Contract analysis

I. PURPOSE AND SCOPE OF THIS MEMORANDUM This memorandum summarizes the voluntary proffer session of Sandra Chu ("Chu"), Director of Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. ("TMC"), conducted on March 10, 2023, at the U.S. Department of Justice ("DOJ"), Antitrust Division, San Francisco Field Office, located at 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.

II. SESSION LOGISTICS A. Date, Time, and Location The proffer session took place on Friday, March 10, 2023. The session commenced at approximately 9:30 a.m. Pacific Time and concluded at approximately 3:45 p.m. Pacific Time, for a total elapsed duration of approximately six hours and fifteen minutes. The session included the following breaks: • A short break at approximately 11:00 a.m. (approximately 15 minutes); • A

III. BACKGROUND ON SANDRA CHU Sandra Chu currently holds the title of Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. She has been employed by TMC continuously since approximately 2013, initially as a Senior Pricing Analyst before being promoted to Director of Pricing Analytics in approximately 2016. In her current role, Chu is responsible for managing a team of three pricing an

IV. SUMMARY OF DOJ QUESTIONS AND CHU'S RESPONSES The following is a detailed summary of the DOJ's questions and Chu's responses during the proffer session, organized by subject matter and presented in approximate chronological order. Quotations attributed to Chu or to DOJ personnel are based on my contemporaneous handwritten notes and reflect the substance and, where indicated, the near-verbatim language of the state

V. DOCUMENTS DISCUSSED DURING THE PROFFER SESSION During the course of the proffer session, the DOJ presented, referenced, or showed Chu the following categories of documents. For each category, I have described the nature of the documents, their relevance to the questioning, and Chu's responses regarding them.

1. Holt-to-Chu Email Instructions. The DOJ presented Chu with a series of approximately eight to ten (8–10) emails from Gavin Holt to Sandra Chu, dated between approximately 2017 and 2021, directing specific price adjustments for high-purity feldspar and industrial talc product lines. These emails were drawn from TMC's own document production, submitted under Grand Jury Subpoena No. GJ-22-0194-SD-003, and bore Bates

2. TMC Published Price Lists. The DOJ presented multiple versions of TMC's published price lists for high-purity feldspar, industrial talc, and rare-earth concentrates, spanning the period from approximately 2017 to 2021. These price lists reflected the adjustments that Chu implemented at Holt's direction, both during the regular quarterly cycle and on a mid-cycle basis. Chu confirmed the authenticity of the price li

3. Pricing Correlation Charts. The DOJ presented Chu with a series of charts — prepared by the DOJ's investigative team and not previously seen by Chu or by Calderwood & Harkness — showing side-by-side timelines of price movements by TMC, Ridgecrest Minerals Inc., and Pinnacle Earth Resources Ltd. for the three product categories (high-purity feldspar, industrial talc, and rare-earth concentrates) from 2017 to 2021.

4. NASMC Conference Attendance Records. The DOJ presented documents reflecting TMC personnel attendance at NASMC quarterly conferences during the relevant period. The documents appeared to be registration records or attendance lists maintained by NASMC. Chu confirmed her own attendance at two NASMC conferences, as described in Section IV.E above. The records also reflected Holt's attendance at multiple NASMC conferen

5. TMC Quarterly Pricing Memoranda. The DOJ presented several of the quarterly pricing analytics reports prepared by Chu's team for Holt's review. These were internal documents from TMC's production. Kowalski asked Chu to walk through the analytical methodology reflected in the memoranda, including the data sources, analytical frameworks, and recommendation formats. Chu did so in detail, explaining the inputs and ass

VI. ASSESSMENT OF CHU'S CREDIBILITY AND DEMEANOR Chu was composed, forthcoming, and consistent throughout the duration of the proffer session. She maintained a calm and professional demeanor during all segments of the questioning, including during the most sensitive and potentially confrontational exchanges regarding her knowledge of Holt's alleged inter-competitor communications. She did not appear evasive, defensiv

VII. ASSESSMENT OF DOJ'S FOCUS AREAS AND APPARENT STRATEGY A. DOJ's Primary Interest in Chu Based on the tone, substance, and direction of the DOJ's questioning during the proffer session, the DOJ appears primarily interested in Sandra Chu as a corroborative fact witness rather than as a target or subject of the investigation. The DOJ's questions were focused on three principal areas in which Chu's testimony would be

VIII. IMPACT ON TMC'S COOPERATION POSTURE A. Positive Indicators The Chu proffer session proceeded smoothly and, on balance, represents a positive development for TMC's cooperation posture with the DOJ. Several specific indicators support this assessment: • Chu's testimony was cooperative, credible, and internally consistent, both within the proffer session itself and in comparison to her prior interview with Calderw

1. Eriksen Proffer Preparation. Continue preparation for the proffer session of Thomas Eriksen, Regional Sales Manager, Western Region, which is scheduled for April 22, 2023. Particular attention should be devoted to Eriksen's NASMC conference attendance, his interactions with competitor personnel, and the ambiguity identified during the internal investigation regarding the extent of Eriksen's knowledge of Holt's act

2. Supplemental Cooperation Submission. Finalize the supplemental cooperation submission, targeted for May 1, 2023, which should incorporate the Chu proffer session as evidence of TMC's ongoing cooperation with the DOJ. The submission should highlight Chu's cooperativeness, the consistency of her testimony with TMC's cooperation narrative, and TMC's continued commitment to making employees available for the governmen

3. Forensic Economics Analysis. Coordinate with Hargrove Forensic Advisory LLC (Dr. Vanessa Tremblay, lead engagement partner) regarding the affected-commerce analysis and the economic rebuttal to the pricing-correlation data presented by the DOJ. Dr. Tremblay's team should be provided with a detailed summary of the DOJ's pricing-correlation charts (to the extent we can reconstruct them from our notes) and should be

4. Enhanced Compliance Program. Continue development of the enhanced antitrust compliance program with Meridian Compliance Partners LLC (Claudia Ferraro) to address the specific compliance gaps highlighted by the DOJ's questioning. The program should be designed to satisfy the DOJ's evaluation criteria for corporate compliance programs and should be ready for submission to the DOJ in connection with the NPA negotiati

5. Holt Monitoring. Continue to monitor developments regarding Gavin Holt's status. Holt's assertion of Fifth Amendment rights through Briarcliff Law Group PLLC (Patrick Dunleavy) before the grand jury on June 14, 2022, means that the DOJ cannot compel his testimony absent an immunity grant. This may result in the DOJ focusing additional pressure on TMC's cooperation as the primary source of factual testimony regardi

IX. PRIVILEGE AND CONFIDENTIALITY NOTICE This memorandum is prepared for the sole use of Calderwood & Harkness LLP attorneys and staff working on Matter No. 1039-00001, In re Grand Jury Investigation No. GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division. It is not intended for distribution to any person or entity outside of Calderwood & Harkness LLP. This memorandum reflects the