Contract analysis

I. EXECUTIVE SUMMARY This memorandum sets forth our analysis of the regulatory filing requirements applicable to the proposed acquisition by Torchlight Mining Corp. ("Torchlight" or "TMC") of all of the outstanding common shares of Ridgeline Cobalt Inc. ("Ridgeline" or "RCI") by means of an all-cash tender offer. We have been asked to identify the applicable antitrust, competition, and foreign investment review regim

II. HART-SCOTT-RODINO ACT ANALYSIS A. Applicability and Jurisdictional Thresholds The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, codified at Section 7A of the Clayton Act, 15 U.S.C. § 18a, and its implementing regulations at 16 C.F.R. Parts 801–803, require pre-merger notification to the FTC and the DOJ for certain acquisitions of voting securities or assets that exceed specified jurisdictional

1. Size-of-Transaction Threshold. The aggregate consideration for all 18,000,000 outstanding common shares of Ridgeline is $45,000,000 (18,000,000 shares × $2.50 per share). The FTC adjusts the HSR Act's notification thresholds annually based on changes in the gross national product. As of the most recent adjustment, effective February 27, 2024, the base size-of-transaction threshold is $111.4 million. At first blush

2. Size-of-Person Test. Under the HSR Act and its implementing regulations, a transaction is reportable if it meets both the size-of-transaction threshold and the size-of-person test, unless the transaction value exceeds $445.5 million (the 2024 adjusted threshold above which the size-of-person test does not apply). Because the transaction value here is $45,000,000, the size-of-person test is relevant. The size-of-pe

3. Determination of Reportability. Under the applicable threshold structure, where the acquiring person has total assets or annual net sales exceeding $222.7 million and the acquired person has total assets or annual net sales exceeding $22.3 million, the transaction is reportable if the value of the voting securities to be acquired exceeds $111.4 million or, alternatively, if the acquisition will result in Torchligh

4. Acquiring Person. The acquiring person for purposes of the HSR Act is Torchlight Mining Corp. (EIN: 98-0743218), together with its "ultimate parent entity" for HSR purposes. Torchlight is a British Columbia corporation and is its own ultimate parent entity (it is not controlled by any other entity). Torchlight's status as a foreign person (Canadian) does not exempt the transaction from HSR Act filing requirements,

5. Acquired Person. The acquired person is Ridgeline Cobalt Inc. (EIN: 83-2196504), a Delaware corporation with its principal executive offices at 44 Lakeshore Drive, Suite 300, Marquette, MI 49855, listed on the NYSE American exchange under the ticker symbol "RCI." Ridgeline's operations consist of two principal mining properties: (a) Hawk Ridge Project — An advanced-stage cobalt-nickel exploration property comprisi

1. Relevant Product Market. The proposed acquisition involves the mining and exploration sector, specifically the extraction and development of cobalt and nickel mineral resources. For purposes of antitrust analysis, the relevant product markets are: (a) Cobalt mining and exploration. This includes the extraction of cobalt from primary cobalt deposits and as a by-product of copper and nickel mining, as well as the ex

2. Relevant Geographic Market. The relevant geographic market for cobalt mining and exploration may be defined at both a North American and a global level: (a) North American cobalt and nickel mining/exploration. Ridgeline's properties are located in Ontario, Canada, and Michigan, United States. Torchlight has existing cobalt mining operations in northern Ontario and British Columbia. The North American cobalt mining

3. Competitive Assessment. Our competitive assessment considers both horizontal and vertical effects. Horizontal Effects. Torchlight's current cobalt production is spread across international operations in Canada, Chile, and Zambia. It does not hold a dominant share of U.S. or North American cobalt supply. Ridgeline is an exploration-stage company with no current commercial cobalt production. Its fiscal year 2023 rev

1. File HSR Notification and Report Forms for both Torchlight (as acquiring person) and Ridgeline (as acquired person) no later than March 21, 2024. The Calderwood & Harkness team will prepare Torchlight's filing; Galbraith Haver & Steele LLP will prepare Ridgeline's filing.

2. Request early termination of the waiting period simultaneously with filing. We believe that early termination is likely to be granted.

3. Pay the HSR filing fee of $111,000, which is the responsibility of Torchlight as the acquiring person. Payment should be coordinated with Torchlight's finance team (Marguerite Soo-Chan, CFO) to ensure that funds are transmitted to the FTC on or before the date of filing.

