XS Platinum and Five Corporate Officials Indicted for Illegal Discharges from the Platinum Creek Mine and for False Statements to Federal Officials

XS Platinum, Inc. and five of its officers and employess were indicted by a federal grand jury in Anchorage today for five felony violations, including conspiracy to violate the Clean Water Act and for submitting material false statements, announced Sam Hirsch, Acting Assistant Attorney General for the Environment and Natural Resources Division of the U.S. Department of Justice, and Karen L. Loeffler, U.S. Attorney for the District of Alaska.   

The indictment charges XS Platinum, Inc. (XSP), a Delaware corporation, and five of its officers and employees, Dr. Bruce Butcher, age 59, and Mark Balfour, age 62 (both Australian citizens), James Slade, age 57 (a Canadian citizen), and Robert Pate, age 62 and James Staeheli, age 43 (both U.S. citizens residing in Washington state) with conspiracy to violate the Clean Water Act (CWA) during the defendants’ operation of the Platinum Creek Mine on the Salmon River in Western Alaska.  In addition, the indictment charges XSP, Butcher, Balfour, Slade, and Pate with knowingly violating the terms of XSP’s CWA permit in 2010; and XSP, Butcher, Balfour, Slade, and Staeheli with knowingly violating the terms of XSP’s CWA permit in 2011.  The indictment also charges XSP, Butcher, Balfour, Slade and Pate with submitting a false statement in violation of the CWA.  Finally, the indictment charges XSP and Balfour with submitting a separate false statement.

According to the indictment, XSP held 159 placer mining claims and 36 hard-rock claims totaling more than 4,000 acres at the Platinum Creek Mine, which was situated along the Salmon River and its tributaries.  The mine contains placer deposits of platinum metal, along with smaller amounts of gold and palladium.  All but 21 of the claims were on land managed by the BLM, with the remaining (undeveloped) claims lying within the Togiak National Wildlife Refuge.  The Salmon River is an anadromous fish stream that is important for the spawning of all five species of Pacific salmon (chinook, chum, coho, pink, and sockeye), and the rearing of coho and sockeye salmon.  After flowing through BLM land, the Salmon River crosses the Togiak National Wildlife Refuge before entering the Pacific Ocean at Kuskokwim Bay.

The CWA prohibits discharges of industrial wastewaters from mining operations in violation of CWA permits which govern those discharges.  According to the indictment, beginning in 2010 and continuing through 2011, XSP and the individual defendants knowingly discharged industrial wastewaters from XSP’s mechanical placer mining operation at the Platinum Creek Mine into the adjacent Salmon River in violation of the terms of XSP’s CWA General Permit.  According to the indictment, XSP told federal regulators in its mining and CWA permit applications that the operation of the mine would recycle all of its wastewater and result in “zero discharge” of mine wastewater to the Salmon River.  The indictment alleges that XSP and the individual defendants conspired to violate the CWA by concealing the 2010 and 2011 mine wastewater discharge violations from federal officials, and submitting material false statements to federal agencies.  The indictment further alleges that the industrial wastewaters discharged from XSP’s operation of the Platinum Creek Mine included large amounts of sediment, turbidity, and toxic metals. It is further alleged that these discharges exceeded the CWA General Permit limits for those pollutants and that the defendants failed to report the violations as they were required.  According to the indictment, XSP and its corporate officers submitted an annual report in 2011 to federal and state agencies which indicated that the mine had “zero discharge” during the 2010 mining season, when XSP’s own monitoring data showed that it had numerous discharges to the Salmon River.

An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. 

The investigation is being conducted by the U.S. Department of Interior Bureau of Land Management Office of Law Enforcement and Security and the U.S. Environmental Protection Agency Criminal Investigation Division.  The case is being prosecuted by First Assistant U.S. Attorney Kevin Feldis of the U.S. Attorney’s Office for the District of Alaska, Trial Attorney Todd S. Mikolop of the U.S. Justice Department’s Environmental Crimes Section, and U.S. Environmental Protection Agency Regional Criminal Enforcement Counsel Dean Ingemanson.