Untangling the ASAOC from Perpetua Resources
View of the Yellow Pine pit and the “cascade” that has served as a fish passage barrier to critical spawning grounds in the upper East Fork South Fork Salmon River drainage for migrating Chinook Salmon. The Yellow Pine pit is also a major source of pollution not addressed in the current ASAOC. Photo credits: Nick Kunath, IRU staff
In July of 2022, Perpetua Resources (formerly Midas Gold) was quick to highlight the start of mitigation work within the Stibnite Mining District outside of Yellow Pine, ID. While we would be glad to see some of the impacts from historical mining addressed, there is much more complexity to this story than is being put forth by Perpetua which raises some interesting questions regarding the motive, reasoning, and purpose behind the work itself. First and foremost, is the work even addressing intended legacy impacts found within Stibnite?
Mining and mineral processing, primarily for gold, antimony, and tungsten have occurred at Stibnite intermittently from the early 1900s through the late 1990s. Through these periods of extraction and processing, the area now contains major sources of pollution impacting ground and surface water. Primarily, this pollution is occurring when clean water infiltrates legacy mine tailings and other waste sources within the site, collecting pollutants as it continues its course downstream. Water and sediment samples collected at Stibnite show elevated levels of antimony, arsenic, mercury, and cyanide. These sources of pollution have been well studied and evaluated by the EPA and other agencies for decades.
Beginning in 2009, Perpetua and its subsidiaries began acquiring patented and unpatented claims within the area and by 2012 held interests in all claims within the Stibnite Mining District. Since acquiring these claims, Perpetua themselves have conducted extensive water sampling and analysis of the site and known sources of pollution.
While there is no dispute that the pollution and legacy impacts in question were not caused by Perpetua, by acquiring these mining claims they also assumed responsibility for the historical sources of pollution originating from these claims. A cornerstone of the plan proposed by Perpetua is to take responsibility for the historical pollution of the site and finally address what has been abandoned by previous mining interests.
The work initiated on July 12th is the result of an Administrative Settlement Agreement and Order on Consent (ASAOC). This agreement is a negotiated settlement between the Environmental Protection Agency (EPA), the United States Forest Service (USFS), and Potentially Responsible Parties (PRP). These types of settlement agreements are part of the Comprehensive Environmental Response, Compensation, and Liability Act (CECLA), more commonly known as Superfund, and are intended to be a tool for the EPA to work toward cleaning up listed superfund sites or to address sites that may qualify to be a listed but have not been officially designated, such as Stibnite.
In the spring of 2019, nearly 10 years after Perpetua began acquiring claims within Stibnite, they finally initiated conversations with EPA to begin the process of establishing some sort of removal action to address the pollution found within their claims.
Around the same time that Perpetua began these conversations with EPA, in August of 2019, the Nez Perce Tribe (NPT) filed a lawsuit against Midas Gold, now Perpetua Resources, for violating the Clean Water Act by allowing known pollution to continue from within the site to discharge into the East Fork South Fork Salmon River (EFSFSR) from several key point sources.
Following litigation brought forward by the NPT, Perpetua petitioned the courts in December of 2019 to dismiss the case outright. After that initiative failed, they again went to the courts hoping to delay the litigation. During this case, Perpetua argued that the case should be stayed while pursuing an ASAOC. However, Judge B. Lynn Winmill, U.S. District Judge for Idaho, disagreed and noted in his denial that, although he has broad discretion to stay proceedings, Midas Gold had not met its burden to stay the litigation. “Midas has simply not offered any evidence that the AOC will be completed in a reasonable time, especially in light of the ongoing environmental harm.”
In an interesting turn of events, Perpetua filed their own lawsuit against the Forest Service in August of 2020 on the same grounds that the NPT used to sue them in an attempt to combine cases and argue that the Forest Service should be held equally liable for the pollution discharged from the site under the Clean Water Act.
In a statement released at the time of the suit, Midas Gold CEO, Laurel Sayer, stated, “This action was a necessary step to protect Midas Gold from being held responsible for alleged water pollution from lands owned and managed by the U.S. Forest Service.”.
This lawsuit against the USFS undermines the very notion that Perpetua is operating in good faith and truly has the best interest of Idaho at heart and is contradictory to their supposed commitment to addressing legacy impacts to the site left by previous operators.
As these cases moved forward, Perpetua continued to work with the EPA to develop an ASAOC, and on January 15th, 2021, during the final days of the Trump administration, the EPA published the ASAOC without opportunity for public review or comment during the drafting process. As a result of this settlement, Perpetua agreed to drop its suit against the Forest Service, who is a signatory to the ASAOC. Despite promises and colorful pamphlets, the agreement itself falls woefully short of providing anywhere near the level of comprehensive cleanup or analysis that this site deserves.
EPA finally provided the general public an opportunity to comment on the agreement after the final draft was released. Idaho Rivers United, along with other coalition partners, provided comments highlighting our concerns.
