1039-00003 · Torchlight Mining Corp · State Coordination

letter-to-west-virginia-dep.docx DOCUMENT Antitrust

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CALDERWOOD & HARKNESS LLP Attorneys at Law

28 Liberty Street, 44th Floor New York, New York 10005

Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com

February 5, 2025

VIA FedEx OVERNIGHT AND EMAIL

Loretta May Hatcher, Esq. Assistant Attorney General Environmental Bureau West Virginia Attorney General's Office 1900 Kanawha Boulevard East Building 1, Room E-26 Charleston, West Virginia 25305

Re: Status Update and Consent Decree Summary — Kanawha Bend Chemical Plant, Institute, Kanawha County, West Virginia; United States of America and State of Montana v. Torchlight Mining Corp., et al., Civil Action No. 9:24-cv-00087-DWM, U.S. District Court for the District of Montana, Missoula Division

Dear Ms. Hatcher:

I. Introduction and Purpose

I write on behalf of Calderwood & Harkness LLP ("C&H") in my capacity as lead outside counsel to Torchlight Mining Corp. ("TMC") and its relevant U.S. subsidiaries in connection with the above-captioned enforcement action. The purpose of this letter is twofold: first, to provide the West Virginia Attorney General's Office and the West Virginia Department of Environmental Protection ("WV DEP") with a comprehensive status update regarding the substantially final consent decree reached by the parties on February 3, 2025, in the matter styled United States of America and State of Montana v. Torchlight Mining Corp., et al., Civil Action No. 9:24-cv-00087-DWM (the "Action"); and second, to summarize the specific terms of that consent decree (the "Consent Decree") as they pertain to the Kanawha Bend Chemical Plant located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112 (the "Kanawha Bend Facility" or the "Facility").

As you are aware, the State of West Virginia participates in the Action as a co-plaintiff and intervenor with respect to the Kanawha Bend Facility, and the WV DEP serves as the state regulatory authority with oversight jurisdiction over the Facility's environmental permits, including its RCRA corrective action permit. We are writing to you in your capacity as the Assistant Attorney General assigned to the Environmental Bureau, who has been the State's lead attorney on this matter.

By way of background on our firm's engagement, C&H was retained by TMC as lead outside counsel for this enforcement action effective October 21, 2024, replacing prior counsel Whitfield, Palmer & Goss LLP. Our internal matter number is 1039-00003. C&H's engagement encompasses overall case management, consent decree negotiation, and coordination of regulatory compliance obligations across all four facilities at issue in the Action.

In addition, TMC has retained Baxter, Tully & Crane PLLC ("BTC") as its local counsel in the State of West Virginia. BTC's offices are located at 500 Lee Street East, Suite 1100, Charleston, West Virginia 25301. The lead partner for this engagement at BTC is Nathan Tully, Esq. Mr. Tully and his team at BTC will serve as the primary point of contact for state-level regulatory coordination, including all interactions with the WV DEP regarding state permit requirements and parallel state compliance obligations.

We express at the outset our sincere desire to coordinate closely and transparently with the West Virginia Attorney General's Office and the WV DEP throughout the implementation of the Consent Decree and the fulfillment of all state-specific regulatory requirements applicable to the Kanawha Bend Facility. We believe that open communication and proactive coordination among all stakeholders will be essential to achieving the environmental remediation objectives that are central to the Consent Decree.

II. Background on the Overall Enforcement Action

The United States Environmental Protection Agency ("EPA"), acting through EPA Region 3 with respect to the Kanawha Bend Facility in West Virginia, together with the United States Department of Justice, Environment and Natural Resources Division ("DOJ ENRD"), initiated the above-captioned enforcement action against TMC and its U.S. subsidiaries. DOJ filed the complaint on January 18, 2024, and the matter was assigned Civil Action No. 9:24-cv-00087-DWM in the United States District Court for the District of Montana, Missoula Division. The case is presided over by the Honorable Donald W. Molloy, Senior United States District Judge.

The complaint names the following defendants:

1. Torchlight Mining Corp. ("TMC"), a corporation organized and existing under the Canada Business Corporations Act ("CBCA"), with its principal Canadian headquarters at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario, Canada M5H 2Y4;

2. Torchlight Mining (U.S.) Inc., a Delaware corporation (EIN 83-2047156), serving as the U.S. holding company for TMC's American operations;

3. Torchlight Specialty Chemicals, Inc., a Delaware corporation (EIN 47-3819204), which is the direct operator of the Kanawha Bend Chemical Plant and is wholly owned by TMC through Torchlight Mining (U.S.) Inc.;

4. Ridgecrest Mine Holdings, LLC, a Montana limited liability company (Montana Secretary of State ID E1042738); and

5. Bonanza Creek Mining, LLC, a Nevada limited liability company (Nevada Secretary of State Entity No. E0518294731).

The enforcement action encompasses four facilities across three states — Montana, Nevada, and West Virginia. The complaint alleges violations of the Clean Water Act ("CWA"), 33 U.S.C. §§ 1251 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. The States of Montana, Nevada, and West Virginia have each joined the Action as co-plaintiffs and intervenors with respect to the facilities located within their respective jurisdictions. The State of West Virginia's joinder relates specifically and exclusively to the Kanawha Bend Facility.

The procedural history of the Action is summarized as follows:

• January 18, 2024: DOJ filed the complaint on behalf of the United States and the State of Montana.

• March 5, 2024: TMC and its co-defendants filed their answer to the complaint.

• April 22, 2024: The parties entered into a tolling agreement, tolling the applicable statutes of limitations through December 31, 2025, to facilitate settlement discussions without prejudice to any party's claims or defenses.

• May 15, 2024: The Court ordered the parties to participate in mediation before United States Magistrate Judge Clara Finnegan.

• July 30, 2024: Following mediation and extensive inter-party negotiations, the parties reached an agreement in principle on the framework for a comprehensive consent decree.

• November 8, 2024: DOJ circulated the first draft of the consent decree text.

• December 16, 2024: TMC submitted its redline of the first draft.

• January 14, 2025: The government circulated its counter-redline in response to TMC's December 16, 2024 submission.

• January 24, 2025: TMC submitted its second redline.

• February 3, 2025: The parties finalized the substantially agreed consent decree text (the "Consent Decree").

The Consent Decree, a copy of which is enclosed with this letter, represents the culmination of over six months of intensive drafting and negotiation. While certain minor ministerial items remain to be completed — including execution of the State of West Virginia's joinder and signature pages — the substantive terms of the Consent Decree are final and agreed among the parties.

