CALDERWOOD & HARKNESS LLP Counsellors at Law
One World Financial Center 200 Liberty Street, 49th Floor New York, New York 10281-1003
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
October 23, 2024
VIA EMAIL AND FedEx — OVERNIGHT DELIVERY
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
Miriam Soo-Hwan Park, Esq. General Counsel Torchlight Mining Corp. 1800 Bayfield Tower 401 Bay Street Toronto, Ontario M5H 2Y4 Canada
cc: Douglas K. Prennell, Chief Executive Officer, Torchlight Mining Corp. Gareth Linford, Vice President, Environmental Health & Safety, Torchlight Mining Corp. Carolyn Bracebridge, Chief Financial Officer, Torchlight Mining Corp.
From: Harrison Wexford, Responsible Partner, Calderwood & Harkness LLP Beatrice Holloway, Billing Partner, Calderwood & Harkness LLP
Matter No.: 1039-00003
Re: Litigation Hold Notice and Document Preservation Directive — Multi-Site EPA Compliance and Consent Decree Matter Civil Action No. 9:24-cv-00087-DWM, United States of America and State of Montana v. Torchlight Mining Corp. et al., U.S. District Court for the District of Montana, Missoula Division
Dear Ms. Park:
This memorandum constitutes a formal litigation hold notice and document preservation directive issued by Calderwood & Harkness LLP on behalf of, and to, Torchlight Mining Corp. ("TMC") and its U.S. subsidiaries identified herein. The matters addressed in this memorandum are of the utmost importance. We ask that you review this memorandum immediately, take the actions described herein without delay, and distribute it to all individuals identified in Section III as key custodians. The obligations imposed by this litigation hold are mandatory and supersede any pre-existing document retention or destruction policies maintained by TMC or any of its subsidiaries with respect to the categories of materials described below.
I. PURPOSE AND LEGAL OBLIGATION
This memorandum constitutes a formal litigation hold notice requiring the immediate preservation of all documents, electronically stored information ("ESI"), and tangible materials potentially relevant to the pending litigation and ongoing consent-decree negotiations referenced above. The preservation obligations described in this memorandum apply to TMC, all of the U.S. subsidiaries identified below, and all individuals, departments, and third-party agents who may possess, maintain, or control materials within the scope of this hold.
Calderwood & Harkness LLP was engaged on October 21, 2024, to represent Torchlight Mining Corp. and its U.S. subsidiaries in connection with the above-captioned matter, replacing prior environmental counsel Whitfield, Palmer & Goss LLP. This engagement encompasses the pending federal civil action, consent-decree negotiations with the United States Department of Justice ("DOJ"), the United States Environmental Protection Agency ("EPA"), and certain state co-plaintiffs, and all related regulatory proceedings, administrative orders, and enforcement actions concerning the four sites described in Section II below.
The following is a summary of the key procedural history of this matter to date:
• September 12, 2023: EPA issued a Notice of Violation ("NOV") covering all four sites at issue.
• January 18, 2024: The DOJ, on behalf of the United States and in coordination with the States of Montana, Nevada, and West Virginia, filed the complaint initiating Civil Action No. 9:24-cv-00087-DWM in the United States District Court for the District of Montana, Missoula Division.
• March 5, 2024: TMC, through prior counsel, filed its answer to the complaint.
• April 22, 2024: The parties executed a Tolling Agreement, tolling the applicable statutes of limitations through December 31, 2025.
• May 15, 2024: Court-ordered mediation was conducted before Magistrate Judge Clara Finnegan.
• July 30, 2024: The parties reached an agreement in principle on the framework for a consent decree.
• October 21, 2024: Calderwood & Harkness LLP was engaged as replacement counsel.
• On or about November 8, 2024: The DOJ is expected to circulate the first draft of the consent decree for review and comment.
The duty to preserve relevant materials arises under the Federal Rules of Civil Procedure, particularly Rules 26(a), 26(b), and 37(e), as well as applicable case law, including but not limited to Zubulake v. Ashgrove Trust Bank, 220 F.R.D. 212 (S.D.N.Y. 2003), Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010), and The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 2d 456 (S.D.N.Y. 2010), and the Court's standing orders on discovery and ESI preservation in the District of Montana. The duty to preserve was triggered no later than the date on which TMC received the September 12, 2023 NOV, and continues through the present and until further notice.
