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with respect to both Phase 1 and Phase 2 of the Work, except that Phase 2 Work shall be <br /> excluded from the definition of"Work" if Purchaser successfully elects to discontinue its <br /> obligations under this Settlement for Phase 2 Work pursuant to Paragraph 26.c herein. <br /> IV. FINDINGS OF FACT <br /> 9. The Property is located six miles south of the City of Ouray, on land within the <br /> Uncompahgre National Forest, in Ouray County, Colorado. It consists of numerous mining <br /> claims and real property covering approximately 1,200 acres. <br /> 10. Mining activities began at the Camp Bird Mine in 1877 when the first claims were <br /> staked. Silver was discovered the following year. The Camp Bird Mine produced about 1.5 <br /> million troy ounces of gold, and 4 million troy ounces of silver, from 1896 to 1990. Milling <br /> activities began at the Site in the late 1800s. Large quantities of tailings were deposited in cells <br /> that border Sneffels, Imogene and Canyon Creeks, which ultimately combine and flow <br /> downstream to Ouray. <br /> 11. CBCI acquired the Property in 1958 and owned and operated the Property for <br /> over the past 50 years. CBCI applied for and obtained a mining permit from the predecessors of <br /> DRMS in 1982. CBCI undertook reclamation of the tailings cell located on the north side of <br /> Sneffels and Canyon Creeks,placing cover materials on the top and slopes of the tailings piles. <br /> 12. In May 2015, EPA visually inspected the Site. EPA conducted more extensive <br /> sampling on May 27 and 28, 2015. EPA's sampling showed that conditions at the Site present a <br /> variety of environmental problems including, but not limited to, the existence of uncovered mine <br /> waste deposits. These mine waste deposits are roughly bisected by Canyon Creek, with the so- <br /> called"historic tailings" south of Canyon Creek and the "modern tailings"north of Canyon <br /> Creek. Waste materials are being readily eroded into the creek,which, in turn, are loading <br /> significant amounts of heavy metals into the stream system. <br /> 13. EPA's sampling shows there are concentrations of copper, zinc and lead in the <br /> mine waste deposits at the Site, at levels toxic to aquatic life. Copper, zinc and lead are listed as <br /> hazardous substances as defined by Section 101(14) of CERCLA, 42 U.S.C. § 9601(14). An <br /> uncontrolled release of hazardous substances threatens the creek's benthic invertebrate <br /> community and could pose a threat to fish. <br /> 14. In December 2014, CBCI filed for reorganization under Chapter 11 of the <br /> Bankruptcy Code along with its parent corporation, Federal Resources Corporation, in the U.S. <br /> Bankruptcy Court, District of Utah, Central Division. In response, the United States filed a proof <br /> of claim in the Utah bankruptcy court to recover EPA response costs at multiple sites. <br /> 15. On March 23, 2016,the Chapter 11 bankruptcy was converted to Chapter 7, and <br /> Duane H. Gillman was appointed Chapter 7 trustee for Respondent. <br /> 16. Respondent and Purchaser intend to settle their claims against each other in <br /> CBCI's and Federal Resources Corporation's bankruptcy case pursuant to a compromise of <br /> controversies in accordance with Bankruptcy Rule 9019. As part of the settlement, Respondent <br /> 5 <br />