III. Kanawha Bend Chemical Plant: Factual Background

For the convenience of your office and to provide context for the Consent Decree terms discussed below, we set forth the following summary of the factual background relating to the Kanawha Bend Facility.

Location and Physical Description. The Kanawha Bend Chemical Plant is situated on approximately 78 acres at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112. The Facility is located within the well-known "Chemical Valley" corridor along the Kanawha River in the vicinity of Institute, West Virginia.

Operations. The Facility has been engaged in chemical manufacturing operations since 1985. Its principal operations include the production of leaching agents used in mining processes and sulfuric acid regeneration. The Facility is currently active and is operated by Torchlight Specialty Chemicals, Inc., a wholly owned subsidiary of TMC through its U.S. holding company, Torchlight Mining (U.S.) Inc.

EPA Regulatory Status. EPA has designated the Kanawha Bend Facility as a RCRA Corrective Action facility under Permit No. WVD048823915. The Facility is subject to corrective action requirements under RCRA and is regulated under the state-authorized RCRA program administered by the WV DEP.

Principal Contaminants of Concern. The environmental contamination at the Kanawha Bend Facility includes the following principal contaminants:

• Sulfuric acid residuals in soils: Extensive soil contamination from sulfuric acid releases has resulted in soil pH levels as low as 1.8 in certain areas of the Facility, particularly in the vicinity of the former surface impoundment and process areas.

• Heavy metals in subsurface soils: Lead concentrations as high as 4,200 mg/kg and arsenic concentrations as high as 890 mg/kg have been detected in subsurface soils in the area proximate to the former waste lagoon. These concentrations substantially exceed applicable risk-based screening levels.

• Dense non-aqueous phase liquid ("DNAPL"): Chlorinated solvents have been detected as DNAPL in the fractured bedrock aquifer beneath the Facility. DNAPL contamination in fractured bedrock presents particular remediation challenges due to the complexity of contaminant transport and fate in fractured media.

Key Environmental Incident. On June 14, 2020, a significant sulfuric acid release from the Facility reached a tributary of the Kanawha River. EPA conducted an emergency response to the release, incurring response costs of approximately $3.8 million. The 2020 incident is one of the principal bases for the enforcement action with respect to the Kanawha Bend Facility.

Alleged Violations. The complaint alleges the following violations with respect to the Kanawha Bend Facility:

• RCRA §§ 3004 and 3005 violations: The complaint alleges that Torchlight Specialty Chemicals, Inc. failed to properly close the former surface impoundment at the Facility in accordance with applicable RCRA closure requirements and engaged in unpermitted treatment of listed hazardous wastes, specifically K062 (spent pickle liquor from steel finishing operations) and D002 (corrosive hazardous waste), in violation of RCRA permitting requirements.

• CERCLA § 107 cost recovery: The United States seeks recovery under CERCLA § 107(a) of the $3.8 million in costs incurred by EPA in connection with the 2020 emergency response to the sulfuric acid release to the Kanawha River tributary.

IV. Summary of Consent Decree Terms Relevant to the Kanawha Bend Facility

The following summary sets forth the material terms of the Consent Decree as they relate to the Kanawha Bend Facility. This summary is intended to be informational and does not purport to be a comprehensive restatement of all terms and conditions of the Consent Decree. In all cases, the Consent Decree itself — a copy of which is enclosed — governs.

A. Case Caption and Parties

The Consent Decree is entered in the matter captioned United States of America and State of Montana v. Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC, Civil Action No. 9:24-cv-00087-DWM, United States District Court for the District of Montana, Missoula Division. The States of Montana, Nevada, and West Virginia are consolidated in the Action as co-plaintiffs with respect to the facilities within their respective jurisdictions.

B. Civil Penalty (Kanawha Bend Allocation)

The Consent Decree provides for a total civil penalty of $31.5 million across all four facilities covered by the Action. Of this total, $3.6 million is allocated to the Kanawha Bend Facility. The civil penalty is payable in four equal installments according to the following schedule, which applies to the aggregate $31.5 million amount (including the Kanawha Bend allocation):

The Consent Decree specifies the payment mechanisms and provides for interest on late payments at the rate established under 28 U.S.C. § 1961.

C. EPA Past-Costs Reimbursement (Kanawha Bend)

With respect to the Kanawha Bend Facility, the Consent Decree requires TMC and its subsidiaries to reimburse EPA in the amount of $3.8 million under CERCLA § 107(a) for costs incurred by EPA in connection with its emergency response to the June 14, 2020 sulfuric acid release to the Kanawha River tributary.

The total EPA past-costs reimbursement obligation across all sites covered by the Consent Decree is $18.1 million, comprising $14.3 million attributable to the Ridgecrest Mine facility in Montana and the $3.8 million attributable to the Kanawha Bend Facility.

D. Remediation Obligations (Kanawha Bend)

The Consent Decree imposes comprehensive remediation obligations at the Kanawha Bend Facility. The estimated total cost of remediation at the Facility is $38.9 million over a 20-year remediation period. The net present value of these remediation costs, calculated at a 3% discount rate, is approximately $29.0 million ($38.9 million × 0.7454 ≈ $29.0 million).

The remediation scope for the Kanawha Bend Facility includes, without limitation:

• Remediation of sulfuric acid residuals in soils across the Facility;

• Remediation of heavy metals contamination (lead and arsenic) in subsurface soils in the vicinity of the former waste lagoon;

• Investigation, characterization, and remediation of DNAPL (chlorinated solvents) in the fractured bedrock aquifer beneath the Facility;

• Proper closure of the former surface impoundment in accordance with RCRA closure requirements and applicable state-authorized program requirements; and

• Long-term groundwater monitoring and institutional controls.

The Consent Decree requires completion of interim stabilization measures at the Kanawha Bend Facility by December 14, 2026. The Kanawha Bend Interim Stabilization Measures Scope of Work and Schedule was prepared on February 18, 2025, and is incorporated into the Consent Decree as Appendix D-2. These interim stabilization measures are designed to mitigate ongoing risks to human health and the environment while the longer-term remediation activities are designed, approved, and implemented.

TMC has retained Pinnacle Creek Environmental, LLC as its environmental remediation consultant for the Kanawha Bend Facility. The lead consultant is Dr. Astrid Bergmann, P.E., Senior Principal, whose principal office is located at 320 Willowbrook Drive, Suite 100, Bozeman, Montana 59715. Pinnacle Creek Environmental has extensive experience with RCRA corrective action sites and complex remediation projects involving DNAPL in fractured bedrock.