Failure to preserve relevant materials can result in severe consequences, including but not limited to sanctions, adverse inference instructions, exclusion of evidence, monetary penalties, default judgment, and other remedies available to the Court under Federal Rule of Civil Procedure 37(e). In addition, failure to preserve evidence may constitute obstruction of justice or contempt of court in certain circumstances, and may give rise to separate causes of action or regulatory penalties.
This litigation hold supersedes any existing document retention, records management, or document destruction policies maintained by TMC, its subsidiaries, or any of their departments, whether in Canada, the United States, or elsewhere, with respect to the categories of materials described herein. No relevant documents or ESI may be destroyed, deleted, discarded, overwritten, altered, or otherwise made unavailable, regardless of whether the applicable retention period under any TMC policy has expired or may expire during the pendency of this hold.
This litigation hold applies to TMC and all of its relevant U.S. subsidiaries, which for purposes of this memorandum are identified as follows:
1. Torchlight Mining Corp. — the Canadian parent entity
2. Torchlight Mining (U.S.) Inc. (EIN: 83-2047156) — U.S. holding company and primary U.S. operating subsidiary
3. Torchlight Specialty Chemicals, Inc. (EIN: 47-3819204) — operator of chemical manufacturing facilities
4. Ridgecrest Mine Holdings, LLC (MT Secretary of State ID: E1042738) — entity holding the Ridgecrest Copper-Molybdenum Mine
5. Bonanza Creek Mining, LLC (NV Secretary of State Entity No.: E0518294731) — entity operating the Bonanza Creek Gold Mine
Throughout this memorandum, references to "TMC" shall include each of the foregoing entities unless the context clearly indicates otherwise.
II. SCOPE OF THE MATTER
The following section provides an overview of the parties, sites, regulatory history, and statutes at issue in this matter. This overview is provided for context and to assist custodians in understanding the breadth of potentially relevant materials. Custodians should err on the side of over-inclusion when evaluating whether materials may fall within the scope of this hold.
A. Parties
Plaintiffs / Co-Plaintiffs:
• United States of America, acting through the Environmental Protection Agency ("EPA"), Office of Enforcement and Compliance Assurance ("OECA"), and the Department of Justice ("DOJ"), Environment and Natural Resources Division ("ENRD").
• State of Montana, acting through the Montana Department of Environmental Quality ("MT DEQ") and the Montana Attorney General's Office. Lead state counsel: Annika Hedstrom, Assistant Attorney General.
• State of Nevada, acting through the Nevada Division of Environmental Protection ("NV DEP") and the Nevada Attorney General's Office. Lead state counsel: Ricardo Fuentes, Senior Deputy Attorney General.
• State of West Virginia, acting through the West Virginia Department of Environmental Protection ("WV DEP") and the West Virginia Attorney General's Office. Lead state counsel: Loretta May Hatcher, Assistant Attorney General.
Defendants:
• Torchlight Mining Corp.
• Torchlight Mining (U.S.) Inc.
• Torchlight Specialty Chemicals, Inc.
• Ridgecrest Mine Holdings, LLC
• Bonanza Creek Mining, LLC
Government Counsel of Record:
• Philip Orenstein, Lead DOJ Trial Attorney, Environment and Natural Resources Division
• Katherine Rowe-Halpern, Supervising DOJ Attorney, Environment and Natural Resources Division
• Margaret Coulson, Lead EPA Case Attorney, Office of Enforcement and Compliance Assurance
B. The Four Sites
The complaint and anticipated consent decree involve environmental contamination, regulatory non-compliance, and remediation obligations at the following four sites, each of which is operated by or associated with TMC or its U.S. subsidiaries:
1. Ridgecrest Copper-Molybdenum Mine
Location: 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832
Acreage: Approximately 3,200 acres (mine footprint); approximately 8,700 acres (total property)
Operations: Open-pit copper-molybdenum mine; operational from 1978 through 2019; currently in closure and reclamation phase
Regulatory Status: Proposed for listing on the National Priorities List ("NPL"). Subject to an Administrative Order on Consent ("AOC"), Docket No. CERCLA-08-2022-0039, executed September 15, 2022.
Alleged Violations: Clean Water Act ("CWA") § 301 (unpermitted discharges); Resource Conservation and Recovery Act ("RCRA") § 3004 (waste management); Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") § 107 (cost recovery and liability)
Contaminants of Concern: Acid mine drainage containing elevated dissolved copper (average 47 mg/L), molybdenum, selenium, and sulfate. The site includes a 425-acre tailings impoundment with documented seepage into Flint Creek, a tributary of the Clark Fork River.
