Contract analysis

1. This Agreed Statement of Facts ("Statement") is attached as Appendix B to the Non-Prosecution Agreement ("Agreement" or "NPA") dated as of May 6, 2024, between the United States of America, acting through the United States Department of Justice, Antitrust Division ("DOJ" or the "Government"), and Torchlight Mining Corp. ("TMC" or "Torchlight"), a corporation organized under the Canada Business Corporations Act.

2. The purpose of this Statement is to set forth the factual basis upon which the Agreement is entered into by the parties. TMC accepts and stipulates to the accuracy of the facts set forth herein for purposes of the Agreement. This Statement reflects the joint understanding of the DOJ and TMC regarding the relevant factual circumstances that form the basis of the NPA and the undertakings of TMC contained therein.

3. This Statement does not constitute a complete recitation of all facts known to the parties, whether derived from the DOJ's investigation, the grand jury proceedings, TMC's internal investigation, or any other source. Rather, this Statement is limited to those facts that are sufficient to establish the basis for the Agreement, including the nature and scope of the conduct at issue, the parties and individuals invol

4. As set forth in Section VIII of the Agreement, in the event that TMC materially breaches the NPA during the term thereof, the DOJ may use the admissions and stipulations contained in this Statement in any subsequent criminal prosecution of TMC, in any proceeding before any court or tribunal, and in any other forum, without limitation, subject only to the provisions of the Agreement governing dispute resolution ove

II. THE PARTIES AND RELEVANT ENTITIES A. Torchlight Mining Corp.

5. Torchlight Mining Corp. ("TMC" or "Torchlight") is a corporation organized and existing under the Canada Business Corporations Act, CBCA Corporation No. 7841526-1. TMC's registered office is located at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada.

6. TMC is a publicly traded corporation. Its common shares are listed and traded on the Toronto Stock Exchange under the ticker symbol "TSX: TRCL" and on the New York Stock Exchange under the ticker symbol "NYSE: TMC." As a dual-listed issuer, TMC is subject to the regulatory requirements of both Canadian provincial securities regulators and the United States Securities and Exchange Commission.

7. For its fiscal year ended December 31, 2021 ("FY 2021"), TMC reported consolidated revenue of approximately CAD 4.27 billion (approximately USD 3.38 billion, based on the average exchange rate for the reporting period), and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately CAD 812 million.

8. TMC is a diversified mining company that operates fourteen (14) mines across Canada, the United States, Brazil, and Australia, as well as six (6) downstream chemical-processing facilities. TMC's operations span a range of mineral products, including base metals, precious metals, industrial minerals, and specialty mineral concentrates.

9. TMC's wholly owned U.S. subsidiary is Torchlight Mining (U.S.) Inc. ("TMC-US"), a corporation organized and existing under the laws of the State of Nevada, Entity No. NV20160438721, with its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. TMC-US's Federal Employer Identification Number is 83-2947106. TMC-US serves as the operating entity for TMC's U.S.-based mining operations an

10. Within TMC's corporate structure, the U.S. Specialty Minerals Division (the "Division") is the business unit responsible for the extraction, processing, and sale of high-purity feldspar, industrial talc, and rare-earth concentrates to U.S. industrial and chemical-manufacturing customers. In FY 2021, the U.S. Specialty Minerals Division generated approximately USD 687 million in revenue, representing approximately

11. During the period relevant to this Statement, TMC's senior leadership included: Søren Dalmqvist, Chief Executive Officer; Priya Anand, General Counsel; Richard Fong, Chief Financial Officer; and Margaret Caldwell, Chair of the Board of Directors. B. Ridgecrest Minerals Inc.

12. Ridgecrest Minerals Inc. ("Ridgecrest") is a corporation organized and existing under the laws of the State of Delaware, with its principal office and headquarters located at 1700 Lincoln Street, Suite 4200, Denver, Colorado 80203.

13. Ridgecrest is the second-largest North American producer of high-purity feldspar and industrial talc. For its fiscal year ended December 31, 2021, Ridgecrest reported total revenue of approximately USD 1.92 billion. Ridgecrest's products are sold to industrial and chemical-manufacturing customers throughout the United States and internationally.

14. Ridgecrest is a portfolio company of Marlowe Asset Management Peak Capital Partners LP ("Marlowe Asset Management Peak"), a private equity fund organized under the laws of the State of Delaware. Marlowe Asset Management Peak acquired a controlling interest in Ridgecrest in approximately 2013 and has maintained that interest throughout the period relevant to this Statement.

15. During the period relevant to this Statement, Ridgecrest's senior leadership included: Brian Novotny, Chief Executive Officer; and Carl Edgerton, Vice President of Sales. As described further in Section IV below, Edgerton has been identified as a key participant in the conduct described herein. C. Pinnacle Earth Resources Ltd.

16. Pinnacle Earth Resources Ltd. ("Pinnacle") is a corporation organized and existing under the laws of the Province of Ontario, Canada, with its principal office and headquarters located at 85 Elm Street West, Suite 600, Sudbury, Ontario P3C 1T3, Canada. Pinnacle's U.S. operations are headquartered at 222 South Main Street, Suite 1500, Salt Lake City, Utah 84101.

17. Pinnacle is among the top five North American producers of rare-earth concentrates and specialty industrial minerals. For its fiscal year ended December 31, 2021, Pinnacle reported total revenue of approximately CAD 1.45 billion (approximately USD 1.15 billion, based on the average exchange rate for the reporting period). Pinnacle's products are sold to industrial and chemical-manufacturing customers located in t

18. During the period relevant to this Statement, Pinnacle's senior leadership included: Douglas Harlowe, Chief Executive Officer; and Kevin Tsang, Senior Vice President of Commercial Operations. As described further in Section IV below, Tsang has been identified as a key participant in the conduct described herein. Tsang departed Pinnacle in approximately early 2022. D. Cascade Chemical Supply Co.

19. Cascade Chemical Supply Co. ("Cascade") is a corporation organized and existing under the laws of the State of Washington, with its principal office and headquarters located at 901 West Riverside Avenue, Suite 300, Spokane, Washington 99201.

20. Cascade is a downstream distributor and processor of specialty minerals, including high-purity feldspar, industrial talc, and rare-earth concentrates. Cascade purchases these minerals from producers, including TMC, Ridgecrest, and Pinnacle, and processes and resells them to end-use customers in the United States.

21. On or about September 15, 2021, Cascade entered into a cooperation agreement with the DOJ. Pursuant to that agreement, Cascade provided the DOJ with documents and testimony that triggered the broader investigation into the specialty-minerals sector, as further described in Section VIII of this Statement.

22. During the period relevant to this Statement, Cascade's president was Leonard Massey. E. North American Specialty Minerals Council (NASMC)

23. The North American Specialty Minerals Council ("NASMC") is a trade association organized as a tax-exempt entity under Section 501(c)(6) of the Internal Revenue Code. NASMC is headquartered at 2300 Wilson Boulevard, Suite 400, Arlington, Virginia 22201.

24. NASMC's mission includes promoting the interests of the specialty minerals industry in North America, facilitating industry dialogue, and publishing pricing benchmarks and market data for specialty minerals. NASMC organizes and hosts quarterly industry conferences at locations throughout the United States, which are attended by representatives of mining companies, distributors, processors, and end-use customers i

25. As described further in Section V of this Statement, several of the meetings and communications relevant to the conduct at issue occurred on the margins of NASMC quarterly conferences. NASMC itself is not alleged to have participated in, endorsed, or been aware of the unlawful conduct described herein.

III. THE RELEVANT PRODUCTS AND MARKETS A. Products at Issue

26. The products at the center of the conduct described in this Statement are the following three categories of specialty mineral products: (a) High-purity feldspar: a group of rock-forming tectosilicate minerals used extensively in the manufacture of ceramics, glass, specialty coatings, and related industrial applications. High-purity feldspar is sold in bulk quantities to U.S. industrial and chemical-manufacturing

27. The relevant market encompasses sales of high-purity feldspar, industrial talc, and rare-earth concentrates to industrial and chemical-manufacturing customers located in the United States. TMC, Ridgecrest, and Pinnacle are among the largest suppliers of these products to U.S. customers, and each made substantial sales in interstate and international commerce during the period relevant to this Statement.

28. The conduct described herein affected interstate and international commerce in and into the United States within the meaning of the Sherman Antitrust Act, 15 U.S.C. § 1. The products at issue were extracted, processed, and shipped across state and national boundaries, and were sold to customers located in multiple states throughout the United States. Payments for the products at issue crossed state lines, and the

IV. THE RELEVANT INDIVIDUALS A. Gavin Holt (TMC)

29. Gavin Holt ("Holt") served as Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp. from approximately 2016 through September 30, 2021. In that capacity, Holt led TMC's commercial pricing function for the U.S. Specialty Minerals Division. Holt reported to the Division's Senior Vice President and had direct authority over the Division's pricing strategies, customer-relationship management, and bid

30. Holt resigned from TMC effective September 30, 2021, approximately four months before the commencement of the DOJ's grand jury investigation described in Section VIII below. TMC's internal investigation has not identified evidence that Holt's resignation was prompted by knowledge of an impending government investigation, although the timing of his departure has been noted by the parties.

31. As described further in Section V below, Holt was the individual most directly involved in the pricing communications with counterparts at Ridgecrest and Pinnacle that form the basis of the conduct described in this Statement. Holt initiated and maintained regular contact with his counterparts through in-person meetings, encrypted messaging, and telephone calls over the course of the conspiracy period.

32. The NPA does not cover Gavin Holt individually. The DOJ expressly reserves the right to pursue criminal charges against Holt separately, and nothing in this Statement or the Agreement is intended to limit the DOJ's ability to do so. B. Carl Edgerton (Ridgecrest)

33. Carl Edgerton ("Edgerton") has served as Vice President of Sales, Ridgecrest Minerals Inc., during the period relevant to this Statement and continues to hold that position. In that capacity, Edgerton is responsible for Ridgecrest's sales operations, customer-relationship management, and pricing for specialty mineral products, including sales to U.S. industrial and chemical-manufacturing customers.

34. Edgerton was Holt's principal counterpart at Ridgecrest in the conduct described in this Statement. Edgerton participated in in-person meetings, encrypted messaging communications, and telephone calls with Holt throughout the conspiracy period. C. Kevin Tsang (Pinnacle)

35. Kevin Tsang ("Tsang") served as Senior Vice President of Commercial Operations, Pinnacle Earth Resources Ltd., during the period relevant to this Statement. Tsang departed Pinnacle in approximately early 2022. In his role at Pinnacle, Tsang was responsible for overseeing Pinnacle's commercial operations, including the pricing and sale of rare-earth concentrates and specialty industrial minerals to U.S. customers.

36. Tsang was Holt's principal counterpart at Pinnacle in the conduct described in this Statement. Tsang participated in in-person meetings, encrypted messaging communications, and telephone calls with Holt throughout the conspiracy period. D. Sandra Chu (TMC)

37. Sandra Chu ("Chu") served as Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. during the period relevant to this Statement and continues to hold that position. In that capacity, Chu was responsible for maintaining and updating TMC's published price lists for specialty mineral products, implementing pricing adjustments as directed by her superiors, and conducting pricing analy

38. Chu reported directly to Gavin Holt during the relevant period. As described further in Section V below, Chu received pricing-adjustment instructions from Holt on multiple occasions and implemented those instructions through the Division's pricing system. Based on the evidence reviewed to date, including documents produced in the internal investigation and Chu's voluntary proffer session with the DOJ on March 10,

39. Thomas Eriksen ("Eriksen") served as Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. during the period relevant to this Statement and continues to hold that position. In that capacity, Eriksen was responsible for managing customer relationships and sales activities for the Division's Western Region, which encompassed customers located in states west of the Missis

