1039-00003 · Torchlight Mining Corp · Court Filings & Lodging

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION

UNITED STATES OF AMERICA and STATE OF MONTANA,

Plaintiffs,

and

STATE OF NEVADA and STATE OF WEST VIRGINIA,

Co-Plaintiffs,

TORCHLIGHT MINING CORP.; TORCHLIGHT MINING (U.S.) INC.; TORCHLIGHT SPECIALTY CHEMICALS, INC.; RIDGECREST MINE HOLDINGS, LLC; and BONANZA CREEK MINING, LLC,

Defendants.

Civil Action No. 9:24-cv-00087-DWM

[PROPOSED] ORDER ENTERING CONSENT DECREE

PREAMBLE

This matter comes before the Court on the Joint Motion for Entry of Consent Decree filed by Plaintiffs the United States of America, acting through the United States Department of Justice, Environment and Natural Resources Division, and the United States Environmental Protection Agency ("EPA"), and the State of Montana (collectively with the United States, "Plaintiffs"), Co-Plaintiffs the State of Nevada and the State of West Virginia (collectively, "Co-Plaintiffs"), and Defendants Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC (collectively, "Defendants" or the "Torchlight Defendants").

WHEREAS, the Consent Decree between the above-captioned parties (the "Consent Decree") was lodged with this Court on February 19, 2025, and notice of the lodging was published in the Federal Register on February 21, 2025 (90 Fed. Reg. 12,437), inviting members of the public to submit written comments on the Consent Decree for a period of thirty (30) days. The public comment period closed on March 21, 2025.

WHEREAS, the Court has reviewed in their entirety the Consent Decree as lodged, the Motion for Entry of Consent Decree filed by the parties on April 7, 2025, the United States' Response to Public Comments filed therewith, and all public comments received by the United States Department of Justice during the public comment period. The Court has further reviewed the accompanying memoranda, declarations, and exhibits submitted in support of entry of the Consent Decree.

WHEREAS, the Consent Decree resolves alleged violations of the Clean Water Act ("CWA"), 33 U.S.C. § 1311 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.; and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., arising from the ownership, operation, and management of four facilities owned and/or operated by Defendants located in the States of Montana, Nevada, and West Virginia, specifically:

(1) the Ridgecrest Copper-Molybdenum Mine, located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832, an active open-pit copper and molybdenum mining complex encompassing approximately 4,200 acres, including the Ridgecrest tailings impoundment, waste rock disposal areas, and associated water treatment facilities;

(2) the Gallatin Chemical Works, located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714, a specialty chemicals manufacturing facility producing copper sulfate, molybdenum trioxide, and related chemical intermediates;

(3) the Bonanza Creek Gold Mine, located at County Road 447, Mile Marker 12, Lander County, Nevada 89820, a heap-leach gold mining operation encompassing approximately 1,600 acres, including the Bonanza Creek heap-leach pad, solution containment ponds, and associated ore-processing infrastructure; and

(4) the Kanawha Bend Chemical Plant, located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112, a chemical processing and distribution facility engaged in the manufacture of mining reagents, flotation chemicals, and solvent extraction compounds.

WHEREAS, the United States filed its Complaint in this action on January 18, 2024 (Dkt. No. 1), alleging, inter alia, that Defendants violated Section 301(a) of the CWA, 33 U.S.C. § 1311(a), by discharging pollutants, including copper, molybdenum, arsenic, selenium, and suspended solids, from the Ridgecrest Copper-Molybdenum Mine and the Bonanza Creek Gold Mine into waters of the United States without authorization under a valid National Pollutant Discharge Elimination System ("NPDES") permit or in violation of the terms and conditions of existing NPDES permits; that Defendants violated Sections 3004 and 3005 of RCRA, 42 U.S.C. §§ 6924 and 6925, by failing to comply with applicable hazardous waste management requirements at the Gallatin Chemical Works and the Kanawha Bend Chemical Plant; and that Defendants are liable under Sections 106 and 107 of CERCLA, 42 U.S.C. §§ 9606 and 9607, for response costs and injunctive relief in connection with the release or threatened release of hazardous substances at the Ridgecrest Copper-Molybdenum Mine and the Kanawha Bend Chemical Plant.

WHEREAS, Defendants filed their Answer on March 5, 2024 (Dkt. No. 14), denying the material allegations of the Complaint and asserting affirmative defenses, but not contesting the Court's jurisdiction over the subject matter or over the Defendants.

WHEREAS, the parties entered into a Tolling Agreement on April 22, 2024 (Dkt. No. 23), tolling the applicable statutes of limitations and statutes of repose during the pendency of settlement negotiations, which Tolling Agreement remains in effect until entry of the Consent Decree or termination of settlement negotiations, whichever occurs first.

WHEREAS, this Court referred the matter to court-ordered mediation, which was conducted before the Honorable Magistrate Judge Clara Finnegan on May 15, 2024. Following extensive mediation sessions and further negotiations among the parties, the parties reached an agreement in principle on a consent-decree framework on July 30, 2024, which framework was subsequently reduced to the detailed Consent Decree that was lodged with this Court on February 19, 2025.

NOW, THEREFORE, having considered the Consent Decree, the Joint Motion for Entry, the public comments, and the United States' Response to Public Comments, and being fully advised in the premises, the Court makes the following findings and enters the following Order:

FINDINGS

Finding 1 — Jurisdiction

The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1345, and the citizen-suit and enforcement provisions of the statutes under which claims are brought, specifically Section 309(b) of the Clean Water Act, 33 U.S.C. § 1319(b); Section 7002 and Section 3008 of the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6972 and 6928; and Sections 106 and 107 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9606 and 9607. The United States brings this action on behalf of the Administrator of the EPA pursuant to its statutory authority to seek injunctive relief and civil penalties for violations of federal environmental law.

The Court has personal jurisdiction over each of the Defendants. Defendant Torchlight Mining Corp. is a corporation organized and existing under the laws of Canada pursuant to the Canada Business Corporations Act, R.S.C. 1985, c. C-44, with its shares dual-listed on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol "TRC," maintaining its principal U.S. office and headquarters at 750 Copper Ridge Boulevard, Suite 200, Helena, Montana 59601, and conducting substantial and continuous business operations within the State of Montana and within this judicial district. Defendant Torchlight Mining (U.S.) Inc. is a corporation organized and existing under the laws of the State of Delaware, with Employer Identification Number 83-2047156, maintaining its principal place of business in Helena, Montana, and serving as the primary U.S. operating subsidiary of Torchlight Mining Corp. Defendant Torchlight Specialty Chemicals, Inc. is a corporation organized and existing under the laws of the State of Delaware, with Employer Identification Number 47-3819204, maintaining its principal place of business in Belgrade, Montana, and owning and operating the Gallatin Chemical Works and the Kanawha Bend Chemical Plant. Defendant Ridgecrest Mine Holdings, LLC is a limited liability company organized and existing under the laws of the State of Montana, with Montana Secretary of State Identification Number E1042738, and is the direct owner and operator of the Ridgecrest Copper-Molybdenum Mine. Defendant Bonanza Creek Mining, LLC is a limited liability company organized and existing under the laws of the State of Nevada, with Nevada Secretary of State Entity Number E0518294731, and is the direct owner and operator of the Bonanza Creek Gold Mine.

Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and (c) and 33 U.S.C. § 1319(b), as a substantial part of the events, acts, and omissions giving rise to the claims occurred in this District, two of the four subject facilities are located in Montana, and Defendants maintain their principal U.S. offices in this District.

Finding 2 — Public Notice and Comment

The Consent Decree was lodged with this Court on February 19, 2025 (Dkt. No. 47). In accordance with 28 C.F.R. § 50.7 and the requirements of Section 122(d)(2) of CERCLA, 42 U.S.C. § 9622(d)(2), and Department of Justice policy, the United States caused to be published a notice in the Federal Register on February 21, 2025 (90 Fed. Reg. 12,437), providing a summary of the terms of the proposed Consent Decree and inviting interested persons to submit written comments on the Consent Decree for a period of thirty (30) days.

The public comment period closed on March 21, 2025. During the comment period, the United States Department of Justice received a total of forty-seven (47) written comments from interested persons, including comments from environmental advocacy organizations, affected community members, local government officials, industry trade associations, and individual citizens. The United States carefully reviewed all comments received during the comment period.

On April 7, 2025, the United States filed with this Court its Response to Public Comments (Dkt. No. 53), together with the Joint Motion for Entry of Consent Decree (Dkt. No. 52). The Response to Public Comments addressed each substantive comment or category of comments received, explained the basis for the United States' position with respect to the terms of the Consent Decree, and set forth the reasons why the United States believes that the Consent Decree is fair, reasonable, and consistent with the objectives of the applicable environmental statutes.

The Court has reviewed the public comments and the United States' Response to Public Comments in their entirety and is satisfied that the United States has adequately considered and addressed all comments received during the public comment period. The Court finds that the public notice and comment process required by law has been fully and properly completed.