Cost Recovery: EPA has asserted past-cost recovery claims of $14.3 million for removal actions performed between 2021 and 2023.
EPA Project Coordinator: Dr. Samuel Tesfaye
2. Gallatin Chemical Works
Location: 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714
Acreage: Approximately 145 acres
Operations: Specialty chemical manufacturing, including production of flotation reagents, sodium xanthate, and dithiophosphate collectors. Operational since 1993; currently active.
Regulatory Status: RCRA Corrective Action facility under Permit No. MTD098712456. Three Solid Waste Management Units ("SWMUs") have been identified and are subject to corrective action.
Alleged Violations: RCRA §§ 3004 and 3005 (waste management and permit violations); CWA § 301 (unpermitted and excess discharges)
Contaminants of Concern: Carbon disulfide ("CS₂") in groundwater at concentrations up to 890 µg/L (compared to the Maximum Contaminant Level of 10 µg/L); xanthate decomposition products; volatile organic compounds ("VOCs"), including toluene and xylene. The facility has recorded 14 Montana Pollutant Discharge Elimination System ("MPDES") permit exceedances for CS₂ and total suspended solids ("TSS") between January 2021 and June 2024.
3. Bonanza Creek Gold Mine
Location: County Road 447, Mile Marker 12, Lander County, Nevada 89820
Acreage: Approximately 5,600 acres (mine footprint); approximately 12,400 acres (total property)
Operations: Open-pit heap-leach gold mine; operational since 2001; active mining ongoing.
Alleged Violations: CWA § 301 (unpermitted discharges); RCRA § 3004 (waste management); Migratory Bird Treaty Act ("MBTA") (avian mortalities at solution ponds)
Contaminants of Concern: Weak acid dissociable ("WAD") cyanide at 0.62 mg/L (compared to a discharge limit of 0.022 mg/L); mercury at average concentrations of 12.4 µg/L (compared to the applicable water quality criterion of 0.77 µg/L); selenium.
Key Incidents: Three documented heap-leach pad releases involving liner failures:
• March 17, 2022 — release via torn liner to ephemeral tributary of the Reese River
• August 9, 2022 — release via torn liner to ephemeral tributary of the Reese River
• January 22, 2023 — release via torn liner to ephemeral tributary of the Reese River
Additionally, 17 avian mortalities were documented at solution ponds between 2021 and 2023, creating exposure under the MBTA.
EPA Project Coordinator: Jennifer Whitfield
4. Kanawha Bend Chemical Plant
Location: 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112
Acreage: Approximately 78 acres
Operations: Chemical manufacturing, including production of leaching agents and sulfuric acid regeneration. Operational since 1985; currently active.
Regulatory Status: RCRA Corrective Action facility under Permit No. WVD048823915.
Alleged Violations: RCRA §§ 3004 and 3005 (waste management and permit violations); CERCLA § 107 (cost recovery and liability)
Contaminants of Concern: Sulfuric acid residuals (pH as low as 1.8); lead (maximum soil concentrations of 4,200 mg/kg); arsenic (maximum soil concentrations of 890 mg/kg); dense non-aqueous phase liquid ("DNAPL"), specifically chlorinated solvents, present in the fractured bedrock aquifer underlying the facility.
Key Incident: On June 14, 2020, a sulfuric acid release from the facility reached a tributary of the Kanawha River, triggering an EPA emergency response action with costs of approximately $3.8 million.
C. Regulatory History and Key Dates Referenced
The following timeline summarizes key regulatory and litigation milestones relevant to this matter. Custodians should use this timeline as a reference point when identifying potentially responsive materials:
D. Statutes at Issue
The principal federal statutes at issue in this matter include:
• Clean Water Act ("CWA"), 33 U.S.C. §§ 1251 et seq., particularly § 301, 33 U.S.C. § 1311 (effluent limitations and prohibition of unpermitted discharges)
• Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq., particularly § 3004, 42 U.S.C. § 6924 (standards applicable to owners and operators of hazardous waste treatment, storage, and disposal facilities) and § 3005, 42 U.S.C. § 6925 (permits for treatment, storage, or disposal of hazardous waste)
• Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et seq., particularly § 107, 42 U.S.C. § 9607 (liability for costs of response and damages to natural resources)
• Migratory Bird Treaty Act ("MBTA"), 16 U.S.C. §§ 703 et seq. (applicable specifically to the Bonanza Creek Gold Mine in connection with documented avian mortalities at solution ponds)
In addition, various state statutes and regulations governing water quality, hazardous waste management, and mining operations in Montana, Nevada, and West Virginia are implicated. Custodians should preserve materials relating to compliance with any such state requirements.