E. Supplemental Environmental Project (Kanawha Bend / West Virginia)

The Consent Decree requires TMC to fund and implement a Supplemental Environmental Project ("SEP") specifically benefiting the community surrounding the Kanawha Bend Facility. The SEP consists of the Institute Community Air Quality Monitoring Network, at a cost of $3.0 million. The scope of the SEP encompasses the installation and ten-year operation of six ambient air quality monitoring stations in the Institute and South Charleston areas of Kanawha County, West Virginia. The monitoring stations will provide continuous real-time data on ambient air quality parameters, which will be made publicly available through an online portal.

The total SEP obligation across all four sites covered by the Consent Decree is $12.0 million. The Kanawha Bend SEP represents 25% of the aggregate SEP obligation.

F. Financial Assurance

The Consent Decree requires TMC to establish and maintain financial assurance in the total amount of $245.0 million to guarantee the performance of its remediation obligations across all four sites. The financial assurance is structured as follows:

Surety Bond:

• Amount: $165.0 million

• Issuer: Ironbark Surety of America, Inc.

• Bond Number: ISA-ENV-2025-08934

• Annual premium: 1.85% ($3,052,500 per year)

• The surety bond guarantees the performance of remediation obligations across all four facilities.

Remediation Trust Fund:

• Amount: $80.0 million (initial deposit)

• Trustee: Larchfield Trust Company, N.A.

• Trust Agreement Number: LTC-REM-2025-1177

• Trust Officer: David Henshaw

• The trust fund will be established to hold and disburse funds for remediation activities at all four sites, subject to the terms and conditions set forth in the Trust Agreement.

The Consent Decree requires that the remediation trust fund be established and the financial assurance be posted no later than September 12, 2025. Failure to meet this deadline will result in the imposition of stipulated penalties as set forth in the Consent Decree.

G. Independent Environmental Monitor

The Consent Decree provides for the appointment of a court-designated independent environmental monitor to oversee compliance with the Consent Decree's requirements across all four facilities, including the Kanawha Bend Facility. The independent monitor is Verdant Analytics, Inc., led by Dr. Kamal Osei, Senior Managing Director. Verdant Analytics' principal office is located at 1550 NW Couch Street, Suite 400, Portland, Oregon 97209.

The independent monitor's duties include:

• Conducting quarterly compliance audits at each of the four facilities;

• Preparing and publishing annual public reports summarizing compliance status, remediation progress, and any areas of concern; and

• Reporting directly to the Court and to EPA on compliance matters.

The estimated cost of the independent monitor over the initial five-year term is $4.8 million (approximately $960,000 per year). These costs are borne by TMC and its subsidiaries.

H. Stipulated Penalties

The Consent Decree includes a stipulated penalty provision applicable to violations of the Consent Decree's requirements. The stipulated penalty schedule is as follows:

Stipulated penalties are in addition to any other remedies available to the United States or the co-plaintiff States under the Consent Decree or applicable law.

I. Force Majeure

The Consent Decree contains a standard EPA force majeure provision. In the event that force majeure prevents TMC from complying with any requirement of the Consent Decree, TMC must provide written notice to EPA within fifteen (15) days of the occurrence of the force majeure event. The notice must describe the anticipated duration of the noncompliance, the cause or causes of the noncompliance, the measures taken or to be taken by TMC to minimize the delay and its effects, and a proposed schedule for completing the affected work. Any disputes regarding the applicability of force majeure are to be resolved under the Consent Decree's dispute resolution provision.

J. Dispute Resolution

The Consent Decree establishes a three-tier dispute resolution mechanism for resolving disputes between the parties:

1. Informal Negotiation (30 days): The disputing parties shall attempt to resolve any dispute through informal negotiation for a period of thirty (30) days following written notice of the dispute.

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

3. Judicial Review (30 days to petition): Any party aggrieved by EPA's formal decision may petition the Court for judicial review within thirty (30) days of the issuance of EPA's decision.

K. Termination. The Consent Decree provides for site-by-site termination upon certification of completion by both EPA and the independent environmental monitor. For each site, termination of the Consent Decree's requirements may not occur sooner than five (5) years after the completion of all remedial construction at the relevant site. Upon termination with respect to a particular site, the obligations of the Consent Decree as they relate to that site shall be deemed satisfied, subject to any continuing obligations expressly specified in the Consent Decree.

V. Anticipated Timeline

The following is our current best estimate of the anticipated timeline for the lodging, entry, and initial implementation of the Consent Decree as it pertains to the Kanawha Bend Facility and the Action generally:

These dates are subject to change based on court scheduling, the public comment process, and other factors. We will keep your office apprised of any material changes to this timeline.

VI. Aggregate Financial Summary

For context, we provide below a summary of the aggregate financial obligations under the Consent Decree across all four sites:

TMC has established an environmental remediation reserve of C$340.0 million (approximately US$251.4 million at the prevailing exchange rate of 0.7394 CAD/USD) as of Q3 2024. This reserve is reflected in TMC's most recent public financial filings.

For further context regarding TMC's financial capacity to meet these obligations, we note the following: TMC is a corporation organized under the Canada Business Corporations Act and is dual-listed on the Toronto Stock Exchange (TSX: TRC) and the New York Stock Exchange (NYSE: TRC). TMC's Canadian headquarters are located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, and its U.S. headquarters are located at 750 Copper Ridge Boulevard, Suite 200, Helena, Montana 59601. For fiscal year 2023, TMC reported revenue of approximately C$4.82 billion (approximately US$3.56 billion) and EBITDA of approximately C$1.14 billion (approximately US$843 million). TMC's current market capitalization is approximately C$7.6 billion.

VII. Request for State Permit Coordination

We respectfully request the opportunity to coordinate with the WV DEP regarding the parallel state environmental permit obligations applicable to the Kanawha Bend Facility. As your office is aware, the Consent Decree's remediation requirements will interact with and, in certain respects, be implemented in conjunction with the Facility's existing state-authorized RCRA corrective action obligations under Permit No. WVD048823915. Additionally, the Facility holds or is subject to National Pollutant Discharge Elimination System ("NPDES") permits and other state-authorized permits that may require modification or updating in connection with the remediation activities contemplated by the Consent Decree.

