1039-00001 · Torchlight Mining Corp · documents

conflict-check-memorandum.docx DOCUMENT Litigation

8 / 88 ← → ✕

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104

INTERNAL MEMORANDUM

Date: February 16, 2022

Matter Number: 1039-00001

To: Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group Howard Bellamy, Billing Partner, Antitrust & Competition Practice Group

From: Aaron Liu, Associate, Antitrust & Competition Practice Group Monica Reyes, Associate, Antitrust & Competition Practice Group

Re: New Matter Conflict Check — Proposed Representation of Torchlight Mining Corp. in U.S. Department of Justice Antitrust Division Grand Jury Investigation (Grand Jury No. GJ-22-0194, N.D. Cal.)

This memorandum is a confidential internal document of Calderwood & Harkness LLP, prepared for the purpose of facilitating the firm's ethical obligations under the California Rules of Professional Conduct and the ABA Model Rules of Professional Conduct. It is protected by the attorney work product doctrine and the attorney-client privilege. This memorandum should not be disclosed to any person outside of the firm without the prior written approval of the Responsible Partner.

I. PURPOSE

This memorandum documents the results of the conflict-of-interest check conducted by the Antitrust & Competition Practice Group in connection with the proposed engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") to represent Torchlight Mining Corp. ("TMC" or "Torchlight") in the defense of a grand jury investigation initiated by the Antitrust Division of the United States Department of Justice (the "DOJ" or the "Antitrust Division"). The investigation, designated Grand Jury No. GJ-22-0194 and pending in the United States District Court for the Northern District of California, San Francisco Division, concerns suspected price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector, with a particular focus on the markets for high-purity feldspar, industrial talc, and rare-earth concentrates.

TMC first approached Calderwood & Harkness on or about February 15, 2022, through its General Counsel, Priya Anand. Ms. Anand contacted Elaine Forsythe directly by telephone and followed up with a written communication outlining the nature of the investigation and TMC's need for experienced antitrust defense counsel. TMC's outreach was precipitated by its receipt of Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003, which was served upon TMC's U.S. subsidiary, Torchlight Mining (U.S.) Inc., on February 14, 2022. The subpoena calls for the production of a broad range of documents relating to TMC's pricing practices, customer communications, competitor contacts, and trade-association participation in the specialty-minerals sector over the period from January 1, 2016 through the date of the subpoena.

If the proposed engagement is cleared, the matter would be led by Elaine Forsythe, who would serve as the Responsible Partner and would be based in the Firm's San Francisco office, and Howard Bellamy, who would serve as the Billing Partner and would be based in the Firm's New York office. The proposed team would also include the undersigned associates, as well as additional associates and support staff as appropriate given the scope of the investigation.

A prompt clearance determination is required. The initial return date on the grand jury subpoena is March 7, 2022, and TMC's counsel must immediately assess the scope of the subpoena, issue document-preservation directives to TMC's information-technology and records-management departments, and begin communications with the DOJ regarding the production schedule. To that end, the parties have targeted execution of the engagement letter on or about February 18, 2022, and the Firm must complete its conflict-of-interest analysis before that date in order to proceed. This memorandum is intended to satisfy the Firm's obligation under its internal policies and the applicable rules of professional conduct to conduct a thorough conflict check before undertaking new client representations.

II. PROPOSED CLIENT INFORMATION

The following information was gathered from publicly available sources, TMC's corporate filings, and information provided directly by Ms. Anand during her initial communications with the Firm. This information was used to populate the conflict-check queries described in Sections IV and V below.

Full Legal Name: Torchlight Mining Corp.

Entity Type: Corporation organized and existing under the Canada Business Corporations Act ("CBCA"), CBCA Corporation No. 7841526-1.

Registered Office: 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada.

U.S. Subsidiary: Torchlight Mining (U.S.) Inc., a corporation organized and existing under the laws of the State of Nevada (Nevada Secretary of State Entity No. NV20160438721), with its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. Torchlight Mining (U.S.) Inc. is a wholly owned subsidiary of TMC and serves as the holding entity for TMC's U.S.-based mining operations and downstream chemical-processing activities. The grand jury subpoena was served upon this subsidiary in its capacity as TMC's U.S. agent for service of process.

U.S. Federal Employer Identification Number (EIN): 83-2947106

Canadian Business Number: 741 829 456 RC0001

Public Listings: TMC's common shares are listed and traded on the Toronto Stock Exchange under the symbol TSX: TRCL and on the New York Stock Exchange under the symbol NYSE: TMC. As a dual-listed public company, TMC is subject to reporting obligations under both Canadian securities laws (including the requirements of the Canadian Securities Administrators) and U.S. securities laws (including the Securities Exchange Act of 1934, as a foreign private issuer registered with the U.S. Securities and Exchange Commission).

FY 2021 Consolidated Revenue: CAD 4.27 billion (approximately USD 3.38 billion, based on the average exchange rate for the fiscal year ended December 31, 2021).

FY 2021 EBITDA: CAD 812 million.

Industry: TMC is a vertically integrated specialty-minerals mining and chemicals company. It operates fourteen mines across four countries — Canada, the United States, Brazil, and Australia — and six downstream chemical-processing facilities that convert mined specialty minerals into refined chemical products for industrial, agricultural, and consumer applications. TMC's product portfolio includes high-purity feldspar, industrial talc, rare-earth concentrates, lithium compounds, and various industrial-grade chemical intermediaries.

Division at Issue: The DOJ investigation focuses on the activities of TMC's U.S. Specialty Minerals Division, which is responsible for the extraction, processing, and sale of high-purity feldspar, industrial talc, and rare-earth concentrates within the United States and for export from the United States to certain international markets. The U.S. Specialty Minerals Division generated revenue of approximately USD 687 million in fiscal year 2021, representing approximately 20% of TMC's consolidated revenue.

Key Client Contacts:

Ms. Anand will serve as the primary point of contact between TMC and the Firm for purposes of the engagement. All communications regarding the investigation should be directed through Ms. Anand unless she designates an alternative contact.

III. DESCRIPTION OF THE MATTER

The following is a summary of the matter in connection with which TMC seeks representation by Calderwood & Harkness LLP. This summary is based on information provided by Ms. Anand and on the face of Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003.

Nature of the Investigation. The Antitrust Division of the United States Department of Justice has formally opened a grand jury investigation into suspected violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, in the North American specialty-minerals sector. The investigation was formally initiated on or about February 10, 2022, when the grand jury was empaneled and designated Grand Jury No. GJ-22-0194 in the United States District Court for the Northern District of California, San Francisco Division.

Subject Conduct. The investigation concerns suspected price-fixing, market allocation, and bid-rigging among competitors in three product categories within the North American specialty-minerals sector: (i) high-purity feldspar, (ii) industrial talc, and (iii) rare-earth concentrates. The DOJ suspects that competitors in these product markets engaged in coordinated conduct designed to artificially inflate prices, divide geographic and customer markets, and rig bids in response to procurement solicitations issued by major industrial purchasers.

Alleged Conspiracy Period. Based on the date ranges specified in the grand jury subpoena and information relayed by Ms. Anand from TMC's preliminary assessment, the alleged conspiracy period extends from approximately January 2017 through approximately August 2021.

DOJ Prosecutors. The investigation is being conducted by the San Francisco Field Office of the Antitrust Division. The principal trial attorneys assigned to the matter are:

• Denise Kowalski, Trial Attorney, DOJ Antitrust Division, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.

• Marcus Reeves, Senior Trial Attorney, DOJ Antitrust Division, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.

The investigation is supervised by Julia Stafford-Hayes, Deputy Assistant Attorney General, DOJ Antitrust Division, Washington, D.C.

Court. The grand jury sits in the United States District Court for the Northern District of California, San Francisco Division. The presiding judicial officer for purposes of grand jury matters has not yet been identified.

Grand Jury Subpoena. TMC (through its U.S. subsidiary, Torchlight Mining (U.S.) Inc.) received Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003 on February 14, 2022. The subpoena commands the production of documents relating to, among other things: (a) TMC's pricing of high-purity feldspar, industrial talc, and rare-earth concentrates in North America; (b) communications between TMC personnel and any representative of Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., Cascade Chemical Supply Co., or any other competitor; (c) TMC's participation in meetings, conferences, and events organized by or associated with the North American Specialty Minerals Council ("NASMC"); and (d) TMC's bidding practices in response to procurement solicitations from specified major industrial customers. The initial return date on the subpoena is March 7, 2022.

Proposed Scope of Representation. If the engagement is cleared, Calderwood & Harkness's representation of TMC would encompass the following:

1. Responding to Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003, including negotiation of the production schedule and scope with DOJ counsel, document collection, review for responsiveness and privilege, and production.

2. Conducting an internal investigation on behalf of TMC to assess the facts underlying the DOJ's investigation, identify relevant witnesses and documents, and advise TMC on its exposure and strategic options.

3. Preparing TMC personnel for potential grand jury testimony or voluntary witness interviews.

4. Conducting privilege review of documents and communications, including identification and assertion of attorney-client privilege and work-product protections.

5. Advising TMC on the design and implementation of compliance remediation measures to strengthen TMC's antitrust-compliance program.

6. As necessary, negotiating a potential resolution with the DOJ, which could include a plea agreement, deferred prosecution agreement, non-prosecution agreement, or other disposition, depending on the outcome of the internal investigation and TMC's strategic determinations.

IV. PARTIES CHECKED

The Firm's conflict-checking system, IntegrityCheck™ (the Firm's proprietary client-and-matter database, maintained by the Office of the General Counsel and the Conflicts Department, which captures current and former client engagements, adverse parties, interested parties, affiliated entities, and key individual contacts for all matters opened since the Firm's founding), was queried on February 15 and 16, 2022. Queries were run against the following categories of parties, and the results are set forth below.