III. KEY CUSTODIANS
A. Identification of Key Custodians
We request that Miriam Soo-Hwan Park, as General Counsel of TMC, take immediate steps to identify and notify each custodian listed below, as well as any additional individuals who may possess, maintain, or control materials potentially relevant to this matter. To the extent that Ms. Park identifies additional custodians beyond those listed below — including personnel at the site level whose names and titles are not yet known to Calderwood & Harkness LLP — such individuals should be added to the custodian list and notified promptly.
Each custodian must receive a complete copy of this memorandum and must acknowledge receipt in writing by executing and returning the Acknowledgment Form attached as Attachment A. Acknowledgment Forms must be returned within ten (10) business days of receipt, as further described in Section VII below.
B. List of Key Custodians
The following individuals and categories of individuals have been identified as key custodians for purposes of this litigation hold. This list is not exhaustive, and additional custodians may be identified as the matter progresses.
TMC Corporate Officers and Management
1. Douglas K. Prennell, Chief Executive Officer, Torchlight Mining Corp. — Included as custodian due to his corporate oversight of all operations and environmental matters, including ultimate management authority over decisions relating to the four sites, regulatory strategy, and capital allocation for remediation.
2. Miriam Soo-Hwan Park, General Counsel, Torchlight Mining Corp. — Included as custodian due to her legal oversight of all regulatory correspondence, management of prior outside counsel, litigation strategy, and supervision of TMC's internal legal department.
3. Gareth Linford, Vice President, Environmental Health & Safety, Torchlight Mining Corp. — Included as custodian due to his environmental, health, and safety oversight across all four sites, including direct responsibility for regulatory compliance programs, EPA and DOJ communications, remediation planning, and the supervision of site-level EHS personnel.
4. Carolyn Bracebridge, Chief Financial Officer, Torchlight Mining Corp. — Included as custodian due to her responsibility for financial reporting, environmental reserve accounting (including ASC 450 and IAS 37 analyses), insurance claims, credit facility compliance, and environmental financial assurance obligations.
Site-Level Personnel.
5. All site managers, environmental managers, and EHS staff at the Ridgecrest Copper-Molybdenum Mine, the Gallatin Chemical Works, the Bonanza Creek Gold Mine, and the Kanawha Bend Chemical Plant. TMC management is requested to provide a complete roster of such personnel to Calderwood & Harkness LLP within ten (10) business days.
6. All operations managers and production supervisors at each currently active site (Gallatin Chemical Works, Bonanza Creek Gold Mine, and Kanawha Bend Chemical Plant). These individuals are likely to possess knowledge of, and documents relating to, day-to-day operations, waste handling, discharge events, and incident reporting.
7. Mine closure and reclamation managers at the Ridgecrest Copper-Molybdenum Mine, including any personnel responsible for ongoing reclamation activities, water management, seepage monitoring, and regulatory reporting during the closure phase.
External Consultants and Advisors
TMC is requested to coordinate with the following third-party consultants and advisors to ensure preservation of all relevant materials in their possession, subject to any contractual provisions governing document retention and access:
8. Pinnacle Creek Environmental, LLC — Contact: Dr. Astrid Bergmann, P.E., Senior Principal, 320 Willowbrook Drive, Suite 100, Bozeman, Montana 59715. Pinnacle Creek has served as TMC's primary environmental consultant and is believed to possess or control all remedial investigation and feasibility study ("RI/FS") reports, remediation designs, site assessments, environmental monitoring data, and engineering analyses related to one or more of the four sites.
9. Northspire Capital Markets, Inc. — Contact: Vivian Okafor, Managing Director. Northspire has provided financial advisory services to TMC, including cost modeling and financial analysis related to the environmental liabilities at issue.
