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UNITED STATES DEPARTMENT OF JUSTICE ANTITRUST DIVISION

NON-PROSECUTION AGREEMENT

DOJ Reference Number: ATR-SF-2024-00312

February 5, 2024

This Non-Prosecution Agreement ("Agreement" or "NPA") is entered into by and between the United States Department of Justice, Antitrust Division ("the United States" or "the Department"), and Torchlight Mining Corp., a corporation organized and existing under the Canada Business Corporations Act, CBCA Corporation No. 7841526-1, with its registered office at 200 Bay Street, Suite 3400, Toronto, ON M5J 2J2, Canada, and its principal U.S. operations conducted through its wholly owned subsidiary, Torchlight Mining (U.S.) Inc., a Nevada corporation (Entity No. NV20160438721), with principal offices at 8750 West Sahara Avenue, Suite 210, Reno, NV 89117 (collectively, "TMC" or "the Company").

This Agreement is entered into in connection with the investigation conducted by the Antitrust Division, San Francisco Field Office, and the grand jury sitting in the United States District Court for the Northern District of California, San Francisco Division, Grand Jury No. GJ-22-0194.

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RECITALS

WHEREAS:

A. The Investigation. The Department, through the Antitrust Division, San Francisco Field Office, under the supervision of Deputy Assistant Attorney General Julia Stafford-Hayes, Criminal Enforcement, has been conducting an investigation into suspected violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, involving the fixing of prices, allocation of customers, and rigging of bids for high-purity feldspar, industrial talc, and rare-earth concentrates sold in the United States and its territories. The investigation was formally opened on February 10, 2022, and is being conducted before the grand jury in the United States District Court for the Northern District of California, San Francisco Division (Grand Jury No. GJ-22-0194). The lead prosecutors assigned to this matter are Trial Attorney Denise Kowalski and Senior Trial Attorney Marcus Reeves, both of the Antitrust Division, San Francisco Field Office, under the supervision of Deputy Assistant Attorney General Julia Stafford-Hayes.

B. TMC's Status in the Investigation. TMC received Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003 on February 14, 2022. TMC subsequently received a target letter from the Department on May 20, 2022, informing TMC that it was a target of the investigation. TMC received a second Grand Jury Subpoena No. GJ-22-0194-SD-007 on May 15, 2023. TMC is a publicly traded corporation listed on the Toronto Stock Exchange (TSX: TRCL) and the New York Stock Exchange (NYSE: TMC). TMC's U.S. Specialty Minerals Division, which operates as a business unit within Torchlight Mining (U.S.) Inc., is the business unit relevant to the conduct described herein.

C. TMC's Cooperation. TMC retained Calderwood & Harkness LLP as outside counsel on February 18, 2022, promptly following receipt of the first grand jury subpoena. Since that time, TMC has cooperated with the Department's investigation, including: (i) production of approximately 555,000 documents (approximately 3.2 million pages) in response to the two grand jury subpoenas referenced above; (ii) making current employees available for voluntary proffer sessions with the Department; (iii) conducting a thorough internal investigation and sharing the findings of that investigation with the Department through written proffers, including detailed chronologies, transaction analyses, and communications summaries; and (iv) designing and proposing an enhanced antitrust compliance program intended to prevent recurrence of the type of conduct under investigation. TMC submitted a comprehensive cooperation proffer to the Department on February 15, 2023, which the Department has acknowledged was timely, thorough, and materially assisted the Department's investigation.

D. Identified Conduct. The Department has identified conduct involving the former Vice President of U.S. Specialty Minerals Sales at TMC, Gavin Holt, and counterparts at other companies in the specialty-minerals industry, during the period from approximately January 2017 through approximately August 2021. The specific conduct identified by the Department, and agreed to by TMC, is set forth in the Agreed Statement of Facts attached hereto as Appendix B and incorporated herein by reference.

E. Purpose of the Agreement. TMC and the Department wish to resolve the Department's investigation of TMC without criminal prosecution, subject to the terms and conditions set forth herein. The parties have negotiated and agreed upon the terms of this Agreement in good faith, with due regard for the interests of justice, the nature and seriousness of the conduct at issue, the extent of TMC's cooperation, the remedial measures undertaken by TMC, and the Department's policies governing non-prosecution agreements in criminal antitrust matters.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and obligations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Department and TMC agree as follows:

SECTION 1 — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

1.1 "Agreement" or "NPA" shall mean this Non-Prosecution Agreement, including all appendices attached hereto and incorporated herein by reference, specifically Appendix A (Enhanced Antitrust Compliance Program) and Appendix B (Agreed Statement of Facts).

1.2 "Company" or "TMC" shall mean Torchlight Mining Corp. (CBCA Corporation No. 7841526-1) and its wholly owned U.S. subsidiary Torchlight Mining (U.S.) Inc. (Nevada Entity No. NV20160438721), including all of their respective directors, officers, and employees, other than Gavin Holt, whose exclusion from this Agreement is set forth in Section 7 below.

1.3 "Department" shall mean the United States Department of Justice, Antitrust Division, including its agents, employees, attorneys, and representatives.

1.4 "Effective Date" shall mean the date on which this Agreement is executed by both parties, as reflected on the signature pages hereof.

1.5 "Term" shall mean the period of three (3) years commencing on the Effective Date and ending on the third anniversary of the Effective Date. Assuming execution on May 6, 2024, the Term would run from May 6, 2024 through May 6, 2027. All references to specific dates in this Agreement based on the anticipated Effective Date of May 6, 2024 are for illustrative purposes only, and shall be adjusted accordingly if the actual Effective Date differs.

1.6 "Relevant Conduct" shall mean the conduct described in the Agreed Statement of Facts attached hereto as Appendix B, involving the fixing of prices, allocation of customers, and rigging of bids for high-purity feldspar, industrial talc, and rare-earth concentrates sold to U.S. industrial and chemical-manufacturing customers during the period from approximately January 2017 through approximately August 2021.

1.7 "Affected Commerce" shall mean the total volume of commerce in high-purity feldspar, industrial talc, and rare-earth concentrates sold in the United States by TMC during the period of the Relevant Conduct. The parties agree that the Affected Commerce is approximately Four Hundred Seventy-Eight Million U.S. Dollars (USD $478,000,000).

1.8 "Enhanced Compliance Program" shall mean the Enhanced Antitrust Compliance Program described in detail in Appendix A attached hereto and incorporated herein by reference.

1.9 "Monitor" shall mean the independent compliance monitor to be retained by TMC pursuant to Section 6 of this Agreement, subject to approval by the Department.

1.10 "Agreed Statement of Facts" shall mean the statement of facts set forth in Appendix B attached hereto and incorporated herein by reference, as agreed upon by TMC and the Department.