Finding 3 — Fairness, Reasonableness, and Consistency with Statutory Objectives

The Court finds, after careful review of the Consent Decree, the supporting memoranda, and the record in this case, that the Consent Decree is fair, reasonable, and consistent with the objectives of the Clean Water Act, the Resource Conservation and Recovery Act, and the Comprehensive Environmental Response, Compensation, and Liability Act.

In making this determination, the Court has considered the totality of the relief obtained under the Consent Decree, including injunctive relief, civil penalties, past-cost reimbursement, supplemental environmental projects, financial assurance, and independent monitoring, and has balanced those considerations against the risks, costs, and delays of continued litigation, the strength of the parties' respective positions, and the public interest in prompt remediation of the environmental contamination at the four subject facilities.

Remediation. The Consent Decree requires Defendants to perform comprehensive remediation at all four sites, with a total negotiated nominal remediation cost of approximately Three Hundred Forty-Three Million Five Hundred Thousand Dollars ($343,500,000) (approximately Two Hundred Forty-Five Million One Hundred Thousand Dollars ($245,100,000) on a net-present-value basis, calculated at a three percent (3%) discount rate). The site-specific remediation obligations and costs are as follows:

(a) Ridgecrest Copper-Molybdenum Mine — Remediation cost of approximately One Hundred Ninety-Eight Million Six Hundred Thousand Dollars ($198,600,000) in nominal terms, to be performed over a thirty (30)-year period. Remediation measures include, but are not limited to, construction and operation of an advanced water treatment system for acid mine drainage, consolidation and capping of approximately 12 million tons of waste rock, rehabilitation of the tailings impoundment, restoration of approximately 3.2 miles of impacted stream reaches, long-term groundwater monitoring, and post-closure maintenance.

(b) Gallatin Chemical Works — Remediation cost of approximately Forty-Two Million Eight Hundred Thousand Dollars ($42,800,000) in nominal terms, to be performed over a fifteen (15)-year period. Remediation measures include corrective action for soil and groundwater contamination from historical chemical releases, closure and decommissioning of three hazardous waste management units, installation of a groundwater extraction and treatment system, and institutional controls to restrict future land use.

(c) Bonanza Creek Gold Mine — Remediation cost of approximately Sixty-Three Million Two Hundred Thousand Dollars ($63,200,000) in nominal terms, to be performed over a twenty (20)-year period. Remediation measures include repair and reinforcement of the heap-leach pad liner system, construction of enhanced solution containment infrastructure, detoxification and closure of spent heap-leach pads, revegetation of disturbed areas encompassing approximately 850 acres, and long-term ecological monitoring.

(d) Kanawha Bend Chemical Plant — Remediation cost of approximately Thirty-Eight Million Nine Hundred Thousand Dollars ($38,900,000) in nominal terms, to be performed over a twenty (20)-year period. Remediation measures include removal and treatment of contaminated soils and sediments, remediation of an impacted segment of the Kanawha River bank, decontamination and demolition of legacy process buildings, installation and operation of a soil vapor extraction system, and groundwater monitoring and treatment.

Civil Penalty. The Consent Decree requires Defendants to pay a total civil penalty of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000), payable in four (4) equal quarterly installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each. The first installment is due thirty (30) days after the Effective Date of the Consent Decree. The Court finds that this civil penalty amount is appropriate, taking into account the seriousness of the violations alleged, the environmental harm resulting from those violations, the duration of noncompliance, the economic benefit of noncompliance, the Defendants' ability to pay, the Defendants' history of compliance, and the deterrent effect of the penalty, as well as such other factors as justice may require.

Past-Cost Reimbursement. The Consent Decree requires Defendants to reimburse the United States the sum of Eighteen Million One Hundred Thousand Dollars ($18,100,000) for past costs incurred by the EPA, consisting of: (i) Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for removal actions conducted at the Ridgecrest Copper-Molybdenum Mine between January 15, 2021 and May 30, 2023, pursuant to CERCLA Section 104, 42 U.S.C. § 9604; and (ii) Three Million Eight Hundred Thousand Dollars ($3,800,000) for emergency response actions conducted at the Kanawha Bend Chemical Plant on and after June 14, 2020, in response to a release of hazardous substances. The Court finds that the reimbursement amount is fair and reasonable and represents a substantial recovery of the costs incurred by the United States.

Supplemental Environmental Projects. The Consent Decree requires Defendants to fund and implement three Supplemental Environmental Projects ("SEPs") with a combined value of Twelve Million Dollars ($12,000,000), each of which has a nexus to the violations alleged and to the communities affected by the contamination at the four subject facilities:

(a) The Flint Creek Watershed Restoration Project ($5,500,000) — This project will fund the restoration of riparian habitat, stream-bank stabilization, and water quality improvement measures in the Flint Creek watershed in Granite County, Montana, which has been impacted by historical mining operations in the area, including operations at the Ridgecrest site.

(b) The Battle Mountain Community Drinking Water Improvement Project ($3,500,000) — This project will fund improvements to the drinking water supply and distribution infrastructure serving the unincorporated community of Battle Mountain and surrounding areas in Lander County, Nevada, located in proximity to the Bonanza Creek Gold Mine, including the installation of advanced filtration and treatment systems to address elevated metals concentrations in the community's water supply.

(c) The Institute Community Air Quality Monitoring Network ($3,000,000) — This project will fund the design, installation, and five-year operation of a network of continuous air quality monitoring stations in the community of Institute and surrounding areas of Kanawha County, West Virginia, to provide real-time public access to air quality data for pollutants of concern, including volatile organic compounds, particulate matter, and hazardous air pollutants associated with chemical manufacturing operations in the Kanawha Valley.

Financial Assurance. The Consent Decree requires Defendants to post and maintain financial assurance in the total amount of Two Hundred Forty-Five Million Dollars ($245,000,000), to ensure the availability of funds to complete the remedial actions required by the Consent Decree even in the event of Defendants' financial inability to perform. The financial assurance consists of two instruments:

(i) A surety bond in the amount of One Hundred Sixty-Five Million Dollars ($165,000,000), designated Bond No. ISA-ENV-2025-08934, issued by Ironbark Surety of America, Inc., a surety company listed on the United States Department of the Treasury's Listing of Approved Sureties (Department Circular 570); and

(ii) A remediation trust fund in the amount of Eighty Million Dollars ($80,000,000), established pursuant to Trust Agreement No. LTC-REM-2025-1177, with Larchfield Trust Company, N.A. serving as trustee, the corpus and income of which are reserved exclusively for the payment of costs of remedial actions required under the Consent Decree.

Independent Environmental Monitor. The Consent Decree provides for the appointment of Verdant Analytics, Inc., with Dr. Kamal Osei, Senior Managing Director, serving as the lead monitor, as an independent environmental monitor to perform quarterly compliance audits of Defendants' performance under the Consent Decree and to prepare and publish annual public reports summarizing compliance status at each of the four subject facilities. The estimated cost of the independent monitoring program is Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year initial term, to be borne by Defendants. The independent monitor's role will enhance transparency, accountability, and public confidence in the implementation of the Consent Decree.

Aggregate Cost. The aggregate estimated cost of the Consent Decree to Defendants is approximately Four Hundred Nine Million Nine Hundred Thousand Dollars ($409,900,000) in nominal terms, or approximately Three Hundred Eleven Million Five Hundred Thousand Dollars ($311,500,000) on a present-value, cash-equivalent basis. The Court finds that this aggregate cost represents a fair and reasonable resolution of the claims asserted in this action, taking into account the nature and extent of the environmental contamination at the four subject facilities, the scope of Defendants' liability, the risks and costs of continued litigation, and the public interest in achieving prompt and effective remediation.

Finding 4 — Adequate Remedies and Compliance Mechanisms

The Court finds that the Consent Decree contains adequate remedies and compliance mechanisms to ensure that the Defendants fulfill their obligations under the Consent Decree and that the environmental objectives of the decree are achieved.

Stipulated Penalties. The Consent Decree contains stipulated penalty provisions that impose escalating per-day, per-violation penalties for failures to comply with the requirements of the Consent Decree. Specifically, the stipulated penalties are as follows:

(a) For the first thirty (30) days of a violation: One Thousand Five Hundred Dollars ($1,500) per day per violation;

(b) For days thirty-one (31) through sixty (60) of a violation: Three Thousand Dollars ($3,000) per day per violation; and

(c) For each day of a violation beyond sixty (60) days: Five Thousand Five Hundred Dollars ($5,500) per day per violation.

These stipulated penalties are in addition to, and do not limit, the authority of the United States to seek contempt sanctions or other judicial remedies for violations of the Consent Decree. The Court finds that the stipulated penalty provisions are reasonable and provide an adequate incentive for Defendants to comply with all requirements of the Consent Decree in a timely manner.