10. Ridgeline Accounting Partners LLP — Contact: Frances Whitmore, CPA, CA. Ridgeline serves as TMC's external auditor and is believed to possess audit workpapers related to TMC's environmental liability disclosures, including analyses prepared under ASC 450 (formerly FAS 5) and IAS 37.
Prior Outside Counsel
11. Whitfield, Palmer & Goss LLP — All files, documents, ESI, work product, and communications from the prior representation of TMC and its subsidiaries in connection with this matter must be preserved in full and transitioned to Calderwood & Harkness LLP. TMC should direct Whitfield, Palmer & Goss LLP to take no action to destroy or dispose of any materials from the engagement pending completion of the file transfer.
Insurance-Related Custodians.
12. All correspondence, claims files, and related materials involving Meridian Environmental Insurance Company — Contact: Sheila Grantham, Claims Adjuster — regarding Pollution Legal Liability ("PLL") Policy No. MEI-ENV-2021-04738, including any reservation of rights letters, coverage demands, claim submissions, denial correspondence, and coverage opinions.
13. All correspondence, claims files, and related materials involving Clearwater Mutual Insurance, Ltd. and its servicing entity Clearwater Mutual Services, Inc. — Contact: Brendan Forsythe, Account Manager — regarding Directors and Officers Liability ("D&O") Policy No. CMI-DO-2023-10221, including any notice of claim correspondence, indemnification requests, and related communications.
Banking / Financial Custodians
14. All correspondence, certifications, compliance reports, and related materials involving Harborstone National Bank, N.A. regarding the C$750.0 million syndicated revolving credit facility ("RCF"), environmental covenant compliance, environmental compliance certificates, lender notifications, and any related waivers, amendments, or discussions concerning TMC's environmental liabilities and their impact on credit facility covenants.
IV. CATEGORIES OF MATERIALS TO BE PRESERVED
The following categories describe the types of materials that must be preserved under this litigation hold. These categories are intended to be broadly inclusive. When in doubt about whether a particular document or item falls within the scope of this hold, custodians must err on the side of preservation. Do not discard, delete, or destroy any material that could potentially be relevant.
A. Documents and Records (Hard Copy and Electronic)
The following categories of documents and records, whether maintained in hard copy or electronic form, must be preserved:
1. Environmental conditions and operations. All documents, reports, memoranda, correspondence (including letters, emails, text messages, and instant messages), notes, and presentations relating to environmental conditions, contamination, waste management, discharges, releases, spills, or remediation at any of the four sites. This includes internal analyses, management reports, board presentations, and any other documents discussing or describing the environmental status or compliance posture of any site.
2. Environmental permits and permitting. All environmental permits, permit applications, permit modifications, renewal applications, and related correspondence, including but not limited to MPDES permits (Montana), water pollution control permits (Nevada and West Virginia), RCRA permits (including Permit Nos. MTD098712456 and WVD048823915), mining reclamation permits, and any other federal, state, or local permits related to discharges, emissions, waste management, or land disturbance at any of the four sites.
3. Environmental monitoring and sampling data. All internal and external environmental monitoring data, sampling results, laboratory analytical reports, chain-of-custody records, field notes, data validation reports, and quality assurance/quality control ("QA/QC") documentation for all four sites. This includes, without limitation, groundwater monitoring data, surface water monitoring data, soil and sediment sampling results, air monitoring data, effluent monitoring data, and discharge monitoring reports ("DMRs").
4. Government correspondence and regulatory communications. All correspondence, communications, and documents received from or sent to the EPA, DOJ, MT DEQ, NV DEP, WV DEP, the Montana Attorney General's Office, the Nevada Attorney General's Office, the West Virginia Attorney General's Office, the U.S. Fish and Wildlife Service, and any other federal, state, or local regulatory agency. This includes, without limitation:
• The September 12, 2023 Notice of Violation
• The Ridgecrest Administrative Order on Consent (Docket No. CERCLA-08-2022-0039)
• All inspection reports and inspection-related correspondence
• All information requests issued under CWA § 308, RCRA § 3007, and CERCLA § 104(e), and all responses thereto
• All compliance orders, administrative orders, and enforcement notices
• All communications with EPA Project Coordinators Dr. Samuel Tesfaye (Ridgecrest) and Jennifer Whitfield (Bonanza Creek)
5. Litigation documents. All documents related to the DOJ complaint (Civil Action No. 9:24-cv-00087-DWM), the TMC answer, the Tolling Agreement dated April 22, 2024, the court-ordered mediation before Magistrate Judge Clara Finnegan on May 15, 2024, the agreement in principle on the consent-decree framework reached on July 30, 2024, and all subsequent pleadings, motions, orders, correspondence with the Court, and communications between the parties or their counsel.