4. Coordinate with Galbraith Haver & Steele LLP (Martin Galbraith and Rebecca Tsang, One Liberty Plaza, 52nd Floor, New York, NY 10006), outside counsel to Ridgeline, regarding Ridgeline's filing obligations and information requirements. Timely coordination is essential to ensure that both parties' filings are submitted simultaneously.

5. Advise the Torchlight and Ridgeline deal teams — specifically, Nils Brenner and Patricia Edevane at Torchlight, and Gordon McTavish and Elaine Bricker at Ridgeline — of the gun-jumping restrictions that apply during the HSR waiting period. Under Section 7A(a) of the Clayton Act and the HSR Act's implementing regulations, Torchlight must not exercise control over Ridgeline's business operations, make management dec

III. INVESTMENT CANADA ACT ANALYSIS A. Applicability. The Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.) (the "ICA"), governs the acquisition of control of "Canadian businesses" by investors. The ICA applies to the proposed transaction for the following reasons. Ridgeline, although organized as a Delaware corporation with its headquarters in Marquette, Michigan, carries on a "Canadian business" within the mean

1. Net Benefit Review Threshold. A full net benefit review is required only if the value of the Canadian business being acquired exceeds the applicable review threshold. For 2024, the net benefit review threshold for investments by WTO investors (which includes U.S.-controlled entities, as the United States is a member of the World Trade Organization) is C$1.326 billion in enterprise value. For investments subject to

2. National Security Review. Regardless of whether the net benefit review threshold is met, all investments — including those below the review threshold — are subject to potential national security review under Part IV.1 of the ICA (Sections 25.1–25.6). The national security review provisions empower the Minister to recommend to the Governor in Council that an investment be subject to a national security review if th

1. File the ICA notification no later than March 25, 2024. The notification should be prepared in consultation with Canadian regulatory counsel, whether through the Calderwood & Harkness team's Canadian law capabilities or through engagement of local counsel in Ottawa with expertise in ICA filings.

2. Include a detailed description of the Hawk Ridge Project in the notification, including the nature and scope of exploration activities, the NI 43-101 resource estimate, the number of Canadian employees and contractors, and the project's expected contribution to the Canadian mining sector.

3. Describe Torchlight's existing Canadian mining operations in the notification, including its operations in northern Ontario and British Columbia, its TSX listing, its Canadian workforce, and its headquarters in Vancouver. This information will help establish that the acquirer is a bona fide Canadian mining company with deep roots in the Canadian resource sector.

4. Articulate the strategic rationale for the acquisition, emphasizing the objective of securing domestic North American cobalt feedstock for the Sudbury cobalt sulfate refinery. This rationale aligns with Canada's Critical Minerals Strategy and should help pre-empt any national security concerns.

5. Monitor the 45-day review period following the filing. We will track the timeline and be prepared to respond promptly to any information requests from the Investment Review Division or inquiries from the Minister's office.

6. Prepare for the possibility (however remote) that the Minister may seek additional information or initiate informal consultations regarding the critical minerals aspects of the transaction. We should be prepared with detailed responses regarding Torchlight's plans for the Hawk Ridge Project and its commitment to Canadian employment and economic activity.

IV. OTHER POTENTIAL REGULATORY CONSIDERATIONS In addition to the HSR Act and ICA filings analyzed above, we have considered several other regulatory regimes that could potentially apply to the proposed transaction. Our analysis and recommendations with respect to each are set forth below. A. CFIUS (Committee on Foreign Investment in the United States) The Committee on Foreign Investment in the United States ("CFIUS")

V. REGULATORY CONDITION IN THE OFFER-TO-PURCHASE AGREEMENT The definitive Offer-to-Purchase Agreement governing the proposed tender offer (which is expected to be executed and was subsequently signed on May 2, 2024) will include as conditions to Torchlight's obligation to accept for payment and pay for shares tendered the following regulatory clearance conditions: (1) HSR Condition: The expiration or early terminatio

VI. RECOMMENDED TIMELINE The following table sets forth the recommended timeline for regulatory filings and key milestones in the regulatory clearance process: The timeline above provides adequate margin between the regulatory clearance milestones and the initial offer expiration date. Even in the absence of early termination, the HSR waiting period would expire by approximately April 5, 2024 — more than two months b

VII. CONCLUSION Based on the analysis set forth in this memorandum, our conclusions and recommendations are summarized as follows: HSR Act. A pre-merger notification filing under the HSR Act is required and should be filed no later than March 21, 2024, for both Torchlight and Ridgeline. The applicable filing fee of $111,000 is payable by Torchlight. We recommend requesting early termination simultaneously with filing