We believe it is essential that the federal Consent Decree requirements and the WV DEP's state-authorized RCRA corrective action program be closely coordinated to avoid duplication, ensure consistency, and promote the efficient use of resources in achieving the shared objective of comprehensive environmental remediation at the Kanawha Bend Facility.

Nathan Tully of Baxter, Tully & Crane PLLC, as TMC's West Virginia-licensed local counsel, will serve as the primary point of contact for all state permit coordination matters. Mr. Tully and his team have extensive experience with WV DEP regulatory processes and are well positioned to facilitate effective communication between TMC, the WV DEP, and the Attorney General's Office.

We are currently preparing a detailed memorandum on state permit coordination and parallel state compliance obligations, which is anticipated to be completed and circulated on or about February 8, 2025. That memorandum will address, among other things, the specific interactions between the Consent Decree requirements and the Facility's existing state permits, and will identify areas where state permit modifications or additional state approvals may be necessary.

We would welcome the opportunity to arrange a meeting or conference call with your office and appropriate representatives of the WV DEP to discuss coordination between the Consent Decree obligations and the WV DEP's corrective action requirements for the Kanawha Bend Facility. Please let us know your availability, and we will work to schedule a mutually convenient time.

VIII. State Co-Plaintiff Joinder

The signature pages and joinder agreement by which the State of West Virginia will formally join the Consent Decree as a co-plaintiff are currently being finalized. We anticipate that these documents will be ready for the State's review and execution by February 14, 2025. We respectfully request your coordination in reviewing and executing the joinder and signature pages on behalf of the State of West Virginia in a timely manner so that the State's joinder can be incorporated into the Consent Decree prior to its lodging with the Court, which is currently scheduled for February 19, 2025.

Should your office or the WV DEP require any additional information, documentation, or clarification in order to complete its review of the joinder and signature pages, please do not hesitate to contact us. We are committed to providing whatever assistance is necessary to facilitate the State's participation in the Consent Decree.

IX. Key Contacts

For your reference, we set forth below the key contacts for the matters discussed in this letter:

Calderwood & Harkness LLP:

Harrison Wexford — Responsible Partner Beatrice Holloway — Billing Partner Elliot Nguyen — Lead Associate Grace Nakamura — Working Associate

28 Liberty Street, 44th Floor New York, New York 10005 Telephone: (212) 558-4000

Torchlight Mining Corp.:

Miriam Soo-Hwan Park — General Counsel Gareth Linford — Vice President, Environmental Health & Safety

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

Local Counsel — Baxter, Tully & Crane PLLC:

Nathan Tully — Lead Partner

500 Lee Street East, Suite 1100 Charleston, West Virginia 25301

Environmental Consultant — Pinnacle Creek Environmental, LLC:

Dr. Astrid Bergmann, P.E. — Senior Principal

320 Willowbrook Drive, Suite 100 Bozeman, Montana 59715

X. Confidentiality and Privilege Reservation

We note that certain information contained in this letter is provided in the context of settlement discussions and is subject to the applicable confidentiality provisions of the Consent Decree and the parties' prior agreements. Nothing in this letter is intended to waive, and TMC expressly reserves, any and all applicable privileges, including without limitation the attorney-client privilege and the work product doctrine, with respect to TMC's internal legal analyses, communications, and deliberations relating to the matters discussed herein. This letter is not intended to, and does not, constitute an admission of liability or fault on the part of TMC or any of its subsidiaries.

\* \* \*

We hope that this summary is helpful, and we look forward to working with your office and the WV DEP to ensure the smooth implementation of the Consent Decree as it pertains to the Kanawha Bend Facility. We are committed to maintaining transparent and cooperative coordination with the State of West Virginia throughout this process.

Should you wish to discuss any aspect of this letter or the enclosed Consent Decree, please do not hesitate to contact me directly at (212) 558-4127 or by email at hwexford@calderwoodharkness.com. I am available at your convenience.

Thank you for your continued attention to this matter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Harrison Wexford Partner Environmental Litigation and Enforcement Group

Direct Telephone: (212) 558-4127

Email: hwexford@calderwoodharkness.com

cc: (via email)

Miriam Soo-Hwan Park, General Counsel, Torchlight Mining Corp. Gareth Linford, Vice President, Environmental Health & Safety, Torchlight Mining Corp. Nathan Tully, Esq., Baxter, Tully & Crane PLLC Philip Orenstein, Esq., Trial Attorney, DOJ Environment and Natural Resources Division Margaret Coulson, Esq., Lead Case Attorney, EPA Office of Enforcement and Compliance Assurance Elliot Nguyen, Esq., Calderwood & Harkness LLP

Enclosure:

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

Installment	Amount	Due Date
First (25%)	$7,875,000	Within 30 days of the Effective Date
Second (25%)	$7,875,000	12 months after entry of the Consent Decree
Third (25%)	$7,875,000	24 months after entry of the Consent Decree
Fourth (25%)	$7,875,000	36 months after entry of the Consent Decree
Period of Violation	Penalty Rate
Days 1–30	$1,500 per day per violation
Days 31–60	$3,000 per day per violation
Day 61 and thereafter	$5,500 per day per violation
Milestone	Date
Consent decree lodged with U.S. District Court	February 19, 2025
30-day public comment period closes	March 21, 2025
DOJ files motion for entry with response to public comments	April 7, 2025
Court hearing on motion for entry (target)	April 28, 2025
Expected entry of consent decree (target)	May 15, 2025
Effective Date (30 days after entry, per § IV of decree)	June 14, 2025
First civil penalty installment due (30 days after Effective Date)	July 14, 2025
Deadline to establish remediation trust fund and post financial assurance	September 12, 2025
Kanawha Bend interim stabilization measures completion deadline	December 14, 2026
Obligation Category	Amount (Nominal)
Total remediation costs (all four sites, over 20 years)	$343,500,000
Total remediation costs (NPV at 3% discount rate)	$245,100,000
Total civil penalties	$31,500,000
EPA past-costs reimbursement	$18,100,000
Supplemental Environmental Projects (all four sites)	$12,000,000

Independent environmental monitor (5 years)	$4,800,000
Grand total (nominal)	$409,900,000
Grand total (NPV / cash equivalent)	$311,500,000