6. Remediation and engineering documents. All remedial investigation/feasibility study ("RI/FS") documents, corrective action plans, remediation work plans, closure plans, cost estimates, and engineering studies prepared by or for TMC or any of its subsidiaries, including all reports, analyses, and deliverables prepared by Pinnacle Creek Environmental, LLC (Dr. Astrid Bergmann, P.E.). This includes draft versions as well as final reports.
7. Bonanza Creek heap-leach releases. All documents related to the three documented heap-leach pad releases at the Bonanza Creek Gold Mine, which occurred on March 17, 2022, August 9, 2022, and January 22, 2023, respectively. This includes incident reports, root-cause analyses, liner integrity assessments, geomembrane inspection records, repair and replacement documentation, and all communications with the NV DEP, the EPA, and any third-party contractors regarding these releases.
8. Bonanza Creek avian mortalities. All documents related to the 17 documented avian mortalities at Bonanza Creek solution ponds between 2021 and 2023, including wildlife incident reports, MBTA compliance records, netting and deterrent system documentation, and all communications with the U.S. Fish and Wildlife Service.
9. Kanawha Bend sulfuric acid release. All documents related to the June 14, 2020 sulfuric acid release at the Kanawha Bend Chemical Plant, including incident reports, emergency response records, EPA emergency response cost documentation, internal investigation reports, root-cause analyses, corrective action documentation, and all communications with the WV DEP and the EPA regarding this incident.
10. Ridgecrest tailings seepage. All documents related to the tailings impoundment seepage at the Ridgecrest Copper-Molybdenum Mine, including seepage monitoring data, piezometer readings, Flint Creek water quality data, downgradient groundwater monitoring results, seepage interception and collection system records, and engineering assessments of impoundment integrity.
11. Gallatin permit exceedances. All documents related to the 14 MPDES permit exceedances at the Gallatin Chemical Works recorded between January 2021 and June 2024, including discharge monitoring reports ("DMRs"), exceedance notifications submitted to MT DEQ, corrective action reports, operational adjustments, and internal communications regarding the causes of and responses to each exceedance.
12. Financial records. All financial records, budgets, capital expenditure plans and authorizations, insurance policies, insurance claims, reserve analyses (including ASC 450/IAS 37 analyses), financial assurance instruments (including surety bonds, letters of credit, trust funds, and insurance policies), and cost projections related to environmental liabilities at any of the four sites. This includes all documents reflecting the accrual, estimation, disclosure, or reporting of environmental liabilities in TMC's financial statements.
13. Board and committee materials. All minutes, agendas, presentations, information packages, and materials from meetings of the TMC board of directors, any committee thereof (including the Audit Committee, the Health, Safety and Environment Committee, and any special committee), and the boards or governing bodies of any TMC subsidiary, to the extent such materials discuss or reference environmental compliance, contamination, enforcement actions, remediation, litigation, or the consent decree at any of the four sites.
14. Prior counsel communications. All documents reflecting or containing communications with prior outside counsel Whitfield, Palmer & Goss LLP regarding this matter or any aspect of environmental compliance, enforcement, or remediation at any of the four sites. This includes engagement letters, invoices, legal memoranda, strategy documents, correspondence, and all files maintained by TMC's internal legal department in connection with the prior representation.
15. Insurance coverage. All documents related to insurance coverage for environmental liabilities, including the Meridian Environmental Insurance Company PLL policy (Policy No. MEI-ENV-2021-04738), any excess or umbrella environmental liability policies, and the Clearwater Mutual Insurance D&O policy (Policy No. CMI-DO-2023-10221). This category encompasses the policies themselves, all endorsements and amendments, all notices of claim, reservation of rights letters, coverage demands, coverage position letters, denial correspondence, premium payment records, and all correspondence between TMC and any insurance carrier, broker, or intermediary.
16. Credit facility compliance. All documents related to the C$750.0 million syndicated revolving credit facility with Harborstone National Bank, N.A., including the credit agreement, all amendments and waivers, environmental covenant compliance certificates, officer's certificates, lender notifications, correspondence with Harborstone National Bank or any syndicate member regarding environmental matters, and any financial projections or analyses prepared for lender reporting purposes.
