Contract analysis

I. Executive Summary This memorandum analyzes the Canadian securities law issues arising from the proposed offering by Torchlight Mining Corp. ("TMC" or the "Issuer"), a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the "CBCA"), whose common shares are listed and traded on the Toronto Stock Exchange (the "TSX") under the ticker symbol "TMC," of $300,000,000 aggregate princ

II. Background and Transaction Overview A. The Issuer Torchlight Mining Corp. is a corporation incorporated under the CBCA. TMC is principally engaged in the exploration, development, and operation of base metal mines in Ontario and British Columbia, with its flagship asset being the Wolverine Lake nickel-copper mine located approximately 85 kilometers northeast of Thunder Bay, Ontario. The key corporate details of t

III. Canadian Prospectus Requirements and Applicable Exemptions A. Overview of Canadian Prospectus Regime Canadian securities regulation is principally a matter of provincial and territorial jurisdiction. Each province and territory of Canada has enacted its own securities legislation, administered by a local securities commission or equivalent regulatory authority. These regimes are substantially harmonized through

IV. TSX Notification and Approval Requirements A. TSX Company Manual — Issuance of Debt Securities TMC's common shares are listed and posted for trading on the TSX. As a TSX-listed issuer, TMC is bound by the requirements of the TSX Company Manual (the "Manual"), which imposes certain notification, approval, and disclosure obligations on listed issuers in connection with significant corporate transactions. Under the

V. Continuous Disclosure Obligations A. Material Change Reporting TMC, as a reporting issuer in all Canadian provinces and territories, is subject to the continuous disclosure requirements of National Instrument 51-102 — Continuous Disclosure Obligations. Section 7.1 of NI 51-102 requires a reporting issuer to issue and file a "material change report" on Form 51-102F3 promptly, and in any event within 10 days, of any

VI. Cross-Border Regulatory Considerations A. Canadian Dealer Registration Under the Securities Act (Ontario) and corresponding legislation in other provinces, as well as National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations ("NI 31-103"), any person or company that engages in the business of trading in securities in a province of Canada must be registered as a dealer (

VII. Collateral and Security Filing Considerations Under Canadian Law A. Canadian General Security Agreement The Canadian General Security Agreement (the "Canadian GSA") dated as of April 19, 2022, among Torchlight Mining Corp., Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc. (collectively, the "Canadian Grantors") and Northern Dominion Trust Company, as Collateral Agent, grants a first-priority

VIII. Tax Considerations (Summary) Canadian withholding tax is a relevant consideration in the context of a cross-border debt offering by a Canadian issuer to non-resident holders. Under the Income Tax Act (Canada), R.S.C. 1985, c. 1 (5th Supp.) (the "ITA"), interest, dividends, and certain other payments made by a Canadian resident to a non-resident are generally subject to Canadian withholding tax at a rate of 25%,

IX. Offering Memorandum — Canadian-Specific Disclosure and Legends A. Cover Page and Selling Restriction Legends The Offering Memorandum (final dated March 14, 2022) contains the following Canadian-specific legends, which have been reviewed and approved by both Pendleton Ross LLP and Greystone & Whitfield LLP: Cover Page Legend: "The Notes have not been and will not be qualified for distribution to the public under a