CALDERWOOD & HARKNESS LLP Attorneys at Law
28 Liberty Street, 44th Floor New York, New York 10005
Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com
February 5, 2025
VIA FedEx OVERNIGHT AND EMAIL
Loretta May Hatcher, Esq. Assistant Attorney General Environmental Bureau West Virginia Attorney General's Office 1900 Kanawha Boulevard East Building 1, Room E-26 Charleston, West Virginia 25305
Re: Status Update and Consent Decree Summary — Kanawha Bend Chemical Plant, Institute, Kanawha County, West Virginia; United States of America and State of Montana v. Torchlight Mining Corp., et al., Civil Action No. 9:24-cv-00087-DWM, U.S. District Court for the District of Montana, Missoula Division
Dear Ms. Hatcher:
I. Introduction and Purpose
I write on behalf of Calderwood & Harkness LLP ("C&H") in my capacity as lead outside counsel to Torchlight Mining Corp. ("TMC") and its relevant U.S. subsidiaries in connection with the above-captioned enforcement action. The purpose of this letter is twofold: first, to provide the West Virginia Attorney General's Office and the West Virginia Department of Environmental Protection ("WV DEP") with a comprehensive status update regarding the substantially final consent decree reached by the parties on February 3, 2025, in the matter styled United States of America and State of Montana v. Torchlight Mining Corp., et al., Civil Action No. 9:24-cv-00087-DWM (the "Action"); and second, to summarize the specific terms of that consent decree (the "Consent Decree") as they pertain to the Kanawha Bend Chemical Plant located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112 (the "Kanawha Bend Facility" or the "Facility").
As you are aware, the State of West Virginia participates in the Action as a co-plaintiff and intervenor with respect to the Kanawha Bend Facility, and the WV DEP serves as the state regulatory authority with oversight jurisdiction over the Facility's environmental permits, including its RCRA corrective action permit. We are writing to you in your capacity as the Assistant Attorney General assigned to the Environmental Bureau, who has been the State's lead attorney on this matter.
By way of background on our firm's engagement, C&H was retained by TMC as lead outside counsel for this enforcement action effective October 21, 2024, replacing prior counsel Whitfield, Palmer & Goss LLP. Our internal matter number is 1039-00003. C&H's engagement encompasses overall case management, consent decree negotiation, and coordination of regulatory compliance obligations across all four facilities at issue in the Action.
In addition, TMC has retained Baxter, Tully & Crane PLLC ("BTC") as its local counsel in the State of West Virginia. BTC's offices are located at 500 Lee Street East, Suite 1100, Charleston, West Virginia 25301. The lead partner for this engagement at BTC is Nathan Tully, Esq. Mr. Tully and his team at BTC will serve as the primary point of contact for state-level regulatory coordination, including all interactions with the WV DEP regarding state permit requirements and parallel state compliance obligations.
We express at the outset our sincere desire to coordinate closely and transparently with the West Virginia Attorney General's Office and the WV DEP throughout the implementation of the Consent Decree and the fulfillment of all state-specific regulatory requirements applicable to the Kanawha Bend Facility. We believe that open communication and proactive coordination among all stakeholders will be essential to achieving the environmental remediation objectives that are central to the Consent Decree.
II. Background on the Overall Enforcement Action
The United States Environmental Protection Agency ("EPA"), acting through EPA Region 3 with respect to the Kanawha Bend Facility in West Virginia, together with the United States Department of Justice, Environment and Natural Resources Division ("DOJ ENRD"), initiated the above-captioned enforcement action against TMC and its U.S. subsidiaries. DOJ filed the complaint on January 18, 2024, and the matter was assigned Civil Action No. 9:24-cv-00087-DWM in the United States District Court for the District of Montana, Missoula Division. The case is presided over by the Honorable Donald W. Molloy, Senior United States District Judge.
The complaint names the following defendants:
1. Torchlight Mining Corp. ("TMC"), a corporation organized and existing under the Canada Business Corporations Act ("CBCA"), with its principal Canadian headquarters at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario, Canada M5H 2Y4;
2. Torchlight Mining (U.S.) Inc., a Delaware corporation (EIN 83-2047156), serving as the U.S. holding company for TMC's American operations;
3. Torchlight Specialty Chemicals, Inc., a Delaware corporation (EIN 47-3819204), which is the direct operator of the Kanawha Bend Chemical Plant and is wholly owned by TMC through Torchlight Mining (U.S.) Inc.;
4. Ridgecrest Mine Holdings, LLC, a Montana limited liability company (Montana Secretary of State ID E1042738); and
5. Bonanza Creek Mining, LLC, a Nevada limited liability company (Nevada Secretary of State Entity No. E0518294731).
The enforcement action encompasses four facilities across three states — Montana, Nevada, and West Virginia. The complaint alleges violations of the Clean Water Act ("CWA"), 33 U.S.C. §§ 1251 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. The States of Montana, Nevada, and West Virginia have each joined the Action as co-plaintiffs and intervenors with respect to the facilities located within their respective jurisdictions. The State of West Virginia's joinder relates specifically and exclusively to the Kanawha Bend Facility.
The procedural history of the Action is summarized as follows:
• January 18, 2024: DOJ filed the complaint on behalf of the United States and the State of Montana.
• March 5, 2024: TMC and its co-defendants filed their answer to the complaint.
• April 22, 2024: The parties entered into a tolling agreement, tolling the applicable statutes of limitations through December 31, 2025, to facilitate settlement discussions without prejudice to any party's claims or defenses.
• May 15, 2024: The Court ordered the parties to participate in mediation before United States Magistrate Judge Clara Finnegan.
• July 30, 2024: Following mediation and extensive inter-party negotiations, the parties reached an agreement in principle on the framework for a comprehensive consent decree.
• November 8, 2024: DOJ circulated the first draft of the consent decree text.
• December 16, 2024: TMC submitted its redline of the first draft.
• January 14, 2025: The government circulated its counter-redline in response to TMC's December 16, 2024 submission.
• January 24, 2025: TMC submitted its second redline.
• February 3, 2025: The parties finalized the substantially agreed consent decree text (the "Consent Decree").
The Consent Decree, a copy of which is enclosed with this letter, represents the culmination of over six months of intensive drafting and negotiation. While certain minor ministerial items remain to be completed — including execution of the State of West Virginia's joinder and signature pages — the substantive terms of the Consent Decree are final and agreed among the parties.
III. Kanawha Bend Chemical Plant: Factual Background
