Contract analysis

I. PURPOSE AND BACKGROUND A. Purpose of This Memorandum On November 1, 2023, the United States Department of Justice, Antitrust Division (the "DOJ" or the "Division"), communicated its willingness to negotiate a non-prosecution agreement ("NPA") with Torchlight Mining Corp. ("TMC" or the "Company") in connection with Grand Jury Investigation No. GJ-22-0194 pending before the United States District Court for the North

II. SUMMARY OF KEY INTERNAL INVESTIGATION FINDINGS BEARING ON NEGOTIATIONS The following summarizes the findings of the internal investigation that are most directly relevant to the NPA negotiation strategy. This summary is not a comprehensive restatement of the internal investigation report presented to the Board on January 20, 2023. Rather, it highlights the findings that will shape our negotiating positions, argum

III. NEGOTIATION OBJECTIVES — MONETARY PAYMENT The monetary payment is the single most visible term of the NPA, both to the client and to the public. The following sets forth our negotiation strategy for this term. A. Target Range Opening Position: USD 35 million. Our opening position in the penalty negotiation will be USD 35 million. This figure reflects a cooperation credit of approximately 63% from the DOJ's USD 9

IV. NEGOTIATION OBJECTIVES — COOPERATION OBLIGATIONS The cooperation obligations to be imposed under the NPA are among the most operationally significant terms for TMC. While TMC has demonstrated a strong willingness to cooperate with the Division and will continue to do so, it is essential that the NPA's cooperation provisions be appropriately bounded to avoid imposing disproportionate or open-ended burdens on the C

V. NEGOTIATION OBJECTIVES — NO-PROSECUTION PROTECTIONS The no-prosecution protections are the core of the NPA and represent the fundamental consideration that TMC is receiving in exchange for its monetary payment, cooperation, and compliance commitments. These protections must be comprehensive, clearly drafted, and unambiguous. A. Entity Protection Objective: The NPA must provide that the DOJ agrees not to bring crim

VI. NEGOTIATION OBJECTIVES — COMPLIANCE ENHANCEMENTS A. Compliance Program Requirements TMC has already taken the initiative to develop and submit a comprehensive Enhanced Antitrust Compliance Program to the DOJ. This program was designed by Calderwood & Harkness and Meridian Compliance Partners LLC (engagement lead Claudia Ferraro) and was submitted to the Division on September 15, 2023. The proactive submission of

VII. NEGOTIATION OBJECTIVES — MATERIAL BREACH AND CONSEQUENCES A. Material Breach Standard The NPA will include a material breach provision that allows the DOJ to prosecute TMC if TMC materially breaches the agreement. This is a standard feature of all NPAs and DPAs and is, in essence, the enforcement mechanism that gives the agreement its force. While we cannot avoid the inclusion of a material breach provision, we