SECTION 2 — NON-PROSECUTION COMMITMENT

2.1 Agreement Not to Prosecute TMC. Subject to TMC's full and continued compliance with all terms and conditions of this Agreement, the Department agrees that it will not bring criminal charges against Torchlight Mining Corp. or Torchlight Mining (U.S.) Inc. for the Relevant Conduct described in the Agreed Statement of Facts (Appendix B). This commitment by the Department extends to all current employees of TMC, in their capacities as employees and agents of TMC, other than Gavin Holt, whose exclusion from this Agreement is set forth in Section 7 below. The non-prosecution commitment with respect to current employees does not extend to such employees' individual conduct outside the scope of their employment with TMC or to conduct that post-dates the Relevant Conduct period.

2.2 Scope of Non-Prosecution Commitment. The non-prosecution commitment set forth in Section 2.1 applies solely to the Relevant Conduct as defined in Section 1.6 and as described in the Agreed Statement of Facts (Appendix B). For the avoidance of doubt, the non-prosecution commitment does not extend to:

(a) any conduct not described in the Agreed Statement of Facts, whether or not such conduct occurred during the period of the Relevant Conduct or involved the same products, customers, or individuals;

(b) any false statements or obstruction of justice by TMC or any of its directors, officers, or employees, whether occurring before, during, or after the execution of this Agreement;

(c) any future violations of the federal antitrust laws, including Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, or any other federal criminal statutes, committed by TMC or its employees after the date of execution of this Agreement; or

(d) any conduct by Gavin Holt individually, whether in his former capacity as Vice President of U.S. Specialty Minerals Sales at TMC or otherwise, as more fully set forth in Section 7.

2.3 Duration. The non-prosecution commitment set forth in this Section 2 shall remain in effect throughout the Term. Upon the expiration of the Term, provided that TMC has fully complied with all terms and conditions of this Agreement throughout the Term, the non-prosecution commitment shall become permanent, and the Department's obligation not to prosecute TMC or its current employees (other than Gavin Holt) for the Relevant Conduct shall be irrevocable. If, however, TMC materially breaches this Agreement during the Term, the Department's obligations under this Section 2 shall be void, and the Department shall be free to prosecute TMC as set forth in Section 9 below.

SECTION 3 — MONETARY PAYMENT

3.1 Payment Amount. TMC agrees to pay a monetary amount of Forty-Eight Million Five Hundred Thousand U.S. Dollars (USD $48,500,000.00) to the United States Treasury. This amount has been calculated by reference to the Department's standard methodology, which uses twenty percent (20%) of affected commerce as a starting point for the monetary penalty calculation. The starting-point amount is USD $95,600,000 (USD $478,000,000 × 20%). That starting-point amount has been reduced by an aggregate cooperation and remediation credit of approximately 49.2%, reflecting the Department's assessment of the nature, extent, and value of TMC's cooperation with the investigation, TMC's prompt remedial actions (including the termination of Gavin Holt's employment and the design and implementation of enhanced compliance measures), and other mitigating factors, resulting in the agreed monetary amount of USD $48,500,000.00.

3.2 Payment Timing. The full monetary amount of USD $48,500,000.00 shall be paid within sixty (60) days of the Effective Date of this Agreement by wire transfer to the United States Treasury, in accordance with written payment instructions to be provided by the Department to TMC's counsel, Calderwood & Harkness LLP, within ten (10) business days of the Effective Date. Based on the anticipated execution of this Agreement on May 6, 2024, the payment deadline would be July 5, 2024. TMC shall provide the Department with written confirmation of the wire transfer, including the transaction reference number and date, within two (2) business days of making the payment.

3.3 Payment Not Tax Deductible. TMC acknowledges and agrees that the monetary payment required under this Agreement is a penalty payment and is not deductible as a business expense, ordinary or otherwise, for U.S. federal, state, or local tax purposes under 26 U.S.C. § 162(f) or any analogous provision of law. TMC further acknowledges that the monetary payment is not deductible for Canadian federal or provincial tax purposes under any analogous provision of the Income Tax Act (Canada) or applicable provincial taxation statutes. TMC shall not claim any such deduction or credit with respect to the monetary payment.

3.4 No Offset. TMC may not offset, credit, or reduce the monetary payment required under this Agreement against any restitution, damages, fines, penalties, disgorgement, or other monetary obligations that may be assessed against TMC in any related civil litigation, administrative proceeding, regulatory enforcement action, or private treble-damages action under Section 4 of the Clayton Act, 15 U.S.C. § 15, or any other applicable law. The monetary payment required under this Agreement is separate from and in addition to any other monetary obligations TMC may incur as a result of or in connection with the Relevant Conduct.

SECTION 4 — COOPERATION OBLIGATIONS

4.1 Full Cooperation. TMC agrees to cooperate fully and truthfully with the Department in any investigation, prosecution, or other proceeding arising out of or related to the Relevant Conduct for the duration of the Term. This cooperation obligation encompasses cooperation in connection with the Department's ongoing investigation of other participants in the conspiracy described in Appendix B, including but not limited to Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., and any individuals who may have participated in the Relevant Conduct, as well as any trial, sentencing, or other court proceeding.

4.2 Specific Cooperation Obligations. TMC's cooperation obligations under this Agreement include, without limitation, the following:

(a) Document Production. TMC shall promptly produce, or cause to be produced, any documents, records, electronic data, or other materials requested by the Department that are within TMC's possession, custody, or control, regardless of the physical or electronic location of such documents and regardless of whether such documents are located in the United States or abroad. TMC's obligation to produce documents is subject to applicable legal privileges (including the attorney-client privilege and the work-product doctrine) and foreign data-protection laws that may restrict the transfer of personal data across jurisdictions, provided that TMC shall promptly notify the Department in writing of any such privilege assertion or foreign data-protection limitation, shall provide the Department with a privilege log or other description of withheld materials sufficient for the Department to evaluate the assertion, and shall work cooperatively with the Department to find alternative means of providing the information or documents at issue.

(b) Witness Availability. TMC shall use its best efforts to make available for interviews, depositions, grand jury appearances, and trial testimony any current employee of TMC, at times and locations reasonably requested by the Department, giving due consideration to the business needs of TMC and the personal circumstances of the employees involved. TMC shall also use its best efforts to make former employees available for such purposes, to the extent TMC has the ability to do so, including by exercising any contractual rights TMC may have to compel cooperation by former employees. TMC shall not discourage, directly or indirectly, any current or former employee from cooperating with the Department.

(c) Disclosure of Relevant Information. TMC shall promptly disclose to the Department any information that comes to TMC's attention, whether through its normal business operations, its internal investigation, or otherwise, concerning the Relevant Conduct or any related potentially criminal conduct in the specialty-minerals industry. This obligation includes, but is not limited to, information regarding contacts between TMC employees and employees of competitor companies, documents or communications not previously produced, and any information suggesting the existence of additional anticompetitive agreements or understandings.

(d) No Interference. TMC shall not take any action, direct or indirect, to interfere with, impede, obstruct, or delay the cooperation of any individual, whether a current or former employee of TMC or otherwise, with the Department's investigation or any related proceeding. TMC shall not counsel, advise, or encourage any individual not to cooperate with the Department, not to provide truthful testimony, or not to produce documents or other materials requested by the Department.

