) Such other documents and instruments as may be required or requested by the Court, the EPA, the DOJ ENRD, or the co-plaintiff States in connection with the Decree.
Resolution 9 — Ratification of Prior Acts
RESOLVED, that all actions heretofore taken by the officers, employees, agents, and representatives of the Corporation and the U.S. Subsidiaries in connection with the negotiation and preparation of the Consent Decree, the engagement of Calderwood & Harkness LLP (Matter No. 1039-00003), Holcroft, Dane & Weiss LLP, sagebrush Law Group, PLLC, Baxter, Tully & Crane PLLC, Pinnacle Creek Environmental, LLC, and Northspire Capital Markets, Inc., and all preliminary steps taken toward executing the financial assurance instruments and preparing for the implementation of the remediation program, are hereby ratified, approved, and confirmed in all respects as the authorized acts and deeds of the Corporation.
Resolution 10 — Delegation of Authority
RESOLVED, that any one of Douglas K. Prennell, Chief Executive Officer, or Miriam Soo-Hwan Park, General Counsel, acting alone and without requiring co-signatures, shall have full power and authority to take any and all actions, and to negotiate, execute, and deliver any and all documents and instruments, as contemplated by these resolutions, and each such officer is hereby further authorized to delegate signing authority with respect to specific documents and instruments to officers, directors, or authorized signatories of the U.S. Subsidiaries, as such officer may deem necessary or appropriate to effectuate the purposes of these resolutions, provided that any such delegation shall be evidenced by a written instrument signed by the delegating officer and filed with the Corporate Secretary of the Corporation.
Resolution 11 — General Authorization
RESOLVED, that the officers of the Corporation are hereby authorized, empowered, and directed to take any and all further actions, to incur any and all further expenses, and to negotiate, execute, and deliver any and all further documents and instruments of any kind or nature as may be necessary, appropriate, or advisable, in the sole judgment of the officers of the Corporation, to carry out the intent and purposes of each and all of the foregoing resolutions, and to consummate the transactions contemplated hereby, and any and all such actions, expenses, documents, and instruments are hereby authorized, approved, ratified, and confirmed in all respects.
CERTIFICATION
I, the undersigned, being the duly appointed and acting Corporate Secretary of Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), do hereby certify as follows:
1.  The foregoing is a true, complete, and correct copy of the resolutions duly adopted by the Board of Directors of Torchlight Mining Corp. at a special meeting of the Board of Directors held on February 10, 2025, at the principal offices of the Corporation located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada.
2.  A quorum of the Board of Directors was present, in person or by electronic means, throughout the entirety of the Meeting, in accordance with the Corporation's articles of incorporation, by-laws, and the CBCA.
3.  The resolutions were duly moved, seconded, and adopted by unanimous vote of the directors present and voting at the Meeting.
4.  The foregoing resolutions have not been modified, amended, rescinded, or revoked in any respect and remain in full force and effect as of the date of this certification.
5.  The undersigned is authorized to execute this certification and to affix the corporate seal of the Corporation hereto.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of Torchlight Mining Corp. as of the date set forth below.
TORCHLIGHT MINING CORP.
By: ________
Name: Priya Chandrashekaran
Title: Corporate Secretary
Date: ________
[CORPORATE SEAL]
EXHIBITS
EXHIBIT A.  
Consent Decree — Substantially Final Agreed Text (dated February 3, 2025)
Civil Action No. 9:24-cv-00087-DWM United States of America and State of Montana et al. v. Torchlight Mining Corp. et al. United States District Court for the District of Montana, Missoula Division
[Full text of the Consent Decree is incorporated herein by reference and attached separately as a stand-alone document of approximately 185 pages, together with all appendices, attachments, and exhibits thereto.]
EXHIBIT B.  
Summary of Financial Obligations Under the Consent Decree (Nominal Basis)
Note: The net present value of the total obligations, discounted at 3% per annum, is approximately $311,500,000. The NPV of the remediation component alone is approximately $245,100,000. See Exhibit D for site-by-site NPV figures.
EXHIBIT C.  
Financial Assurance Term Sheet
Deadline to establish trust fund and post surety bond: September 12, 2025 (90 days after anticipated Effective Date of June 14, 2025).
EXHIBIT D.  
Remediation Cost Summary by Site (Nominal and Net Present Value)
Note: NPV figures are estimates based on the projected timing of expenditures as set forth in the remediation schedules attached to the Consent Decree and a uniform discount rate of 3% per annum. Actual expenditure timing may vary, which would affect NPV calculations. Figures have been reviewed by Northspire Capital Markets, Inc. and Pinnacle Creek Environmental, LLC.
[End of Resolutions and Exhibits]
Category | Amount (US$)
Remediation Obligations (Nominal, All Sites) | $343,500,000
Civil Penalties (Aggregate) | $31,500,000
EPA Past-Costs Reimbursement (CERCLA § 107) | $18,100,000
Supplemental Environmental Projects (3 SEPs) | $12,000,000
Independent Monitor Costs (Est., 5 Years) | $4,800,000
Grand Total (Nominal) | $409,900,000
Instrument | Provider | Reference No. | Amount (US$) | Key Terms
Surety Bond | Ironbark Surety of America, Inc. | Bond No. ISA-ENV-2025-08934 | $165,000,000 | Annual premium: 1.85% ($3,052,500/yr); renewable annually; subject to indemnity agreement
Environmental Remediation Trust Fund | Larchfield Trust Company, N.A. (David Henshaw, Trust Officer) | Trust Agreement No. LTC-REM-2025-1177 | $80,000,000 | Initial deposit of $80,000,000; invested per trust investment policy; disbursements subject to EPA approval
Total Financial Assurance | $245,000,000
Site | Nominal Cost (US$) | Remediation Period | NPV at 3% discount Rate (US$)
Ridgecrest Copper-Molybdenum Mine (Drummond, MT) | $198,600,000 | 30 years | $132,400,000
Gallatin Chemical Works (Belgrade, MT) | $42,800,000 | 15 years | $34,200,000
Bonanza Creek Gold Mine (Lander County, NV) | $63,200,000 | 20 years | $46,900,000
Kanawha Bend Chemical Plant (Institute, WV) | $38,900,000 | 20 years | $31,600,000
Total — All Sites | $343,500,000 | — | $245,100,000