Dispute Resolution. The Consent Decree establishes a three-tier dispute resolution mechanism to address disagreements between the parties concerning the implementation or interpretation of the Consent Decree:

(a) Tier 1 — Informal Negotiation: The disputing parties shall engage in good-faith informal negotiations for a period of thirty (30) days following written notice of a dispute.

(b) Tier 2 — Formal EPA Decision: If the dispute is not resolved through informal negotiation, the EPA shall issue a formal written decision within thirty (30) days of the conclusion of the informal negotiation period.

(c) Tier 3 — Judicial Review: Any party aggrieved by the EPA's formal decision may petition this Court for judicial review within thirty (30) days of issuance of the EPA's decision, and this Court shall resolve the dispute in accordance with the applicable standard of review set forth in the Consent Decree.

The Court finds that the dispute resolution mechanism is adequate to address potential disputes during the implementation of the Consent Decree and will promote the efficient and effective resolution of such disputes without unnecessary litigation.

Force Majeure. The Consent Decree contains a force majeure provision that excuses noncompliance with the Consent Decree's requirements to the extent that such noncompliance is caused by circumstances entirely beyond the control of Defendants, provided that Defendants provide written notice to the EPA within fifteen (15) days of the occurrence of any qualifying force majeure event. The force majeure provision sets forth specific criteria for qualifying events and requires Defendants to demonstrate, by a preponderance of the evidence, that the force majeure event was the sole cause of the delay or noncompliance, that Defendants exercised due diligence to avoid or mitigate the effects of the event, and that Defendants took all reasonable steps to comply with the Consent Decree's requirements as expeditiously as possible following the cessation of the force majeure event.

Termination. Termination of the Consent Decree is available on a site-by-site basis, upon written certification of completion by the EPA and the independent environmental monitor, no sooner than five (5) years after the completion of all remedial construction at the relevant site, and subject to the Defendants' satisfaction of all other obligations under the Consent Decree with respect to that site, including payment of all civil penalties, stipulated penalties, and past-cost reimbursements. The Court finds that the termination provisions are appropriate and ensure that Defendants' obligations will continue for a sufficient period of time to verify the effectiveness of the remedial actions and the long-term protection of human health and the environment.

Finding 5 — Consent of the Parties

The Court finds that all parties to this action have voluntarily consented to the entry of the Consent Decree. The United States of America, the State of Montana, the State of Nevada, and the State of West Virginia, as Plaintiffs and Co-Plaintiffs, have consented to the entry of the Consent Decree, as evidenced by the signature pages executed by authorized representatives of the United States Department of Justice, the United States Environmental Protection Agency, the Montana Attorney General's Office, the Nevada Attorney General's Office, and the West Virginia Attorney General's Office, which signature pages are attached to the Consent Decree as lodged with this Court.

All Defendants — Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC — have consented to the entry of the Consent Decree, as evidenced by the signature pages and joinder agreements executed by duly authorized officers of each Defendant entity, which signature pages and joinder agreements are attached to the Consent Decree as lodged with this Court.

The Torchlight Defendants have represented to this Court that they are duly authorized to enter into the Consent Decree and to perform the obligations required thereunder, as evidenced by the following corporate authorization documents filed with the Court: (i) the Board Resolution of Torchlight Mining Corp., adopted at a duly noticed special meeting of the Board of Directors held on February 10, 2025, authorizing the execution and delivery of the Consent Decree and all related agreements and instruments (Dkt. No. 48, Ex. A); (ii) the Officer's Certificate of Gregory Talbot, Executive Vice President and General Counsel of Torchlight Mining Corp., dated February 18, 2025, certifying as to the authority of the signatories and the binding nature of the Consent Decree upon all Defendant entities (Dkt. No. 48, Ex. B); and (iii) the Secretary's Certificate of Diana Felch, Corporate Secretary of Torchlight Mining Corp., dated February 18, 2025, certifying the authenticity of the Board Resolution and the incumbency of the signing officers (Dkt. No. 48, Ex. C).

The Court is satisfied that all parties have freely, voluntarily, and with full knowledge of the terms and consequences of the Consent Decree, consented to its entry, and that the Consent Decree represents a negotiated resolution of the claims and defenses asserted in this action.

ORDER

Based on the foregoing findings, and for good cause shown, IT IS HEREBY ORDERED as follows:

1. Entry of Consent Decree. The Consent Decree, lodged with this Court on February 19, 2025 (Dkt. No. 47), a copy of which is attached hereto as Exhibit 1, is hereby APPROVED and ENTERED as an Order of this Court. The Consent Decree is incorporated herein by reference as if set forth in full. Each provision of the Consent Decree shall be enforceable as an order of this Court.

2. Effective Date. The Effective Date of the Consent Decree shall be thirty (30) days after the date of entry of this Order, i.e., June 14, 2025, as defined in Section IV ("Definitions") of the Consent Decree. All deadlines and obligations of the parties that are measured from the Effective Date shall be calculated from June 14, 2025, unless otherwise specified in the Consent Decree.

3. Binding Effect. The Consent Decree shall be binding upon the United States of America, the State of Montana, the State of Nevada, and the State of West Virginia, and upon all Defendants — Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC — as well as upon their respective officers, directors, employees, agents, successors, and assigns, in accordance with the terms and conditions of the Consent Decree, including the provisions regarding transfer of ownership or operations set forth in Section XXIII of the Consent Decree.

4. Retention of Jurisdiction. This Court retains jurisdiction over the subject matter of this action and over the parties for the duration of the Consent Decree for the purpose of implementing and enforcing the terms and conditions of the Consent Decree, for the purpose of resolving disputes arising under the Consent Decree in accordance with the dispute resolution provisions set forth therein (Section XVI), and for the purpose of entering any modification, amendment, or supplemental order that may be necessary or appropriate to effectuate the purposes of the Consent Decree.

5. Civil Penalty Payment Schedule. Defendants shall pay the total civil penalty of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000) in four (4) equal installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each, in accordance with the following schedule:

(a) First Installment: $7,875,000, due on July 14, 2025 (thirty (30) days after the Effective Date);

(b) Second Installment: $7,875,000, due on May 15, 2026 (twelve (12) months after entry of this Order);

(d) Fourth Installment: $7,875,000, due on May 15, 2028 (thirty-six (36) months after entry of this Order).

All civil penalty payments shall be made in accordance with the payment instructions set forth in Section IX of the Consent Decree, including remittance to the United States Department of Justice lockbox account and contemporaneous notice to the EPA Cincinnati Finance Center and the Financial Litigation Unit of the United States Attorney's Office for the District of Montana. Late payments shall bear interest at the rate established pursuant to 28 U.S.C. § 1961 from the date payment is due until the date payment is received. The portions of the civil penalty allocated to the States of Montana, Nevada, and West Virginia, as set forth in Section IX(C) of the Consent Decree, shall be remitted by the United States to those States in accordance with the intergovernmental allocation provisions therein.

6. Remediation Obligations. Defendants shall perform all remedial actions required by the Consent Decree at the four subject facilities in accordance with the schedules, performance standards, and specifications set forth in the Consent Decree and its appendices, including but not limited to the following milestones:

(a) Ridgecrest Copper-Molybdenum Mine:

(i) Submission of the Ridgecrest Remedial Action Work Plan to EPA Region 8 for review and approval by December 14, 2025 (one hundred eighty (180) days after the Effective Date);

(ii) Commencement of Ridgecrest remedy construction by June 14, 2027 (two (2) years after the Effective Date); and

(iii) Continuation of remediation obligations, including long-term operation and maintenance, groundwater monitoring, and post-closure care, through June 14, 2055 (thirty (30) years after the Effective Date).

(b) Gallatin Chemical Works:

(i) Submission of the Gallatin Corrective Measures Study to EPA Region 8 for review and approval by June 14, 2026 (one (1) year after the Effective Date).

(i) Commencement of Bonanza Creek liner repair and containment construction by June 14, 2026 (one (1) year after the Effective Date).

(d) Kanawha Bend Chemical Plant:

(i) Completion of Kanawha Bend interim stabilization measures, including removal and off-site disposal of the most immediately hazardous materials, temporary containment of affected soils and sediments, and installation of interim erosion controls along the Kanawha River bank, by December 14, 2026 (eighteen (18) months after the Effective Date).

Defendants shall perform all remedial actions in compliance with all applicable federal, state, and local laws and regulations and in accordance with applicable EPA guidance documents, including but not limited to the National Contingency Plan, 40 C.F.R. Part 300. Any modifications to the remedial action work plans or schedules shall be subject to EPA approval and, where required by the Consent Decree, the review and recommendation of the independent environmental monitor.