(e) Preservation of Documents. TMC shall continue to preserve all documents, records, electronic data, and other materials relevant to the Relevant Conduct for the duration of the Term, consistent with the litigation hold issued by TMC on March 1, 2022, as supplemented from time to time. TMC shall not destroy, alter, conceal, or otherwise dispose of any such documents during the Term without the prior written consent of the Department.

4.3 Limitation on Use of Cooperation. No information, documents, or testimony provided by TMC or its employees pursuant to this Agreement shall be used directly against TMC in any criminal prosecution of TMC, except that such information, documents, or testimony may be used in a prosecution of TMC for perjury, false statements (18 U.S.C. § 1001), obstruction of justice (18 U.S.C. §§ 1503, 1505, 1512, 1519), or for breach of this Agreement as described in Section 9. This limitation does not apply to information, documents, or testimony that are derived from a source independent of TMC's cooperation under this Agreement.

SECTION 5 — COMPLIANCE ENHANCEMENTS

5.1 Enhanced Antitrust Compliance Program. TMC shall implement and maintain the Enhanced Antitrust Compliance Program described in Appendix A attached hereto for the duration of the Term. TMC represents that it has already commenced implementation of certain elements of the Enhanced Compliance Program, and TMC commits to achieving full implementation within ninety (90) days of the Effective Date. The Enhanced Compliance Program shall include, at a minimum, the following key elements:

(a) Independent Chief Compliance Officer. TMC shall appoint an independent Chief Compliance Officer ("CCO") with primary responsibility for overseeing TMC's antitrust compliance efforts. The CCO shall have direct reporting access to TMC's Board of Directors and shall not be subordinate to the General Counsel or any business-unit leader. The CCO shall have sufficient authority, resources, and staffing to carry out the compliance functions described in Appendix A.

(b) Mandatory Annual Antitrust Compliance Training. TMC shall provide mandatory annual antitrust compliance training to all employees involved in sales, marketing, pricing, bidding, and customer-facing functions, as well as all senior management personnel at the director level and above. Such training shall be conducted by qualified antitrust counsel and shall cover, at a minimum, the prohibitions of Section 1 of the Sherman Antitrust Act, the specific types of conduct at issue in this investigation, and TMC's policies regarding competitor contacts and trade-association participation.

(c) Written Policies Governing Competitor Contacts, Trade-Association Participation, and Pricing Practices. TMC shall adopt and distribute written policies setting forth clear guidelines for employee interactions with competitors, participation in trade associations and industry events, and pricing and bidding practices. These policies shall be made available to all relevant employees and shall be updated periodically as necessary to reflect changes in the law or in TMC's business operations.

(d) Confidential Reporting Hotline and Whistleblower Protections. TMC shall establish and maintain a confidential reporting mechanism, including a toll-free telephone hotline and an online reporting portal, through which employees may report suspected antitrust violations or other compliance concerns anonymously and without fear of retaliation. TMC shall adopt and enforce a non-retaliation policy prohibiting adverse employment actions against any employee who reports a compliance concern in good faith.

(e) Periodic Auditing and Monitoring. TMC shall conduct periodic internal audits and monitoring of compliance with the Enhanced Compliance Program, including reviews of communications, pricing decisions, and customer interactions for indicators of potential antitrust violations. The results of such audits and monitoring shall be reported to the CCO and the Board of Directors.

(f) Disciplinary Procedures. TMC shall adopt and enforce disciplinary procedures for violations of the Enhanced Compliance Program, including termination of employment for willful or repeated violations. TMC shall promptly report to the Department any material violation of the Enhanced Compliance Program identified during the Term.

5.2 Annual Compliance Certifications. Within thirty (30) days of each anniversary of the Effective Date during the Term, TMC's Chief Executive Officer and General Counsel shall each execute a written certification, in a form to be approved by the Department in advance, certifying that:

(a) TMC has maintained and adhered to the Enhanced Antitrust Compliance Program throughout the preceding year;

(b) to their knowledge, after due inquiry, no material violations of the Enhanced Compliance Program have occurred during the preceding year; and

(c) all training, reporting, and monitoring requirements set forth in the Enhanced Compliance Program and this Agreement have been satisfied during the preceding year.

Such certifications shall be delivered simultaneously to the Department and to the Monitor (during the monitor term described in Section 6). If the Chief Executive Officer or General Counsel becomes aware of any material compliance deficiency, such individual shall promptly disclose the deficiency to the Department, and shall describe in the certification the steps taken or planned to remediate the deficiency.

5.3 Trade-Association Interaction Policies. TMC shall implement specific protocols governing employee participation in trade-association events, conferences, and meetings, including those organized by the North American Specialty Minerals Council ("NASMC") and any similar industry organizations. These protocols shall include, at a minimum, the following requirements:

(a) written pre-approval from the CCO or a designated compliance officer for any employee's attendance at a trade-association event at which representatives of competitors are expected to be present;

(b) written agendas for all trade-association meetings, to be reviewed and approved in advance by the CCO or a designated compliance officer;

(c) written post-event reports prepared by each attending employee within five (5) business days of the event, describing the substance of any interactions with representatives of competitors;

(d) a prohibition on private, one-on-one discussions between TMC employees and representatives of competitors regarding pricing, customer allocation, market division, bidding, or any other competitively sensitive topic; and

(e) annual training specific to trade-association participation risks and best practices.

SECTION 6 — INDEPENDENT COMPLIANCE MONITOR

6.1 Appointment of Monitor. Within thirty (30) days of the Effective Date, TMC shall retain an independent compliance monitor ("Monitor") approved by the Department to assess and monitor TMC's implementation of and compliance with the Enhanced Antitrust Compliance Program (Appendix A) and the terms of this Agreement. Meridian Compliance Partners LLC, located at 1100 Connecticut Avenue NW, Suite 730, Washington, DC 20036, with Claudia Ferraro as engagement lead, has been pre-approved by the Department to serve as the Monitor. TMC shall enter into an engagement agreement with the Monitor within the thirty-day period specified above, and shall provide a copy of the executed engagement agreement to the Department promptly upon execution.

6.2 Monitor Term. The Monitor's engagement shall be for a period of two (2) years from the Effective Date of this Agreement. Assuming execution on May 6, 2024, the monitor term would run from May 6, 2024 through May 6, 2026. The monitor term may be extended as provided in Section 6.7 below.

6.3 Monitor's Scope and Authority. The Monitor shall have the authority to undertake all actions reasonably necessary to assess and monitor TMC's compliance with the Enhanced Antitrust Compliance Program and this Agreement, including, without limitation, the authority to:

(a) review TMC's antitrust compliance policies, procedures, internal controls, and training materials;

(b) interview any current employee of TMC, including senior management, sales and marketing personnel, and compliance staff, at reasonable times and with reasonable notice;

(c) review documents and records related to TMC's compliance with the Enhanced Compliance Program, including communications, pricing records, bidding documents, trade-association correspondence, and internal audit reports;

(d) attend compliance training sessions conducted by TMC to evaluate the content, quality, and effectiveness of such training;

(e) assess the overall effectiveness of the Enhanced Antitrust Compliance Program in preventing, detecting, and remediating potential antitrust violations; and

(f) make recommendations for improvements to the Enhanced Compliance Program, which TMC shall consider in good faith and implement to the extent reasonably practicable. TMC shall notify the Department in writing of any recommendation that TMC declines to implement, together with a detailed explanation of the reasons for its decision.