A. Adverse Party — U.S. Department of Justice, Antitrust Division

The United States Department of Justice is a federal government agency and, as such, is treated under the Firm's conflict-checking policies in accordance with the Firm's Government Agency Representation Policy (Policy No. SC-ETHICS-007, revised January 2021). Under this policy, the DOJ is not treated as a "client" for conflict-checking purposes (as the Firm does not represent the DOJ in any capacity), but the Firm is required to check whether: (i) any current engagement involves representation of a client in a matter adverse to the DOJ Antitrust Division, such that taking on this new engagement could create a positional or issue conflict; and (ii) any current or recently departed Firm attorney has prior government service at the DOJ Antitrust Division that could give rise to recusal obligations under applicable ethics rules, including Rule 1.11 of the California Rules of Professional Conduct and Rule 1.11 of the ABA Model Rules of Professional Conduct.

The following individual DOJ personnel were also checked in the Firm's database to confirm that no Firm attorney has a personal or professional relationship that could create a conflict or the appearance of a conflict:

• Denise Kowalski, Trial Attorney

• Marcus Reeves, Senior Trial Attorney

• Julia Stafford-Hayes, Deputy Assistant Attorney General

Results: The conflict check confirmed that there are no current or former matters in which Calderwood & Harkness LLP represents or has represented the DOJ Antitrust Division in any capacity. No current engagement was identified in which the Firm represents a client in a matter that is directly adverse to the DOJ Antitrust Division in a manner that would create a disqualifying conflict or a material positional conflict with respect to the proposed TMC engagement. No Calderwood & Harkness attorney — whether partner, of counsel, or associate — was identified as having prior employment at the DOJ Antitrust Division, the DOJ Antitrust Division's San Francisco Field Office, or the Criminal Enforcement Sections of the Antitrust Division within the applicable recusal period prescribed by Rule 1.11. No Firm attorney was identified as having a personal or professional relationship with Denise Kowalski, Marcus Reeves, or Julia Stafford-Hayes that would warrant disclosure or further analysis.

Conclusion: No conflict identified.

B. Co-Subjects / Co-Targets

Based on information provided by Ms. Anand and on the face of the grand jury subpoena, the following entities have been identified as co-subjects, co-targets, or cooperating entities in the DOJ investigation. Each was checked against the Firm's conflict database, along with their key personnel, outside counsel, and, where applicable, significant affiliated entities.

1. Ridgecrest Minerals Inc.

Full Legal Name: Ridgecrest Minerals Inc.

Entity Type: Corporation organized and existing under the laws of the State of Delaware.

Headquarters: 1700 Lincoln Street, Suite 4200, Denver, Colorado 80203.

FY 2021 Revenue: Approximately USD 1.92 billion.

Ownership: Ridgecrest is a portfolio company of Marlowe Asset Management Peak Capital Partners LP, a Delaware limited partnership and Denver-based private equity fund. Marlowe Asset Management Peak acquired Ridgecrest in a leveraged buyout in 2015 and retains a controlling equity interest.

Key Personnel:

• Brian Novotny, Chief Executive Officer. Mr. Novotny has served as CEO of Ridgecrest since 2016 and is a known industry figure in the specialty-minerals sector.

• Carl Edgerton, Vice President of Sales. Mr. Edgerton has been identified by the DOJ as a key participant in the suspected anticompetitive conduct. Mr. Edgerton is alleged to have been a direct counterpart to TMC's Gavin Holt in pricing discussions and customer-allocation arrangements.

Status in Investigation: Based on information provided by Ms. Anand and publicly available reports, Ridgecrest received a DOJ target letter on or about January 12, 2022, indicating that the DOJ considers Ridgecrest a target of the grand jury investigation. Ridgecrest's status as a target suggests that the DOJ has substantial evidence of Ridgecrest's participation in the alleged conspiracy.

Outside Counsel: Ridgecrest has retained Davenport, Kline & Archer LLP ("DKA"), with offices at 1801 California Street, Suite 3500, Denver, Colorado 80202, to represent it in connection with the investigation. The lead partner for the engagement is Helen Marchetti.

Conflict Check Results:

The Firm's IntegrityCheck™ database was queried for the following names and entities: Ridgecrest Minerals Inc.; Marlowe Asset Management Peak Capital Partners LP; Brian Novotny; Carl Edgerton. The database was searched across all current open matters, all matters closed within the past five years, and all archived entries in the Firm's historical index.

• No current client relationship exists between Calderwood & Harkness and Ridgecrest Minerals Inc. or Marlowe Asset Management Peak Capital Partners LP.

• No prior matters were identified within the past five years in which Ridgecrest Minerals Inc. or Marlowe Asset Management Peak Capital Partners LP appeared as a client, adverse party, or interested party in any Calderwood & Harkness engagement.

• No current or prior representation of Brian Novotny or Carl Edgerton was identified in any capacity.

• Davenport, Kline & Archer LLP was also checked. No current matters were identified in which C&H serves as co-counsel with DKA or in which C&H and DKA are adversely positioned. No prior matters within the past five years gave rise to any concern.

Conclusion: No conflict identified.

2. Pinnacle Earth Resources Ltd.

Full Legal Name: Pinnacle Earth Resources Ltd.

Entity Type: Corporation organized and existing under the laws of the Province of Ontario, Canada.

Headquarters: 85 Elm Street West, Suite 600, Sudbury, Ontario P3C 1T3, Canada. Pinnacle's U.S. operations are headquartered at 222 South Main Street, Suite 1500, Salt Lake City, Utah 84101.

FY 2021 Revenue: Approximately CAD 1.45 billion (approximately USD 1.15 billion, based on the average exchange rate for the fiscal year ended December 31, 2021).

Key Personnel:

• Douglas Harlowe, Chief Executive Officer. Mr. Harlowe has led Pinnacle since 2014 and is a well-known figure in the Canadian mining industry.

• Kevin Tsang, former Senior Vice President, Commercial Operations. Mr. Tsang has been identified by the DOJ as a key individual in the investigation. Mr. Tsang is alleged to have participated in pricing discussions with representatives of TMC and Ridgecrest at NASMC conferences and through direct communications. Mr. Tsang departed Pinnacle in approximately mid-2021 under circumstances that are not yet fully known to the Firm.

Outside Counsel: Pinnacle has retained Ashford Whitmore LLP ("AW"), with offices at 100 King Street West, Suite 5700, Toronto, Ontario M5X 1C7, and at 485 Lexington Avenue, 30th Floor, New York, New York 10017, to represent it in connection with the investigation. The lead partner for the engagement is George Nakamura, based in AW's Toronto office.

Conflict Check Results:

The Firm's IntegrityCheck™ database was queried for the following names and entities: Pinnacle Earth Resources Ltd.; Douglas Harlowe; Kevin Tsang. The database was searched across all current open matters, all matters closed within the past five years, and all archived entries in the Firm's historical index.

• No current client relationship exists between Calderwood & Harkness and Pinnacle Earth Resources Ltd.

• No prior matters were identified within the past five years in which Pinnacle Earth Resources Ltd. appeared as a client, adverse party, or interested party in any Calderwood & Harkness engagement.

• No current or prior representation of Douglas Harlowe or Kevin Tsang was identified in any capacity.

• Ashford Whitmore LLP was also checked. No current matters were identified in which C&H serves as co-counsel with AW or in which C&H and AW are adversely positioned. No prior matters within the past five years gave rise to any concern.

Conclusion: No conflict identified.

3. Cascade Chemical Supply Co. (Cooperating Witness Entity)

Full Legal Name: Cascade Chemical Supply Co.

Entity Type: Corporation organized and existing under the laws of the State of Washington.

Headquarters: 901 West Riverside Avenue, Suite 300, Spokane, Washington 99201.

Key Personnel:

• Leonard Massey, President. Mr. Massey is the principal executive of Cascade and, based on information from Ms. Anand, is believed to be cooperating with the DOJ in a personal capacity as well.

Status in Investigation: Cascade is the cooperating witness entity whose cooperation with the DOJ triggered the broader investigation. Based on information relayed by Ms. Anand, Cascade entered into a cooperation agreement with the Antitrust Division in approximately September 2021, prior to the formal opening of the grand jury investigation. It is believed that Cascade's cooperation may have been initiated through the Antitrust Division's Corporate Leniency Policy (or a related cooperation framework), and that Cascade has been providing the DOJ with documents, witness testimony, and other evidence relating to the suspected anticompetitive conduct in the specialty-minerals sector. The Firm should anticipate that Cascade's cooperation has provided the DOJ with significant insider information regarding the alleged conspiracy.

Outside Counsel: Cascade has retained Whitfield, Strauss & Tully LLP ("WST"), with offices at 1201 Third Avenue, Suite 4100, Seattle, Washington 98101, to represent it in connection with the investigation. The lead partner for the engagement is Rebecca Ostrander.

Conflict Check Results:

The Firm's IntegrityCheck™ database was queried for the following names and entities: Cascade Chemical Supply Co.; Leonard Massey. The database was searched across all current open matters, all matters closed within the past five years, and all archived entries in the Firm's historical index.

• No current client relationship exists between Calderwood & Harkness and Cascade Chemical Supply Co.

• No prior client relationship was identified at any point in the Firm's records.

• No prior matters were identified within the past five years in which Cascade Chemical Supply Co. appeared as a client, adverse party, or interested party.

• No current or prior representation of Leonard Massey was identified in any capacity.

• Whitfield, Strauss & Tully LLP was also checked. No current matters were identified in which C&H serves as co-counsel with WST or in which C&H and WST are adversely positioned. No prior matters within the past five years gave rise to any concern.

Conclusion: No conflict identified.

