Contract analysis

Section 1: Engagement and Scope 1.1 Engagement Overview Hargrove Forensic Advisory LLC ("Hargrove" or the "Firm") was retained by Calderwood & Harkness LLP ("C&H" or "Calderwood & Harkness") on July 1, 2022, on behalf of Torchlight Mining Corp. ("TMC" or "Torchlight"), to provide forensic economic advisory services in connection with an ongoing criminal antitrust investigation being conducted by the Antitrust Divisio

1. Quantification of Affected Commerce. Hargrove has calculated the total volume of affected commerce for three product categories that are the subject of the DOJ investigation: high-purity feldspar, industrial talc, and rare-earth concentrates. The calculation encompasses all U.S. sales revenue generated by all identified participants in the alleged conspiracy during the conspiracy period.

2. Geographic Scope. The analysis is limited to the United States market — specifically, sales of the three product categories to U.S. industrial and chemical-manufacturing customers. Export sales, sales to non-U.S. customers, and sales of products outside the three identified categories are excluded from the affected-commerce calculation.

3. Temporal Scope. The alleged conspiracy period extends from approximately January 2017 through August 2021, a period of approximately four years and eight months. This temporal scope is consistent with the DOJ's investigation parameters as communicated to Calderwood & Harkness and as reflected in the grand jury subpoenas and related correspondence.

4. Participants Under Analysis. The analysis addresses the affected commerce of the following three entities: (a) Torchlight Mining Corp., through its U.S. subsidiary, Torchlight Mining (U.S.) Inc. ("TMC U.S."), which operates the U.S. Specialty Minerals Division; (b) Ridgecrest Minerals Inc. ("Ridgecrest"), a Delaware corporation headquartered in Denver, Colorado, and a portfolio company of Marlowe Asset Management

5. Penalty Calculation. Hargrove has applied the DOJ Antitrust Division's standard fine-calculation methodology under the United States Sentencing Guidelines framework to derive a base fine for TMC and has analyzed applicable cooperation and remediation credits to arrive at a recommended penalty range and target negotiation figure.

6. Cooperation and Remediation Credits. The analysis includes an assessment of the cooperation and remediation credits that TMC may be entitled to claim in NPA negotiations, based on TMC's cooperation record, remediation efforts, and comparable DOJ precedents. 1.3 Materials Reviewed In preparing this analysis, Hargrove reviewed and relied upon the following categories of materials and data sources: • TMC Internal Sal

1. Data Cutoff. This analysis is based on data available to Hargrove as of February 28, 2024. Any additional data produced or made available after that date has not been incorporated into this report.

2. Competitor Revenue Estimates. Revenue figures for Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. have been derived from publicly available financial disclosures, regulatory filings, and industry estimates. Hargrove did not have direct access to the internal financial records of either Ridgecrest or Pinnacle. Where direct data was unavailable, Hargrove employed industry market-share data, publicly repor

3. Purpose of Report. This report has been prepared at the direction of counsel for the sole purpose of supporting NPA penalty negotiations with the DOJ Antitrust Division. It is not prepared for submission as trial testimony, nor is it intended to serve as an expert report under Federal Rule of Criminal Procedure 16 or Federal Rule of Civil Procedure 26.

4. Privilege. Certain information relied upon in this analysis, including the Calderwood & Harkness internal investigation memoranda and the VaultChat message analysis, is subject to the attorney-client privilege and the work-product doctrine. Hargrove has relied upon summaries and characterizations of that material as provided by Calderwood & Harkness. The conclusions in this report should not be construed as waivin

5. Currency. Unless otherwise noted, all monetary figures in this report are expressed in United States dollars ("USD"). Where Canadian dollar ("CAD") figures are referenced, the applicable exchange rate is noted.

Section 2: Background — The Investigation and Alleged Conduct 2.1 Overview of the DOJ Investigation The DOJ Antitrust Division is conducting a criminal investigation into alleged anticompetitive conduct in the North American specialty-minerals market, under the authority of Grand Jury No. GJ-22-0194, empaneled in the United States District Court for the Northern District of California, San Francisco Division. The inv

Section 3: Methodology — Affected-Commerce Calculation 3.1 DOJ Framework for Affected Commerce The DOJ Antitrust Division calculates monetary penalties in criminal antitrust cases using a framework rooted in the United States Sentencing Guidelines Manual ("U.S.S.G." or "Sentencing Guidelines"), specifically §2R1.1, which governs bid-rigging, price-fixing, and market-allocation offenses. Under this framework, the star

Section 4: Pricing Pattern Analysis 4.1 Methodology Hargrove conducted an econometric analysis of pricing patterns for all three product categories over the period from FY 2015 through FY 2022. The purpose of this analysis is to assess whether the pricing behavior of TMC, Ridgecrest, and Pinnacle during the alleged conspiracy period (January 2017 – August 2021) is consistent with coordinated pricing, and whether the

1. Price-correlation coefficients during the conspiracy period were statistically significantly higher than during both the pre-conspiracy and post-conspiracy periods.

2. Near-simultaneous price adjustments occurred at a frequency and with a consistency that is not explained by common market forces and is correlated with documented VaultChat exchanges and NASMC conference attendance.

3. Structural-break analysis confirms that the statistical relationship governing pricing dynamics changed materially at the temporal boundaries of the alleged conspiracy.

4. The return to competitive pricing patterns in the post-conspiracy period is consistent with the cessation of coordinated conduct following Holt's departure and the initiation of the DOJ investigation. These findings support the temporal scope defined by the DOJ (January 2017 through August 2021) and provide econometric corroboration for the existence of the alleged pricing agreement. Detailed statistical results,

Section 5: Penalty Calculation Framework 5.1 DOJ Antitrust Division Fine Calculation Methodology The DOJ Antitrust Division calculates monetary penalties in criminal antitrust cases using a structured methodology derived from the United States Sentencing Guidelines and internal DOJ policy. The principal elements of this methodology are as follows: Base Fine (U.S.S.G. §2R1.1). The base fine for an antitrust offense is

Section 6: Cooperation and Remediation Credit Analysis 6.1 DOJ Cooperation Credit Framework The DOJ Antitrust Division's policies on cooperation credit provide that defendants who cooperate with the government's investigation may receive meaningful reductions in monetary penalties. The policies recognize that cooperation by targets and subjects of antitrust investigations serves important law-enforcement objectives,