6.4 Reporting. The Monitor shall prepare and submit semi-annual written reports to the Department and to TMC's Board of Directors. The first such report shall be due six (6) months after the Effective Date of this Agreement, with subsequent reports due every six (6) months thereafter for the duration of the monitor term. Each report shall address, at a minimum, the following matters:

(a) the status of TMC's implementation of and compliance with the Enhanced Antitrust Compliance Program;

(b) TMC's compliance with the cooperation, disclosure, and other obligations set forth in this Agreement;

(d) the Monitor's recommendations for improvements or corrective actions; and

(e) TMC's response to any prior recommendations by the Monitor, including the status of any remedial actions undertaken.

The Monitor shall provide TMC an opportunity to review and comment on each report prior to submission to the Department. TMC's comments, if any, shall be included as an addendum to the report. The Department may share the Monitor's reports with other federal or state agencies as it deems appropriate.

6.5 TMC's Obligations to the Monitor. TMC shall fulfill the following obligations with respect to the Monitor:

(a) Full Cooperation. TMC shall cooperate fully, promptly, and truthfully with the Monitor in all respects, and shall instruct all directors, officers, and employees to cooperate fully with the Monitor.

(b) Access. TMC shall provide the Monitor with timely and complete access to all documents, records, electronic data, personnel, and facilities relevant to the Monitor's assessment of TMC's compliance with the Enhanced Compliance Program and this Agreement, subject to applicable legal privileges.

(c) Non-Interference. TMC shall not take any action to interfere with, impede, obstruct, or unduly delay the Monitor's work, nor shall TMC attempt to influence the content or conclusions of the Monitor's reports.

(d) Costs and Expenses. TMC shall bear all reasonable and documented costs and expenses of the Monitor's engagement, including the fees and expenses of the Monitor and any consultants or experts retained by the Monitor. The Monitor's fees shall be on terms set forth in the engagement agreement between TMC and the Monitor, and shall be reasonable in light of the scope and complexity of the Monitor's responsibilities.

6.6 Independence. The Monitor shall function as an independent third party, and shall not be an employee, agent, or representative of either TMC or the Department. The Monitor's reports and recommendations shall reflect the Monitor's independent professional judgment. TMC shall not employ or retain the Monitor, or any partner, principal, or employee of the Monitor's firm, in any capacity other than as Monitor during the monitor term and for a period of two (2) years following the conclusion of the monitor term. Similarly, the Monitor shall not accept employment or an engagement from TMC in any other capacity during the monitor term or for a period of two (2) years following the conclusion of the monitor term.

6.7 Transition at End of Monitor Term. At the conclusion of the two-year monitor term, the Monitor shall prepare a final comprehensive report assessing TMC's overall compliance posture, the effectiveness of the Enhanced Compliance Program, and whether any additional monitoring is warranted. The final report shall include a specific recommendation regarding the need for continued monitoring. The Department retains discretion, in its sole judgment, to extend the monitor term by up to one (1) additional year if the final report identifies material compliance deficiencies that, in the Department's assessment, warrant continued independent oversight. If the Department determines that an extension is warranted, the Department shall provide written notice to TMC within thirty (30) days of receiving the Monitor's final report, and TMC shall extend the Monitor's engagement accordingly.

SECTION 7 — HOLT CARVE-OUT

7.1 Exclusion of Gavin Holt. This Agreement does not provide any protection, benefit, immunity, or non-prosecution commitment to Gavin Holt, former Vice President of U.S. Specialty Minerals Sales at TMC. Mr. Holt departed TMC effective September 30, 2021. The Department expressly reserves the right to investigate, indict, and prosecute Gavin Holt individually for any criminal conduct, including but not limited to the Relevant Conduct described in the Agreed Statement of Facts (Appendix B) and any related violations of federal criminal statutes, including Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, mail fraud, 18 U.S.C. § 1341, wire fraud, 18 U.S.C. § 1343, and conspiracy, 18 U.S.C. § 371. Nothing in this Agreement shall be construed as limiting, restricting, or qualifying in any manner the Department's authority to proceed against Gavin Holt.

7.2 TMC's Cooperation Regarding Holt. TMC's cooperation obligations under Section 4 of this Agreement include, without limitation, full and complete cooperation in any investigation, grand jury proceeding, or criminal prosecution of Gavin Holt. Such cooperation includes, but is not limited to, the production of all documents and records within TMC's possession, custody, or control that are relevant to Holt's conduct, and making current and, to the extent possible, former TMC employees available to testify regarding Holt's conduct, including testimony before the grand jury, at trial, and at any sentencing or other court proceeding.

7.3 No Interference; Limitations on Payments. TMC shall not make any payments, directly or indirectly, to or for the benefit of Gavin Holt in connection with any legal defense, fine, penalty, restitution, or other monetary obligation arising from or related to the Relevant Conduct, except to the extent that such payments are required under pre-existing contractual obligations, including any obligation to advance legal fees or provide indemnification under TMC's articles of incorporation, bylaws, or policies, or under the Canada Business Corporations Act, or under any applicable directors' and officers' insurance policies in effect as of the date of this Agreement. TMC shall promptly notify the Department in writing of any such payments made or anticipated to be made, including the legal basis for the payment, the amount, and the recipient. TMC shall not enter into any new agreement or arrangement to provide Gavin Holt with legal-defense funding, indemnification, or other financial support in connection with the Relevant Conduct.

SECTION 8 — AGREED STATEMENT OF FACTS AND ADMISSIONS

8.1 Agreed Statement of Facts. TMC agrees to the Agreed Statement of Facts set forth in Appendix B attached hereto and incorporated herein by reference. TMC acknowledges that the facts described in Appendix B are true and accurate to the best of TMC's knowledge, information, and belief, based upon its internal investigation and the information available to it as of the date of this Agreement.

8.2 No Admission of Criminal Liability. TMC's agreement to the Agreed Statement of Facts set forth in Appendix B does not constitute an admission of guilt or criminal liability for purposes of this Agreement or otherwise. TMC enters into this Agreement without admitting or denying that it has committed any criminal offense. However, TMC acknowledges and agrees that the Department may use the Agreed Statement of Facts as provided in Section 8.3 and Section 9 (Breach Provisions) below.

8.3 Use of Agreed Statement of Facts. TMC agrees that in any criminal prosecution brought by the Department against TMC pursuant to Section 9 (Breach Provisions), the Agreed Statement of Facts (Appendix B) shall be admissible against TMC as evidence of the facts set forth therein. TMC hereby waives any objection to the admissibility of the Agreed Statement of Facts, including any objection based on the rules governing hearsay (Federal Rules of Evidence 801–807), relevance (Federal Rules of Evidence 401–403), authentication (Federal Rules of Evidence 901–902), or any other evidentiary ground. TMC further agrees that it will not challenge or contradict in any proceeding the facts set forth in the Agreed Statement of Facts.