7. Financial Assurance. Defendants shall establish and maintain financial assurance in the total amount of Two Hundred Forty-Five Million Dollars ($245,000,000) as required by Section XIV of the Consent Decree, consisting of the following two instruments:

(a) A surety bond in the amount of One Hundred Sixty-Five Million Dollars ($165,000,000), Bond No. ISA-ENV-2025-08934, issued by Ironbark Surety of America, Inc.; and

(b) A remediation trust fund in the amount of Eighty Million Dollars ($80,000,000), Trust Agreement No. LTC-REM-2025-1177, held by Larchfield Trust Company, N.A. as trustee.

Both financial assurance instruments shall be established and fully funded no later than September 12, 2025 (ninety (90) days after the Effective Date). Defendants shall provide to the EPA copies of the executed surety bond and trust agreement, together with evidence of funding, within five (5) business days of the establishment of each instrument. The financial assurance shall remain in effect until such time as the Consent Decree is terminated with respect to all four sites, or until modified by agreement of the parties and approval of this Court. The adequacy of the financial assurance shall be reviewed annually by the EPA and the independent environmental monitor, and Defendants shall adjust the amount of financial assurance as necessary to account for changes in estimated remediation costs, inflation, or investment performance, as provided in the Consent Decree.

8. EPA Past-Cost Reimbursement. Defendants shall reimburse the United States the sum of Eighteen Million One Hundred Thousand Dollars ($18,100,000) for past costs incurred by the EPA, consisting of:

(a) Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for removal actions conducted at the Ridgecrest Copper-Molybdenum Mine between January 15, 2021 and May 30, 2023, pursuant to CERCLA Section 104, 42 U.S.C. § 9604, including costs associated with the construction and operation of temporary water diversion structures, emergency stabilization of waste rock piles, and sampling and analysis of surface water and groundwater; and

(b) Three Million Eight Hundred Thousand Dollars ($3,800,000) for emergency response actions conducted at the Kanawha Bend Chemical Plant on and after June 14, 2020, in response to a release of hazardous substances, including costs associated with the deployment of an EPA On-Scene Coordinator, the mobilization of an emergency response contractor, the excavation and off-site disposal of contaminated soils, and the installation of temporary containment measures.

Reimbursement shall be made in accordance with the payment schedule set forth in Section X of the Consent Decree. All past-cost reimbursement payments shall be accompanied by the appropriate interest, calculated from the date such costs were incurred by the United States through the date of payment, at the rate established pursuant to Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), and 28 U.S.C. § 1961.

9. Supplemental Environmental Projects. Defendants shall fund and implement the three Supplemental Environmental Projects described in Section XII of the Consent Decree, with a combined value of Twelve Million Dollars ($12,000,000), in accordance with the schedules, specifications, and reporting requirements set forth therein:

(a) Flint Creek Watershed Restoration Project — $5,500,000;

(b) Battle Mountain Community Drinking Water Improvement Project — $3,500,000; and

Defendants shall submit detailed SEP implementation plans to the EPA within one hundred twenty (120) days of the Effective Date and shall complete all SEP activities within the timeframes specified in the Consent Decree. Defendants shall provide semi-annual progress reports and a final completion report for each SEP to the EPA and the relevant State co-plaintiff. The SEPs shall be subject to the stipulated penalty provisions of the Consent Decree in the event of failure to comply with the implementation schedules or specifications.

10. Independent Monitor. Verdant Analytics, Inc. is hereby appointed as the independent environmental monitor under the Consent Decree, with the duties, responsibilities, access rights, and compensation set forth in the Independent Monitor Agreement executed on February 15, 2025, which is attached to the Consent Decree as Appendix F. Dr. Kamal Osei, Senior Managing Director of Verdant Analytics, Inc., shall serve as the lead monitor. The independent environmental monitor shall conduct quarterly compliance audits at each of the four subject facilities, prepare and publish annual public reports summarizing the status of Defendants' compliance with the Consent Decree, and provide such other reports and recommendations to the EPA and this Court as may be required by the Consent Decree or as may be requested by the Court. The estimated cost of the independent monitoring program, Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year initial term, shall be borne by Defendants. The independent monitor shall have the right of access to the subject facilities, Defendants' records and documents, and Defendants' personnel, to the extent necessary to carry out the monitor's duties, as set forth in the Consent Decree and the Independent Monitor Agreement. The initial five-year term of the independent monitor may be extended by the EPA, with the approval of this Court, if the EPA determines that continued monitoring is necessary to ensure Defendants' compliance with the Consent Decree.

11. Stipulated Penalties. The stipulated penalty provisions of the Consent Decree, as set forth in Section XV thereof, are approved and shall be enforceable in accordance with their terms. Stipulated penalties shall accrue for each day of noncompliance with the requirements of the Consent Decree, as provided therein, and shall be payable upon demand by the United States. The accrual and payment of stipulated penalties shall not excuse any violation or relieve Defendants of their obligation to achieve and maintain compliance with all requirements of the Consent Decree. The United States' decision not to demand stipulated penalties for any particular violation shall not constitute a waiver of its right to demand such penalties for subsequent or continuing violations.

12. Dispute Resolution. All disputes arising under the Consent Decree shall be resolved in accordance with the dispute resolution provisions set forth in Section XVI of the Consent Decree, subject to this Court's retained jurisdiction as set forth in Paragraph 4 of this Order. Nothing in this paragraph or in the Consent Decree's dispute resolution provisions shall be construed to limit this Court's inherent authority to enforce its own orders or to impose appropriate sanctions for noncompliance.

13. Force Majeure. The force majeure provisions of the Consent Decree, as set forth in Section XVII thereof, are approved and shall apply in accordance with their terms. The Court notes that the force majeure provisions do not relieve Defendants of their obligation to use best efforts to comply with the Consent Decree's requirements during and after any force majeure event, and that the burden of demonstrating entitlement to force majeure relief rests with Defendants.

14. Modification. The Consent Decree may be modified only upon the written agreement of all parties and approval of this Court, in accordance with Section XXII of the Consent Decree, or upon motion by any party and order of this Court pursuant to applicable law. No modification shall be effective until it has been approved by this Court and entered as an order. Any party seeking a modification shall file a motion with this Court and serve the motion on all parties in accordance with the Federal Rules of Civil Procedure and the Local Rules of this Court.

15. No Other Relief. Except as expressly provided in the Consent Decree and this Order, this Order does not limit, modify, or otherwise affect any rights, claims, or defenses of any party, including the right of the United States, the State of Montana, the State of Nevada, or the State of West Virginia to seek further relief against Defendants for any matters not resolved by the Consent Decree. Nothing in this Order or the Consent Decree shall be construed as a waiver or limitation of the sovereign immunity of the United States or any State plaintiff or co-plaintiff, nor shall anything herein be construed to affect the rights of any third parties not party to this action.

SO ORDERED.

Dated this 15th day of May, 2025.

________________________________________

HON. DONALD W. MOLLOY Senior United States District Judge United States District Court for the District of Montana

CERTIFICATE OF SERVICE

A certificate of service shall be filed separately by the Clerk of Court confirming that the entered Order and Consent Decree have been served electronically via the Court's CM/ECF system and, where applicable, by first-class mail, on all counsel of record in Civil Action No. 9:24-cv-00087-DWM, including the following:

For the United States of America:

Philip Orenstein, Senior Trial Attorney Katherine Rowe-Halpern, Trial Attorney United States Department of Justice Environment and Natural Resources Division Environmental Enforcement Section P.O. Box 7611 Washington, D.C. 20044-7611

Margaret Coulson, Senior Enforcement Counsel United States Environmental Protection Agency Office of Enforcement and Compliance Assurance 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

For the State of Montana:

Annika Hedstrom, Assistant Attorney General Montana Attorney General's Office Environmental Protection Bureau 215 North Sanders Street Helena, Montana 59620

For the State of Nevada:

Ricardo Fuentes, Senior Deputy Attorney General Nevada Attorney General's Office Bureau of Consumer Protection 100 North Carson Street Carson City, Nevada 89701

For the State of West Virginia:

Loretta May Hatcher, Assistant Attorney General West Virginia Attorney General's Office Environmental Protection Division State Capitol, Building 1, Room 26-E Charleston, West Virginia 25305

For Defendants Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC:

Harrison Wexford, Partner Calderwood & Harkness LLP 125 Broad Street New York, New York 10004

Russell Dane, Partner Holcroft, Dane & Weiss LLP 401 North Last Chance Gulch Helena, Montana 59601 (Local Counsel, Montana)

Denise Quartaro, Member Sagebrush Law Group, PLLC 300 East Second Street, Suite 800 Reno, Nevada 89501 (Local Counsel, Nevada)