C. Key Individuals at TMC (Potential Individual-Representation Conflicts)

A critical component of the conflict analysis in a grand jury investigation involving a corporate entity is the assessment of potential conflicts between the entity client and individual officers, directors, and employees whose conduct is at issue or who may become targets or subjects of the investigation in their individual capacities. The proposed engagement is to represent the entity — Torchlight Mining Corp. — and not any individual officer, director, or employee in a personal capacity. This distinction is fundamental and must be clearly communicated in the engagement letter.

The following TMC personnel have been identified, based on information provided by Ms. Anand and the scope of the grand jury subpoena, as persons of interest to the DOJ investigation. Each was checked in the Firm's conflict database to determine whether Calderwood & Harkness has any current or prior representation of the individual that could create a conflict or complicate the entity representation.

1. Gavin Holt

Title and Role: Former Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp. Mr. Holt led TMC's commercial pricing function for the U.S. Specialty Minerals Division from approximately 2016 through 2021. He was directly responsible for setting prices, negotiating customer contracts, and managing TMC's relationships with major industrial purchasers in the feldspar, talc, and rare-earth concentrate markets.

Departure: Mr. Holt resigned from TMC effective September 30, 2021. Ms. Anand indicated that Mr. Holt's departure was characterized as a voluntary resignation and that TMC's internal assessment suggests that Mr. Holt may have resigned in anticipation of the investigation, though no formal statement to that effect has been made.

Role in Investigation: Mr. Holt has been identified as the TMC individual most directly implicated in the alleged anticompetitive conduct. The DOJ is believed to possess evidence — likely obtained through Cascade's cooperation — that Mr. Holt engaged in direct pricing communications with Carl Edgerton (Ridgecrest) and Kevin Tsang (Pinnacle), and that he attended private meetings on the margins of NASMC conferences at which pricing and customer-allocation arrangements were discussed.

Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Gavin Holt. No current or prior representation of Mr. Holt by Calderwood & Harkness was identified in any capacity, whether personal or professional. No matters were identified in which Mr. Holt appeared as a client, adverse party, or interested party.

Note: Mr. Holt, as a former employee of TMC and a likely target or subject of the DOJ investigation in his individual capacity, may retain separate personal counsel. If Mr. Holt does engage personal counsel, the Firm should assess whether a joint-defense or common-interest agreement between TMC and Mr. Holt's counsel is desirable and appropriate. Any such arrangement would require a separate conflict analysis and would need to account for the possibility that Mr. Holt's interests may diverge from TMC's interests — for example, if Mr. Holt seeks to minimize his personal culpability by attributing knowledge or direction to TMC's senior management. This issue is addressed further in Section VI below.

Conclusion: No conflict identified.

2. Sandra Chu

Title and Role: Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. Ms. Chu reported directly to Gavin Holt during the alleged conspiracy period and remains employed by TMC in her current role. Ms. Chu was responsible for analyzing market data, preparing pricing recommendations, and implementing pricing decisions within the U.S. Specialty Minerals Division.

Role in Investigation: Ms. Chu is a fact witness regarding TMC's internal pricing processes and is likely to have knowledge of the inputs, analyses, and communications that informed TMC's pricing decisions. She may have been copied on communications between Mr. Holt and external parties, and her files may contain documents responsive to the grand jury subpoena.

Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Sandra Chu. No current or prior representation of Ms. Chu by Calderwood & Harkness was identified in any capacity.

Note: Although no conflict has been identified at this time, the Firm must monitor for the potential divergence of interests between Ms. Chu and TMC as the investigation develops. If evidence emerges suggesting that Ms. Chu had greater knowledge of or participation in the alleged anticompetitive conduct than currently understood, the DOJ may seek to target her individually, at which point her interests could diverge materially from those of the entity. If such a divergence emerges, the Firm must reassess whether continued representation of TMC while also interacting with Ms. Chu as a company witness creates an impermissible conflict.

Conclusion: No conflict identified. Subject to ongoing monitoring.

3. Thomas Eriksen

Title and Role: Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. Mr. Eriksen manages TMC's sales relationships with customers in the western United States and remains employed by TMC.

Role in Investigation: Mr. Eriksen attended certain NASMC quarterly trade-association conferences during the alleged conspiracy period, including conferences in Scottsdale, Arizona, and Orlando, Florida, where the DOJ suspects that anticompetitive coordination occurred on the margins of official sessions. Mr. Eriksen's attendance at these events and his potential interactions with representatives of Ridgecrest, Pinnacle, and Cascade make him a person of interest to the investigation.

Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Thomas Eriksen. No current or prior representation of Mr. Eriksen by Calderwood & Harkness was identified in any capacity.

Note: The same monitoring recommendation applicable to Ms. Chu applies equally to Mr. Eriksen. If Mr. Eriksen's role in the alleged conduct proves to be more substantial than currently understood, the potential for a conflict between his individual interests and TMC's interests must be reassessed.

Conclusion: No conflict identified. Subject to ongoing monitoring.

4. Priya Anand

Title and Role: General Counsel, Torchlight Mining Corp. Ms. Anand oversees TMC's global legal function and has been responsible for directing TMC's initial response to the investigation, including issuing document-preservation notices, conducting a preliminary internal review of relevant records, and engaging Calderwood & Harkness as outside counsel.

Role in Investigation: Ms. Anand is not believed to have had any personal involvement in the alleged anticompetitive conduct. Her relevance to the investigation arises from her role in managing TMC's legal response and in overseeing the company's compliance program during and after the alleged conspiracy period. Certain communications between Ms. Anand and TMC business personnel may be implicated by the grand jury subpoena, and the Firm will need to work closely with Ms. Anand to identify and assert applicable privilege claims.

Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Priya Anand. No current or prior representation of Ms. Anand by Calderwood & Harkness was identified in any personal capacity.

Conclusion: No conflict identified.

5. Søren Dalmqvist

Title and Role: Chief Executive Officer, Torchlight Mining Corp. Mr. Dalmqvist has served as TMC's CEO since 2019 and is the ultimate decision-maker on matters of corporate strategy, including decisions relating to cooperation with the DOJ, settlement, and any potential plea or resolution.

Role in Investigation: Based on information provided by Ms. Anand, Mr. Dalmqvist is not believed to have had any personal involvement in the alleged anticompetitive conduct, which predates his appointment as CEO for the first portion of the alleged conspiracy period (January 2017 through his appointment). Mr. Dalmqvist's role in the engagement will be as the principal executive decision-maker for TMC in connection with the investigation.

Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Søren Dalmqvist. No current or prior representation of Mr. Dalmqvist by Calderwood & Harkness was identified in any personal capacity.

Conclusion: No conflict identified.

D. Trade Association — North American Specialty Minerals Council (NASMC)

The North American Specialty Minerals Council ("NASMC") is a trade association organized as a tax-exempt organization under Section 501(c)(6) of the Internal Revenue Code, with its headquarters at 2300 Wilson Boulevard, Suite 400, Arlington, Virginia 22201. NASMC serves as the principal industry association for companies engaged in the mining, processing, and sale of specialty minerals in North America.

NASMC is relevant to the investigation because several of the allegedly anticompetitive meetings at which pricing discussions and customer-allocation arrangements are suspected to have occurred took place on the margins of NASMC's quarterly conferences, which were held at various locations including Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida, between 2017 and 2021. TMC, Ridgecrest, Pinnacle, and Cascade were all members of NASMC during the relevant period. NASMC itself is not known to be a subject or target of the investigation, but it may be a recipient of a grand jury subpoena for records relating to conference attendance, meeting agendas, and member communications.

Conflict Check Results: The Firm's IntegrityCheck™ database was queried for North American Specialty Minerals Council and NASMC. No current or prior client relationship between Calderwood & Harkness and NASMC was identified. No matters were identified in which NASMC appeared as a client, adverse party, or interested party.

Conclusion: No conflict identified.

E. TMC's Existing Advisors (Checked to Ensure No Adverse Relationship)

To ensure that the Firm's representation of TMC will not be complicated by existing adverse relationships with TMC's current professional advisors, the following entities were checked in the Firm's conflict database:

Calvert & Associates LLP — TMC's independent auditor, headquartered in Montreal, Quebec. The engagement partner for the TMC audit is Daniel Moreau. The Firm's database was queried for Calvert & Associates LLP and Daniel Moreau. No current client relationship or current adverse matters were identified. No conflict exists.

Ironbridge Capital Markets Inc. — TMC's investment bank and financial advisor, headquartered in Toronto, Ontario. The relationship partner for the TMC account is Alan Kirkwood. The Firm's database was queried for Ironbridge Capital Markets Inc. and Alan Kirkwood. No current client relationship or current adverse matters were identified. No conflict exists.

Sovereign Trust Company — TMC's transfer agent, headquartered in Toronto, Ontario. The Firm's database was queried for Sovereign Trust Company. No current client relationship or current adverse matters were identified. No conflict exists.

Northland Mutual Insurance Co. — TMC's lead directors-and-officers ("D&O") liability insurer, headquartered in Toronto, Ontario. TMC's D&O policy is Policy No. NMI-DO-2021-5547. The Firm's database was queried for Northland Mutual Insurance Co. No current client relationship or current adverse matters were identified. No conflict exists. Note: Calderwood & Harkness may need to correspond with Northland Mutual regarding the applicability and scope of D&O coverage for the costs and potential liabilities associated with the DOJ investigation. This correspondence does not create a conflict, as Northland is not a client of the Firm and the correspondence would be undertaken on behalf of TMC, but the potential for future disagreements between TMC and Northland regarding coverage obligations is flagged for awareness. Should a coverage dispute arise, the Firm would need to assess whether separate counsel is required for any coverage litigation.

Greystone Specialty Insurance Ltd. — D&O excess carrier (Layer 2), domiciled in Bermuda. The Firm's database was queried for Greystone Specialty Insurance Ltd. No current client relationship or current adverse matters were identified. No conflict exists.