SECTION 9 — BREACH AND REMEDIES

9.1 Material Breach. A material breach of this Agreement includes, but is not limited to, any of the following:

(a) failure to make the monetary payment required by Section 3 in full and by the deadline specified therein;

(b) the commission of any federal crime by TMC during the Term, including but not limited to violations of the federal antitrust laws, mail or wire fraud, obstruction of justice, or false statements;

(c) the provision of materially false, incomplete, or misleading information to the Department or to the Monitor by TMC or any of its directors, officers, or employees acting in their capacity as such;

(d) failure to cooperate fully and truthfully as required by Section 4 of this Agreement;

(e) failure to implement or maintain the Enhanced Antitrust Compliance Program as required by Section 5, or failure to submit annual compliance certifications as required by Section 5.2;

(f) failure to retain the Monitor, cooperate with the Monitor, or provide the Monitor with access to documents, personnel, and facilities as required by Section 6; or

(g) any public statement by TMC that contradicts or is materially inconsistent with the Agreed Statement of Facts (Appendix B), in violation of Section 10.3.

9.2 Notice and Cure. Before declaring a material breach of this Agreement, the Department shall provide written notice to TMC, at the addresses specified in Section 11.4, describing the alleged breach with reasonable specificity. TMC shall have thirty (30) calendar days from receipt of such notice to cure the breach. If the breach is of a nature that it cannot reasonably be cured within thirty (30) calendar days, TMC shall, within such thirty-day period, commence good-faith efforts to cure the breach and shall provide the Department with a written plan and timeline for cure. The written plan shall describe in detail the steps TMC proposes to take to cure the breach and the timeframe within which each step will be completed. The Department retains sole discretion to determine whether a proposed cure plan is acceptable and whether a breach has been adequately cured. The Department shall notify TMC in writing of its determination regarding the adequacy of any proposed cure or completed cure.

9.3 Consequences of Breach. If TMC materially breaches this Agreement and fails to cure the breach as provided in Section 9.2, the following consequences shall apply:

(a) Prosecution. The Department may, at its sole discretion, initiate criminal prosecution of TMC for the Relevant Conduct described in the Agreed Statement of Facts (Appendix B), or for any other federal criminal violation arising out of or related to the Relevant Conduct, including but not limited to violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.

(b) Admissibility of Agreed Statement of Facts. In any such prosecution, the Agreed Statement of Facts (Appendix B) shall be admissible against TMC as provided in Section 8.3, and TMC shall not challenge or object to its admissibility on any ground.

(c) Tolling and Waiver of Statute of Limitations. Any statute of limitations applicable to the Relevant Conduct shall be tolled for the Term of this Agreement plus one (1) year, as set forth in Section 9.4. TMC hereby waives any statute-of-limitations defense for the Relevant Conduct for that period.

(d) Waiver of Venue Objection. TMC waives any objection to venue in the United States District Court for the Northern District of California, San Francisco Division, for any prosecution arising from or related to the Relevant Conduct.

The monetary payment made by TMC pursuant to Section 3, if already paid, shall not be refunded in the event of a breach and subsequent prosecution, and shall not be credited against any fine or penalty imposed in a subsequent prosecution.

9.4 Tolling of Statute of Limitations. TMC agrees that the statute of limitations applicable to the Relevant Conduct, as defined in Section 1.6, is tolled from the Effective Date of this Agreement through one (1) year after the expiration or termination of this Agreement, whichever occurs later. TMC expressly and irrevocably waives any right to assert a statute-of-limitations defense with respect to the Relevant Conduct for this tolled period, and agrees that this waiver is knowing and voluntary, made with the advice of counsel.

SECTION 10 — PUBLIC STATEMENTS AND DISCLOSURE

10.1 TMC Disclosures. TMC may disclose the existence and terms of this Agreement in its public filings with securities regulators, including filings with the U.S. Securities and Exchange Commission (SEC) and on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval+ (SEDAR+), and in its annual and quarterly financial statements and earnings releases, to the extent required by applicable securities laws and regulations, including the U.S. Securities Exchange Act of 1934, the regulations of the SEC and the NYSE, and applicable Canadian securities legislation. TMC shall provide the Department with reasonable advance written notice of any public disclosure regarding this Agreement, including a draft of the proposed disclosure, no fewer than five (5) business days prior to the intended date of disclosure, to permit the Department to review and provide comments on the proposed disclosure.

10.2 Department's Authority. The Department retains the right, in its sole discretion, to make this Agreement and the Agreed Statement of Facts (Appendix B) public at any time after execution, including through press releases, public statements, postings on the Department's website, and filings with the court. TMC acknowledges and consents to the Department's authority to make such disclosures.

10.3 No Contradictory Statements. TMC agrees not to make any public statement, directly or through any agent, representative, or spokesperson, that contradicts, is materially inconsistent with, or calls into question the truth or accuracy of the Agreed Statement of Facts (Appendix B). This provision does not prohibit TMC from stating publicly that it has not admitted guilt or criminal liability in connection with this Agreement, or from making other statements that are factually accurate and consistent with the terms of this Agreement, including statements regarding its cooperation with the Department and the remedial measures it has undertaken.

SECTION 11 — GENERAL PROVISIONS

11.1 Entire Agreement. This Agreement, including Appendix A (Enhanced Antitrust Compliance Program) and Appendix B (Agreed Statement of Facts), constitutes the entire agreement between the Department and TMC with respect to the subject matter hereof. This Agreement supersedes all prior negotiations, discussions, representations, promises, understandings, and agreements, whether oral or written, between the parties relating to the subject matter hereof. No representations, warranties, or inducements have been made to TMC other than those set forth in this Agreement.

11.2 Amendments. This Agreement may not be modified, amended, or supplemented except by a written instrument signed by authorized representatives of both the Department and TMC. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the party granting the waiver.

11.3 Governing Law. This Agreement shall be construed, interpreted, and enforced in accordance with the federal laws of the United States. To the extent that issues arise under this Agreement that are not governed by federal law, the laws of the State of California shall apply, without regard to its conflict-of-laws principles.

11.4 Notices. All notices, requests, demands, certifications, reports, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given when delivered personally, sent by nationally recognized overnight courier service, or sent by registered or certified mail, return receipt requested, postage prepaid, to the following addresses (or to such other address as a party may designate by written notice to the other party):

For the Department:

Deputy Assistant Attorney General Julia Stafford-Hayes Criminal Enforcement Antitrust Division U.S. Department of Justice 950 Pennsylvania Avenue NW Washington, DC 20530

and

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

For TMC:

General Counsel Priya Anand Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2 Canada

with copies to:

Elaine Forsythe, Partner Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104

11.5 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of TMC and its successors and assigns, and upon the Department. TMC may not assign, transfer, or delegate this Agreement or any of its rights or obligations hereunder to any person or entity without the prior written consent of the Department. Any purported assignment in violation of this provision shall be null and void. In the event of a merger, acquisition, corporate reorganization, or other change in corporate structure affecting TMC, TMC shall promptly notify the Department and shall ensure that the surviving or successor entity assumes all of TMC's obligations under this Agreement.