40. Eriksen attended certain NASMC quarterly conferences during the relevant period where side meetings between Holt, Edgerton, and Tsang are known to have occurred. However, the evidence of Eriksen's direct participation in the conduct described in this Statement is ambiguous. Eriksen has denied knowledge of any agreements between TMC and its competitors regarding pricing, customer allocation, or bid coordination. E

V. THE CONSPIRACY A. Overview and Duration

41. From approximately January 2017 through at least August 2021, a period of approximately four (4) years and eight (8) months (the "conspiracy period"), senior commercial personnel at TMC, Ridgecrest, and Pinnacle engaged in an unlawful agreement to fix prices, allocate customers, and rig bids for the sale of high-purity feldspar, industrial talc, and rare-earth concentrates to U.S. industrial and chemical-manufact

42. The agreement constituted an unreasonable restraint of trade and commerce in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. The conspiracy was carried out through a series of in-person meetings, encrypted electronic communications, and telephone calls among the principal participants, as described in further detail below.

43. The objective of the conspiracy was to suppress and eliminate competition among TMC, Ridgecrest, and Pinnacle in the sale of the products described in Section III above, to artificially inflate and maintain prices at supracompetitive levels, to allocate customers among the participants so as to reduce competitive pressure, and to coordinate bids for large-volume supply contracts in order to predetermine the outco

44. Throughout the conspiracy period, Holt (TMC), Edgerton (Ridgecrest), and Tsang (Pinnacle) met in person on the margins of NASMC quarterly industry conferences. These side meetings were not part of the official NASMC conference agenda and were not sanctioned, organized, or facilitated by NASMC or its staff. Rather, the participants used the occasion of NASMC conferences—which brought together representatives from

45. Based on the evidence reviewed to date, these side meetings occurred at NASMC conferences held in, among other locations, Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida, during the period from approximately 2017 through 2021. Evidence indicates that side meetings took place at no fewer than eight (8) NASMC conferences during the conspiracy period, though the precise number may be higher.

46. During these meetings, the participants discussed and agreed upon pricing levels for high-purity feldspar, industrial talc, and rare-earth concentrates to be sold to U.S. customers. The participants also allocated specific customer accounts among themselves, with each participant agreeing to refrain from competing aggressively for customers assigned to another participant. In addition, the participants coordinate

47. Thomas Eriksen (TMC) attended four (4) NASMC conferences during the conspiracy period at which such side meetings are believed to have occurred. However, as noted in Section IV.E above, the evidence of Eriksen's direct participation in the agreements reached during these side meetings is ambiguous. Eriksen has denied any knowledge of the agreements, and no documentary evidence directly linking Eriksen to the subs

2. VaultChat Encrypted Messaging Communications.

48. In addition to in-person meetings, Holt, Edgerton, and Tsang communicated extensively through an encrypted messaging application known as "VaultChat" throughout the conspiracy period. VaultChat is a commercial encrypted-messaging platform that allows users to exchange text messages, images, and files with end-to-end encryption and configurable message-deletion settings. The participants used VaultChat as their pr

49. The earliest documented VaultChat exchange between Holt and Edgerton occurred on or about March 14, 2017. Communications between Holt and Tsang through VaultChat commenced shortly thereafter. The participants continued to use VaultChat as a regular channel of communication through at least July 2021.

50. In total, at least thirty-seven (37) documented VaultChat exchanges and related communications between Holt and his counterparts (Edgerton and Tsang, individually and in group messages) have been identified through the DOJ's investigation and TMC's internal investigation. These communications occurred between approximately March 2017 and July 2021 and were recovered from device forensics, backup data, and related

51. The content of these VaultChat communications included, among other things: (a) the sharing of confidential, competitively sensitive pricing information, including current and planned price levels for high-purity feldspar, industrial talc, and rare-earth concentrates; (b) agreements on price increases and the specific timing of their implementation, including coordinated announcements of price increases to custom

52. In addition to the NASMC conference side meetings and VaultChat messaging communications described above, the participants occasionally communicated by telephone to discuss pricing, customer-allocation, and bid-coordination matters. These telephone calls supplemented the other channels of communication and were used on an ad hoc basis to address time-sensitive matters, clarify agreements previously reached, or re