Sentinel Re Ltd. — D&O excess carrier (Layer 3), domiciled in Bermuda. The Firm's database was queried for Sentinel Re Ltd. No current client relationship or current adverse matters were identified. No conflict exists.

V. CROSS-PRACTICE AND CROSS-OFFICE CHECK

In addition to the party-specific searches described in Section IV above, the undersigned conducted a comprehensive cross-practice and cross-office check across all Calderwood & Harkness offices — including San Francisco, New York, Washington, D.C., London, Hong Kong, and all other domestic and international offices — to identify any engagement, whether current or recently closed, that could give rise to a direct conflict, a positional conflict, or an issue conflict in connection with the proposed TMC representation. This cross-practice check was designed to capture potential conflicts that might not be identified through party-name searches alone, including conflicts arising from the Firm's broader involvement in the specialty-minerals industry or in antitrust matters involving overlapping legal issues.

Specifically, the cross-practice check sought to identify:

1. Industry-specific representations. Any current representation of a participant in the specialty-minerals industry — whether as a mining company, chemical processor, distributor, or customer — in any antitrust matter, regulatory investigation, or litigation that could create a positional conflict with TMC's defense of the DOJ investigation. For example, if the Firm were currently representing a purchaser of specialty minerals in a private antitrust damages action arising from the same alleged conspiracy, such a representation could create a direct conflict with the proposed TMC engagement.

2. Adverse representations. Any current representation of a party that is adverse to TMC in any unrelated matter — such as a commercial dispute, contract negotiation, or regulatory proceeding — that could create a concurrent-client conflict under Rule 1.7 of the California Rules of Professional Conduct or the ABA Model Rules.

3. DOJ Antitrust Division matters. Any current matter in which the Firm represents a client in connection with a DOJ Antitrust Division investigation or enforcement action in which TMC, Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., or Cascade Chemical Supply Co. is a relevant party, witness, subject, or target.

4. Related investigations. Any current matter involving an investigation by a foreign competition authority (such as the Competition Bureau of Canada, the European Commission's Directorate-General for Competition, or the Australian Competition and Consumer Commission) into the specialty-minerals sector that could be related to the U.S. DOJ investigation, and in which the Firm's representation of a party in the foreign proceeding could conflict with the proposed TMC representation.

Results: The cross-practice and cross-office check did not identify any positional conflicts, issue conflicts, or cross-practice conflicts. No current Calderwood & Harkness engagement involves the representation of a specialty-minerals industry participant in any antitrust matter. No current engagement involves the representation of any party adverse to TMC in any matter. No current engagement involves a DOJ Antitrust Division investigation in which TMC, Ridgecrest, Pinnacle, or Cascade is a relevant party. No current engagement involves a foreign competition-authority investigation into the specialty-minerals sector.

Conclusion: No cross-practice or cross-office conflicts identified.

VI. ETHICAL SCREENS AND MONITORING RECOMMENDATIONS

Based on the comprehensive conflict review documented in Sections IV and V above, no conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from undertaking the proposed representation of Torchlight Mining Corp. in connection with the DOJ Antitrust Division grand jury investigation, Grand Jury No. GJ-22-0194, N.D. Cal.

Notwithstanding this clearance, the nature of a grand jury investigation — particularly one involving allegations of a multi-party conspiracy — creates an inherent risk that conflicts may emerge as the investigation develops and as additional facts come to light. Accordingly, the following monitoring recommendations are made and should be implemented upon commencement of the engagement:

1. Entity-Individual Conflict Monitoring. The engagement team must continuously monitor for potential conflicts between the interests of TMC as an entity and the interests of individual TMC officers, directors, and employees whose conduct is at issue in the investigation. This monitoring obligation is particularly acute with respect to:

(a) Gavin Holt (former VP, U.S. Specialty Minerals Sales) — Mr. Holt is the TMC individual most directly implicated in the alleged conspiracy. Because he is a former employee, he is not subject to TMC's direction and control, and his interests may diverge significantly from TMC's. If the DOJ targets Mr. Holt individually, he will likely retain (and may already have retained) separate personal counsel. The engagement team must take care to avoid any conduct that could be construed as representing Mr. Holt in his individual capacity, and must ensure that the Upjohn / corporate-counsel warnings (sometimes referred to as "corporate Miranda" warnings) are appropriately administered in any interaction with Mr. Holt.

(b) Sandra Chu (Director, Pricing Analytics) — Ms. Chu remains a TMC employee and is a fact witness regarding internal pricing processes. If evidence emerges suggesting that Ms. Chu had individual culpability in the alleged conduct — for instance, if she knowingly facilitated the transmission of competitively sensitive information to competitors — her personal interests may diverge from those of TMC. If such a divergence materializes, the Firm must assess whether it can continue to prepare Ms. Chu as a witness for TMC or whether she should be advised to retain independent personal counsel.

(c) Thomas Eriksen (Regional Sales Manager, Western Region) — The same considerations applicable to Ms. Chu apply to Mr. Eriksen, given his attendance at NASMC conferences where anticompetitive coordination is suspected to have occurred.

If the DOJ targets any current TMC employee individually — whether through the issuance of a target letter, the service of a personal subpoena, or otherwise — the engagement team must immediately reassess whether continued representation of TMC creates an impermissible conflict with that individual's interests, and must advise TMC accordingly.

2. Joint-Defense Agreement with Gavin Holt's Counsel. If Mr. Holt retains separate personal counsel, the engagement team should assess the desirability and risks of entering into a joint-defense or common-interest agreement with Mr. Holt's counsel. Such an arrangement could facilitate the sharing of information and the coordination of defense strategies, but it also carries risks — most significantly, the risk that information shared with Mr. Holt's counsel could later be used against TMC if Mr. Holt decides to cooperate with the DOJ in exchange for personal leniency. A separate memorandum analyzing the risks and benefits of a joint-defense arrangement should be prepared before any such agreement is executed.

3. Joint-Defense Agreements with Co-Subject Counsel. If TMC considers entering into a joint-defense or common-interest agreement with counsel for Ridgecrest Minerals Inc. (Davenport, Kline & Archer LLP) or Pinnacle Earth Resources Ltd. (Ashford Whitmore LLP), a fresh conflict check must be conducted at that time. The formation of a joint-defense arrangement creates new obligations and potential conflicts that are not captured by the present analysis, including the risk that a co-subject may subsequently cooperate with the DOJ and the risk that shared information could be used to TMC's detriment.

4. Expansion of Investigation. If the DOJ investigation expands to encompass additional entities or individuals — whether as targets, subjects, or witnesses — this conflict check must be updated to account for the new parties. Such an expansion could occur if, for example, the DOJ identifies additional competitors in the specialty-minerals sector as participants in the alleged conspiracy, or if the DOJ broadens the investigation to encompass additional product markets or geographic markets.

5. Information Barriers. The engagement team must maintain appropriate information barriers to prevent the inadvertent receipt of privileged or confidential information from Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., or Cascade Chemical Supply Co. (or their respective counsel) unless and until a formal joint-defense, common-interest, or information-sharing arrangement has been executed. Any unsolicited receipt of such information should be reported immediately to the Responsible Partner.

VII. CONCLUSION AND CLEARANCE

Based on the foregoing review of the Firm's IntegrityCheck™ conflict-checking database, the party-specific analysis set forth in Section IV, and the cross-practice and cross-office check documented in Section V, it is the conclusion of the undersigned that Calderwood & Harkness LLP is cleared to undertake the representation of Torchlight Mining Corp. in connection with the DOJ Antitrust Division grand jury investigation, Grand Jury No. GJ-22-0194, N.D. Cal.

No current or former client relationships, adverse-party relationships, or other circumstances have been identified that would create a disqualifying conflict of interest under Rule 1.7 (Conflict of Interest: Current Clients), Rule 1.9 (Duties to Former Clients), Rule 1.10 (Imputation of Conflicts of Interest), or Rule 1.11 (Special Conflicts of Interest for Former and Current Government Officials and Employees) of the California Rules of Professional Conduct, or the corresponding provisions of the ABA Model Rules of Professional Conduct.

This clearance is expressly subject to the monitoring recommendations set forth in Section VI above and to the ongoing obligation to conduct supplemental conflict checks should new parties, issues, or circumstances arise during the course of the engagement that could give rise to conflicts not identified in this initial review.

The engagement letter for the proposed representation of Torchlight Mining Corp. may proceed for drafting and execution on or about February 18, 2022, consistent with the Firm's standard engagement-letter protocols and the requirements of the Antitrust & Competition Practice Group.

VIII. APPROVALS

Prepared by:

________________________________________

Aaron Liu Associate, Antitrust & Competition Practice Group Calderwood & Harkness LLP

Date: February 16, 2022

________________________________________

Monica Reyes Associate, Antitrust & Competition Practice Group Calderwood & Harkness LLP

Date: February 16, 2022

Reviewed and Approved by:

________________________________________

Elaine Forsythe Responsible Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP

Date: February 16, 2022

Firm Matter Number: 1039-00001

Date of Clearance: February 16, 2022

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is an internal document of Calderwood & Harkness LLP and is not intended for distribution outside the Firm. Any unauthorized disclosure, copying, or distribution is strictly prohibited.

Name	Title	Location
Søren Dalmqvist	Chief Executive Officer	Toronto, ON
Priya Anand	General Counsel	Toronto, ON
Margaret Caldwell	Chair, Board of Directors	Vancouver, BC
Richard Fong	Chief Financial Officer	Toronto, ON
Janet Moreau-Shaw	Chair, Audit Committee, Board of Directors	Montréal, QC

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104
INTERNAL MEMORANDUM
Date: February 16, 2022
Matter Number: 1039-00001
To: Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group Howard Bellamy, Billing Partner, Antitrust & Competition Practice Group
From: Aaron Liu, Associate, Antitrust & Competition Practice Group Monica Reyes, Associate, Antitrust & Competition Practice Group
Re: New Matter Conflict Check — Proposed Representation of Torchlight Mining Corp. in U.S. Department of Justice Antitrust Division Grand Jury Investigation (Grand Jury No. GJ-22-0194, N.D. Cal.)
This memorandum is a confidential internal document of Calderwood & Harkness LLP, prepared for the purpose of facilitating the firm's ethical obligations under the California Rules of Professional Conduct and the ABA Model Rules of Professional Conduct. It is protected by the attorney work product doctrine and the attorney-client privilege. This memorandum should not be disclosed to any person outside of the firm without the prior written approval of the Responsible Partner.
I. PURPOSE
This memorandum documents the results of the conflict-of-interest check conducted by the Antitrust & Competition Practice Group in connection with the proposed engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") to represent Torchlight Mining Corp. ("TMC" or "Torchlight") in the defense of a grand jury investigation initiated by the Antitrust Division of the United States Department of Justice (the "DOJ" or the "Antitrust Division"). The investigation, designated Grand Jury No. GJ-22-0194 and pending in the United States District Court for the Northern District of California, San Francisco Division, concerns suspected price-fixing, market allocation, and bid-rigging in the North American specialty-minerals sector, with a particular focus on the markets for high-purity feldspar, industrial talc, and rare-earth concentrates.
TMC first approached Calderwood & Harkness on or about February 15, 2022, through its General Counsel, Priya Anand. Ms. Anand contacted Elaine Forsythe directly by telephone and followed up with a written communication outlining the nature of the investigation and TMC's need for experienced antitrust defense counsel. TMC's outreach was precipitated by its receipt of Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003, which was served upon TMC's U.S. subsidiary, Torchlight Mining (U.S.) Inc., on February 14, 2022. The subpoena calls for the production of a broad range of documents relating to TMC's pricing practices, customer communications, competitor contacts, and trade-association participation in the specialty-minerals sector over the period from January 1, 2016 through the date of the subpoena.
If the proposed engagement is cleared, the matter would be led by Elaine Forsythe, who would serve as the Responsible Partner and would be based in the Firm's San Francisco office, and Howard Bellamy, who would serve as the Billing Partner and would be based in the Firm's New York office. The proposed team would also include the undersigned associates, as well as additional associates and support staff as appropriate given the scope of the investigation.
A prompt clearance determination is required. The initial return date on the grand jury subpoena is March 7, 2022, and TMC's counsel must immediately assess the scope of the subpoena, issue document-preservation directives to TMC's information-technology and records-management departments, and begin communications with the DOJ regarding the production schedule. To that end, the parties have targeted execution of the engagement letter on or about February 18, 2022, and the Firm must complete its conflict-of-interest analysis before that date in order to proceed. This memorandum is intended to satisfy the Firm's obligation under its internal policies and the applicable rules of professional conduct to conduct a thorough conflict check before undertaking new client representations.
II. PROPOSED CLIENT INFORMATION
The following information was gathered from publicly available sources, TMC's corporate filings, and information provided directly by Ms. Anand during her initial communications with the Firm. This information was used to populate the conflict-check queries described in Sections IV and V below.
Full Legal Name: Torchlight Mining Corp.
Entity Type: Corporation organized and existing under the Canada Business Corporations Act ("CBCA"), CBCA Corporation No. 7841526-1.
Registered Office: 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada.
U.S. Subsidiary: Torchlight Mining (U.S.) Inc., a corporation organized and existing under the laws of the State of Nevada (Nevada Secretary of State Entity No. NV20160438721), with its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. Torchlight Mining (U.S.) Inc. is a wholly owned subsidiary of TMC and serves as the holding entity for TMC's U.S.-based mining operations and downstream chemical-processing activities. The grand jury subpoena was served upon this subsidiary in its capacity as TMC's U.S. agent for service of process.
U.S. Federal Employer Identification Number (EIN): 83-2947106
Canadian Business Number: 741 829 456 RC0001
Public Listings: TMC's common shares are listed and traded on the Toronto Stock Exchange under the symbol TSX: TRCL and on the New York Stock Exchange under the symbol NYSE: TMC. As a dual-listed public company, TMC is subject to reporting obligations under both Canadian securities laws (including the requirements of the Canadian Securities Administrators) and U.S. securities laws (including the Securities Exchange Act of 1934, as a foreign private issuer registered with the U.S. Securities and Exchange Commission).
FY 2021 Consolidated Revenue: CAD 4.27 billion (approximately USD 3.38 billion, based on the average exchange rate for the fiscal year ended December 31, 2021).
FY 2021 EBITDA: CAD 812 million.
Industry: TMC is a vertically integrated specialty-minerals mining and chemicals company. It operates fourteen mines across four countries — Canada, the United States, Brazil, and Australia — and six downstream chemical-processing facilities that convert mined specialty minerals into refined chemical products for industrial, agricultural, and consumer applications. TMC's product portfolio includes high-purity feldspar, industrial talc, rare-earth concentrates, lithium compounds, and various industrial-grade chemical intermediaries.
Division at Issue: The DOJ investigation focuses on the activities of TMC's U.S. Specialty Minerals Division, which is responsible for the extraction, processing, and sale of high-purity feldspar, industrial talc, and rare-earth concentrates within the United States and for export from the United States to certain international markets. The U.S. Specialty Minerals Division generated revenue of approximately USD 687 million in fiscal year 2021, representing approximately 20% of TMC's consolidated revenue.
Key Client Contacts:
Ms. Anand will serve as the primary point of contact between TMC and the Firm for purposes of the engagement. All communications regarding the investigation should be directed through Ms. Anand unless she designates an alternative contact.
III. DESCRIPTION OF THE MATTER
The following is a summary of the matter in connection with which TMC seeks representation by Calderwood & Harkness LLP. This summary is based on information provided by Ms. Anand and on the face of Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003.
Nature of the Investigation. The Antitrust Division of the United States Department of Justice has formally opened a grand jury investigation into suspected violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, in the North American specialty-minerals sector. The investigation was formally initiated on or about February 10, 2022, when the grand jury was empaneled and designated Grand Jury No. GJ-22-0194 in the United States District Court for the Northern District of California, San Francisco Division.
Subject Conduct. The investigation concerns suspected price-fixing, market allocation, and bid-rigging among competitors in three product categories within the North American specialty-minerals sector: (i) high-purity feldspar, (ii) industrial talc, and (iii) rare-earth concentrates. The DOJ suspects that competitors in these product markets engaged in coordinated conduct designed to artificially inflate prices, divide geographic and customer markets, and rig bids in response to procurement solicitations issued by major industrial purchasers.
Alleged Conspiracy Period. Based on the date ranges specified in the grand jury subpoena and information relayed by Ms. Anand from TMC's preliminary assessment, the alleged conspiracy period extends from approximately January 2017 through approximately August 2021.
DOJ Prosecutors. The investigation is being conducted by the San Francisco Field Office of the Antitrust Division. The principal trial attorneys assigned to the matter are:
•  Denise Kowalski, Trial Attorney, DOJ Antitrust Division, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.
•  Marcus Reeves, Senior Trial Attorney, DOJ Antitrust Division, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.
The investigation is supervised by Julia Stafford-Hayes, Deputy Assistant Attorney General, DOJ Antitrust Division, Washington, D.C.
Court. The grand jury sits in the United States District Court for the Northern District of California, San Francisco Division. The presiding judicial officer for purposes of grand jury matters has not yet been identified.
Grand Jury Subpoena. TMC (through its U.S. subsidiary, Torchlight Mining (U.S.) Inc.) received Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003 on February 14, 2022. The subpoena commands the production of documents relating to, among other things: (a) TMC's pricing of high-purity feldspar, industrial talc, and rare-earth concentrates in North America; (b) communications between TMC personnel and any representative of Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., Cascade Chemical Supply Co., or any other competitor; (c) TMC's participation in meetings, conferences, and events organized by or associated with the North American Specialty Minerals Council ("NASMC"); and (d) TMC's bidding practices in response to procurement solicitations from specified major industrial customers. The initial return date on the subpoena is March 7, 2022.
Proposed Scope of Representation. If the engagement is cleared, Calderwood & Harkness's representation of TMC would encompass the following:
1.  Responding to Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003, including negotiation of the production schedule and scope with DOJ counsel, document collection, review for responsiveness and privilege, and production.
2.  Conducting an internal investigation on behalf of TMC to assess the facts underlying the DOJ's investigation, identify relevant witnesses and documents, and advise TMC on its exposure and strategic options.
3.  Preparing TMC personnel for potential grand jury testimony or voluntary witness interviews.
4.  Conducting privilege review of documents and communications, including identification and assertion of attorney-client privilege and work-product protections.
5.  Advising TMC on the design and implementation of compliance remediation measures to strengthen TMC's antitrust-compliance program.
6.  As necessary, negotiating a potential resolution with the DOJ, which could include a plea agreement, deferred prosecution agreement, non-prosecution agreement, or other disposition, depending on the outcome of the internal investigation and TMC's strategic determinations.
IV. PARTIES CHECKED
The Firm's conflict-checking system, IntegrityCheck™ (the Firm's proprietary client-and-matter database, maintained by the Office of the General Counsel and the Conflicts Department, which captures current and former client engagements, adverse parties, interested parties, affiliated entities, and key individual contacts for all matters opened since the Firm's founding), was queried on February 15 and 16, 2022. Queries were run against the following categories of parties, and the results are set forth below.
A. Adverse Party — U.S. Department of Justice, Antitrust Division
The United States Department of Justice is a federal government agency and, as such, is treated under the Firm's conflict-checking policies in accordance with the Firm's Government Agency Representation Policy (Policy No. SC-ETHICS-007, revised January 2021). Under this policy, the DOJ is not treated as a "client" for conflict-checking purposes (as the Firm does not represent the DOJ in any capacity), but the Firm is required to check whether: (i) any current engagement involves representation of a client in a matter adverse to the DOJ Antitrust Division, such that taking on this new engagement could create a positional or issue conflict; and (ii) any current or recently departed Firm attorney has prior government service at the DOJ Antitrust Division that could give rise to recusal obligations under applicable ethics rules, including Rule 1.11 of the California Rules of Professional Conduct and Rule 1.11 of the ABA Model Rules of Professional Conduct.
The following individual DOJ personnel were also checked in the Firm's database to confirm that no Firm attorney has a personal or professional relationship that could create a conflict or the appearance of a conflict:
•  Denise Kowalski, Trial Attorney
•  Marcus Reeves, Senior Trial Attorney
•  Julia Stafford-Hayes, Deputy Assistant Attorney General
Results: The conflict check confirmed that there are no current or former matters in which Calderwood & Harkness LLP represents or has represented the DOJ Antitrust Division in any capacity. No current engagement was identified in which the Firm represents a client in a matter that is directly adverse to the DOJ Antitrust Division in a manner that would create a disqualifying conflict or a material positional conflict with respect to the proposed TMC engagement. No Calderwood & Harkness attorney — whether partner, of counsel, or associate — was identified as having prior employment at the DOJ Antitrust Division, the DOJ Antitrust Division's San Francisco Field Office, or the Criminal Enforcement Sections of the Antitrust Division within the applicable recusal period prescribed by Rule 1.11. No Firm attorney was identified as having a personal or professional relationship with Denise Kowalski, Marcus Reeves, or Julia Stafford-Hayes that would warrant disclosure or further analysis.
Conclusion: No conflict identified.
B. Co-Subjects / Co-Targets
Based on information provided by Ms. Anand and on the face of the grand jury subpoena, the following entities have been identified as co-subjects, co-targets, or cooperating entities in the DOJ investigation. Each was checked against the Firm's conflict database, along with their key personnel, outside counsel, and, where applicable, significant affiliated entities.
1. Ridgecrest Minerals Inc.
Full Legal Name: Ridgecrest Minerals Inc.
Entity Type: Corporation organized and existing under the laws of the State of Delaware.
Headquarters: 1700 Lincoln Street, Suite 4200, Denver, Colorado 80203.
FY 2021 Revenue: Approximately USD 1.92 billion.
Ownership: Ridgecrest is a portfolio company of Marlowe Asset Management Peak Capital Partners LP, a Delaware limited partnership and Denver-based private equity fund. Marlowe Asset Management Peak acquired Ridgecrest in a leveraged buyout in 2015 and retains a controlling equity interest.
Key Personnel:
•  Brian Novotny, Chief Executive Officer. Mr. Novotny has served as CEO of Ridgecrest since 2016 and is a known industry figure in the specialty-minerals sector.
•  Carl Edgerton, Vice President of Sales. Mr. Edgerton has been identified by the DOJ as a key participant in the suspected anticompetitive conduct. Mr. Edgerton is alleged to have been a direct counterpart to TMC's Gavin Holt in pricing discussions and customer-allocation arrangements.
Status in Investigation: Based on information provided by Ms. Anand and publicly available reports, Ridgecrest received a DOJ target letter on or about January 12, 2022, indicating that the DOJ considers Ridgecrest a target of the grand jury investigation. Ridgecrest's status as a target suggests that the DOJ has substantial evidence of Ridgecrest's participation in the alleged conspiracy.
Outside Counsel: Ridgecrest has retained Davenport, Kline & Archer LLP ("DKA"), with offices at 1801 California Street, Suite 3500, Denver, Colorado 80202, to represent it in connection with the investigation. The lead partner for the engagement is Helen Marchetti.
Conflict Check Results:
The Firm's IntegrityCheck™ database was queried for the following names and entities: Ridgecrest Minerals Inc.; Marlowe Asset Management Peak Capital Partners LP; Brian Novotny; Carl Edgerton. The database was searched across all current open matters, all matters closed within the past five years, and all archived entries in the Firm's historical index.
•  No current client relationship exists between Calderwood & Harkness and Ridgecrest Minerals Inc. or Marlowe Asset Management Peak Capital Partners LP.
•  No prior matters were identified within the past five years in which Ridgecrest Minerals Inc. or Marlowe Asset Management Peak Capital Partners LP appeared as a client, adverse party, or interested party in any Calderwood & Harkness engagement.
•  No current or prior representation of Brian Novotny or Carl Edgerton was identified in any capacity.
•  Davenport, Kline & Archer LLP was also checked. No current matters were identified in which C&H serves as co-counsel with DKA or in which C&H and DKA are adversely positioned. No prior matters within the past five years gave rise to any concern.
Conclusion: No conflict identified.
2. Pinnacle Earth Resources Ltd.
Full Legal Name: Pinnacle Earth Resources Ltd.
Entity Type: Corporation organized and existing under the laws of the Province of Ontario, Canada.
Headquarters: 85 Elm Street West, Suite 600, Sudbury, Ontario P3C 1T3, Canada. Pinnacle's U.S. operations are headquartered at 222 South Main Street, Suite 1500, Salt Lake City, Utah 84101.
FY 2021 Revenue: Approximately CAD 1.45 billion (approximately USD 1.15 billion, based on the average exchange rate for the fiscal year ended December 31, 2021).
Key Personnel:
•  Douglas Harlowe, Chief Executive Officer. Mr. Harlowe has led Pinnacle since 2014 and is a well-known figure in the Canadian mining industry.
•  Kevin Tsang, former Senior Vice President, Commercial Operations. Mr. Tsang has been identified by the DOJ as a key individual in the investigation. Mr. Tsang is alleged to have participated in pricing discussions with representatives of TMC and Ridgecrest at NASMC conferences and through direct communications. Mr. Tsang departed Pinnacle in approximately mid-2021 under circumstances that are not yet fully known to the Firm.
Outside Counsel: Pinnacle has retained Ashford Whitmore LLP ("AW"), with offices at 100 King Street West, Suite 5700, Toronto, Ontario M5X 1C7, and at 485 Lexington Avenue, 30th Floor, New York, New York 10017, to represent it in connection with the investigation. The lead partner for the engagement is George Nakamura, based in AW's Toronto office.
Conflict Check Results:
The Firm's IntegrityCheck™ database was queried for the following names and entities: Pinnacle Earth Resources Ltd.; Douglas Harlowe; Kevin Tsang. The database was searched across all current open matters, all matters closed within the past five years, and all archived entries in the Firm's historical index.
•  No current client relationship exists between Calderwood & Harkness and Pinnacle Earth Resources Ltd.
•  No prior matters were identified within the past five years in which Pinnacle Earth Resources Ltd. appeared as a client, adverse party, or interested party in any Calderwood & Harkness engagement.
•  No current or prior representation of Douglas Harlowe or Kevin Tsang was identified in any capacity.
•  Ashford Whitmore LLP was also checked. No current matters were identified in which C&H serves as co-counsel with AW or in which C&H and AW are adversely positioned. No prior matters within the past five years gave rise to any concern.
Conclusion: No conflict identified.
3. Cascade Chemical Supply Co. (Cooperating Witness Entity)
Full Legal Name: Cascade Chemical Supply Co.
Entity Type: Corporation organized and existing under the laws of the State of Washington.
Headquarters: 901 West Riverside Avenue, Suite 300, Spokane, Washington 99201.
Key Personnel:
•  Leonard Massey, President. Mr. Massey is the principal executive of Cascade and, based on information from Ms. Anand, is believed to be cooperating with the DOJ in a personal capacity as well.
Status in Investigation: Cascade is the cooperating witness entity whose cooperation with the DOJ triggered the broader investigation. Based on information relayed by Ms. Anand, Cascade entered into a cooperation agreement with the Antitrust Division in approximately September 2021, prior to the formal opening of the grand jury investigation. It is believed that Cascade's cooperation may have been initiated through the Antitrust Division's Corporate Leniency Policy (or a related cooperation framework), and that Cascade has been providing the DOJ with documents, witness testimony, and other evidence relating to the suspected anticompetitive conduct in the specialty-minerals sector. The Firm should anticipate that Cascade's cooperation has provided the DOJ with significant insider information regarding the alleged conspiracy.
Outside Counsel: Cascade has retained Whitfield, Strauss & Tully LLP ("WST"), with offices at 1201 Third Avenue, Suite 4100, Seattle, Washington 98101, to represent it in connection with the investigation. The lead partner for the engagement is Rebecca Ostrander.
Conflict Check Results:
The Firm's IntegrityCheck™ database was queried for the following names and entities: Cascade Chemical Supply Co.; Leonard Massey. The database was searched across all current open matters, all matters closed within the past five years, and all archived entries in the Firm's historical index.
•  No current client relationship exists between Calderwood & Harkness and Cascade Chemical Supply Co.
•  No prior client relationship was identified at any point in the Firm's records.
•  No prior matters were identified within the past five years in which Cascade Chemical Supply Co. appeared as a client, adverse party, or interested party.
•  No current or prior representation of Leonard Massey was identified in any capacity.
•  Whitfield, Strauss & Tully LLP was also checked. No current matters were identified in which C&H serves as co-counsel with WST or in which C&H and WST are adversely positioned. No prior matters within the past five years gave rise to any concern.
Conclusion: No conflict identified.
C. Key Individuals at TMC (Potential Individual-Representation Conflicts)
A critical component of the conflict analysis in a grand jury investigation involving a corporate entity is the assessment of potential conflicts between the entity client and individual officers, directors, and employees whose conduct is at issue or who may become targets or subjects of the investigation in their individual capacities. The proposed engagement is to represent the entity — Torchlight Mining Corp. — and not any individual officer, director, or employee in a personal capacity. This distinction is fundamental and must be clearly communicated in the engagement letter.
The following TMC personnel have been identified, based on information provided by Ms. Anand and the scope of the grand jury subpoena, as persons of interest to the DOJ investigation. Each was checked in the Firm's conflict database to determine whether Calderwood & Harkness has any current or prior representation of the individual that could create a conflict or complicate the entity representation.
1. Gavin Holt
Title and Role: Former Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp. Mr. Holt led TMC's commercial pricing function for the U.S. Specialty Minerals Division from approximately 2016 through 2021. He was directly responsible for setting prices, negotiating customer contracts, and managing TMC's relationships with major industrial purchasers in the feldspar, talc, and rare-earth concentrate markets.
Departure: Mr. Holt resigned from TMC effective September 30, 2021. Ms. Anand indicated that Mr. Holt's departure was characterized as a voluntary resignation and that TMC's internal assessment suggests that Mr. Holt may have resigned in anticipation of the investigation, though no formal statement to that effect has been made.
Role in Investigation: Mr. Holt has been identified as the TMC individual most directly implicated in the alleged anticompetitive conduct. The DOJ is believed to possess evidence — likely obtained through Cascade's cooperation — that Mr. Holt engaged in direct pricing communications with Carl Edgerton (Ridgecrest) and Kevin Tsang (Pinnacle), and that he attended private meetings on the margins of NASMC conferences at which pricing and customer-allocation arrangements were discussed.
Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Gavin Holt. No current or prior representation of Mr. Holt by Calderwood & Harkness was identified in any capacity, whether personal or professional. No matters were identified in which Mr. Holt appeared as a client, adverse party, or interested party.
Note: Mr. Holt, as a former employee of TMC and a likely target or subject of the DOJ investigation in his individual capacity, may retain separate personal counsel. If Mr. Holt does engage personal counsel, the Firm should assess whether a joint-defense or common-interest agreement between TMC and Mr. Holt's counsel is desirable and appropriate. Any such arrangement would require a separate conflict analysis and would need to account for the possibility that Mr. Holt's interests may diverge from TMC's interests — for example, if Mr. Holt seeks to minimize his personal culpability by attributing knowledge or direction to TMC's senior management. This issue is addressed further in Section VI below.
Conclusion: No conflict identified.
2. Sandra Chu
Title and Role: Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp. Ms. Chu reported directly to Gavin Holt during the alleged conspiracy period and remains employed by TMC in her current role. Ms. Chu was responsible for analyzing market data, preparing pricing recommendations, and implementing pricing decisions within the U.S. Specialty Minerals Division.
Role in Investigation: Ms. Chu is a fact witness regarding TMC's internal pricing processes and is likely to have knowledge of the inputs, analyses, and communications that informed TMC's pricing decisions. She may have been copied on communications between Mr. Holt and external parties, and her files may contain documents responsive to the grand jury subpoena.
Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Sandra Chu. No current or prior representation of Ms. Chu by Calderwood & Harkness was identified in any capacity.
Note: Although no conflict has been identified at this time, the Firm must monitor for the potential divergence of interests between Ms. Chu and TMC as the investigation develops. If evidence emerges suggesting that Ms. Chu had greater knowledge of or participation in the alleged anticompetitive conduct than currently understood, the DOJ may seek to target her individually, at which point her interests could diverge materially from those of the entity. If such a divergence emerges, the Firm must reassess whether continued representation of TMC while also interacting with Ms. Chu as a company witness creates an impermissible conflict.
Conclusion: No conflict identified. Subject to ongoing monitoring.
3. Thomas Eriksen
Title and Role: Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. Mr. Eriksen manages TMC's sales relationships with customers in the western United States and remains employed by TMC.
Role in Investigation: Mr. Eriksen attended certain NASMC quarterly trade-association conferences during the alleged conspiracy period, including conferences in Scottsdale, Arizona, and Orlando, Florida, where the DOJ suspects that anticompetitive coordination occurred on the margins of official sessions. Mr. Eriksen's attendance at these events and his potential interactions with representatives of Ridgecrest, Pinnacle, and Cascade make him a person of interest to the investigation.
Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Thomas Eriksen. No current or prior representation of Mr. Eriksen by Calderwood & Harkness was identified in any capacity.
Note: The same monitoring recommendation applicable to Ms. Chu applies equally to Mr. Eriksen. If Mr. Eriksen's role in the alleged conduct proves to be more substantial than currently understood, the potential for a conflict between his individual interests and TMC's interests must be reassessed.
Conclusion: No conflict identified. Subject to ongoing monitoring.
4. Priya Anand
Title and Role: General Counsel, Torchlight Mining Corp. Ms. Anand oversees TMC's global legal function and has been responsible for directing TMC's initial response to the investigation, including issuing document-preservation notices, conducting a preliminary internal review of relevant records, and engaging Calderwood & Harkness as outside counsel.
Role in Investigation: Ms. Anand is not believed to have had any personal involvement in the alleged anticompetitive conduct. Her relevance to the investigation arises from her role in managing TMC's legal response and in overseeing the company's compliance program during and after the alleged conspiracy period. Certain communications between Ms. Anand and TMC business personnel may be implicated by the grand jury subpoena, and the Firm will need to work closely with Ms. Anand to identify and assert applicable privilege claims.
Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Priya Anand. No current or prior representation of Ms. Anand by Calderwood & Harkness was identified in any personal capacity.
Conclusion: No conflict identified.
5. Søren Dalmqvist
Title and Role: Chief Executive Officer, Torchlight Mining Corp. Mr. Dalmqvist has served as TMC's CEO since 2019 and is the ultimate decision-maker on matters of corporate strategy, including decisions relating to cooperation with the DOJ, settlement, and any potential plea or resolution.
Role in Investigation: Based on information provided by Ms. Anand, Mr. Dalmqvist is not believed to have had any personal involvement in the alleged anticompetitive conduct, which predates his appointment as CEO for the first portion of the alleged conspiracy period (January 2017 through his appointment). Mr. Dalmqvist's role in the engagement will be as the principal executive decision-maker for TMC in connection with the investigation.
Conflict Check Results: The Firm's IntegrityCheck™ database was queried for Søren Dalmqvist. No current or prior representation of Mr. Dalmqvist by Calderwood & Harkness was identified in any personal capacity.
Conclusion: No conflict identified.
D. Trade Association — North American Specialty Minerals Council (NASMC)
The North American Specialty Minerals Council ("NASMC") is a trade association organized as a tax-exempt organization under Section 501(c)(6) of the Internal Revenue Code, with its headquarters at 2300 Wilson Boulevard, Suite 400, Arlington, Virginia 22201. NASMC serves as the principal industry association for companies engaged in the mining, processing, and sale of specialty minerals in North America.
NASMC is relevant to the investigation because several of the allegedly anticompetitive meetings at which pricing discussions and customer-allocation arrangements are suspected to have occurred took place on the margins of NASMC's quarterly conferences, which were held at various locations including Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida, between 2017 and 2021. TMC, Ridgecrest, Pinnacle, and Cascade were all members of NASMC during the relevant period. NASMC itself is not known to be a subject or target of the investigation, but it may be a recipient of a grand jury subpoena for records relating to conference attendance, meeting agendas, and member communications.
Conflict Check Results: The Firm's IntegrityCheck™ database was queried for North American Specialty Minerals Council and NASMC. No current or prior client relationship between Calderwood & Harkness and NASMC was identified. No matters were identified in which NASMC appeared as a client, adverse party, or interested party.
Conclusion: No conflict identified.
E. TMC's Existing Advisors (Checked to Ensure No Adverse Relationship)
To ensure that the Firm's representation of TMC will not be complicated by existing adverse relationships with TMC's current professional advisors, the following entities were checked in the Firm's conflict database:
Calvert & Associates LLP — TMC's independent auditor, headquartered in Montreal, Quebec. The engagement partner for the TMC audit is Daniel Moreau. The Firm's database was queried for Calvert & Associates LLP and Daniel Moreau. No current client relationship or current adverse matters were identified. No conflict exists.
Ironbridge Capital Markets Inc. — TMC's investment bank and financial advisor, headquartered in Toronto, Ontario. The relationship partner for the TMC account is Alan Kirkwood. The Firm's database was queried for Ironbridge Capital Markets Inc. and Alan Kirkwood. No current client relationship or current adverse matters were identified. No conflict exists.
Sovereign Trust Company — TMC's transfer agent, headquartered in Toronto, Ontario. The Firm's database was queried for Sovereign Trust Company. No current client relationship or current adverse matters were identified. No conflict exists.
Northland Mutual Insurance Co. — TMC's lead directors-and-officers ("D&O") liability insurer, headquartered in Toronto, Ontario. TMC's D&O policy is Policy No. NMI-DO-2021-5547. The Firm's database was queried for Northland Mutual Insurance Co. No current client relationship or current adverse matters were identified. No conflict exists. Note: Calderwood & Harkness may need to correspond with Northland Mutual regarding the applicability and scope of D&O coverage for the costs and potential liabilities associated with the DOJ investigation. This correspondence does not create a conflict, as Northland is not a client of the Firm and the correspondence would be undertaken on behalf of TMC, but the potential for future disagreements between TMC and Northland regarding coverage obligations is flagged for awareness. Should a coverage dispute arise, the Firm would need to assess whether separate counsel is required for any coverage litigation.
Greystone Specialty Insurance Ltd. — D&O excess carrier (Layer 2), domiciled in Bermuda. The Firm's database was queried for Greystone Specialty Insurance Ltd. No current client relationship or current adverse matters were identified. No conflict exists.
Sentinel Re Ltd. — D&O excess carrier (Layer 3), domiciled in Bermuda. The Firm's database was queried for Sentinel Re Ltd. No current client relationship or current adverse matters were identified. No conflict exists.