Nathan Tully, Partner Baxter, Tully & Crane PLLC 500 Virginia Street East, Suite 1200 Charleston, West Virginia 25301 (Local Counsel, West Virginia)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION
UNITED STATES OF AMERICA and STATE OF MONTANA,
Plaintiffs,
and
STATE OF NEVADA and STATE OF WEST VIRGINIA,
Co-Plaintiffs,
v.
TORCHLIGHT MINING CORP.; TORCHLIGHT MINING (U.S.) INC.; TORCHLIGHT SPECIALTY CHEMICALS, INC.; RIDGECREST MINE HOLDINGS, LLC; and BONANZA CREEK MINING, LLC,
Defendants.
Civil Action No. 9:24-cv-00087-DWM
[PROPOSED] ORDER ENTERING CONSENT DECREE
PREAMBLE
This matter comes before the Court on the Joint Motion for Entry of Consent Decree filed by Plaintiffs the United States of America, acting through the United States Department of Justice, Environment and Natural Resources Division, and the United States Environmental Protection Agency ("EPA"), and the State of Montana (collectively with the United States, "Plaintiffs"), Co-Plaintiffs the State of Nevada and the State of West Virginia (collectively, "Co-Plaintiffs"), and Defendants Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC (collectively, "Defendants" or the "Torchlight Defendants").
WHEREAS, the Consent Decree between the above-captioned parties (the "Consent Decree") was lodged with this Court on February 19, 2025, and notice of the lodging was published in the Federal Register on February 21, 2025 (90 Fed. Reg. 12,437), inviting members of the public to submit written comments on the Consent Decree for a period of thirty (30) days. The public comment period closed on March 21, 2025.
WHEREAS, the Court has reviewed in their entirety the Consent Decree as lodged, the Motion for Entry of Consent Decree filed by the parties on April 7, 2025, the United States' Response to Public Comments filed therewith, and all public comments received by the United States Department of Justice during the public comment period. The Court has further reviewed the accompanying memoranda, declarations, and exhibits submitted in support of entry of the Consent Decree.
WHEREAS, the Consent Decree resolves alleged violations of the Clean Water Act ("CWA"), 33 U.S.C. § 1311 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.; and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq., arising from the ownership, operation, and management of four facilities owned and/or operated by Defendants located in the States of Montana, Nevada, and West Virginia, specifically:
(1) the Ridgecrest Copper-Molybdenum Mine, located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832, an active open-pit copper and molybdenum mining complex encompassing approximately 4,200 acres, including the Ridgecrest tailings impoundment, waste rock disposal areas, and associated water treatment facilities;
(2) the Gallatin Chemical Works, located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714, a specialty chemicals manufacturing facility producing copper sulfate, molybdenum trioxide, and related chemical intermediates;
(3) the Bonanza Creek Gold Mine, located at County Road 447, Mile Marker 12, Lander County, Nevada 89820, a heap-leach gold mining operation encompassing approximately 1,600 acres, including the Bonanza Creek heap-leach pad, solution containment ponds, and associated ore-processing infrastructure; and
(4) the Kanawha Bend Chemical Plant, located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112, a chemical processing and distribution facility engaged in the manufacture of mining reagents, flotation chemicals, and solvent extraction compounds.
WHEREAS, the United States filed its Complaint in this action on January 18, 2024 (Dkt. No. 1), alleging, inter alia, that Defendants violated Section 301(a) of the CWA, 33 U.S.C. § 1311(a), by discharging pollutants, including copper, molybdenum, arsenic, selenium, and suspended solids, from the Ridgecrest Copper-Molybdenum Mine and the Bonanza Creek Gold Mine into waters of the United States without authorization under a valid National Pollutant Discharge Elimination System ("NPDES") permit or in violation of the terms and conditions of existing NPDES permits; that Defendants violated Sections 3004 and 3005 of RCRA, 42 U.S.C. §§ 6924 and 6925, by failing to comply with applicable hazardous waste management requirements at the Gallatin Chemical Works and the Kanawha Bend Chemical Plant; and that Defendants are liable under Sections 106 and 107 of CERCLA, 42 U.S.C. §§ 9606 and 9607, for response costs and injunctive relief in connection with the release or threatened release of hazardous substances at the Ridgecrest Copper-Molybdenum Mine and the Kanawha Bend Chemical Plant.
WHEREAS, Defendants filed their Answer on March 5, 2024 (Dkt. No. 14), denying the material allegations of the Complaint and asserting affirmative defenses, but not contesting the Court's jurisdiction over the subject matter or over the Defendants.
WHEREAS, the parties entered into a Tolling Agreement on April 22, 2024 (Dkt. No. 23), tolling the applicable statutes of limitations and statutes of repose during the pendency of settlement negotiations, which Tolling Agreement remains in effect until entry of the Consent Decree or termination of settlement negotiations, whichever occurs first.
WHEREAS, this Court referred the matter to court-ordered mediation, which was conducted before the Honorable Magistrate Judge Clara Finnegan on May 15, 2024. Following extensive mediation sessions and further negotiations among the parties, the parties reached an agreement in principle on a consent-decree framework on July 30, 2024, which framework was subsequently reduced to the detailed Consent Decree that was lodged with this Court on February 19, 2025.
NOW, THEREFORE, having considered the Consent Decree, the Joint Motion for Entry, the public comments, and the United States' Response to Public Comments, and being fully advised in the premises, the Court makes the following findings and enters the following Order:
FINDINGS
Finding 1 — Jurisdiction
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1345, and the citizen-suit and enforcement provisions of the statutes under which claims are brought, specifically Section 309(b) of the Clean Water Act, 33 U.S.C. § 1319(b); Section 7002 and Section 3008 of the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6972 and 6928; and Sections 106 and 107 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9606 and 9607. The United States brings this action on behalf of the Administrator of the EPA pursuant to its statutory authority to seek injunctive relief and civil penalties for violations of federal environmental law.
The Court has personal jurisdiction over each of the Defendants. Defendant Torchlight Mining Corp. is a corporation organized and existing under the laws of Canada pursuant to the Canada Business Corporations Act, R.S.C. 1985, c. C-44, with its shares dual-listed on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol "TRC," maintaining its principal U.S. office and headquarters at 750 Copper Ridge Boulevard, Suite 200, Helena, Montana 59601, and conducting substantial and continuous business operations within the State of Montana and within this judicial district. Defendant Torchlight Mining (U.S.) Inc. is a corporation organized and existing under the laws of the State of Delaware, with Employer Identification Number 83-2047156, maintaining its principal place of business in Helena, Montana, and serving as the primary U.S. operating subsidiary of Torchlight Mining Corp. Defendant Torchlight Specialty Chemicals, Inc. is a corporation organized and existing under the laws of the State of Delaware, with Employer Identification Number 47-3819204, maintaining its principal place of business in Belgrade, Montana, and owning and operating the Gallatin Chemical Works and the Kanawha Bend Chemical Plant. Defendant Ridgecrest Mine Holdings, LLC is a limited liability company organized and existing under the laws of the State of Montana, with Montana Secretary of State Identification Number E1042738, and is the direct owner and operator of the Ridgecrest Copper-Molybdenum Mine. Defendant Bonanza Creek Mining, LLC is a limited liability company organized and existing under the laws of the State of Nevada, with Nevada Secretary of State Entity Number E0518294731, and is the direct owner and operator of the Bonanza Creek Gold Mine.
Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and (c) and 33 U.S.C. § 1319(b), as a substantial part of the events, acts, and omissions giving rise to the claims occurred in this District, two of the four subject facilities are located in Montana, and Defendants maintain their principal U.S. offices in this District.
Finding 2 — Public Notice and Comment
The Consent Decree was lodged with this Court on February 19, 2025 (Dkt. No. 47). In accordance with 28 C.F.R. § 50.7 and the requirements of Section 122(d)(2) of CERCLA, 42 U.S.C. § 9622(d)(2), and Department of Justice policy, the United States caused to be published a notice in the Federal Register on February 21, 2025 (90 Fed. Reg. 12,437), providing a summary of the terms of the proposed Consent Decree and inviting interested persons to submit written comments on the Consent Decree for a period of thirty (30) days.
The public comment period closed on March 21, 2025. During the comment period, the United States Department of Justice received a total of forty-seven (47) written comments from interested persons, including comments from environmental advocacy organizations, affected community members, local government officials, industry trade associations, and individual citizens. The United States carefully reviewed all comments received during the comment period.
On April 7, 2025, the United States filed with this Court its Response to Public Comments (Dkt. No. 53), together with the Joint Motion for Entry of Consent Decree (Dkt. No. 52). The Response to Public Comments addressed each substantive comment or category of comments received, explained the basis for the United States' position with respect to the terms of the Consent Decree, and set forth the reasons why the United States believes that the Consent Decree is fair, reasonable, and consistent with the objectives of the applicable environmental statutes.
The Court has reviewed the public comments and the United States' Response to Public Comments in their entirety and is satisfied that the United States has adequately considered and addressed all comments received during the public comment period. The Court finds that the public notice and comment process required by law has been fully and properly completed.
Finding 3 — Fairness, Reasonableness, and Consistency with Statutory Objectives
The Court finds, after careful review of the Consent Decree, the supporting memoranda, and the record in this case, that the Consent Decree is fair, reasonable, and consistent with the objectives of the Clean Water Act, the Resource Conservation and Recovery Act, and the Comprehensive Environmental Response, Compensation, and Liability Act.
In making this determination, the Court has considered the totality of the relief obtained under the Consent Decree, including injunctive relief, civil penalties, past-cost reimbursement, supplemental environmental projects, financial assurance, and independent monitoring, and has balanced those considerations against the risks, costs, and delays of continued litigation, the strength of the parties' respective positions, and the public interest in prompt remediation of the environmental contamination at the four subject facilities.
Remediation. The Consent Decree requires Defendants to perform comprehensive remediation at all four sites, with a total negotiated nominal remediation cost of approximately Three Hundred Forty-Three Million Five Hundred Thousand Dollars ($343,500,000) (approximately Two Hundred Forty-Five Million One Hundred Thousand Dollars ($245,100,000) on a net-present-value basis, calculated at a three percent (3%) discount rate). The site-specific remediation obligations and costs are as follows:
(a) Ridgecrest Copper-Molybdenum Mine — Remediation cost of approximately One Hundred Ninety-Eight Million Six Hundred Thousand Dollars ($198,600,000) in nominal terms, to be performed over a thirty (30)-year period. Remediation measures include, but are not limited to, construction and operation of an advanced water treatment system for acid mine drainage, consolidation and capping of approximately 12 million tons of waste rock, rehabilitation of the tailings impoundment, restoration of approximately 3.2 miles of impacted stream reaches, long-term groundwater monitoring, and post-closure maintenance.
(b) Gallatin Chemical Works — Remediation cost of approximately Forty-Two Million Eight Hundred Thousand Dollars ($42,800,000) in nominal terms, to be performed over a fifteen (15)-year period. Remediation measures include corrective action for soil and groundwater contamination from historical chemical releases, closure and decommissioning of three hazardous waste management units, installation of a groundwater extraction and treatment system, and institutional controls to restrict future land use.
(c) Bonanza Creek Gold Mine — Remediation cost of approximately Sixty-Three Million Two Hundred Thousand Dollars ($63,200,000) in nominal terms, to be performed over a twenty (20)-year period. Remediation measures include repair and reinforcement of the heap-leach pad liner system, construction of enhanced solution containment infrastructure, detoxification and closure of spent heap-leach pads, revegetation of disturbed areas encompassing approximately 850 acres, and long-term ecological monitoring.
(d) Kanawha Bend Chemical Plant — Remediation cost of approximately Thirty-Eight Million Nine Hundred Thousand Dollars ($38,900,000) in nominal terms, to be performed over a twenty (20)-year period. Remediation measures include removal and treatment of contaminated soils and sediments, remediation of an impacted segment of the Kanawha River bank, decontamination and demolition of legacy process buildings, installation and operation of a soil vapor extraction system, and groundwater monitoring and treatment.
Civil Penalty. The Consent Decree requires Defendants to pay a total civil penalty of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000), payable in four (4) equal quarterly installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each. The first installment is due thirty (30) days after the Effective Date of the Consent Decree. The Court finds that this civil penalty amount is appropriate, taking into account the seriousness of the violations alleged, the environmental harm resulting from those violations, the duration of noncompliance, the economic benefit of noncompliance, the Defendants' ability to pay, the Defendants' history of compliance, and the deterrent effect of the penalty, as well as such other factors as justice may require.
Past-Cost Reimbursement. The Consent Decree requires Defendants to reimburse the United States the sum of Eighteen Million One Hundred Thousand Dollars ($18,100,000) for past costs incurred by the EPA, consisting of: (i) Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for removal actions conducted at the Ridgecrest Copper-Molybdenum Mine between January 15, 2021 and May 30, 2023, pursuant to CERCLA Section 104, 42 U.S.C. § 9604; and (ii) Three Million Eight Hundred Thousand Dollars ($3,800,000) for emergency response actions conducted at the Kanawha Bend Chemical Plant on and after June 14, 2020, in response to a release of hazardous substances. The Court finds that the reimbursement amount is fair and reasonable and represents a substantial recovery of the costs incurred by the United States.
Supplemental Environmental Projects. The Consent Decree requires Defendants to fund and implement three Supplemental Environmental Projects ("SEPs") with a combined value of Twelve Million Dollars ($12,000,000), each of which has a nexus to the violations alleged and to the communities affected by the contamination at the four subject facilities:
(a) The Flint Creek Watershed Restoration Project ($5,500,000) — This project will fund the restoration of riparian habitat, stream-bank stabilization, and water quality improvement measures in the Flint Creek watershed in Granite County, Montana, which has been impacted by historical mining operations in the area, including operations at the Ridgecrest site.
(b) The Battle Mountain Community Drinking Water Improvement Project ($3,500,000) — This project will fund improvements to the drinking water supply and distribution infrastructure serving the unincorporated community of Battle Mountain and surrounding areas in Lander County, Nevada, located in proximity to the Bonanza Creek Gold Mine, including the installation of advanced filtration and treatment systems to address elevated metals concentrations in the community's water supply.
(c) The Institute Community Air Quality Monitoring Network ($3,000,000) — This project will fund the design, installation, and five-year operation of a network of continuous air quality monitoring stations in the community of Institute and surrounding areas of Kanawha County, West Virginia, to provide real-time public access to air quality data for pollutants of concern, including volatile organic compounds, particulate matter, and hazardous air pollutants associated with chemical manufacturing operations in the Kanawha Valley.
Financial Assurance. The Consent Decree requires Defendants to post and maintain financial assurance in the total amount of Two Hundred Forty-Five Million Dollars ($245,000,000), to ensure the availability of funds to complete the remedial actions required by the Consent Decree even in the event of Defendants' financial inability to perform. The financial assurance consists of two instruments:
(i) A surety bond in the amount of One Hundred Sixty-Five Million Dollars ($165,000,000), designated Bond No. ISA-ENV-2025-08934, issued by Ironbark Surety of America, Inc., a surety company listed on the United States Department of the Treasury's Listing of Approved Sureties (Department Circular 570); and
(ii) A remediation trust fund in the amount of Eighty Million Dollars ($80,000,000), established pursuant to Trust Agreement No. LTC-REM-2025-1177, with Larchfield Trust Company, N.A. serving as trustee, the corpus and income of which are reserved exclusively for the payment of costs of remedial actions required under the Consent Decree.
Independent Environmental Monitor. The Consent Decree provides for the appointment of Verdant Analytics, Inc., with Dr. Kamal Osei, Senior Managing Director, serving as the lead monitor, as an independent environmental monitor to perform quarterly compliance audits of Defendants' performance under the Consent Decree and to prepare and publish annual public reports summarizing compliance status at each of the four subject facilities. The estimated cost of the independent monitoring program is Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year initial term, to be borne by Defendants. The independent monitor's role will enhance transparency, accountability, and public confidence in the implementation of the Consent Decree.
Aggregate Cost. The aggregate estimated cost of the Consent Decree to Defendants is approximately Four Hundred Nine Million Nine Hundred Thousand Dollars ($409,900,000) in nominal terms, or approximately Three Hundred Eleven Million Five Hundred Thousand Dollars ($311,500,000) on a present-value, cash-equivalent basis. The Court finds that this aggregate cost represents a fair and reasonable resolution of the claims asserted in this action, taking into account the nature and extent of the environmental contamination at the four subject facilities, the scope of Defendants' liability, the risks and costs of continued litigation, and the public interest in achieving prompt and effective remediation.
Finding 4 — Adequate Remedies and Compliance Mechanisms
The Court finds that the Consent Decree contains adequate remedies and compliance mechanisms to ensure that the Defendants fulfill their obligations under the Consent Decree and that the environmental objectives of the decree are achieved.
Stipulated Penalties. The Consent Decree contains stipulated penalty provisions that impose escalating per-day, per-violation penalties for failures to comply with the requirements of the Consent Decree. Specifically, the stipulated penalties are as follows:
(a) For the first thirty (30) days of a violation: One Thousand Five Hundred Dollars ($1,500) per day per violation;
(b) For days thirty-one (31) through sixty (60) of a violation: Three Thousand Dollars ($3,000) per day per violation; and
(c) For each day of a violation beyond sixty (60) days: Five Thousand Five Hundred Dollars ($5,500) per day per violation.
These stipulated penalties are in addition to, and do not limit, the authority of the United States to seek contempt sanctions or other judicial remedies for violations of the Consent Decree. The Court finds that the stipulated penalty provisions are reasonable and provide an adequate incentive for Defendants to comply with all requirements of the Consent Decree in a timely manner.
Dispute Resolution. The Consent Decree establishes a three-tier dispute resolution mechanism to address disagreements between the parties concerning the implementation or interpretation of the Consent Decree:
(a) Tier 1 — Informal Negotiation: The disputing parties shall engage in good-faith informal negotiations for a period of thirty (30) days following written notice of a dispute.
(b) Tier 2 — Formal EPA Decision: If the dispute is not resolved through informal negotiation, the EPA shall issue a formal written decision within thirty (30) days of the conclusion of the informal negotiation period.
(c) Tier 3 — Judicial Review: Any party aggrieved by the EPA's formal decision may petition this Court for judicial review within thirty (30) days of issuance of the EPA's decision, and this Court shall resolve the dispute in accordance with the applicable standard of review set forth in the Consent Decree.
The Court finds that the dispute resolution mechanism is adequate to address potential disputes during the implementation of the Consent Decree and will promote the efficient and effective resolution of such disputes without unnecessary litigation.
Force Majeure. The Consent Decree contains a force majeure provision that excuses noncompliance with the Consent Decree's requirements to the extent that such noncompliance is caused by circumstances entirely beyond the control of Defendants, provided that Defendants provide written notice to the EPA within fifteen (15) days of the occurrence of any qualifying force majeure event. The force majeure provision sets forth specific criteria for qualifying events and requires Defendants to demonstrate, by a preponderance of the evidence, that the force majeure event was the sole cause of the delay or noncompliance, that Defendants exercised due diligence to avoid or mitigate the effects of the event, and that Defendants took all reasonable steps to comply with the Consent Decree's requirements as expeditiously as possible following the cessation of the force majeure event.
Termination. Termination of the Consent Decree is available on a site-by-site basis, upon written certification of completion by the EPA and the independent environmental monitor, no sooner than five (5) years after the completion of all remedial construction at the relevant site, and subject to the Defendants' satisfaction of all other obligations under the Consent Decree with respect to that site, including payment of all civil penalties, stipulated penalties, and past-cost reimbursements. The Court finds that the termination provisions are appropriate and ensure that Defendants' obligations will continue for a sufficient period of time to verify the effectiveness of the remedial actions and the long-term protection of human health and the environment.
Finding 5 — Consent of the Parties
The Court finds that all parties to this action have voluntarily consented to the entry of the Consent Decree. The United States of America, the State of Montana, the State of Nevada, and the State of West Virginia, as Plaintiffs and Co-Plaintiffs, have consented to the entry of the Consent Decree, as evidenced by the signature pages executed by authorized representatives of the United States Department of Justice, the United States Environmental Protection Agency, the Montana Attorney General's Office, the Nevada Attorney General's Office, and the West Virginia Attorney General's Office, which signature pages are attached to the Consent Decree as lodged with this Court.
All Defendants — Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC — have consented to the entry of the Consent Decree, as evidenced by the signature pages and joinder agreements executed by duly authorized officers of each Defendant entity, which signature pages and joinder agreements are attached to the Consent Decree as lodged with this Court.
The Torchlight Defendants have represented to this Court that they are duly authorized to enter into the Consent Decree and to perform the obligations required thereunder, as evidenced by the following corporate authorization documents filed with the Court: (i) the Board Resolution of Torchlight Mining Corp., adopted at a duly noticed special meeting of the Board of Directors held on February 10, 2025, authorizing the execution and delivery of the Consent Decree and all related agreements and instruments (Dkt. No. 48, Ex. A); (ii) the Officer's Certificate of Gregory Talbot, Executive Vice President and General Counsel of Torchlight Mining Corp., dated February 18, 2025, certifying as to the authority of the signatories and the binding nature of the Consent Decree upon all Defendant entities (Dkt. No. 48, Ex. B); and (iii) the Secretary's Certificate of Diana Felch, Corporate Secretary of Torchlight Mining Corp., dated February 18, 2025, certifying the authenticity of the Board Resolution and the incumbency of the signing officers (Dkt. No. 48, Ex. C).
The Court is satisfied that all parties have freely, voluntarily, and with full knowledge of the terms and consequences of the Consent Decree, consented to its entry, and that the Consent Decree represents a negotiated resolution of the claims and defenses asserted in this action.
ORDER
Based on the foregoing findings, and for good cause shown, IT IS HEREBY ORDERED as follows:
1. Entry of Consent Decree. The Consent Decree, lodged with this Court on February 19, 2025 (Dkt. No. 47), a copy of which is attached hereto as Exhibit 1, is hereby APPROVED and ENTERED as an Order of this Court. The Consent Decree is incorporated herein by reference as if set forth in full. Each provision of the Consent Decree shall be enforceable as an order of this Court.
2. Effective Date. The Effective Date of the Consent Decree shall be thirty (30) days after the date of entry of this Order, i.e., June 14, 2025, as defined in Section IV ("Definitions") of the Consent Decree. All deadlines and obligations of the parties that are measured from the Effective Date shall be calculated from June 14, 2025, unless otherwise specified in the Consent Decree.
3. Binding Effect. The Consent Decree shall be binding upon the United States of America, the State of Montana, the State of Nevada, and the State of West Virginia, and upon all Defendants — Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC — as well as upon their respective officers, directors, employees, agents, successors, and assigns, in accordance with the terms and conditions of the Consent Decree, including the provisions regarding transfer of ownership or operations set forth in Section XXIII of the Consent Decree.
4. Retention of Jurisdiction. This Court retains jurisdiction over the subject matter of this action and over the parties for the duration of the Consent Decree for the purpose of implementing and enforcing the terms and conditions of the Consent Decree, for the purpose of resolving disputes arising under the Consent Decree in accordance with the dispute resolution provisions set forth therein (Section XVI), and for the purpose of entering any modification, amendment, or supplemental order that may be necessary or appropriate to effectuate the purposes of the Consent Decree.
5. Civil Penalty Payment Schedule. Defendants shall pay the total civil penalty of Thirty-One Million Five Hundred Thousand Dollars ($31,500,000) in four (4) equal installments of Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000) each, in accordance with the following schedule:
(a) First Installment: $7,875,000, due on July 14, 2025 (thirty (30) days after the Effective Date);
(b) Second Installment: $7,875,000, due on May 15, 2026 (twelve (12) months after entry of this Order);
(c) Third Installment: $7,875,000, due on May 15, 2027 (twenty-four (24) months after entry of this Order); and
(d) Fourth Installment: $7,875,000, due on May 15, 2028 (thirty-six (36) months after entry of this Order).
All civil penalty payments shall be made in accordance with the payment instructions set forth in Section IX of the Consent Decree, including remittance to the United States Department of Justice lockbox account and contemporaneous notice to the EPA Cincinnati Finance Center and the Financial Litigation Unit of the United States Attorney's Office for the District of Montana. Late payments shall bear interest at the rate established pursuant to 28 U.S.C. § 1961 from the date payment is due until the date payment is received. The portions of the civil penalty allocated to the States of Montana, Nevada, and West Virginia, as set forth in Section IX(C) of the Consent Decree, shall be remitted by the United States to those States in accordance with the intergovernmental allocation provisions therein.
6. Remediation Obligations. Defendants shall perform all remedial actions required by the Consent Decree at the four subject facilities in accordance with the schedules, performance standards, and specifications set forth in the Consent Decree and its appendices, including but not limited to the following milestones:
(a) Ridgecrest Copper-Molybdenum Mine:
(i) Submission of the Ridgecrest Remedial Action Work Plan to EPA Region 8 for review and approval by December 14, 2025 (one hundred eighty (180) days after the Effective Date);
(ii) Commencement of Ridgecrest remedy construction by June 14, 2027 (two (2) years after the Effective Date); and
(iii) Continuation of remediation obligations, including long-term operation and maintenance, groundwater monitoring, and post-closure care, through June 14, 2055 (thirty (30) years after the Effective Date).
(b) Gallatin Chemical Works:
(i) Submission of the Gallatin Corrective Measures Study to EPA Region 8 for review and approval by June 14, 2026 (one (1) year after the Effective Date).
(c) Bonanza Creek Gold Mine:
(i) Commencement of Bonanza Creek liner repair and containment construction by June 14, 2026 (one (1) year after the Effective Date).
(d) Kanawha Bend Chemical Plant:
(i) Completion of Kanawha Bend interim stabilization measures, including removal and off-site disposal of the most immediately hazardous materials, temporary containment of affected soils and sediments, and installation of interim erosion controls along the Kanawha River bank, by December 14, 2026 (eighteen (18) months after the Effective Date).
Defendants shall perform all remedial actions in compliance with all applicable federal, state, and local laws and regulations and in accordance with applicable EPA guidance documents, including but not limited to the National Contingency Plan, 40 C.F.R. Part 300. Any modifications to the remedial action work plans or schedules shall be subject to EPA approval and, where required by the Consent Decree, the review and recommendation of the independent environmental monitor.
7. Financial Assurance. Defendants shall establish and maintain financial assurance in the total amount of Two Hundred Forty-Five Million Dollars ($245,000,000) as required by Section XIV of the Consent Decree, consisting of the following two instruments:
(a) A surety bond in the amount of One Hundred Sixty-Five Million Dollars ($165,000,000), Bond No. ISA-ENV-2025-08934, issued by Ironbark Surety of America, Inc.; and
(b) A remediation trust fund in the amount of Eighty Million Dollars ($80,000,000), Trust Agreement No. LTC-REM-2025-1177, held by Larchfield Trust Company, N.A. as trustee.
Both financial assurance instruments shall be established and fully funded no later than September 12, 2025 (ninety (90) days after the Effective Date). Defendants shall provide to the EPA copies of the executed surety bond and trust agreement, together with evidence of funding, within five (5) business days of the establishment of each instrument. The financial assurance shall remain in effect until such time as the Consent Decree is terminated with respect to all four sites, or until modified by agreement of the parties and approval of this Court. The adequacy of the financial assurance shall be reviewed annually by the EPA and the independent environmental monitor, and Defendants shall adjust the amount of financial assurance as necessary to account for changes in estimated remediation costs, inflation, or investment performance, as provided in the Consent Decree.
8. EPA Past-Cost Reimbursement. Defendants shall reimburse the United States the sum of Eighteen Million One Hundred Thousand Dollars ($18,100,000) for past costs incurred by the EPA, consisting of:
(a) Fourteen Million Three Hundred Thousand Dollars ($14,300,000) for removal actions conducted at the Ridgecrest Copper-Molybdenum Mine between January 15, 2021 and May 30, 2023, pursuant to CERCLA Section 104, 42 U.S.C. § 9604, including costs associated with the construction and operation of temporary water diversion structures, emergency stabilization of waste rock piles, and sampling and analysis of surface water and groundwater; and
(b) Three Million Eight Hundred Thousand Dollars ($3,800,000) for emergency response actions conducted at the Kanawha Bend Chemical Plant on and after June 14, 2020, in response to a release of hazardous substances, including costs associated with the deployment of an EPA On-Scene Coordinator, the mobilization of an emergency response contractor, the excavation and off-site disposal of contaminated soils, and the installation of temporary containment measures.
Reimbursement shall be made in accordance with the payment schedule set forth in Section X of the Consent Decree. All past-cost reimbursement payments shall be accompanied by the appropriate interest, calculated from the date such costs were incurred by the United States through the date of payment, at the rate established pursuant to Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), and 28 U.S.C. § 1961.
9. Supplemental Environmental Projects. Defendants shall fund and implement the three Supplemental Environmental Projects described in Section XII of the Consent Decree, with a combined value of Twelve Million Dollars ($12,000,000), in accordance with the schedules, specifications, and reporting requirements set forth therein:
(a) Flint Creek Watershed Restoration Project — $5,500,000;
(b) Battle Mountain Community Drinking Water Improvement Project — $3,500,000; and
(c) Institute Community Air Quality Monitoring Network — $3,000,000.
Defendants shall submit detailed SEP implementation plans to the EPA within one hundred twenty (120) days of the Effective Date and shall complete all SEP activities within the timeframes specified in the Consent Decree. Defendants shall provide semi-annual progress reports and a final completion report for each SEP to the EPA and the relevant State co-plaintiff. The SEPs shall be subject to the stipulated penalty provisions of the Consent Decree in the event of failure to comply with the implementation schedules or specifications.
10. Independent Monitor. Verdant Analytics, Inc. is hereby appointed as the independent environmental monitor under the Consent Decree, with the duties, responsibilities, access rights, and compensation set forth in the Independent Monitor Agreement executed on February 15, 2025, which is attached to the Consent Decree as Appendix F. Dr. Kamal Osei, Senior Managing Director of Verdant Analytics, Inc., shall serve as the lead monitor. The independent environmental monitor shall conduct quarterly compliance audits at each of the four subject facilities, prepare and publish annual public reports summarizing the status of Defendants' compliance with the Consent Decree, and provide such other reports and recommendations to the EPA and this Court as may be required by the Consent Decree or as may be requested by the Court. The estimated cost of the independent monitoring program, Four Million Eight Hundred Thousand Dollars ($4,800,000) over a five (5)-year initial term, shall be borne by Defendants. The independent monitor shall have the right of access to the subject facilities, Defendants' records and documents, and Defendants' personnel, to the extent necessary to carry out the monitor's duties, as set forth in the Consent Decree and the Independent Monitor Agreement. The initial five-year term of the independent monitor may be extended by the EPA, with the approval of this Court, if the EPA determines that continued monitoring is necessary to ensure Defendants' compliance with the Consent Decree.
11. Stipulated Penalties. The stipulated penalty provisions of the Consent Decree, as set forth in Section XV thereof, are approved and shall be enforceable in accordance with their terms. Stipulated penalties shall accrue for each day of noncompliance with the requirements of the Consent Decree, as provided therein, and shall be payable upon demand by the United States. The accrual and payment of stipulated penalties shall not excuse any violation or relieve Defendants of their obligation to achieve and maintain compliance with all requirements of the Consent Decree. The United States' decision not to demand stipulated penalties for any particular violation shall not constitute a waiver of its right to demand such penalties for subsequent or continuing violations.
12. Dispute Resolution. All disputes arising under the Consent Decree shall be resolved in accordance with the dispute resolution provisions set forth in Section XVI of the Consent Decree, subject to this Court's retained jurisdiction as set forth in Paragraph 4 of this Order. Nothing in this paragraph or in the Consent Decree's dispute resolution provisions shall be construed to limit this Court's inherent authority to enforce its own orders or to impose appropriate sanctions for noncompliance.
13. Force Majeure. The force majeure provisions of the Consent Decree, as set forth in Section XVII thereof, are approved and shall apply in accordance with their terms. The Court notes that the force majeure provisions do not relieve Defendants of their obligation to use best efforts to comply with the Consent Decree's requirements during and after any force majeure event, and that the burden of demonstrating entitlement to force majeure relief rests with Defendants.
14. Modification. The Consent Decree may be modified only upon the written agreement of all parties and approval of this Court, in accordance with Section XXII of the Consent Decree, or upon motion by any party and order of this Court pursuant to applicable law. No modification shall be effective until it has been approved by this Court and entered as an order. Any party seeking a modification shall file a motion with this Court and serve the motion on all parties in accordance with the Federal Rules of Civil Procedure and the Local Rules of this Court.
15. No Other Relief. Except as expressly provided in the Consent Decree and this Order, this Order does not limit, modify, or otherwise affect any rights, claims, or defenses of any party, including the right of the United States, the State of Montana, the State of Nevada, or the State of West Virginia to seek further relief against Defendants for any matters not resolved by the Consent Decree. Nothing in this Order or the Consent Decree shall be construed as a waiver or limitation of the sovereign immunity of the United States or any State plaintiff or co-plaintiff, nor shall anything herein be construed to affect the rights of any third parties not party to this action.
SO ORDERED.
Dated this 15th day of May, 2025.
________________________________________
HON. DONALD W. MOLLOY Senior United States District Judge United States District Court for the District of Montana
CERTIFICATE OF SERVICE
A certificate of service shall be filed separately by the Clerk of Court confirming that the entered Order and Consent Decree have been served electronically via the Court's CM/ECF system and, where applicable, by first-class mail, on all counsel of record in Civil Action No. 9:24-cv-00087-DWM, including the following:
For the United States of America:
Philip Orenstein, Senior Trial Attorney Katherine Rowe-Halpern, Trial Attorney United States Department of Justice Environment and Natural Resources Division Environmental Enforcement Section P.O. Box 7611 Washington, D.C. 20044-7611
Margaret Coulson, Senior Enforcement Counsel United States Environmental Protection Agency Office of Enforcement and Compliance Assurance 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460
For the State of Montana:
Annika Hedstrom, Assistant Attorney General Montana Attorney General's Office Environmental Protection Bureau 215 North Sanders Street Helena, Montana 59620
For the State of Nevada:
Ricardo Fuentes, Senior Deputy Attorney General Nevada Attorney General's Office Bureau of Consumer Protection 100 North Carson Street Carson City, Nevada 89701
For the State of West Virginia:
Loretta May Hatcher, Assistant Attorney General West Virginia Attorney General's Office Environmental Protection Division State Capitol, Building 1, Room 26-E Charleston, West Virginia 25305
For Defendants Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC:
Harrison Wexford, Partner Calderwood & Harkness LLP 125 Broad Street New York, New York 10004
Russell Dane, Partner Holcroft, Dane & Weiss LLP 401 North Last Chance Gulch Helena, Montana 59601 (Local Counsel, Montana)
Denise Quartaro, Member Sagebrush Law Group, PLLC 300 East Second Street, Suite 800 Reno, Nevada 89501 (Local Counsel, Nevada)
Nathan Tully, Partner Baxter, Tully & Crane PLLC 500 Virginia Street East, Suite 1200 Charleston, West Virginia 25301 (Local Counsel, West Virginia)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION

PREAMBLE

FINDINGS

SO ORDERED.

CERTIFICATE OF SERVICE

Record

Parties

Dates

Amounts