Contract analysis

I. Purpose and Summary The purpose of this memorandum is to document and analyze the voluntary proffer session of Thomas Eriksen, Regional Sales Manager, Western Region, U.S. Specialty Minerals Division, Torchlight Mining Corp. ("TMC" or the "Company"), conducted with attorneys from the United States Department of Justice, Antitrust Division (the "DOJ" or the "Division") on Saturday, April 22, 2023. The session took

II. Attendees A. DOJ Representatives The following DOJ personnel were present during the proffer session:

1. Denise Kowalski, Trial Attorney, Antitrust Division, San Francisco Field Office. Kowalski has been the lead attorney on the TMC investigation and has served as C&H's primary point of contact at the Division throughout the investigation. Kowalski conducted the majority of the questioning during the first half of the session.

2. Marcus Reeves, Senior Trial Attorney, Antitrust Division, San Francisco Field Office. Reeves is a senior member of the investigation team and has been present at all prior substantive interactions between C&H and the DOJ in connection with this matter. Reeves conducted most of the questioning during the second half of the session, particularly with respect to the NASMC conference documents and the Holt-to-Eriksen

3. Lauren Pittman, Assistant Trial Attorney, Antitrust Division (name and title as identified at the session). This individual was not previously known to C&H and was introduced by Kowalski at the outset of the session as "Assistant Trial Attorney Lauren Pittman." Pittman did not ask questions during the session but appeared to be observing and taking notes. C&H should confirm Pittman's identity and role on the inves

4. DOJ Paralegal / Note-Taker (name not obtained). One additional DOJ staff member was present in the room, appearing to function as a paralegal or dedicated note-taker. This individual did not speak during the session and was not formally introduced by name. C&H did not request the individual's name at the time. B. Torchlight Mining Corp. / Calderwood & Harkness LLP Representatives The following individuals attended

1. Thomas Eriksen, Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. Eriksen appeared as the proffer witness.

2. Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. Forsythe attended in her capacity as lead counsel to TMC in connection with the DOJ investigation.

3. Aaron Liu, Lead Associate, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. I attended in my capacity as counsel to TMC, and I served as the primary note-taker for C&H during the session. This memorandum is based on my contemporaneous notes. C. Note on Representation Thomas Eriksen is a current TMC employee who is represented in this matter by Calderwood & Harkness LLP in his capacity as a TMC em

III. Proffer Session Ground Rules The proffer session was conducted pursuant to the terms of the queen-for-a-day proffer agreement dated April 15, 2023 (the "Proffer Agreement"), which was negotiated between C&H (on behalf of TMC and Eriksen in his capacity as a TMC employee) and the DOJ Antitrust Division. The Proffer Agreement was transmitted to the DOJ via a letter from Elaine Forsythe to Denise Kowalski on that d

IV. Summary of Questions and Eriksen's Responses The following is a detailed summary of the questions posed by DOJ attorneys during the proffer session and the substance of Eriksen's responses. This summary is based on my contemporaneous handwritten notes taken during the session. I have endeavored to capture the substance and, where possible, the approximate language of the questions and responses, though this is no

1. Arlington, Virginia — approximately Q2 2018. Eriksen recalled attending the spring or early summer quarterly conference held at or near NASMC's headquarters in Arlington, Virginia, in approximately the second quarter of 2018. He could not recall the precise dates.

2. Scottsdale, Arizona — approximately Q4 2018. Eriksen recalled attending a fall or year-end quarterly conference held in Scottsdale, Arizona, in approximately the fourth quarter of 2018.

3. Orlando, Florida — approximately Q2 2019. Eriksen recalled attending a spring quarterly conference held in Orlando, Florida, in approximately the second quarter of 2019.