11.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Facsimile and electronically transmitted signatures shall be deemed to be original signatures for all purposes.

11.7 Authority to Execute. TMC represents and warrants that the individual executing this Agreement on behalf of TMC has been duly authorized by TMC's Board of Directors to execute this Agreement and to bind TMC to its terms and conditions. TMC shall, upon request, provide the Department with a copy of the board resolution or other corporate authorization evidencing such authority. The Department represents that the individual executing this Agreement on behalf of the Department has the authority to enter into this Agreement and to bind the Department to its terms and conditions.

11.8 Voluntary Agreement. TMC represents and warrants that it has entered into this Agreement voluntarily and knowingly, with the advice and assistance of experienced and competent counsel (Calderwood & Harkness LLP), after having been fully informed of and having had a full opportunity to consider all relevant facts, rights, and legal consequences. TMC acknowledges that no threats, promises, or inducements have been made to it, other than those contained in this Agreement, to cause it to enter into this Agreement.

11.9 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such holding shall not affect the validity, legality, or enforceability of the remaining provisions of this Agreement. The remaining provisions shall continue in full force and effect, and the parties shall negotiate in good faith to replace the invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that most closely approximates the intent and economic effect of the original provision.

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties have executed this Non-Prosecution Agreement as of the date(s) set forth below.

TORCHLIGHT MINING CORP.

By: ________

Name: Søren Dalmqvist

Title: Chief Executive Officer

Date: ________

Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2, Canada TSX: TRCL

UNITED STATES DEPARTMENT OF JUSTICE, ANTITRUST DIVISION

By: ________

Name: Julia Stafford-Hayes

Title: Deputy Assistant Attorney General, Antitrust Division

Date: ________

ACKNOWLEDGED:

________________________________________

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

________________________________________

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

APPROVED AS TO FORM — COUNSEL FOR TMC:

By: ________

Name: Elaine Forsythe

Title: Responsible Partner

Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104

Date: ________

APPENDIX A

ENHANCED ANTITRUST COMPLIANCE PROGRAM

Appendix A is set forth in the separately attached document (npa-appendix-a-compliance-program-draft.docx), which is incorporated herein by reference as though fully set forth in this Agreement.

Summary of Key Elements. The Enhanced Antitrust Compliance Program, as prepared by Calderwood & Harkness LLP in consultation with Meridian Compliance Partners LLC (Claudia Ferraro, Engagement Lead), includes the following principal elements:

1. Appointment of Independent Chief Compliance Officer. TMC shall appoint an independent Chief Compliance Officer with direct reporting access to the Board of Directors, responsibility for overseeing all aspects of antitrust compliance, and authority to implement and enforce compliance policies across all TMC business units, including the U.S. Specialty Minerals Division.

2. Mandatory Annual Antitrust Compliance Training. All employees involved in sales, marketing, pricing, bidding, and customer-facing functions, as well as all senior management at the director level and above, shall participate in mandatory annual antitrust compliance training. Training shall be conducted by qualified antitrust counsel and shall include case studies, practical scenarios, and assessments of employee comprehension.

3. Competitor-Contact Protocols. Written policies governing all contacts and communications between TMC employees and employees of competitor companies, including detailed guidance on permissible and impermissible topics of discussion.

4. NASMC and Trade-Association Interaction Guidelines. Specific protocols for employee participation in events and meetings organized by the North American Specialty Minerals Council (NASMC) and other trade associations, including pre-approval requirements, written agendas, post-event reporting, and prohibitions on private discussions with competitors regarding competitively sensitive topics.

5. Confidential Reporting Hotline and Whistleblower Protections. A confidential and anonymous reporting mechanism, including a toll-free telephone hotline and an online reporting portal, with robust non-retaliation protections for good-faith reporters.

6. Periodic Auditing and Monitoring. Regular internal audits and monitoring of compliance with the Enhanced Compliance Program, including reviews of pricing data, customer communications, and trade-association activity.

7. Disciplinary Procedures. Clear and enforceable disciplinary procedures for violations of the Enhanced Compliance Program, up to and including termination of employment.

8. Annual CEO and General Counsel Certifications. Annual written certifications by the Chief Executive Officer and General Counsel regarding TMC's compliance with the Enhanced Compliance Program, as described in Section 5.2 of this Agreement.

APPENDIX B

AGREED STATEMENT OF FACTS

Appendix B is set forth in the separately attached document (npa-appendix-b-agreed-statement-facts-draft.docx), which is incorporated herein by reference as though fully set forth in this Agreement.

Summary of Key Facts. The Agreed Statement of Facts describes, among other things, the following:

1. Conspiracy Period. The conspiracy lasted from approximately January 2017 through approximately August 2021.

2. Participants. The individual participants identified in the Agreed Statement of Facts include Gavin Holt, formerly Vice President of U.S. Specialty Minerals Sales at TMC (departed effective September 30, 2021); Carl Edgerton, Vice President of Sales at Ridgecrest Minerals Inc. (1700 Lincoln Street, Suite 4200, Denver, CO 80203; CEO Brian Novotny; separately represented by Davenport, Kline & Archer LLP, lead partner Helen Marchetti); and Kevin Tsang, former Senior Vice President of Commercial Operations at Pinnacle Earth Resources Ltd. (85 Elm Street West, Suite 600, Sudbury, ON P3C 1T3; CEO Douglas Harlowe; separately represented by Ashford Whitmore LLP, lead partner George Nakamura).

3. Products Involved. The products affected by the conspiracy include high-purity feldspar, industrial talc, and rare-earth concentrates sold to U.S. industrial and chemical-manufacturing customers.

4. Methods of Communication and Coordination. The participants coordinated their anticompetitive conduct through multiple channels, including encrypted messaging via the VaultChat application; in-person meetings at conferences organized by the North American Specialty Minerals Council (NASMC), held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida; and telephone calls. The Department has identified at least 37 documented instances of inter-competitor communications during the conspiracy period.

5. Affected Commerce. TMC's share of affected commerce during the conspiracy period is approximately USD $478 million. The total affected commerce across all participants in the conspiracy is approximately USD $1.34 billion. TMC's share of total affected commerce is approximately 35.7%.

6. Cooperation of Cascade Chemical Supply Co. Cascade Chemical Supply Co., located at 901 West Riverside Avenue, Suite 300, Spokane, WA 99201 (President Leonard Massey), entered into a cooperation agreement with the Department in approximately September 2021, providing the initial information that led to the opening of the Department's investigation. Information provided by Cascade Chemical Supply Co. was instrumental in the Department's identification of the participants and conduct described in the Agreed Statement of Facts.