B. Electronically Stored Information (ESI)
In addition to the categories of documents and records described above, the following types of ESI must be preserved:
• Email. All emails, including attachments, on all platforms used by TMC or its subsidiaries, including Strathmore Data Systems/Outlook, web-based email (e.g., Northgate Software, Northpoint Solutions), archived email accounts, journaling systems, and any personal email accounts that have been used for business purposes by any custodian. This includes emails in active mailboxes, archived mailboxes, deleted-items folders (to the extent recoverable), and PST or OST files stored locally.
• Text messages and instant messages. All text messages (SMS and Westmark Software), instant messages (Northgate Data Systems, Meridian Solutions, Meridian Services Inc., Signal, or any other messaging platform used by TMC or its employees for business-related communications), and any other short-form electronic communications.
• Voicemails. All voicemails, to the extent they are stored electronically on servers, unified messaging systems, or voicemail-to-email systems.
• Shared drives and cloud storage. All documents, files, and data stored on shared network drives, file servers, intranets, and cloud-based storage platforms, including Aldermere Systems, Cobalt Ridge Systems, Hollowell Health IT, box, Larkspur Technologies, and any equivalent platform. This includes documents in both active and archived workspaces.
• Databases and management systems. All data stored in environmental monitoring databases, laboratory information management systems ("LIMS"), EHS management systems (e.g., Intelex, Cority, Enablon, or equivalent), incident reporting systems, and compliance management systems.
• GIS and engineering data. All geographic information system ("GIS") data, computer-aided design ("CAD") drawings, mine plans, engineering design files, survey data, and related geospatial information for each of the four sites.
• Financial and accounting system records. All records in TMC's financial and accounting systems (e.g., Hollowell & Co., Ridgeline Industries, or equivalent) related to environmental liabilities, environmental reserves, remediation expenditures, insurance recoveries, and financial assurance instruments.
• Backup media and legacy systems. All backup tapes, disaster recovery archives, and legacy systems that may contain materials from the relevant time periods identified in Section V. Backup media must not be overwritten, recycled, or destroyed.
• Social media. Any social media accounts maintained by TMC, its subsidiaries, or their employees (to the extent used for business purposes) that contain posts, comments, photographs, or other content related to the four sites or the litigation.
• Metadata. All metadata associated with ESI must be preserved in its original form. Custodians and IT personnel must not alter, scrub, remove, or modify metadata for any ESI within the scope of this hold.
C. Tangible Materials
The following tangible materials must also be preserved:
• Environmental samples. All physical samples, core samples, split samples, and any retained environmental media samples (including soil, water, sediment, air, and waste samples) from any of the four sites.
• Hard-copy files. All hard-copy files, binders, notebooks, engineering logs, field logs, and paper records maintained at any site location, office, or storage facility.
• Photographs and visual media. All photographs, videos, aerial imagery, satellite imagery, and drone footage of any of the four sites, including images taken during operations, inspections, incident responses, remediation activities, and monitoring events.
• Physical equipment with data storage. All physical monitoring equipment or instruments that contain data storage capabilities, including data loggers, flow meters with internal memory, telemetry systems, and any other devices that record or store environmental monitoring data. These devices must not be wiped, reset, or recalibrated in a manner that would destroy stored data without first extracting and preserving the data.
V. TEMPORAL SCOPE
The temporal scope of this litigation hold is as follows:
General preservation period: January 1, 1975 through the present date, and continuing until further written notice from Calderwood & Harkness LLP.
The January 1, 1975 start date has been selected to encompass the period prior to the commencement of operations at the earliest of the four sites (the Ridgecrest Copper-Molybdenum Mine, which commenced operations in 1978). This early start date is necessary to capture any pre-operational site condition documentation, including baseline environmental assessments, property acquisition records, land-use histories, and any pre-existing contamination records that may be relevant to the allocation of liability under CERCLA § 107 and to potential defenses available to TMC.
Site-specific emphasis periods are provided below for the guidance of custodians in prioritizing their review and identification of responsive materials. However, custodians must preserve all materials falling within the general preservation period to the extent they are potentially relevant:
• Ridgecrest Copper-Molybdenum Mine: 1975 through present. This period encompasses pre-operational site characterization and land acquisition, the full operational period (1978–2019), and the ongoing closure and reclamation phase.