For the convenience of your office and to provide context for the Consent Decree terms discussed below, we set forth the following summary of the factual background relating to the Kanawha Bend Facility.
Location and Physical Description. The Kanawha Bend Chemical Plant is situated on approximately 78 acres at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112. The Facility is located within the well-known "Chemical Valley" corridor along the Kanawha River in the vicinity of Institute, West Virginia.
Operations. The Facility has been engaged in chemical manufacturing operations since 1985. Its principal operations include the production of leaching agents used in mining processes and sulfuric acid regeneration. The Facility is currently active and is operated by Torchlight Specialty Chemicals, Inc., a wholly owned subsidiary of TMC through its U.S. holding company, Torchlight Mining (U.S.) Inc.
EPA Regulatory Status. EPA has designated the Kanawha Bend Facility as a RCRA Corrective Action facility under Permit No. WVD048823915. The Facility is subject to corrective action requirements under RCRA and is regulated under the state-authorized RCRA program administered by the WV DEP.
Principal Contaminants of Concern. The environmental contamination at the Kanawha Bend Facility includes the following principal contaminants:
• Sulfuric acid residuals in soils: Extensive soil contamination from sulfuric acid releases has resulted in soil pH levels as low as 1.8 in certain areas of the Facility, particularly in the vicinity of the former surface impoundment and process areas.
• Heavy metals in subsurface soils: Lead concentrations as high as 4,200 mg/kg and arsenic concentrations as high as 890 mg/kg have been detected in subsurface soils in the area proximate to the former waste lagoon. These concentrations substantially exceed applicable risk-based screening levels.
• Dense non-aqueous phase liquid ("DNAPL"): Chlorinated solvents have been detected as DNAPL in the fractured bedrock aquifer beneath the Facility. DNAPL contamination in fractured bedrock presents particular remediation challenges due to the complexity of contaminant transport and fate in fractured media.
Key Environmental Incident. On June 14, 2020, a significant sulfuric acid release from the Facility reached a tributary of the Kanawha River. EPA conducted an emergency response to the release, incurring response costs of approximately $3.8 million. The 2020 incident is one of the principal bases for the enforcement action with respect to the Kanawha Bend Facility.
Alleged Violations. The complaint alleges the following violations with respect to the Kanawha Bend Facility:
• RCRA §§ 3004 and 3005 violations: The complaint alleges that Torchlight Specialty Chemicals, Inc. failed to properly close the former surface impoundment at the Facility in accordance with applicable RCRA closure requirements and engaged in unpermitted treatment of listed hazardous wastes, specifically K062 (spent pickle liquor from steel finishing operations) and D002 (corrosive hazardous waste), in violation of RCRA permitting requirements.
• CERCLA § 107 cost recovery: The United States seeks recovery under CERCLA § 107(a) of the $3.8 million in costs incurred by EPA in connection with the 2020 emergency response to the sulfuric acid release to the Kanawha River tributary.
IV. Summary of Consent Decree Terms Relevant to the Kanawha Bend Facility
The following summary sets forth the material terms of the Consent Decree as they relate to the Kanawha Bend Facility. This summary is intended to be informational and does not purport to be a comprehensive restatement of all terms and conditions of the Consent Decree. In all cases, the Consent Decree itself — a copy of which is enclosed — governs.
A. Case Caption and Parties
The Consent Decree is entered in the matter captioned United States of America and State of Montana v. Torchlight Mining Corp., Torchlight Mining (U.S.) Inc., Torchlight Specialty Chemicals, Inc., Ridgecrest Mine Holdings, LLC, and Bonanza Creek Mining, LLC, Civil Action No. 9:24-cv-00087-DWM, United States District Court for the District of Montana, Missoula Division. The States of Montana, Nevada, and West Virginia are consolidated in the Action as co-plaintiffs with respect to the facilities within their respective jurisdictions.
B. Civil Penalty (Kanawha Bend Allocation)
The Consent Decree provides for a total civil penalty of $31.5 million across all four facilities covered by the Action. Of this total, $3.6 million is allocated to the Kanawha Bend Facility. The civil penalty is payable in four equal installments according to the following schedule, which applies to the aggregate $31.5 million amount (including the Kanawha Bend allocation):
The Consent Decree specifies the payment mechanisms and provides for interest on late payments at the rate established under 28 U.S.C. § 1961.
C. EPA Past-Costs Reimbursement (Kanawha Bend)
With respect to the Kanawha Bend Facility, the Consent Decree requires TMC and its subsidiaries to reimburse EPA in the amount of $3.8 million under CERCLA § 107(a) for costs incurred by EPA in connection with its emergency response to the June 14, 2020 sulfuric acid release to the Kanawha River tributary.
The total EPA past-costs reimbursement obligation across all sites covered by the Consent Decree is $18.1 million, comprising $14.3 million attributable to the Ridgecrest Mine facility in Montana and the $3.8 million attributable to the Kanawha Bend Facility.
D. Remediation Obligations (Kanawha Bend)
The Consent Decree imposes comprehensive remediation obligations at the Kanawha Bend Facility. The estimated total cost of remediation at the Facility is $38.9 million over a 20-year remediation period. The net present value of these remediation costs, calculated at a 3% discount rate, is approximately $29.0 million ($38.9 million × 0.7454 ≈ $29.0 million).
The remediation scope for the Kanawha Bend Facility includes, without limitation:
• Remediation of sulfuric acid residuals in soils across the Facility;
• Remediation of heavy metals contamination (lead and arsenic) in subsurface soils in the vicinity of the former waste lagoon;
• Investigation, characterization, and remediation of DNAPL (chlorinated solvents) in the fractured bedrock aquifer beneath the Facility;
• Proper closure of the former surface impoundment in accordance with RCRA closure requirements and applicable state-authorized program requirements; and
• Long-term groundwater monitoring and institutional controls.
The Consent Decree requires completion of interim stabilization measures at the Kanawha Bend Facility by December 14, 2026. The Kanawha Bend Interim Stabilization Measures Scope of Work and Schedule was prepared on February 18, 2025, and is incorporated into the Consent Decree as Appendix D-2. These interim stabilization measures are designed to mitigate ongoing risks to human health and the environment while the longer-term remediation activities are designed, approved, and implemented.
TMC has retained Pinnacle Creek Environmental, LLC as its environmental remediation consultant for the Kanawha Bend Facility. The lead consultant is Dr. Astrid Bergmann, P.E., Senior Principal, whose principal office is located at 320 Willowbrook Drive, Suite 100, Bozeman, Montana 59715. Pinnacle Creek Environmental has extensive experience with RCRA corrective action sites and complex remediation projects involving DNAPL in fractured bedrock.
