Contract analysis

1. Purpose and Authorization Calderwood & Harkness LLP ("C&H") acts as outside environmental and regulatory counsel to Torchlight Mining Corp. ("TMC" or the "Borrower"), a corporation incorporated under the Canada Business Corporations Act (R.S.C., 1985, c. C-44) (the "CBCA"), with its Canadian headquarters located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada, and its U.S. headquarters loc

2. Background — The Enforcement Action On January 18, 2024, the United States Department of Justice, Environment and Natural Resources Division ("DOJ ENRD"), acting on behalf of the United States Environmental Protection Agency ("EPA"), filed a civil complaint (the "Complaint") against TMC and certain of its U.S. operating subsidiaries in the United States District Court for the District of Montana, Missoula Division

1. Ridgecrest Copper-Molybdenum Mine. Located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832. This facility is a former large-scale copper-molybdenum mine currently in the closure and reclamation phase, with an approximately 3,200-acre mine footprint. The Complaint alleges historic and ongoing CWA violations arising from acid mine drainage entering Flint Creek and its tributaries, as well as R

2. Gallatin Chemical Works. Located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714. This is an active specialty chemical manufacturing facility on approximately 145 acres that produces flotation reagents and other mineral processing chemicals. The Complaint alleges RCRA violations relating to the storage and disposal of spent solvents and process waste, as well as CWA violations arising from u

3. Bonanza Creek Gold Mine. Located at County Road 447, Mile Marker 12, Lander County, Nevada 89820. This is an active open-pit heap-leach gold mining operation with an approximately 5,600-acre mine footprint. The Complaint alleges CWA violations arising from seepage of cyanide-bearing process solution from heap leach pads into adjacent groundwater and surface water systems, as well as RCRA violations relating to the

4. Kanawha Bend Chemical Plant. Located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112. This is an active chemical manufacturing facility on approximately 78 acres that produces leaching agents and related products. The Complaint alleges CWA and RCRA violations, as well as CERCLA liability arising from a sulfuric acid release that occurred on June 14, 2020, which required EPA emergency r

3. The Consent Decree — Status and Key Terms 3.1 Procedural History and Current Status Following the filing of the Complaint on January 18, 2024, the parties engaged in preliminary proceedings, including the filing of responsive pleadings by the Defendants and initial discovery. The Court entered an order referring the matter to court-ordered mediation before Magistrate Judge Clara Finnegan on May 15, 2024. Mediation

4. Financial Assurance Instruments The Consent Decree requires TMC and the Defendant entities to post total financial assurance in the amount of US$245.0 million by September 12, 2025 (i.e., ninety (90) days after the anticipated Effective Date). The required financial assurance is structured in the following two primary components, supplemented by a separate escrow arrangement for stipulated penalty purposes. 4.1 Su

5. TMC's Environmental Reserve and Insurance Coverage 5.1 Environmental Remediation Reserve As disclosed in TMC's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, filed with the U.S. Securities and Exchange Commission and the Canadian securities regulatory authorities on November 14, 2024, TMC's environmental remediation reserve stood at C$340.0 million as of September 30, 2024. At the e

6. Environmental Liability Covenant Compliance The Credit Agreement contains an environmental liability covenant (Section 7.14 thereof) pursuant to which TMC's aggregate disclosed and undisclosed environmental liabilities shall not exceed twenty-five percent (25%) of TMC's consolidated net tangible assets ("CNTA"), as defined in the Credit Agreement. C&H has reviewed the relevant provisions of the Credit Agreement an

7. TMC Corporate and Financial Overview For the convenience of the Administrative Agent and the lending syndicate, and to provide context for the financial obligations described in this letter, the following is a summary overview of TMC's corporate profile and financial position: Corporate Organization. Torchlight Mining Corp. is a corporation incorporated under the CBCA, with dual listings on the Toronto Stock Excha

8. Ongoing Obligations and Undertakings TMC undertakes to keep the Administrative Agent and, through it, the lending syndicate, informed of material developments in the Consent Decree proceedings and related matters. Specifically, TMC will provide prompt written notice to the Administrative Agent of each of the following: (a) Entry of the Consent Decree by the Court; (b) The occurrence of the Effective Date under the

9. Request for Acknowledgment We respectfully request that Harborstone National Bank, N.A., as Administrative Agent under the Credit Agreement, acknowledge receipt of this disclosure letter and circulate it to the members of the lending syndicate in accordance with the information-sharing and distribution provisions of the Credit Agreement (Section 10.02 thereof, or such other applicable provision). TMC does not curr

10. Reservation of Rights Nothing in this letter shall constitute or be deemed to constitute a waiver, release, or modification of any rights, remedies, claims, or defenses of TMC, its subsidiaries, or any of the Defendants under the Credit Agreement, any ancillary loan documents, applicable law, or otherwise. TMC expressly reserves all such rights and defenses in their entirety. This letter is provided solely for in

11. Confidentiality TMC respectfully requests that the contents of this letter, including all enclosures, be treated as confidential information in accordance with the confidentiality provisions set forth in Section 10.08 of the Credit Agreement. Distribution of this letter by the Administrative Agent to members of the lending syndicate shall be subject to the confidentiality obligations binding upon each lender unde

1. Consent Decree — Execution Version (lodged with the U.S. District Court for the District of Montana, February 19, 2025)

2. Surety Bond (Bond No. ISA-ENV-2025-08934, Ironbark Surety of America, Inc., dated February 15, 2025)

3. Remediation Trust Agreement (Trust No. LTC-REM-2025-1177, Larchfield Trust Company, N.A., dated February 17, 2025)

4. Aggregate Financial Obligation Summary Table cc: Miriam Soo-Hwan Park, General Counsel, Torchlight Mining Corp. Carolyn Bracebridge, Chief Financial Officer, Torchlight Mining Corp. Vivian Okafor, Managing Director, Northspire Capital Markets, Inc. Beatrice Holloway, Partner, Calderwood & Harkness LLP File: C&H Matter No. 1039-00003 Facility | Nominal Remediation Cost | Remediation Period | NPV (3% discount Rate)