• Kanawha Bend Chemical Plant: 1983 through present. This period encompasses pre-operational site development and construction, and the full operational period from 1985 to the present.
• Gallatin Chemical Works: 1991 through present. This period encompasses pre-operational site preparation and permitting, and the full operational period from 1993 to the present.
• Bonanza Creek Gold Mine: 1999 through present. This period encompasses pre-operational site exploration, permitting, and construction, and the full operational period from 2001 to the present.
To the extent that any custodian possesses materials predating the general preservation start date of January 1, 1975, and such materials relate to any of the four sites, the environmental conditions thereon, or the historical use of any such property, those materials should also be preserved and identified to Calderwood & Harkness LLP.
VI. PRESERVATION OBLIGATIONS — SPECIFIC INSTRUCTIONS
A. Immediate Actions Required
The following actions must be taken immediately upon receipt of this memorandum:
1. Suspend all routine document destruction. Immediately suspend any and all automatic deletion, purging, overwriting, or destruction of documents, ESI, emails, or backup media that may contain materials within the scope of this litigation hold. This includes, without limitation, the suspension of any auto-delete policies on email systems (e.g., 90-day, 180-day, or annual purge cycles), any scheduled destruction of physical records, and any recycling of backup tapes or other storage media. All document retention schedules and records management protocols must be overridden with respect to the categories of materials described in this memorandum.
2. Notify the IT department. Direct TMC's information technology department — at both the Canadian headquarters in Toronto and the U.S. headquarters at 750 Copper Ridge Boulevard, Suite 200, Helena, Montana 59601 — to take the following immediate steps:
(a) Suspend all data destruction schedules, automated purges, and storage rotation protocols that could affect materials within the scope of this hold.
(b) Implement technical holds (e.g., legal holds within Ashgrove Software, journaling rules, mailbox preservation settings) on the email accounts, network storage areas, and cloud accounts of all identified key custodians.
(c) Ensure that all backup tapes, disaster recovery media, and legacy archives that may contain relevant materials are identified, segregated, and placed into secure storage to prevent overwriting or recycling.
(d) Prepare a memorandum documenting the specific technical steps taken to implement the litigation hold, including the date and time of implementation, the systems affected, and the custodian accounts placed on hold. Provide a copy of this memorandum to Miriam Soo-Hwan Park and to Calderwood & Harkness LLP.
3. Notify site personnel. Ensure that all site-level custodians at the Ridgecrest Copper-Molybdenum Mine, the Gallatin Chemical Works, the Bonanza Creek Gold Mine, and the Kanawha Bend Chemical Plant are notified of this litigation hold and receive a complete copy of this memorandum within five (5) business days of the date hereof — i.e., by October 30, 2024. Site managers at each location should be directed to circulate this memorandum to all EHS staff, environmental managers, operations managers, production supervisors, and other personnel identified as custodians.
4. Preserve backup media. Ensure that all backup tapes, disaster recovery media, and legacy archives are not overwritten, recycled, degaussed, or otherwise rendered inaccessible. If any backup media rotation or recycling is scheduled to occur before the IT department can implement the technical hold, such rotation or recycling must be suspended immediately.
5. Personal devices. Instruct all custodians to preserve any and all relevant materials on their personal devices (including personal mobile phones, tablets, laptops, and home computers) if such devices have been used for business purposes at any time during the relevant period. Custodians should take immediate steps to ensure that relevant text messages, emails, photographs, documents, and other files stored on personal devices are not deleted or overwritten, including by disabling any automatic deletion features.
6. Third-party coordination. Issue corresponding preservation notices to the following third-party consultants and advisors, to the extent that TMC's agreements with these parties permit or require such coordination:
• Pinnacle Creek Environmental, LLC (Dr. Astrid Bergmann, P.E.)
• Northspire Capital Markets, Inc. (Vivian Okafor)
• Ridgeline Accounting Partners LLP (Frances Whitmore, CPA, CA)
Before issuing any preservation notice to a third party, TMC should coordinate with Calderwood & Harkness LLP to ensure that the notice is appropriately tailored and does not inadvertently waive any privilege or work-product protection. Calderwood & Harkness LLP will provide template language for third-party preservation notices upon request.
B. Ongoing Obligations
In addition to the immediate actions described above, the following ongoing obligations apply to all custodians for the duration of this litigation hold: