Free Statement - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Honorable Marcia S. Krieger Civil Action No. 00-cv-02325-MSK-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, v. CRIPPLE CREEK & VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORPORATION, ANGLOGOLD ASHANTI NORTH AMERICA, INC., and GOLDEN CYCLE GOLD CORPORATION, Defendants, and Civil Action No. 01-cv-02307-MSK-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, v. CRIPPLE CREEK & VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORPORATION, ANGLOGOLD ASHANTI NORTH AMERICA INC., and GOLDEN CYCLE GOLD CORPORATION, Defendants. ___________________________________________________________________________ DEFENDANT GOLDEN CYCLE GOLD CORPORATION'S SEPARATE AND ADDITIONAL CLOSING STATEMENT ___________________________________________________________________________

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1. Golden Cycle Gold Corporation (hereinafter AGolden Cycle@) is one of four defendants in this case. The other defendants are AngloGold Ashanti (Colorado) Corporation, AngloGold Ashanti North America, Inc., and Cripple Creek & Victor Gold Mining Company (hereinafter, collectively, the AAngloGold Defendants@). This statement is respectfully submitted by Golden Cycle at the close of evidence as to liability and after a Rule 52(c) motion (still pending). JOINT AND SEPARATE DEFENSES 2. Golden Cycle joins the AngloGold Defendants in their defenses to the claims made by the plaintiffs, Sierra Club and Mineral Policy Council (hereinafter APlaintiffs@), and asks that all claims of liability asserted against all Defendants be denied and the case dismissed, with prejudice. Furthermore, as stated in the Amended Final PreTrial Order (Document # 276), Golden Cycle has asserted as separate and additional defenses with respect to each claim in this case that APlaintiffs cannot prove that Golden Cycle is liable as an owner, operator, discharger or otherwise.@ 3. Golden Cycle submits this separate and additional closing statement in support of those separate and additional defenses and, whether the claims of the Plaintiffs against the other defendants are dismissed or not, Golden Cycle asks that all claims of liability made in this case against Golden Cycle be dismissed and judgment entered for Golden Cycle on these separate and additional defenses as well. INTRODUCTION TO THE SEPARATE DEFENSES 4. Plaintiffs commenced this action pursuant to 33 U.S.C. ' 1365(a) of the Clean Water Act, under sections 1311(a) and 1342 of that Act. Plaintiffs have the burden to show that this Court has jurisdiction. See Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d 1133, 1139-1141 (10th Cir. 2005) (hereinafter the AEl Paso case@), as to which a petition for certiorari is pending (No. 05-933, Jan. 19, 2006).

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THE CLEAN WATER ACT STATUTES 5. The Clean Water Act is summarized in the first paragraph of the El Paso case, supra, at 1135, as prohibiting Athe discharge of any pollutant from a point source unless authorized by a permit issued under the National Pollutant Discharge Elimination System@ (ANPDES@), the Adischarge of a pollutant@ being defined in that Act as Aany addition of any pollutant to navigable waters from any point source,@ citing 33 U.S.C. '' 1342 and 1362(12). Such a discharge without an NPDES permit, or in violation of the limitations established in such a permit, Aof any pollutant by any person shall be unlawful.@ 33 U.S.C. ' 1311(a) (emphasis added). 6. The term Aperson@ is defined in the Clean Water Act, ' 1362(5), to mean, among others, Aan individual, corporation, partnership, [or] association.@ Except for the defendant Cripple Creek & Victor Gold Mining Company (hereinafter ACC&V@), all the defendants are corporations. CC&V is an association--a joint venture--which is, for many purposes, considered a partnership under Colorado law. But Aone joint adventurer may act for the others only in matters relating to the object for which the joint venture was formed.@ Bushman Construction Co. v. Conner, 307 F.2d 888, 893 (10th Cir. 1962), applying Colorado law. ARGUMENT 7. At all times here pertinent, CC&V has been the owner of the land and the nominal operator of the joint venture between Golden Cycle and the defendant AngloGold Ashanti (Colorado) Corporation (hereinafter AAngloGold Colorado@). As manager of CC&V, which has no employees of its own, AngloGold Colorado is in fact the operator, using its employees, employees of the Defendant AngloGold Ashanti North America, Inc., and, from time to time, contractors and other providers of personnel and services. Exh. 385. 8. The term Aowner or operator@ is defined in the Clean Water Act, 33 U.S.C. ' 1321(a) (6), Afor the purpose of this section [1321],@ but not in the general definition section of that Act,

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section 1362, applicable to section 1342, at issue in this case. Section 1321 and, particularly, its subsection 1321(a) (6), relate only to oil and hazardous-substances from vessels, and onshore and offshore facilities, as defined also in subsections 1321(a) (10) and (11) for the purposes of that section 1321. The regulations, however, in 40 C.F.R. ' 122.2, do define Aowner or operator@ to mean Athe owner or operator of any >facility or activity= subject to regulation under the NPDES program,@ and in a few, not many, situations the cases find owner liability where no operator can be identified. See, e.g., the El Paso case, supra, 432 F.3d at 1141-1146. 9. Golden Cycle, however, is neither the owner, nor the operator, by any definition. 10. What does matter is responsibility, in the dictionary sense of liability and accountability. Which of the defendants, if any, is in command and has control of an unlawful discharge? 11. Plaintiffs have in these consolidated cases pursued Golden Cycle liability for more than five years now, but the unlawful acts, if any, of which Plaintiffs complain are not the result of any act of Golden Cycle or of any failure to act by Golden Cycle. 12. Golden Cycle is not the Aperson@ as defined in the Clean Water Act which discharged any pollutant from a point source into navigable waters or for that matter, state waters under COLO. REV. STAT. ' 25-8-601 (2005), without a permit. 13. Golden Cycle is not the Aperson@ as so defined which failed to comply with any permit condition or which discharged any pollutant in excess of effluent limitations fixed by a permit. 14. Golden Cycle is not the Aperson@ as so defined responsible for any such act. Golden Cycle can neither manage nor control what is done. 15. Golden Cycle is neither the owner of nor able to enter upon any of the land here involved, either to prevent or to correct what is done by the owner of that land.

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16. In sum, Golden Cycle can command nothing to meet the demands either of the Clean Water Act or the Plaintiffs. 17. It appears, after seven days of trial, that Plaintiffs expect the Court to find Golden Cycle liable simply because it is the owner of a 33% interest in the joint venture which is the owner of the land, and despite the fact that AngloGold Colorado is the owner of the other 67% interest in that joint venture, and its manager. As Manager, AngloGold Colorado is, in fact, the operator and the Aperson@ as defined by the Clean Water Act which is responsible for every act or failure to act which caused every discharge, if any, of pollutants from a point source into navigable waters or state waters without a permit. Likewise, AngloGold Colorado is the manager which failed, if any person failed, to comply with any permit condition or which discharged, if any person discharged, any pollutant in excess of effluent limitations fixed by any permit. 18. AngloGold Colorado is in fact the only Aperson@ as so defined which can manage and control what is done. It can and does occupy the land here involved and can either prevent or correct what is done on that land. In sum, AngloGold Colorado can command and control everything necessary to meet the demands either of the Clean Water Act or of the Plaintiffs. 19, Notwithstanding all of that, Plaintiffs continue to assert that Golden Cycle is jointly and severally liable with AngloGold Colorado simply because the owner-operator, CC&V, as controlled by AngloGold Colorado, is a joint venture and therefore a partnership under Colorado law, any minority partner in which is said to be liable without fault for the unlawful acts, if any, shown to have been the fault of the majority partner. Plaintiffs have cited no Clean Water Act authority in support of such an unjust result, and they ignore the express provisions of the Joint Venture Agreement between AngloGold Colorado and Golden Cycle. The Joint Venture Agreement 20. The Joint Venture Agreement, Exh. 533, provides that:

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20.01 The relationship between the AParticipants@ in the joint venture, collectively, AngloGold Colorado, as successor to Pikes Peak Mining Company, a Delaware corporation (sometimes hereinafter APikes Peak@), and Golden Cycle, according to Exh. 533, ' 1, pp. 1-2, Ashall be governed exclusively by the terms of this Agreement and by the applicable and relevant laws of the State of Colorado.@ Id., ' 2.1, p. 8. See also id., ' 14.4, p. 82. 20.02 The mining and related purposes of the Joint Venture are described in Exh. 533, ' 2.3, p. 9, and the 33% / 67% relationship between the Participants is described as it has been from the beginning. Id., ' 3.6, p. 14. 20.03 Contributions of property by Golden Cycle and of cash by Pikes Peak, now AngloGold Colorado, during the Initial (and still continuing) Phase are described in Exh. 533, '' 3.3 and 3.4, pp. 13-14. The AInitial Phase@ is defined, id., ' 1, p. 4, as ending at such time as the initial loans of cash to cover amounts required of Golden Cycle=s 33% interest are repaid. 20.04 Governance of the Joint Venture by Management Committee is described in detail in Exh. 533, '' 4.1 - 4.5, pp. 24-29. Technical meetings are also described. Id., ' 4.6, pp. 29-30. 20.05 AEach Participant . . . shall have a vote on the Management Committee equal to that Participant=s Share.@ Exh. 533, ' 4.2, p. 25. AShare@ means the percentage interest of each Participant in the Joint Venture. Cf. id., ' 1, p. 8, at AShares@. 20.06 Decisions Amade by the Management Committee shall be by majority vote of the Shares,@ Exh. 533, ' 4.2, p. 25, except as to matters requiring Athe vote of 100 percent of the Shares.@ Id., ' 4.5, pp. 27-29. The only matter requiring such a unanimous vote pertinent in this case is described in id., ' 4.5(b) (ix), p. 29, as A[a]ny settlement or adjustment of any suit or claim involving the Joint Venture for an amount in excess of $100,000.@ To withhold consent and thereby prevent settlement or adjustment on terms acceptable to the other Participant is to assume all amounts Ain excess of the amount for which consent was withheld, plus all attorneys= fees@ thereafter. Id.

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20.07 Management of the Joint Venture by the Manager is described in detail in Exh. 533, ' 5, pp. 30-39. See, particularly, id., ' 5.4(f), p. 34 (maintain, Aoperate and protect the Joint Venture Assets@); id., ' 5.4(g), p. 34 (AAll employees shall be employees of the Manager or one of its Affiliates and not employees of the Joint Venture@); id., ' 5.4(r), p. 36 (compliance with all laws, Aincluding particularly laws relating to the environment@); id., ' 5.4(x) (Aapply for and obtain such authorizations, . . . permits, . . . and consents from the State of Colorado and other . . . governmental authorities which may be required@), and id., ' 5.4(y), p. 38 (take reasonable precautions in connection with Joint Venture operations Afor the safety of employees and the public@). As to the definition of AAffiliate@ see Exh. 533, ' 1, p. 2. 20.08 The standard of conduct is prescribed in Exh. 533, ' 5.5, p. 38-39, for acts by the Manager. The manager is not required to obtain the joint approval of both Participants Abefore taking any action pursuant to this Agreement, except with respect to those matters expressly requiring unanimous consent of the Management Committee under Section 4.5(b)@ of the Agreement. 20.09 AThe Joint Venture Assets are and shall be owned by the Joint Venture, and no Participant shall have any individual ownership in the Joint Venture Assets. Title to all the Joint Venture Assets shall be held in the Joint Venture name unless otherwise unanimously agreed by the Management Committee.@ Exh. 533, ' 6.1, p. 39. 20.10AAs between the Participants the obligations of each Participant under this Agreement and in respect of the Joint Venture shall be in every case several and shall not be, nor be construed to be, either joint or joint and several. The Participants do not intend that the Agreement create any mining partnership, association or other relationship other than a partnership under the Colorado Uniform Partnership Act for the limited purposes set forth in this Agreement and a tax partnership or joint venture under the provisions of the Internal Revenue Code of 1986, as amended. Nothing contained in this Agreement shall be deemed to (i) create a

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general partnership between the Participants for any purpose other than the limited Joint Venture Purposes set forth in Section 2.3, . . . [or] (iii) constitute a Participant an agent or legal representative of any other Participant or to create any fiduciary relationship for any purpose whatever . . . . Except as otherwise specifically provided in this Agreement, a Participant shall not have any authority to act for, or to assume any obligation or responsibility on behalf of, any other Participant or the Joint Venture. Each Party shall be responsible for only its own obligations under this Agreement and shall be liable only for its share of costs and expenses as provided in this Agreement.@ Exh. 533, ' 6.2, pp. 39-40. Cf. id., ' 6.4, p. 41 (partnership created Afor federal and state income tax purposes@). 20.11 There is not even any right to partition Joint Venture Assets. Exh. 533, ' 6.3, p. 40. 21. Exhibits in this case illustrate the relationship between Golden Cycle, AngloGold Colorado, and CC&V. The two investors meet in the third entity, but not as equals. Management is by committee of the two, which convenes regularly, primarily to allow the Manager, AngloGold Colorado, to report to Golden Cycle, and a separate technical committee also convenes regularly for the same purpose. Minutes of the meetings of both committees are prepared over the signature of one of AngloGold Colorado=s officers and delivered by AngloGold Colorado to Golden Cycle. An officer of Golden Cycle signs the minutes, for the record, both to affirm receipt and to confirm that the minutes are accurate. Golden Cycle keeps copies of the minutes as part of its business records. Exh. 80, 420, and 421. The relationship is clear: The majority owner reports to the minority owner and the minority owner is allowed to ask questions and make suggestions, whereupon any required action is approved either by unanimous consent or by the majority vote of the majority owner. The distinction is best illustrated by an expansion plan proposed by AngloGold Colorado and opposed by Golden Cycle, culminating in a vote by shares won, of course, by AngloGold Colorado. Exh. 80 at 002698.

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22. When a 100 percent vote is required under the Joint Venture Agreement, for any reason allowed by Exh. 533, ' 4.5, pp. 25-29, an officer of Golden Cycle signs for CC&V with an officer of AngloGold Colorado. An example of this is Exh. 385 (and even in that case, Golden Cycle executed at the foot of a letter on CC&V/AngloGold Colorado stationery). 23. But Golden Cycle's participation in the Joint Venture is rarely acknowledged and seldom identified: The record is replete with examples of the rigorous way in which this division of power, control and responsibility is evidenced to all who deal with CC&V. See, e.g., Exh. 21, stationery dated March 29, 1994, describing CC&V as AA Joint Venture - Pikes Peak Mining Company, Manager@; Exh. 385, stationery dated August 21, 2002, describing CC&V as AA Joint Venture - ANGLOGOLD (COLORADO) CORP., Manager@; see also Exh. 230, which is an example of the use of AngloGold Colorado stationery for CC&V purposes, and Exh. 422 at 006565 and Exh. 423 at 006569, the former an April 15, 2003, letter from Mr. Komadina to Mr. Hampton, describing AngloGold Colorado as a Awholly owned subsidiary of AngloGold Limited@ and the latter a July 30, 2003, letter from Mr. Ewigleben to Mr. Hampton, advising that Pikes Peak Mining Company is Anow AngloGold (Colorado) Corp.@ 24. Exh. 73 and Exh. 57 are, again respectively, the ACombined Complaint and Consent Agreement@ between CC&V, AngloGold Colorado, Golden Cycle, and the U.S. Environmental Protection Agency, and the AAdministrative Order on Consent@ between CC&V, AngloGold Colorado, Golden Cycle, and the Water Quality Control Division of the Colorado Department of Public Health and Environment. Plaintiffs evidently consider these two documents evidence of Golden Cycle liability in this case as if in control of CC&V equivalent to the admitted control of CC&V by AngloGold Colorado. Besides the fact, as noted earlier, that agreement by AngloGold Colorado in behalf of CC&V to pay a penalty in excess of $100,000.00 requires Golden Cycle consent under Exh. 533, ' 4.5(b) (ix), p. 29, any reading of the Combined Complaint Agreement and the Consent and the Administrative Order on Consent discloses both that they are settlement

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agreements and that CC&V, and therefore AngloGold Colorado, are the owner and operator actually responsible for past discharges and future compliance. As settlement agreements, they cannot in this case be evidence of fault and by their express terms do not prejudice Golden Cycle. Exh. 73, p. 2, && I(6) and (8), and p. 12, & II(23), and Exh. 57, p. 4, & I(4); , p. 5, & I(10); pp. 6-7, & I(12); p. 7, && I(14) and (15), and p. 17, & IX(47). Indeed, for the purposes thereof, both Agreements fix owner/operator responsibility on CC&V. Exh. 73, p. 3, && II(11) (ACC&V owns and operates . . . the Mine@); (12) (ACC&V has owned and operated the Mine since at least 1994@), and (15) (AngloGold Colorado Aoperates the Mine@), and Exh. 57, p. 8, && I(19) and III(21); p. 9, & III(25); p. 15, && VI(38) and (39) (Aentity controlled by CC&V@), and p. 16, & VII(42) (ACC&V shall remain solely responsible for compliance@), and p. 17, &IX(45) (ACC&V is responsible for achieving and maintaining compliance@). See also id. at p. 15, & VI(38) (force majeure Adoes not include CC&V=s financial inability to perform any requirement under this Order@). The Undisputed Testimony 25. Golden Cycle is a A33 percent equity partner@ in CC&V. (Hampton: 2/16 at 3:24 to 4:4) 26. Golden Cycle contributed assets to CC&V over time. (Hampton: 2/16 at 4:5 to 5:2) 27. The CC&V Management Committee has exclusive authority to determine all management matters related to the CC&V Joint Venture Agreement, including environmental issues regarding virtually all areas of the permit and environs. (Hampton: 2/16 at 5:15 to 5:18 and at 6:1 to 6:10) 28. Mr. Hampton signs and Golden Cycle maintains copies of Management Committee minutes. (Hampton: 2/16 at 7: 2 to 7:7) 29. The Pikes Peak Mining Company is now AngloGold Colorado. (Hampton: 2/16 at 11:9 to 11:15)

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30. Golden Cycle=s office is in Colorado Springs, in El Paso County. (Hampton: 2/16 at 12:14 to 12:15) 31. Neither Golden Cycle nor Mr. Hampton office in Teller County, Colorado. (Hampton: 2/16 at 12:16 to 12:19) 32. Golden Cycle has two full-time employees, Mr. Hampton and his assistant. (Hampton: 2/16 at 12:20 to 12:24) Exploration is supervised by a corporate officer who works out of his home in Nevada. (Hampton: 2/16 at 13:3 to 13:4) 33. Mr. Hampton himself has no education or experience in environmental sciences. (Hampton: 2/16 at 13:8 to 13:10) 34. The Joint Venture Manager handles all the technical operations of the joint venture and pays the people who do the work. (Hampton: 2/16 at 13:11 to 13:16) 35. The Joint Venture does not pay Mr. Hampton for any service. (Hampton: 2/16 at 13:17 to 13:18) 36. The Joint Venture makes a $ 250,000.00 minimum annual distribution to Golden Cycle each January 15th, which is considered an advance against future distributions when the Venture becomes profitable, the initial loans are paid off, and AngloGold Colorado has recovered the money paid in advance to Golden Cycle, which is sometime yet very distant in the future. (Hampton: 2/16 at 13:18 to 15:3) See also Exh. 533, ' 7.5.1, pp. 49-50. 37. The Joint Venture acquired property from Golden Cycle at different times. (Hampton: 2/16 at 15:4 to 15:25) 38. The property acquired by the Joint Venture from Golden Cycle will not come back to Golden Cycle at any time in the future. (Hampton: 2/16 at 16:1 to 16:9); Exh. 533, '' 13.2 and 13.3, pp. 78-79.

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39. When Mr. Hampton signs the minutes of joint venture committee meetings, he is acknowledging that they are the minutes that the Manager, not Mr. Hampton, has written recording the gist of the discussions during the meeting. (Hampton: 2/16 at 16:10 to 17:3) 40. Golden Cycle has only the ability to bring problems to the attention of the Manager; it can itself do nothing to prevent discharges of pollutants from the property, though it can make suggestions to the Manager. (Hampton: 2/16 at 17:5 to 17:18) 41. Mr. Hampton has made suggestions to the Manager on many subjects and his opinions carry weight, but ultimately management decisions rest with the Management Committee, where the members vote in accordance with their equity shares, and it has happened on occasion that Mr. Hampton votes Golden Cycle=s 33 percent and AngloGold Colorado will vote its 67 percent. (Hampton: 2/16 at 17:13 to 18:2) When Golden Cycle's representatives disagree with AngloGold Colorado's representatives, and the votes are cast, the vote of AngloGold Colorado is always conclusive. See, e.g., Exh. 80, p. 002698, at & II(B) (AngloGold Colorado 2 votes in favor; Golden Cycle 1 vote opposed; the proposal "will proceed by majority vote of 2 (in favor) to 1 (opposed)"). 42. Mr. Hampton has limited environmental expertise and has taken no steps since roughly 2002 to prevent the management of CC&V from undertaking any particular environmental solutions to problems that AngloGold Colorado=s technical staff recommends. (Hampton: 2/16 at 17:17 to 17:18 and at 18:3 to 18:7) Colorado Joint Venture Law 43. The Colorado Uniform Partnership Act of 1997, COLO. REV. STAT. ' 7-64-305(1) (2005), provides that: A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a person acting in the ordinary course of business of the partnership or with authority of the partnership.

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and, id. ' 7-64-306(1) (emphasis added), provides that: Except as otherwise provided in this section, all partners are liable jointly and severally for all partnership obligations unless otherwise . . . provided by law. This most recent expression of legislative intent reminds us that partners are liable jointly and severally for all partnership obligations unless otherwise provided by law, and the Clean Water Act, as will be seen, clearly Aotherwise provides by law@ even if the wrongful act or omission, or other actionable conduct, occurred in the ordinary course of business or with the authority of the partnership. That is, the partnership may be liable, but the partners not causing the wrongful act or omission, or other actionable conduct, are not jointly and severally liable therefor because controlling law provides otherwise. 44. CC&V was created under the much earlier Colorado Uniform Partnership Law of 1931, COLO. REV. STAT. ' 7-60-113 (2005), as amended, which provides that: Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of the other partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same intent as the partner so acting or omitting to act. and, in id. ' 7-60-115(1) (a), provides that: . . . all partners are liable . . . jointly and severally for everything chargeable to the partnership under section . . . 7-60-113 . . . . That is, neither the partnership nor the partners not causing the wrongful act, omission, or other actionable conduct, are jointly and severally liable for wrongful acts or omissions of any partner acting neither in the ordinary course of the business of the partnership nor with the authority of the other partners. 45. The real questions in such cases are whether the unlawful acts or omissions of one partner, such as those asserted by the Plaintiffs, can occur either in the ordinary course of

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business of the partnership or with the authority of the other partners, and thereby impose liability without fault upon either the partnership or the other partners. In the case of joint ventures and in the words used by the Colorado Court of Appeals in the Mattox & O=Brien case, cited by the Plaintiffs in their Trial Brief at page 24: A joint venture is a partnership formed for a limited purpose, and the acts of one joint venturer are binding upon other joint venturers if those acts pertain to matters within the scope of the joint venture and the joint venturer had authority to act. Bebo Construction Co. v. Mattox & O=Brien, P.C., 998 P.2d 475, 477 (Colo. App. 2000) (emphasis added). In that case, the joint venturer having the majority interest in the venture, Bebo Construction, was the actor, and attempted to avoid liability for its own acts on the ground that the joint venture was itself an unlawful association between the construction company and a law firm. That is hardly pertinent here. 46. More pertinent is the treatise, PARTNERSHIP LAW AND PRACTICE, by Collison & Sullivan, Colorado attorneys, which states that most cases Ahold that only the culpable partners are responsible,@ unless the non-culpable partners had prior knowledge of the acts, for intentional torts and Afor any penalties@ resulting from a partner=s act in the ordinary course of a partnership=s business, and thus when Aa fine or other penalty is imposed,@ courts can Aat least theoretically@ and, especially under Section 13 of the older Act [Colo. Rev. Stat. ' 7-60-113 (2005)], sometimes do, hold the partnership liable for the fine. J. WILLIAM COLLISON & MAUREEN A. SULLIVAN, PARTNERSHIP LAW AND PRACTICE, '' 8.38 - .39, at pp. 8-50 to 8-51 (2004). In that case, of course, Golden Cycle=s investment in the joint venture would be at risk, because all of the assets of the joint venture are owned by CC&V. 47. But no authority cited by the Plaintiffs supports their assertion that in a Clean Water Act case such as this Golden Cycle is ipso facto liable if the joint venture owns the land and the

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joint venture manager and operator is in complete control of the acts and omissions resulting ultra vires in violations of the Clean Water Act. See Bushman Construction Co. v. Conner, supra, 307 F.2d at 893 (applying Colorado law), and 46 AM. JUR. 2d, Joint Ventures, ' 42, at 73 (1994) (joint venturer not liable for result of an unlawful act). 48. Indeed, the only other authority cited by the Plaintiffs, in their Trial Brief at pages 2425, is Natural Resources Defense Council v. Texaco Refining & Marketing, Inc., 719 F. Supp. 281, 283 and 290-291 (D.Del. 1989), vacated and remanded, 906 F.2d 934 (3rd Cir. 1990), relief granted, 800 F. Supp. 1 (D.Del. 1992), aff=d in part, rev=d in part, and remanded, 2 F.3d 493 (3rd Cir. 1993), consent decree enforced, 20 F. Supp. 2d 700 (D.Del. 1998). In that case, the joint venture was a 50/50 joint venture, and each of the two venturers appointed half of the members of the joint venture management committee. Even though Texaco was the sole permittee and the operator when the violations occurred and when the plaintiffs' notice of intention to sue was served, Texaco moved for summary judgment, arguing that its later transfer of the ownership and operation of the facility and the reissuance of the permit to its successor joint venture rendered the plaintiffs= claims moot. The court refused to grant relief against only the Acurrently named@ permit holder, and could hardly do otherwise on those facts so dissimilar to the facts in this case. 49. It is, then, the Clean Water Act, rather than the association in CC&V of Golden Cycle with AngloGold Colorado, which fixes liability, if any, in this case. Substance, not form, is the central point in all of the relevant authorities arising under the Clean Water Act. Thus, Adischarge@ is the issue, and control--in the case of a permitted discharge--or prevention--in the case of an unpermitted discharge--determine who shall be held responsible for violations of the Act. In other words, responsibility defines liability, and actual ownership of the land where the discharge occurs determines responsibility where there is no identifiable discharger. This last is the plain meaning of the El Paso case, supra, 421 F.3d at 1141-1146, in which the Court rejected