4. Arlington, Virginia — approximately Q1 2020. Eriksen recalled attending a winter or early spring quarterly conference held in Arlington, Virginia, in approximately the first quarter of 2020. Eriksen noted that this may have been one of the last in-person NASMC conferences before the COVID-19 pandemic disrupted in-person gatherings. Eriksen stated that his attendance at these conferences was authorized and funded b

V. Documents Referenced During the Session The following documents were referenced or shown to Eriksen during the proffer session:

1. TMC-0215847 — Internal TMC email from Gavin Holt to Thomas Eriksen, dated approximately June 2019, regarding a "revised approach" to a feldspar customer bid in the Western Region. This document was shown to Eriksen during the session, and Eriksen reviewed it before responding to the DOJ's questions. This document was produced by TMC to the DOJ in the course of TMC's document production and has been previously revi

2. NASMC Scottsdale, AZ Conference Check-In / Badge Record (Q4 2018) — A document that appeared to be a conference badge scan or event check-in record from the NASMC Scottsdale, Arizona conference held in approximately the fourth quarter of 2018. This document was shown to Eriksen during the session. The document appeared to indicate that Eriksen, Holt, Edgerton, and Tsang were all checked in to a conference breakout

3. No VaultChat Messages Shown. The DOJ did not show Eriksen any VaultChat messages or other external communications between Holt and personnel at Ridgecrest or Pinnacle. This is notable. The absence of VaultChat messages in this session may indicate that the DOJ did not believe such messages were relevant to Eriksen's testimony, or it may reflect a strategic decision by the DOJ to withhold those communications for u

VI. Assessment of DOJ's Focus Areas and Strategy A. NASMC Conferences as Coordination Venue The DOJ's questioning during the proffer session strongly suggests that the Division is building its case on the theory that NASMC quarterly conferences served as the primary meeting ground and coordination venue for the alleged price-fixing conspiracy among TMC, Ridgecrest, and Pinnacle. This is consistent with the DOJ's broa

VII. Recommended Next Steps Based on the foregoing assessment of the proffer session, C&H recommends the following next steps:

1. Request Copy of Conference Document. C&H should formally request from the DOJ (specifically, Denise Kowalski and Marcus Reeves) a copy of the NASMC Scottsdale, Arizona conference check-in or badge record that was shown to Eriksen during the proffer session. A copy of this document was not provided to C&H at the session, and C&H was not given an opportunity to examine the document in detail beyond the brief review

2. Review TMC-0215847 in Context. C&H should re-examine the Holt-to-Eriksen email (Bates-stamped TMC-0215847) and the surrounding communications in TMC's document production. Specifically, C&H should assess whether the timing of the "revised approach" instruction in approximately June 2019 correlates with any documented VaultChat exchange between Holt and Edgerton (Ridgecrest) or Holt and Tsang (Pinnacle) during the

3. No Upjohn Warning Concerns at Present. Eriksen appeared to understand the Upjohn warning and C&H's role as counsel to TMC. He did not exhibit any confusion about the nature of the representation, and he did not make statements that suggested a divergence between his interests and TMC's interests. At present, there are no indications that Eriksen requires separate personal counsel. However, this situation should be

4. Supplement Cooperation Proffer. The Eriksen proffer session should be referenced in C&H's supplemental cooperation submission to the DOJ, which is currently in preparation and targeted for submission on or about May 1, 2023. The supplemental submission should note that TMC made Eriksen available for a voluntary proffer, that Eriksen testified forthrightly and without invoking the Fifth Amendment, and that Eriksen'

5. Brief TMC General Counsel. C&H should provide an oral briefing to Priya Anand, TMC's General Counsel, on the substance and outcome of the proffer session. The briefing should communicate that Eriksen performed well, that his testimony was consistent with prior representations, and that no adverse developments arose during the session. The briefing should also note the Scottsdale conference document and the potenti

6. Coordinate with Compliance Remediation Effort. Eriksen's testimony about the absence of antitrust compliance training since approximately 2018 and the lack of any trade-association monitoring or pre- and post-conference compliance procedures underscores the urgency and necessity of the enhanced compliance program that C&H is recommending to TMC. The design and implementation of this enhanced program, which C&H ant

VIII. Privilege and Confidentiality Notice This memorandum constitutes privileged attorney work product prepared in anticipation of litigation and in connection with the provision of legal advice to Torchlight Mining Corp. It is protected by the attorney-client privilege and the work-product doctrine. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel at Calderwood &