Contract analysis

I. THE DEFENDANT AND RELATED ENTITIES A. Torchlight Mining Corp.

1. Torchlight Mining Corp. ("TMC" or "Torchlight") is a corporation organized and existing under the Canada Business Corporations Act, CBCA Corporation No. 7841526-1, Canadian Business No. 741 829 456 RC0001, with its registered office at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada.

2. TMC is a publicly traded specialty-minerals mining and chemicals company. TMC's common shares are listed on the Toronto Stock Exchange under the ticker symbol "TRCL" and are also listed on the New York Stock Exchange under the ticker symbol "TMC." TMC has been listed on both exchanges since 2008 and is subject to periodic reporting obligations under the securities laws of Canada and the United States.

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

4. TMC operates fourteen active mines across four countries — Canada, the United States, Brazil, and Australia — and six downstream chemical-processing facilities that produce refined mineral products for sale to industrial, chemical-manufacturing, and advanced-technology customers worldwide. TMC's global workforce during the relevant period consisted of approximately 7,200 employees across all divisions and geograph

5. Torchlight Mining (U.S.) Inc. ("TMC US") is a corporation organized under the laws of the State of Nevada, Nevada Secretary of State Entity No. NV20160438721, Federal Employer Identification Number 83-2947106. TMC US is a wholly owned subsidiary of Torchlight Mining Corp., with its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117.

6. TMC US houses TMC's U.S. Specialty Minerals Division (the "Division"), which is the business division at the center of the conduct described in this Agreed Statement of Facts. The Division is responsible for all mining, processing, marketing, and sales activities related to TMC's specialty-mineral products within the United States.

7. For the fiscal year ended December 31, 2021, the U.S. Specialty Minerals Division generated approximately USD 687 million in revenue, accounting for approximately 20% of TMC's consolidated revenue. The Division operated three active mining sites in Nevada, Utah, and Montana, along with two processing facilities located in Reno, Nevada, and Salt Lake City, Utah.

8. The U.S. Specialty Minerals Division mines, processes, and sells high-purity feldspar, industrial talc, and rare-earth concentrates to industrial and chemical-manufacturing customers in the United States and elsewhere. The Division's customer base includes major ceramics and glass manufacturers, plastics and paint producers, electronics manufacturers, and defense-sector contractors.

II. CO-CONSPIRATOR ENTITIES A. Ridgecrest Minerals Inc.

9. Ridgecrest Minerals Inc. ("Ridgecrest") is a corporation organized under the laws of the State of Delaware, with its principal office located at 1700 Lincoln Street, Suite 4200, Denver, Colorado 80203. Ridgecrest operates mining and processing facilities in Colorado, Wyoming, Idaho, and New Mexico.

10. Ridgecrest is the second-largest North American producer of high-purity feldspar and industrial talc. Ridgecrest also produces and sells other industrial mineral products, including specialty clay and mica, to customers located throughout the United States, Canada, and Mexico.

11. For the fiscal year ended December 31, 2021, Ridgecrest reported approximate revenue of USD 1.92 billion. Ridgecrest's sales of the Relevant Products (as defined in Section IV below) to U.S. customers constituted a substantial portion of its total revenue.

12. Ridgecrest is a portfolio company of Marlowe Asset Management Peak Capital Partners LP, a Delaware limited partnership headquartered in Denver, Colorado. Marlowe Asset Management Peak Capital Partners LP acquired a controlling interest in Ridgecrest in approximately 2015 and has maintained that interest throughout the period relevant to this Agreed Statement of Facts.

13. During the relevant period, Ridgecrest's Vice President of Sales was Carl Edgerton. Edgerton was a key participant in the conduct described herein, as detailed in Sections III and V below. B. Pinnacle Earth Resources Ltd.

14. Pinnacle Earth Resources Ltd. ("Pinnacle") is a corporation organized under the laws of the Province of Ontario, Canada, with its registered office at 85 Elm Street West, Suite 600, Sudbury, Ontario P3C 1T3, Canada. Pinnacle's U.S. operations are based at 222 South Main Street, Suite 1500, Salt Lake City, Utah 84101, and are conducted through a wholly owned U.S. subsidiary.

15. Pinnacle is one of the top five North American producers of rare-earth concentrates and specialty industrial minerals. Pinnacle's product portfolio includes rare-earth concentrates (primarily neodymium, cerium, and lanthanum concentrates), high-purity feldspar, industrial talc, and other specialty mineral products.

16. For the fiscal year ended December 31, 2021, Pinnacle reported approximate revenue of CAD 1.45 billion (approximately USD 1.15 billion, based on the average annual Bank of Canada exchange rate for 2021).

17. During the relevant period, Pinnacle's Senior Vice President of Commercial Operations was Kevin Tsang. Tsang was a key participant in the conduct described herein, as detailed in Sections III and V below. C. Cascade Chemical Supply Co. (Cooperating Entity)

18. Cascade Chemical Supply Co. ("Cascade") is a corporation organized under the laws of the State of Washington, with its headquarters located at 901 West Riverside Avenue, Suite 300, Spokane, Washington 99201. Cascade operates as a downstream distributor and processor of specialty minerals, purchasing mineral products from producers including TMC, Ridgecrest, and Pinnacle, and reselling processed mineral products t

19. Cascade's president is Leonard Massey, who has served in that role since approximately 2012.

20. In approximately September 2021, Cascade entered into a cooperation agreement with the Department of Justice, Antitrust Division, pursuant to which Cascade provided documents and testimony that informed the broader investigation into anticompetitive conduct in the specialty-minerals industry. Information and documentary evidence provided by Cascade contributed materially to the identification and substantiation o

III. RELEVANT INDIVIDUALS A. Gavin Holt

21. Gavin Holt was employed by Torchlight Mining Corp. as Vice President, U.S. Specialty Minerals Sales, from approximately January 2016 until his resignation, which was effective September 30, 2021. Holt's resignation became effective approximately four months before the grand jury investigation of this matter commenced.

22. In his role as Vice President, U.S. Specialty Minerals Sales, Holt led TMC's commercial pricing function for the U.S. Specialty Minerals Division. Holt had authority over published price lists, customer negotiations, and bid submissions for high-purity feldspar, industrial talc, and rare-earth concentrates sold to U.S. customers. Holt also had responsibility for managing TMC's key customer relationships in the Un

23. Holt reported directly to the head of TMC's U.S. operations and had supervisory authority over the Division's pricing and sales personnel, including the Director of Pricing Analytics and several Regional Sales Managers.

24. This Agreed Statement of Facts and the Agreement do not cover Gavin Holt individually. The United States reserves the right to pursue charges against Holt individually for conduct described herein or any related conduct. B. Carl Edgerton

25. Carl Edgerton was Vice President of Sales at Ridgecrest Minerals Inc. during the relevant period, having served in that role from approximately 2015 through at least 2022. In his capacity as Vice President of Sales, Edgerton had pricing and sales authority for Ridgecrest's North American specialty-minerals products, including high-purity feldspar and industrial talc. Edgerton's responsibilities included setting a

26. Edgerton communicated directly with Gavin Holt regarding pricing, customer allocation, and bid coordination as described in Section V below. Edgerton was a direct participant in the conspiracy during the entire Conspiracy Period. C. Kevin Tsang

27. Kevin Tsang was Senior Vice President, Commercial Operations at Pinnacle Earth Resources Ltd. during the relevant period. In his role, Tsang had pricing and commercial authority for Pinnacle's North American specialty-minerals products, including rare-earth concentrates and industrial minerals. Tsang was responsible for Pinnacle's U.S. pricing strategy, customer negotiations, and bid submissions for the Relevant

28. Tsang communicated directly with Gavin Holt regarding pricing and customer allocation as described in Section V below. Tsang was a direct participant in the conspiracy during the Conspiracy Period. D. Sandra Chu

29. Sandra Chu is the Director of Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. Chu holds this position currently and held it throughout the relevant period. In her role, Chu was responsible for maintaining and updating TMC's published price lists for the U.S. Specialty Minerals Division, conducting pricing analyses, and implementing pricing changes as directed by her supervisors. Durin

30. Chu received instructions from Holt to adjust published price lists on at least twelve occasions during the Conspiracy Period. Each of these adjustments correlated in timing and magnitude with contemporaneous price movements by Ridgecrest and Pinnacle. Based on the investigation, including a review of Chu's electronic communications and her voluntary proffer session with the United States, there is no direct evid

31. Thomas Eriksen is a Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. Eriksen holds this position currently and held it throughout the relevant period. In his role, Eriksen managed TMC's customer relationships and sales activities in the Western United States, including California, Oregon, Washington, Nevada, Utah, Colorado, and Arizona.

32. Eriksen attended four NASMC quarterly conferences during the Conspiracy Period at which side meetings involving alleged coordination between Holt, Edgerton, and Tsang are suspected to have occurred. The evidence regarding Eriksen's direct participation in any anticompetitive agreement is ambiguous. Eriksen was present at certain social gatherings at NASMC conferences where Holt, Edgerton, and Tsang were also pres

IV. THE RELEVANT PRODUCTS AND MARKETS A. Products.

33. The conduct described in this Agreed Statement of Facts involved three categories of specialty-mineral products (collectively, the "Relevant Products"): (a) High-purity feldspar — a mineral product used as a flux in the manufacture of ceramics, glass, and certain chemical applications. High-purity feldspar requires processing to achieve chemical specifications (typically Na₂O + K₂O content of 10% or greater and F

34. Each of the three categories of Relevant Products has distinct technical specifications, end-use applications, and customer bases, but all three categories were the subject of the coordinated pricing, customer-allocation, and bid-rigging conduct described herein. B. Geographic Market

35. The Relevant Products were sold to industrial and chemical-manufacturing customers located in the United States. Customers included ceramics and glass manufacturers, plastics compounders, paint and coatings producers, defense contractors, and electronics manufacturers, among others, located throughout the continental United States.

36. TMC, Ridgecrest, and Pinnacle were among the principal suppliers of the Relevant Products to U.S. customers during the relevant period. Together, the three companies accounted for a substantial share of U.S. supply of each of the three categories of Relevant Products during the Conspiracy Period. C. Trade Association — North American Specialty Minerals Council

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

38. NASMC organizes quarterly industry conferences and publishes pricing benchmarks and market reports for the specialty-minerals sector. NASMC's membership includes specialty-minerals producers, processors, distributors, and related service providers operating in North America. TMC, Ridgecrest, Pinnacle, and other industry participants are members of NASMC.

39. NASMC quarterly conferences were held at various locations during the relevant period, including Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. These conferences typically lasted two to three days and included formal presentations, panel discussions, breakout sessions, and social events. The NASMC quarterly conferences served as a regular venue at which the conspirators met in person to further t

V. THE CONSPIRACY A. Overview and Duration

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

41. The conspiracy constituted an unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. The conspiracy was effectuated through a combination of in-person meetings, encrypted electronic communications, and telephone calls among the conspirators, as described in detail below.

42. The purpose and effect of the conspiracy was to suppress and eliminate competition among TMC, Ridgecrest, and Pinnacle for the sale of the Relevant Products to U.S. customers, thereby enabling the conspirators to charge and maintain prices at levels higher than those that would have prevailed in a competitive market. B. Means and Methods of the Conspiracy

1. In-Person Meetings at NASMC Conferences.

43. During the Conspiracy Period, Gavin Holt (TMC), Carl Edgerton (Ridgecrest), and Kevin Tsang (Pinnacle) met in person on the margins of NASMC quarterly conferences held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. The investigation has identified at least eleven NASMC quarterly conferences during the Conspiracy Period at which at least two of the three conspirators were present.

44. At these meetings, the participants discussed and agreed upon pricing levels for the Relevant Products, including specific target prices and minimum price floors for high-purity feldspar, industrial talc, and rare-earth concentrates. The participants also discussed and agreed upon the allocation of specific U.S. customers among the three companies, designating certain customer accounts as "protected" or "allocate

45. These meetings typically took place outside the formal conference sessions, including in hotel rooms reserved by individual participants, at restaurants and bars located near or within the conference venues, and in other private settings adjacent to the conference venues. The participants took deliberate steps to avoid detection, including arranging meetings through personal mobile devices rather than corporate e

2. Encrypted Messaging via VaultChat Application.

46. Gavin Holt, Carl Edgerton, and Kevin Tsang used the VaultChat encrypted messaging application to communicate regarding pricing, customer allocation, and bid coordination during the Conspiracy Period. VaultChat is a commercially available encrypted messaging application that provides end-to-end encryption and an auto-delete function, which the conspirators utilized to destroy evidence of their communications. The

47. The first documented VaultChat exchange between Holt and Edgerton occurred on approximately March 14, 2017. Analysis of metadata recovered from backup files and device forensic extractions revealed that Holt maintained VaultChat contact profiles for both Edgerton and Tsang throughout the Conspiracy Period.

48. Over the Conspiracy Period, there were at least thirty-seven documented communications between Holt and his counterparts at Ridgecrest and Pinnacle through VaultChat messages and in-person conversations, covering the exchange of competitively sensitive pricing information, agreements on price levels for each of the Relevant Products, allocation of customer accounts, and coordination of bid submissions to specific

49. In addition to VaultChat messages and in-person meetings, Holt, Edgerton, and Tsang conducted occasional telephone calls to discuss pricing and customer-allocation matters during the Conspiracy Period. Toll records obtained through grand jury subpoenas reflect calls between Holt's personal mobile telephone number and the personal mobile telephone numbers of Edgerton and Tsang on multiple occasions during the Cons

50. The conspirators agreed to fix, stabilize, and maintain prices for high-purity feldspar, industrial talc, and rare-earth concentrates sold to U.S. customers. The price-fixing agreements encompassed published list prices, minimum prices for negotiated customer contracts, and prices submitted in response to customer requests for proposals and competitive bid solicitations.

51. Gavin Holt exchanged pricing information with Carl Edgerton and Kevin Tsang on at least thirty-seven documented occasions between approximately March 2017 and July 2021. The pricing information exchanged included current and planned price lists, proposed price increases and their timing, customer-specific pricing, and discount levels offered to key accounts.