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the argument that purely passive land owners cannot be liable for discharges of pollutants from their land under the Clean Water Act, 33 U.S.C. ' 1311(a). 50. But just as it is clear that the Clean Water Act reaches owners if dischargers cannot be identified, it is also clear that Apersons@ who discharge are responsible under the Act without regard to ownership. The Act, after all, does not refer to Aowners@ and Aoperators@ in the section of the Act relating to the NPDES program, and the definition found elsewhere in the Act, and in the Regulations, is artificial in the NPDES context, though occasionally accepted as a last resort, as in the El Paso Gold case, supra. But if there is an identifiable and responsible discharger, and the court has jurisdiction, the statutory inquiry ends there. 51. In the words of our Circuit, Golden Cycle cannot be responsible for the Adrips@ from a Aleaky faucet@ which Golden Cycle neither owns nor controls and cannot fix because it has no possessory interest in or access to the land where the faucet is. See the El Paso case, supra, 421 F.3d at 1145. 52. Familiar caselaw makes clear that it is the amount of involvement and control which is determinative. See Apex Oil Co. v. United States, 530 F.2d 1291, 1293 (8th Cir. 1976). The regulatory provisions are written so as to make the person responsible for the discharge of any pollutant strictly liable. United States v. Lambert, 915 F. Supp. 797, 802 (S.D.W.Va. 1996). The Clean Water Act imposes Aliability both on the party who actually performed the work and on the party with responsibility for or control over performance of the work.@ United States v. Earth Sciences, Inc., 599 F.2d 368, 374 (10th Cir. 1979). Persuaded by the reasoning of the Tenth Circuit in Earth Sciences, the United States District Court for the District of Montana put the matter clearly and cleanly, when it said in Beartooth Alliance v. Crown Butte Mines, 904 F. Supp. 1168, 1175 (D.Mont. 1995), that an entity is an operator of a facility where it has the power or capacity to (i) make timely discovery of discharges, (ii) direct the activities of persons who control the mechanisms causing the pollution, and (iii) prevent and abate damage.

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AngloGold Colorado has that power and that capacity. Golden Cycle has neither any such power nor any such capacity. CONCLUSION 53. Plaintiffs point to no authority holding liable under the Clean Water Act a minority equity owner in an owner of land from which the landowner and an operator, which is also the majority equity owner of the landowner, has unlawfully discharged pollutants. Nor is there any reason to make such law where the actual landowner and, furthermore, the true operator which actually has supermajority control of the landowner and is in command and has control of unlawful discharges, are both parties to the case. There can be no question that the responsible parties are present. Since the landowner can act only through and with the consent of its majority owner, it is not clear that the landowner is responsible. Indeed, there is not only no preponderance of proof on this or any other issue in this case, but in this instance no proof at all. It is clear in any case that that the minority owner of the landowner is not responsible and that the case against the Defendant Golden Cycle Gold Corporation should therefore be dismissed and judgment entered for this defendant.

DATED this 6th day of March, 2006. Respectfully submitted, s/ Don H. Sherwood Don H. Sherwood Attorney at Law 10861 West 28th Place Denver, Colorado 80215-7114 Telephone: (303) 233-0335 E-mail: [email protected] Attorney for Defendant Golden Cycle Gold Corporation

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CERTIFICATE OF SERVICE I hereby certify that on this 6th day of March, 2006, I electronically filed the foregoing SEPARATE AND ADDITIONAL CLOSING STATEMENT FOR DEFENDANT GOLDEN CYCLE GOLD CORPORATION with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: John M. Barth P.O. Box 409 Hygiene, CO 80533 [email protected] Craig R. Carver Carver, Kirchhoff, Schwarz, McNab & Bailey, P.C. 1600 Stout Street, Suite 1700 Denver, CO 80202 [email protected] Eugene J. Riordan Lisa C. Ledet Vranesh & Raisch, LLP P.O. Box 871 Boulder, CO 80306-0871 [email protected] [email protected] Randall M. Weiner Law Offices of Randall M. Weiner, P.C. 1942 Broadway, Suite 408 Boulder, CO 80302 [email protected]

Roger Flynn Jeffrey C. Parsons Western Mining Action Project P.O. Box 349 Lyons, CO 80540 [email protected]

Robert C. Troyer Hogan & Hartson, L.L.P. 1200 17th Street, Suite 1500 Denver, CO 80202 [email protected]

s/ Don H. Sherwood Don H. Sherwood

GCGC:03/06/2006:DHS

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