V. CROSS-PRACTICE AND CROSS-OFFICE CHECK
In addition to the party-specific searches described in Section IV above, the undersigned conducted a comprehensive cross-practice and cross-office check across all Calderwood & Harkness offices — including San Francisco, New York, Washington, D.C., London, Hong Kong, and all other domestic and international offices — to identify any engagement, whether current or recently closed, that could give rise to a direct conflict, a positional conflict, or an issue conflict in connection with the proposed TMC representation. This cross-practice check was designed to capture potential conflicts that might not be identified through party-name searches alone, including conflicts arising from the Firm's broader involvement in the specialty-minerals industry or in antitrust matters involving overlapping legal issues.
Specifically, the cross-practice check sought to identify:
1.  Industry-specific representations. Any current representation of a participant in the specialty-minerals industry — whether as a mining company, chemical processor, distributor, or customer — in any antitrust matter, regulatory investigation, or litigation that could create a positional conflict with TMC's defense of the DOJ investigation. For example, if the Firm were currently representing a purchaser of specialty minerals in a private antitrust damages action arising from the same alleged conspiracy, such a representation could create a direct conflict with the proposed TMC engagement.
2.  Adverse representations. Any current representation of a party that is adverse to TMC in any unrelated matter — such as a commercial dispute, contract negotiation, or regulatory proceeding — that could create a concurrent-client conflict under Rule 1.7 of the California Rules of Professional Conduct or the ABA Model Rules.
3.  DOJ Antitrust Division matters. Any current matter in which the Firm represents a client in connection with a DOJ Antitrust Division investigation or enforcement action in which TMC, Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., or Cascade Chemical Supply Co. is a relevant party, witness, subject, or target.
4.  Related investigations. Any current matter involving an investigation by a foreign competition authority (such as the Competition Bureau of Canada, the European Commission's Directorate-General for Competition, or the Australian Competition and Consumer Commission) into the specialty-minerals sector that could be related to the U.S. DOJ investigation, and in which the Firm's representation of a party in the foreign proceeding could conflict with the proposed TMC representation.
Results: The cross-practice and cross-office check did not identify any positional conflicts, issue conflicts, or cross-practice conflicts. No current Calderwood & Harkness engagement involves the representation of a specialty-minerals industry participant in any antitrust matter. No current engagement involves the representation of any party adverse to TMC in any matter. No current engagement involves a DOJ Antitrust Division investigation in which TMC, Ridgecrest, Pinnacle, or Cascade is a relevant party. No current engagement involves a foreign competition-authority investigation into the specialty-minerals sector.
Conclusion: No cross-practice or cross-office conflicts identified.
VI. ETHICAL SCREENS AND MONITORING RECOMMENDATIONS
Based on the comprehensive conflict review documented in Sections IV and V above, no conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from undertaking the proposed representation of Torchlight Mining Corp. in connection with the DOJ Antitrust Division grand jury investigation, Grand Jury No. GJ-22-0194, N.D. Cal.
Notwithstanding this clearance, the nature of a grand jury investigation — particularly one involving allegations of a multi-party conspiracy — creates an inherent risk that conflicts may emerge as the investigation develops and as additional facts come to light. Accordingly, the following monitoring recommendations are made and should be implemented upon commencement of the engagement:
1. Entity-Individual Conflict Monitoring. The engagement team must continuously monitor for potential conflicts between the interests of TMC as an entity and the interests of individual TMC officers, directors, and employees whose conduct is at issue in the investigation. This monitoring obligation is particularly acute with respect to:
(a) Gavin Holt (former VP, U.S. Specialty Minerals Sales) — Mr. Holt is the TMC individual most directly implicated in the alleged conspiracy. Because he is a former employee, he is not subject to TMC's direction and control, and his interests may diverge significantly from TMC's. If the DOJ targets Mr. Holt individually, he will likely retain (and may already have retained) separate personal counsel. The engagement team must take care to avoid any conduct that could be construed as representing Mr. Holt in his individual capacity, and must ensure that the Upjohn / corporate-counsel warnings (sometimes referred to as "corporate Miranda" warnings) are appropriately administered in any interaction with Mr. Holt.
(b) Sandra Chu (Director, Pricing Analytics) — Ms. Chu remains a TMC employee and is a fact witness regarding internal pricing processes. If evidence emerges suggesting that Ms. Chu had individual culpability in the alleged conduct — for instance, if she knowingly facilitated the transmission of competitively sensitive information to competitors — her personal interests may diverge from those of TMC. If such a divergence materializes, the Firm must assess whether it can continue to prepare Ms. Chu as a witness for TMC or whether she should be advised to retain independent personal counsel.
(c) Thomas Eriksen (Regional Sales Manager, Western Region) — The same considerations applicable to Ms. Chu apply to Mr. Eriksen, given his attendance at NASMC conferences where anticompetitive coordination is suspected to have occurred.
If the DOJ targets any current TMC employee individually — whether through the issuance of a target letter, the service of a personal subpoena, or otherwise — the engagement team must immediately reassess whether continued representation of TMC creates an impermissible conflict with that individual's interests, and must advise TMC accordingly.
2. Joint-Defense Agreement with Gavin Holt's Counsel. If Mr. Holt retains separate personal counsel, the engagement team should assess the desirability and risks of entering into a joint-defense or common-interest agreement with Mr. Holt's counsel. Such an arrangement could facilitate the sharing of information and the coordination of defense strategies, but it also carries risks — most significantly, the risk that information shared with Mr. Holt's counsel could later be used against TMC if Mr. Holt decides to cooperate with the DOJ in exchange for personal leniency. A separate memorandum analyzing the risks and benefits of a joint-defense arrangement should be prepared before any such agreement is executed.
3. Joint-Defense Agreements with Co-Subject Counsel. If TMC considers entering into a joint-defense or common-interest agreement with counsel for Ridgecrest Minerals Inc. (Davenport, Kline & Archer LLP) or Pinnacle Earth Resources Ltd. (Ashford Whitmore LLP), a fresh conflict check must be conducted at that time. The formation of a joint-defense arrangement creates new obligations and potential conflicts that are not captured by the present analysis, including the risk that a co-subject may subsequently cooperate with the DOJ and the risk that shared information could be used to TMC's detriment.
4. Expansion of Investigation. If the DOJ investigation expands to encompass additional entities or individuals — whether as targets, subjects, or witnesses — this conflict check must be updated to account for the new parties. Such an expansion could occur if, for example, the DOJ identifies additional competitors in the specialty-minerals sector as participants in the alleged conspiracy, or if the DOJ broadens the investigation to encompass additional product markets or geographic markets.
5. Information Barriers. The engagement team must maintain appropriate information barriers to prevent the inadvertent receipt of privileged or confidential information from Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., or Cascade Chemical Supply Co. (or their respective counsel) unless and until a formal joint-defense, common-interest, or information-sharing arrangement has been executed. Any unsolicited receipt of such information should be reported immediately to the Responsible Partner.
VII. CONCLUSION AND CLEARANCE
Based on the foregoing review of the Firm's IntegrityCheck™ conflict-checking database, the party-specific analysis set forth in Section IV, and the cross-practice and cross-office check documented in Section V, it is the conclusion of the undersigned that Calderwood & Harkness LLP is cleared to undertake the representation of Torchlight Mining Corp. in connection with the DOJ Antitrust Division grand jury investigation, Grand Jury No. GJ-22-0194, N.D. Cal.
No current or former client relationships, adverse-party relationships, or other circumstances have been identified that would create a disqualifying conflict of interest under Rule 1.7 (Conflict of Interest: Current Clients), Rule 1.9 (Duties to Former Clients), Rule 1.10 (Imputation of Conflicts of Interest), or Rule 1.11 (Special Conflicts of Interest for Former and Current Government Officials and Employees) of the California Rules of Professional Conduct, or the corresponding provisions of the ABA Model Rules of Professional Conduct.
This clearance is expressly subject to the monitoring recommendations set forth in Section VI above and to the ongoing obligation to conduct supplemental conflict checks should new parties, issues, or circumstances arise during the course of the engagement that could give rise to conflicts not identified in this initial review.
The engagement letter for the proposed representation of Torchlight Mining Corp. may proceed for drafting and execution on or about February 18, 2022, consistent with the Firm's standard engagement-letter protocols and the requirements of the Antitrust & Competition Practice Group.
VIII. APPROVALS
Prepared by:
________________________________________
Aaron Liu Associate, Antitrust & Competition Practice Group Calderwood & Harkness LLP
Date: February 16, 2022
________________________________________
Monica Reyes Associate, Antitrust & Competition Practice Group Calderwood & Harkness LLP
Date: February 16, 2022
Reviewed and Approved by:
________________________________________
Elaine Forsythe Responsible Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP
Date: February 16, 2022
Firm Matter Number: 1039-00001
Date of Clearance: February 16, 2022
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is an internal document of Calderwood & Harkness LLP and is not intended for distribution outside the Firm. Any unauthorized disclosure, copying, or distribution is strictly prohibited.
Name | Title | Location
Søren Dalmqvist | Chief Executive Officer | Toronto, ON
Priya Anand | General Counsel | Toronto, ON
Margaret Caldwell | Chair, Board of Directors | Vancouver, BC
Richard Fong | Chief Financial Officer | Toronto, ON
Janet Moreau-Shaw | Chair, Audit Committee, Board of Directors | Montréal, QC

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

INTERNAL MEMORANDUM

I. PURPOSE

II. PROPOSED CLIENT INFORMATION

III. DESCRIPTION OF THE MATTER

IV. PARTIES CHECKED

V. CROSS-PRACTICE AND CROSS-OFFICE CHECK

VI. ETHICAL SCREENS AND MONITORING RECOMMENDATIONS

VII. CONCLUSION AND CLEARANCE

VIII. APPROVALS

Record

Parties

Dates

Amounts