In response to our comments regarding our concerns with the ASAOC and the end results, EPA themselves stated that “EPA expects water quality improvements to be de minimis,” or negligible to those of us who need a Latin refresher. Despite this fact, Perpetua still holds on to the claim that this work is indeed a solution to water quality issues found within Stibnite.
This prompts the question that if even the EPA does not expect there to be any meaningful impacts on water quality as the result of this agreement, why move forward with it at all? If Perpetua is truly working towards making improvements to this site, why spend millions of dollars on restoration work that is essentially window dressings that fail to have any real impact?
Another aspect of the ASAOC that raises questions is the fact that EPA has classified this agreement as a Time Critical Removal Action. These actions are typically employed when it's determined that a removal action is necessary to protect human health and the environment from releases of hazardous substances, pollutants, or contaminants, and the removal action is required to be performed within six months of that determination.
In technical documents previously provided to the SEC, Midas states, “An extensive set of baseline data demonstrating historic and existing conditions exists for the Project site, including those collected by contractors for the US Forest Service (USFS) and the US Environmental Protection Agency (EPA) that determined there were no unacceptable risks to the environment or human health and that there were no populations (fish, wildlife, or human) shown as having a "likely" risk. In 2009 and 2010, contractors to Midas Gold conducted Phase I and Phase II Environmental Site Assessments; these assessments determined that there were no imminent threats to human health or the environment.1”
While Idaho Rivers United and our partners wholly disagree with the above statements, how can it be justified as time critical when the EPA and Perpetua have known of and analyzed these releases for years and previously determined that there were no unacceptable risks? What is the rationale for the EPA to move forward so quickly and the abrupt reversal of opinion? The only thing that has changed in recent years is the push from Perpetua to acquire permits and move forward with their mining plans.
If one accepts that this ASAOC does indeed qualify as a time critical action, one would also assume that the EPA would have worked with Perpetua to develop a plan that would have a meaningful impact and not be found to be “de minimis”.
In addition to the ASAOC failing to meaningfully address the point sources of pollution at the site, there are serious financial concerns regarding this cleanup work. Perpetua is currently funded exclusively by investor funds. Without any active revenue streams, the costs associated with this work have the potential to fall back on taxpayers if Perpetua decides to walk away from the project as a result of an unfavorable NEPA decision regarding their plan of operations. In an October 2020 draft of the ASAOC, the financial assurance funds required by Perpetua were set at $16.6 million to ensure that work will be completed; the assurance was arbitrarily reduced to $7.5 million in the final ASAOC.
Phase 1 of the ASAOC calls for the creation of lined drainage ditches to prevent clean water from infiltrating contaminated soils found within the site. This ditch will divert water around the Smelter/Hanger flats area near Meadow Creek.
The ASAOC in question is not the first of its kind to address the issues occurring within Stibnite. In 1995, Stibnite Mine Inc. (SMI) entered into an AOC with the EPA to address some of the same sources of pollution that are yet to be addressed today. SMI primarily mined the West End area of Stibnite from 1991-1997. Facing financial pressures, SMI ceased mining in 1997 and finally declared bankruptcy in 1999 without completing the remediation work agreed to within their AOC.
When presented with this timeline there is a clear precedent for Perpetua to have taken more proactive steps to address the known pollution occurring within their claims based on previous AOCs and work done by the Forest Service and to work with the EPA to come to an agreement that would actually have an impact on the water quality and legacy contamination found within their claims.
Circling back to Ms. Sayer’s statement in August of 2020, it begs the question that if Perpetua was willing to go to such great lengths to avoid the responsibility for the pollution found within the site and “to protect Midas Gold from being held responsible,” what will change if the project moves forward?
As we can clearly see from SMI, even when a mine is in operation and potentially generating profit from its operations, mineral prices fluctuate and can ultimately lead to bankruptcy or generally question the feasibility of a project. This reality, combined with the fact that Perpetua’s plans call for dramatically increasing the current footprint of mine operations, their successful push to change Idaho’s bonding requirements, and analyses conducted by EPA and the USFWS that state each of Perpetua's keystone “reclamation” pieces have a high probability of failure2, we are facing a scenario where the current environmental concerns and costs associated with cleanup could get much worse, leaving Idaho and federal agencies on the hook for even more work in the future.
Over and over, Perpetua has stated that they want to do things differently, but actions speak louder than words and it is clear from the actions taken by Perpetua to distance the company from any responsibility that the very nature of their proposed plan provides legitimate reasons for concern, and this is nothing more than business as usual.
Sources: https://www.sec.gov/Archives/edgar/data/1526243/000110465920107786/tm2030638d1_ex99-1.htm
Stibnite Gold Project Draft Environmental Impact Statement, Forest Service, Region 4, Payette and Boise National Forests, Valley County, Idaho, August 2020, Appendix J3, page 6