7. Co-Subjects of Investigation. In addition to TMC, the Department's investigation involves Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. as co-subjects. Each of these entities is separately represented by outside counsel and is the subject of separate proceedings by the Department.

— END OF NON-PROSECUTION AGREEMENT —

DOJ Reference Number: ATR-SF-2024-00312

UNITED STATES DEPARTMENT OF JUSTICE ANTITRUST DIVISION
NON-PROSECUTION AGREEMENT
DOJ Reference Number: ATR-SF-2024-00312
February 5, 2024
This Non-Prosecution Agreement ("Agreement" or "NPA") is entered into by and between the United States Department of Justice, Antitrust Division ("the United States" or "the Department"), and Torchlight Mining Corp., a corporation organized and existing under the Canada Business Corporations Act, CBCA Corporation No. 7841526-1, with its registered office at 200 Bay Street, Suite 3400, Toronto, ON M5J 2J2, Canada, and its principal U.S. operations conducted through its wholly owned subsidiary, Torchlight Mining (U.S.) Inc., a Nevada corporation (Entity No. NV20160438721), with principal offices at 8750 West Sahara Avenue, Suite 210, Reno, NV 89117 (collectively, "TMC" or "the Company").
This Agreement is entered into in connection with the investigation conducted by the Antitrust Division, San Francisco Field Office, and the grand jury sitting in the United States District Court for the Northern District of California, San Francisco Division, Grand Jury No. GJ-22-0194.
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RECITALS
WHEREAS:
A. The Investigation. The Department, through the Antitrust Division, San Francisco Field Office, under the supervision of Deputy Assistant Attorney General Julia Stafford-Hayes, Criminal Enforcement, has been conducting an investigation into suspected violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, involving the fixing of prices, allocation of customers, and rigging of bids for high-purity feldspar, industrial talc, and rare-earth concentrates sold in the United States and its territories. The investigation was formally opened on February 10, 2022, and is being conducted before the grand jury in the United States District Court for the Northern District of California, San Francisco Division (Grand Jury No. GJ-22-0194). The lead prosecutors assigned to this matter are Trial Attorney Denise Kowalski and Senior Trial Attorney Marcus Reeves, both of the Antitrust Division, San Francisco Field Office, under the supervision of Deputy Assistant Attorney General Julia Stafford-Hayes.
B. TMC's Status in the Investigation. TMC received Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-003 on February 14, 2022. TMC subsequently received a target letter from the Department on May 20, 2022, informing TMC that it was a target of the investigation. TMC received a second Grand Jury Subpoena No. GJ-22-0194-SD-007 on May 15, 2023. TMC is a publicly traded corporation listed on the Toronto Stock Exchange (TSX: TRCL) and the New York Stock Exchange (NYSE: TMC). TMC's U.S. Specialty Minerals Division, which operates as a business unit within Torchlight Mining (U.S.) Inc., is the business unit relevant to the conduct described herein.
C. TMC's Cooperation. TMC retained Calderwood & Harkness LLP as outside counsel on February 18, 2022, promptly following receipt of the first grand jury subpoena. Since that time, TMC has cooperated with the Department's investigation, including: (i) production of approximately 555,000 documents (approximately 3.2 million pages) in response to the two grand jury subpoenas referenced above; (ii) making current employees available for voluntary proffer sessions with the Department; (iii) conducting a thorough internal investigation and sharing the findings of that investigation with the Department through written proffers, including detailed chronologies, transaction analyses, and communications summaries; and (iv) designing and proposing an enhanced antitrust compliance program intended to prevent recurrence of the type of conduct under investigation. TMC submitted a comprehensive cooperation proffer to the Department on February 15, 2023, which the Department has acknowledged was timely, thorough, and materially assisted the Department's investigation.
D. Identified Conduct. The Department has identified conduct involving the former Vice President of U.S. Specialty Minerals Sales at TMC, Gavin Holt, and counterparts at other companies in the specialty-minerals industry, during the period from approximately January 2017 through approximately August 2021. The specific conduct identified by the Department, and agreed to by TMC, is set forth in the Agreed Statement of Facts attached hereto as Appendix B and incorporated herein by reference.
E. Purpose of the Agreement. TMC and the Department wish to resolve the Department's investigation of TMC without criminal prosecution, subject to the terms and conditions set forth herein. The parties have negotiated and agreed upon the terms of this Agreement in good faith, with due regard for the interests of justice, the nature and seriousness of the conduct at issue, the extent of TMC's cooperation, the remedial measures undertaken by TMC, and the Department's policies governing non-prosecution agreements in criminal antitrust matters.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and obligations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Department and TMC agree as follows:
SECTION 1 — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
1.1 "Agreement" or "NPA" shall mean this Non-Prosecution Agreement, including all appendices attached hereto and incorporated herein by reference, specifically Appendix A (Enhanced Antitrust Compliance Program) and Appendix B (Agreed Statement of Facts).
1.2 "Company" or "TMC" shall mean Torchlight Mining Corp. (CBCA Corporation No. 7841526-1) and its wholly owned U.S. subsidiary Torchlight Mining (U.S.) Inc. (Nevada Entity No. NV20160438721), including all of their respective directors, officers, and employees, other than Gavin Holt, whose exclusion from this Agreement is set forth in Section 7 below.
1.3 "Department" shall mean the United States Department of Justice, Antitrust Division, including its agents, employees, attorneys, and representatives.
1.4 "Effective Date" shall mean the date on which this Agreement is executed by both parties, as reflected on the signature pages hereof.
1.5 "Term" shall mean the period of three (3) years commencing on the Effective Date and ending on the third anniversary of the Effective Date. Assuming execution on May 6, 2024, the Term would run from May 6, 2024 through May 6, 2027. All references to specific dates in this Agreement based on the anticipated Effective Date of May 6, 2024 are for illustrative purposes only, and shall be adjusted accordingly if the actual Effective Date differs.
1.6 "Relevant Conduct" shall mean the conduct described in the Agreed Statement of Facts attached hereto as Appendix B, involving the fixing of prices, allocation of customers, and rigging of bids for high-purity feldspar, industrial talc, and rare-earth concentrates sold to U.S. industrial and chemical-manufacturing customers during the period from approximately January 2017 through approximately August 2021.
1.7 "Affected Commerce" shall mean the total volume of commerce in high-purity feldspar, industrial talc, and rare-earth concentrates sold in the United States by TMC during the period of the Relevant Conduct. The parties agree that the Affected Commerce is approximately Four Hundred Seventy-Eight Million U.S. Dollars (USD $478,000,000).
1.8 "Enhanced Compliance Program" shall mean the Enhanced Antitrust Compliance Program described in detail in Appendix A attached hereto and incorporated herein by reference.
1.9 "Monitor" shall mean the independent compliance monitor to be retained by TMC pursuant to Section 6 of this Agreement, subject to approval by the Department.
1.10 "Agreed Statement of Facts" shall mean the statement of facts set forth in Appendix B attached hereto and incorporated herein by reference, as agreed upon by TMC and the Department.
SECTION 2 — NON-PROSECUTION COMMITMENT