E. Supplemental Environmental Project (Kanawha Bend / West Virginia)
The Consent Decree requires TMC to fund and implement a Supplemental Environmental Project ("SEP") specifically benefiting the community surrounding the Kanawha Bend Facility. The SEP consists of the Institute Community Air Quality Monitoring Network, at a cost of $3.0 million. The scope of the SEP encompasses the installation and ten-year operation of six ambient air quality monitoring stations in the Institute and South Charleston areas of Kanawha County, West Virginia. The monitoring stations will provide continuous real-time data on ambient air quality parameters, which will be made publicly available through an online portal.
The total SEP obligation across all four sites covered by the Consent Decree is $12.0 million. The Kanawha Bend SEP represents 25% of the aggregate SEP obligation.
F. Financial Assurance
The Consent Decree requires TMC to establish and maintain financial assurance in the total amount of $245.0 million to guarantee the performance of its remediation obligations across all four sites. The financial assurance is structured as follows:
Surety Bond:
• Amount: $165.0 million
• Issuer: Ironbark Surety of America, Inc.
• Bond Number: ISA-ENV-2025-08934
• Annual premium: 1.85% ($3,052,500 per year)
• The surety bond guarantees the performance of remediation obligations across all four facilities.
Remediation Trust Fund:
• Amount: $80.0 million (initial deposit)
• Trustee: Larchfield Trust Company, N.A.
• Trust Agreement Number: LTC-REM-2025-1177
• Trust Officer: David Henshaw
• The trust fund will be established to hold and disburse funds for remediation activities at all four sites, subject to the terms and conditions set forth in the Trust Agreement.
The Consent Decree requires that the remediation trust fund be established and the financial assurance be posted no later than September 12, 2025. Failure to meet this deadline will result in the imposition of stipulated penalties as set forth in the Consent Decree.
G. Independent Environmental Monitor
The Consent Decree provides for the appointment of a court-designated independent environmental monitor to oversee compliance with the Consent Decree's requirements across all four facilities, including the Kanawha Bend Facility. The independent monitor is Verdant Analytics, Inc., led by Dr. Kamal Osei, Senior Managing Director. Verdant Analytics' principal office is located at 1550 NW Couch Street, Suite 400, Portland, Oregon 97209.
The independent monitor's duties include:
• Conducting quarterly compliance audits at each of the four facilities;
• Preparing and publishing annual public reports summarizing compliance status, remediation progress, and any areas of concern; and
• Reporting directly to the Court and to EPA on compliance matters.
The estimated cost of the independent monitor over the initial five-year term is $4.8 million (approximately $960,000 per year). These costs are borne by TMC and its subsidiaries.
H. Stipulated Penalties
The Consent Decree includes a stipulated penalty provision applicable to violations of the Consent Decree's requirements. The stipulated penalty schedule is as follows:
Stipulated penalties are in addition to any other remedies available to the United States or the co-plaintiff States under the Consent Decree or applicable law.
I. Force Majeure
The Consent Decree contains a standard EPA force majeure provision. In the event that force majeure prevents TMC from complying with any requirement of the Consent Decree, TMC must provide written notice to EPA within fifteen (15) days of the occurrence of the force majeure event. The notice must describe the anticipated duration of the noncompliance, the cause or causes of the noncompliance, the measures taken or to be taken by TMC to minimize the delay and its effects, and a proposed schedule for completing the affected work. Any disputes regarding the applicability of force majeure are to be resolved under the Consent Decree's dispute resolution provision.
J. Dispute Resolution
The Consent Decree establishes a three-tier dispute resolution mechanism for resolving disputes between the parties:
1. Informal Negotiation (30 days): The disputing parties shall attempt to resolve any dispute through informal negotiation for a period of thirty (30) days following written notice of the dispute.
2. Formal EPA Decision (30 days): If the dispute is not resolved through informal negotiation, EPA shall issue a formal written decision within thirty (30) days.
3. Judicial Review (30 days to petition): Any party aggrieved by EPA's formal decision may petition the Court for judicial review within thirty (30) days of the issuance of EPA's decision.
K. Termination. The Consent Decree provides for site-by-site termination upon certification of completion by both EPA and the independent environmental monitor. For each site, termination of the Consent Decree's requirements may not occur sooner than five (5) years after the completion of all remedial construction at the relevant site. Upon termination with respect to a particular site, the obligations of the Consent Decree as they relate to that site shall be deemed satisfied, subject to any continuing obligations expressly specified in the Consent Decree.
V. Anticipated Timeline
The following is our current best estimate of the anticipated timeline for the lodging, entry, and initial implementation of the Consent Decree as it pertains to the Kanawha Bend Facility and the Action generally:
These dates are subject to change based on court scheduling, the public comment process, and other factors. We will keep your office apprised of any material changes to this timeline.
VI. Aggregate Financial Summary
For context, we provide below a summary of the aggregate financial obligations under the Consent Decree across all four sites:
TMC has established an environmental remediation reserve of C$340.0 million (approximately US$251.4 million at the prevailing exchange rate of 0.7394 CAD/USD) as of Q3 2024. This reserve is reflected in TMC's most recent public financial filings.
For further context regarding TMC's financial capacity to meet these obligations, we note the following: TMC is a corporation organized under the Canada Business Corporations Act and is dual-listed on the Toronto Stock Exchange (TSX: TRC) and the New York Stock Exchange (NYSE: TRC). TMC's Canadian headquarters are located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, and its U.S. headquarters are located at 750 Copper Ridge Boulevard, Suite 200, Helena, Montana 59601. For fiscal year 2023, TMC reported revenue of approximately C$4.82 billion (approximately US$3.56 billion) and EBITDA of approximately C$1.14 billion (approximately US$843 million). TMC's current market capitalization is approximately C$7.6 billion.
VII. Request for State Permit Coordination
We respectfully request the opportunity to coordinate with the WV DEP regarding the parallel state environmental permit obligations applicable to the Kanawha Bend Facility. As your office is aware, the Consent Decree's remediation requirements will interact with and, in certain respects, be implemented in conjunction with the Facility's existing state-authorized RCRA corrective action obligations under Permit No. WVD048823915. Additionally, the Facility holds or is subject to National Pollutant Discharge Elimination System ("NPDES") permits and other state-authorized permits that may require modification or updating in connection with the remediation activities contemplated by the Consent Decree.
