Attachments: (1) Draft_Litigation_Hold_Notice_All_TMC_Personnel.docx; (2) Draft_Litigation_Hold_Targeted_USMD.docx
Dear Priya,
Thank you for the prompt execution and return of the engagement letter dated February 18. We have formally opened this matter under Calderwood & Harkness Matter No. 1039-00001.
By way of introduction to the team you will be working with day to day: I have copied Howard Bellamy, who is the billing partner on this engagement out of our New York office, and Aaron Liu, who is a lead associate in our San Francisco office. Howard, Aaron, and I will be your primary points of contact. In addition, Monica Reyes, a working associate on our team, will be staffed on privilege review and legal memoranda. You will be hearing from all of us regularly in the weeks ahead.
I want to cover several items with you below, as there is a good deal to set in motion.
**1. DOJ Subpoena Acknowledgment Letter**
Earlier today, I sent a letter to Trial Attorney Denise Kowalski at the DOJ Antitrust Division, San Francisco Field Office, formally acknowledging Torchlight Mining Corp.'s receipt of Grand Jury Subpoena No. GJ-22-0194-SD-003, which was served on TMC on February 14, 2022. In the letter, we requested a 60-day extension of the initial return date to allow adequate time for document identification, collection, and review. Based on the scope of the subpoena and the volume of data likely involved, I expect the Division to be receptive to a reasonable extension — this is standard practice at this stage. That said, I will follow up promptly if we hear anything to the contrary.
**2. Litigation Hold — Urgent Next Step**
The single most time-sensitive action item right now is the issuance of a company-wide litigation hold. To that end, I have attached two draft litigation hold notices for your review:
- **Attachment 1** is a company-wide litigation hold notice directed to all Torchlight Mining Corp. personnel. This would be issued under your signature as General Counsel. - **Attachment 2** is a supplemental, targeted litigation hold notice with custodian-specific preservation instructions directed to U.S. Specialty Minerals Division personnel. This targeted notice identifies, among others, Sandra Chu (Director, Pricing Analytics), Thomas Eriksen (Regional Sales Manager, Western Region), and other custodians we have initially identified within the division, each of whom will receive more granular preservation instructions given their roles.
Both notices cover preservation of all documents and electronically stored information potentially relevant to the DOJ investigation. Specifically, the hold encompasses:
- Communications regarding pricing of the three product categories identified in the subpoena: high-purity feldspar, industrial talc, and rare-earth concentrates; - All competitor interactions and communications, in any format; - Materials related to the North American Specialty Minerals Council (NASMC), including trade-association events, conferences, meetings, and any related correspondence; - Data from the VaultChat messaging application — I understand this encrypted messaging platform was used by division personnel, and it will require specific preservation steps that we address in the targeted notice; and - Personal devices used for business purposes.
Priya, I want to stress the critical importance of issuing these holds promptly. I recommend we target **March 1, 2022 at the latest** for distribution to all personnel. Timely issuance is essential both to mitigate any spoliation risk and to demonstrate good faith to the DOJ from the outset of this investigation.
Please review both drafts and provide any comments or additions **by end of day Friday, February 25**, so that we have sufficient time to finalize and distribute by the target date.
**3. Custodian Identification and Data Sources — Request for Call**
I would like to schedule a call early next week — ideally Monday or Tuesday of the week of February 28 — with you and, if appropriate, the head of TMC's IT department. We need to discuss the following:
- **Key custodian identification.** Our preliminary assessment is that approximately 30–35 custodians will need to be covered by the preservation and collection effort, including current and former U.S. Specialty Minerals Division personnel, relevant management, and support staff. We will want to refine and finalize this list together. - **Data sources.** We need a comprehensive understanding of TMC's email systems, shared network drives, cloud storage platforms, personal devices, and — critically — the VaultChat messaging archives, including how and where that data is stored and whether it can be exported. - **IT infrastructure and retention policies.** We will need to understand TMC's existing document retention policies, backup systems (including backup tapes and rotation schedules), and the logistics for forensic collection from each relevant source.
On the vendor side, Calderwood & Harkness is in the process of engaging **Redstone Digital Forensics Inc.**, based in McLean, Virginia, to handle forensic collection, processing, hosting, and managed review of TMC's electronic data. Aaron will coordinate directly with Redstone once the engagement is finalized and will serve as the primary liaison between the vendor and your IT team.
Once we have our initial call, we will prepare a formal data collection protocol and finalized custodian list for your approval before any collection begins.
**4. Gavin Holt — Preservation Considerations**
I want to flag a specific concern. Our preliminary review indicates that **Gavin Holt**, former Vice President of U.S. Specialty Minerals Sales, resigned from TMC effective September 30, 2021 — approximately four and a half months before the grand jury investigation commenced. His departure creates particular preservation challenges that we need to address immediately.
Could you please confirm whether TMC retained Holt's email account, files, and any company-issued devices upon his departure, or whether that data was purged pursuant to standard offboarding procedures? This is a **priority item**. Holt's role in the commercial pricing function for the U.S. Specialty Minerals Division from 2016 through 2021 makes his documents highly likely to be responsive to the subpoena's document requests.
If Holt's data has been preserved in any form, we will need to include it in the forensic collection scope. If the data was purged, we will need to understand the precise timeline and circumstances so that we can assess any necessary remediation steps and, if appropriate, address the matter proactively with the DOJ.
**5. Preliminary Timeline and Next Steps**
To keep us organized, here is a summary of key near-term milestones:
| Target Date
Separately, Aaron will circulate a more detailed subpoena analysis memorandum shortly. That memo will break down the subpoena's individual document categories and specifications so the team can prioritize collection efforts accordingly.
**6. Confidentiality**
A brief but important reminder: all communications between Calderwood & Harkness and TMC regarding this matter are protected by the attorney-client privilege and the attorney work-product doctrine. I ask that you limit internal distribution of these materials — including the attached draft litigation hold notices — to those individuals with a need to know, consistent with maintaining the privilege. We can discuss appropriate internal distribution protocols further on our call next week.
**Closing**
Priya, thank you again for the confidence you and the Torchlight team have placed in Calderwood & Harkness. We take that trust seriously, and we are committed to guiding TMC through this investigation with diligence and care.
I am available on my direct line or cell at any time — please do not hesitate to reach out with questions, day or evening. At an appropriate time, I would also suggest a brief introductory call with Søren Dalmqvist so that the broader leadership team is aligned on overall strategy and communication protocols. That said, there is no urgency on that front — it can wait until after the litigation hold is in place and the initial preservation steps are well underway.
I look forward to speaking with you later this week.
Warm regards,
Elaine
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Elaine Forsythe Partner
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