We believe it is essential that the federal Consent Decree requirements and the WV DEP's state-authorized RCRA corrective action program be closely coordinated to avoid duplication, ensure consistency, and promote the efficient use of resources in achieving the shared objective of comprehensive environmental remediation at the Kanawha Bend Facility.
Nathan Tully of Baxter, Tully & Crane PLLC, as TMC's West Virginia-licensed local counsel, will serve as the primary point of contact for all state permit coordination matters. Mr. Tully and his team have extensive experience with WV DEP regulatory processes and are well positioned to facilitate effective communication between TMC, the WV DEP, and the Attorney General's Office.
We are currently preparing a detailed memorandum on state permit coordination and parallel state compliance obligations, which is anticipated to be completed and circulated on or about February 8, 2025. That memorandum will address, among other things, the specific interactions between the Consent Decree requirements and the Facility's existing state permits, and will identify areas where state permit modifications or additional state approvals may be necessary.
We would welcome the opportunity to arrange a meeting or conference call with your office and appropriate representatives of the WV DEP to discuss coordination between the Consent Decree obligations and the WV DEP's corrective action requirements for the Kanawha Bend Facility. Please let us know your availability, and we will work to schedule a mutually convenient time.
VIII. State Co-Plaintiff Joinder
The signature pages and joinder agreement by which the State of West Virginia will formally join the Consent Decree as a co-plaintiff are currently being finalized. We anticipate that these documents will be ready for the State's review and execution by February 14, 2025. We respectfully request your coordination in reviewing and executing the joinder and signature pages on behalf of the State of West Virginia in a timely manner so that the State's joinder can be incorporated into the Consent Decree prior to its lodging with the Court, which is currently scheduled for February 19, 2025.
Should your office or the WV DEP require any additional information, documentation, or clarification in order to complete its review of the joinder and signature pages, please do not hesitate to contact us. We are committed to providing whatever assistance is necessary to facilitate the State's participation in the Consent Decree.
IX. Key Contacts
For your reference, we set forth below the key contacts for the matters discussed in this letter:
Calderwood & Harkness LLP:
Harrison Wexford — Responsible Partner Beatrice Holloway — Billing Partner Elliot Nguyen — Lead Associate Grace Nakamura — Working Associate
28 Liberty Street, 44th Floor New York, New York 10005 Telephone: (212) 558-4000
Torchlight Mining Corp.:
Miriam Soo-Hwan Park — General Counsel Gareth Linford — Vice President, Environmental Health & Safety
1800 Bayfield Tower, 401 Bay Street Toronto, Ontario M5H 2Y4
Local Counsel — Baxter, Tully & Crane PLLC:
Nathan Tully — Lead Partner
500 Lee Street East, Suite 1100 Charleston, West Virginia 25301
Environmental Consultant — Pinnacle Creek Environmental, LLC:
Dr. Astrid Bergmann, P.E. — Senior Principal
320 Willowbrook Drive, Suite 100 Bozeman, Montana 59715
X. Confidentiality and Privilege Reservation
We note that certain information contained in this letter is provided in the context of settlement discussions and is subject to the applicable confidentiality provisions of the Consent Decree and the parties' prior agreements. Nothing in this letter is intended to waive, and TMC expressly reserves, any and all applicable privileges, including without limitation the attorney-client privilege and the work product doctrine, with respect to TMC's internal legal analyses, communications, and deliberations relating to the matters discussed herein. This letter is not intended to, and does not, constitute an admission of liability or fault on the part of TMC or any of its subsidiaries.
\* \* \*
We hope that this summary is helpful, and we look forward to working with your office and the WV DEP to ensure the smooth implementation of the Consent Decree as it pertains to the Kanawha Bend Facility. We are committed to maintaining transparent and cooperative coordination with the State of West Virginia throughout this process.
Should you wish to discuss any aspect of this letter or the enclosed Consent Decree, please do not hesitate to contact me directly at (212) 558-4127 or by email at hwexford@calderwoodharkness.com. I am available at your convenience.
Thank you for your continued attention to this matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Harrison Wexford Partner Environmental Litigation and Enforcement Group
Direct Telephone: (212) 558-4127
Email: hwexford@calderwoodharkness.com
cc: (via email)
Miriam Soo-Hwan Park, General Counsel, Torchlight Mining Corp. Gareth Linford, Vice President, Environmental Health & Safety, Torchlight Mining Corp. Nathan Tully, Esq., Baxter, Tully & Crane PLLC Philip Orenstein, Esq., Trial Attorney, DOJ Environment and Natural Resources Division Margaret Coulson, Esq., Lead Case Attorney, EPA Office of Enforcement and Compliance Assurance Elliot Nguyen, Esq., Calderwood & Harkness LLP
Enclosure:
Consent Decree — Substantially Final Agreed Text (dated February 3, 2025)
Installment | Amount | Due Date
First (25%) | $7,875,000 | Within 30 days of the Effective Date
Second (25%) | $7,875,000 | 12 months after entry of the Consent Decree
Third (25%) | $7,875,000 | 24 months after entry of the Consent Decree
Fourth (25%) | $7,875,000 | 36 months after entry of the Consent Decree
Period of Violation | Penalty Rate
Days 1–30 | $1,500 per day per violation
Days 31–60 | $3,000 per day per violation
Day 61 and thereafter | $5,500 per day per violation
Milestone | Date
Consent decree lodged with U.S. District Court | February 19, 2025
30-day public comment period closes | March 21, 2025
DOJ files motion for entry with response to public comments | April 7, 2025
Court hearing on motion for entry (target) | April 28, 2025
Expected entry of consent decree (target) | May 15, 2025
Effective Date (30 days after entry, per § IV of decree) | June 14, 2025
First civil penalty installment due (30 days after Effective Date) | July 14, 2025
Deadline to establish remediation trust fund and post financial assurance | September 12, 2025
Kanawha Bend interim stabilization measures completion deadline | December 14, 2026
Obligation Category | Amount (Nominal)
Total remediation costs (all four sites, over 20 years) | $343,500,000
Total remediation costs (NPV at 3% discount rate) | $245,100,000
Total civil penalties | $31,500,000
EPA past-costs reimbursement | $18,100,000
Supplemental Environmental Projects (all four sites) | $12,000,000
Independent environmental monitor (5 years) | $4,800,000
Grand total (nominal) | $409,900,000
Grand total (NPV / cash equivalent) | $311,500,000

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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