2.1 Agreement Not to Prosecute TMC. Subject to TMC's full and continued compliance with all terms and conditions of this Agreement, the Department agrees that it will not bring criminal charges against Torchlight Mining Corp. or Torchlight Mining (U.S.) Inc. for the Relevant Conduct described in the Agreed Statement of Facts (Appendix B). This commitment by the Department extends to all current employees of TMC, in their capacities as employees and agents of TMC, other than Gavin Holt, whose exclusion from this Agreement is set forth in Section 7 below. The non-prosecution commitment with respect to current employees does not extend to such employees' individual conduct outside the scope of their employment with TMC or to conduct that post-dates the Relevant Conduct period.
2.2 Scope of Non-Prosecution Commitment. The non-prosecution commitment set forth in Section 2.1 applies solely to the Relevant Conduct as defined in Section 1.6 and as described in the Agreed Statement of Facts (Appendix B). For the avoidance of doubt, the non-prosecution commitment does not extend to:
(a) any conduct not described in the Agreed Statement of Facts, whether or not such conduct occurred during the period of the Relevant Conduct or involved the same products, customers, or individuals;
(b) any false statements or obstruction of justice by TMC or any of its directors, officers, or employees, whether occurring before, during, or after the execution of this Agreement;
(c) any future violations of the federal antitrust laws, including Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, or any other federal criminal statutes, committed by TMC or its employees after the date of execution of this Agreement; or
(d) any conduct by Gavin Holt individually, whether in his former capacity as Vice President of U.S. Specialty Minerals Sales at TMC or otherwise, as more fully set forth in Section 7.
2.3 Duration. The non-prosecution commitment set forth in this Section 2 shall remain in effect throughout the Term. Upon the expiration of the Term, provided that TMC has fully complied with all terms and conditions of this Agreement throughout the Term, the non-prosecution commitment shall become permanent, and the Department's obligation not to prosecute TMC or its current employees (other than Gavin Holt) for the Relevant Conduct shall be irrevocable. If, however, TMC materially breaches this Agreement during the Term, the Department's obligations under this Section 2 shall be void, and the Department shall be free to prosecute TMC as set forth in Section 9 below.
SECTION 3 — MONETARY PAYMENT
3.1 Payment Amount. TMC agrees to pay a monetary amount of Forty-Eight Million Five Hundred Thousand U.S. Dollars (USD $48,500,000.00) to the United States Treasury. This amount has been calculated by reference to the Department's standard methodology, which uses twenty percent (20%) of affected commerce as a starting point for the monetary penalty calculation. The starting-point amount is USD $95,600,000 (USD $478,000,000 × 20%). That starting-point amount has been reduced by an aggregate cooperation and remediation credit of approximately 49.2%, reflecting the Department's assessment of the nature, extent, and value of TMC's cooperation with the investigation, TMC's prompt remedial actions (including the termination of Gavin Holt's employment and the design and implementation of enhanced compliance measures), and other mitigating factors, resulting in the agreed monetary amount of USD $48,500,000.00.
3.2 Payment Timing. The full monetary amount of USD $48,500,000.00 shall be paid within sixty (60) days of the Effective Date of this Agreement by wire transfer to the United States Treasury, in accordance with written payment instructions to be provided by the Department to TMC's counsel, Calderwood & Harkness LLP, within ten (10) business days of the Effective Date. Based on the anticipated execution of this Agreement on May 6, 2024, the payment deadline would be July 5, 2024. TMC shall provide the Department with written confirmation of the wire transfer, including the transaction reference number and date, within two (2) business days of making the payment.
3.3 Payment Not Tax Deductible. TMC acknowledges and agrees that the monetary payment required under this Agreement is a penalty payment and is not deductible as a business expense, ordinary or otherwise, for U.S. federal, state, or local tax purposes under 26 U.S.C. § 162(f) or any analogous provision of law. TMC further acknowledges that the monetary payment is not deductible for Canadian federal or provincial tax purposes under any analogous provision of the Income Tax Act (Canada) or applicable provincial taxation statutes. TMC shall not claim any such deduction or credit with respect to the monetary payment.
3.4 No Offset. TMC may not offset, credit, or reduce the monetary payment required under this Agreement against any restitution, damages, fines, penalties, disgorgement, or other monetary obligations that may be assessed against TMC in any related civil litigation, administrative proceeding, regulatory enforcement action, or private treble-damages action under Section 4 of the Clayton Act, 15 U.S.C. § 15, or any other applicable law. The monetary payment required under this Agreement is separate from and in addition to any other monetary obligations TMC may incur as a result of or in connection with the Relevant Conduct.
SECTION 4 — COOPERATION OBLIGATIONS
4.1 Full Cooperation. TMC agrees to cooperate fully and truthfully with the Department in any investigation, prosecution, or other proceeding arising out of or related to the Relevant Conduct for the duration of the Term. This cooperation obligation encompasses cooperation in connection with the Department's ongoing investigation of other participants in the conspiracy described in Appendix B, including but not limited to Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., and any individuals who may have participated in the Relevant Conduct, as well as any trial, sentencing, or other court proceeding.
4.2 Specific Cooperation Obligations. TMC's cooperation obligations under this Agreement include, without limitation, the following:
(a) Document Production. TMC shall promptly produce, or cause to be produced, any documents, records, electronic data, or other materials requested by the Department that are within TMC's possession, custody, or control, regardless of the physical or electronic location of such documents and regardless of whether such documents are located in the United States or abroad. TMC's obligation to produce documents is subject to applicable legal privileges (including the attorney-client privilege and the work-product doctrine) and foreign data-protection laws that may restrict the transfer of personal data across jurisdictions, provided that TMC shall promptly notify the Department in writing of any such privilege assertion or foreign data-protection limitation, shall provide the Department with a privilege log or other description of withheld materials sufficient for the Department to evaluate the assertion, and shall work cooperatively with the Department to find alternative means of providing the information or documents at issue.
(b) Witness Availability. TMC shall use its best efforts to make available for interviews, depositions, grand jury appearances, and trial testimony any current employee of TMC, at times and locations reasonably requested by the Department, giving due consideration to the business needs of TMC and the personal circumstances of the employees involved. TMC shall also use its best efforts to make former employees available for such purposes, to the extent TMC has the ability to do so, including by exercising any contractual rights TMC may have to compel cooperation by former employees. TMC shall not discourage, directly or indirectly, any current or former employee from cooperating with the Department.
(c) Disclosure of Relevant Information. TMC shall promptly disclose to the Department any information that comes to TMC's attention, whether through its normal business operations, its internal investigation, or otherwise, concerning the Relevant Conduct or any related potentially criminal conduct in the specialty-minerals industry. This obligation includes, but is not limited to, information regarding contacts between TMC employees and employees of competitor companies, documents or communications not previously produced, and any information suggesting the existence of additional anticompetitive agreements or understandings.
(d) No Interference. TMC shall not take any action, direct or indirect, to interfere with, impede, obstruct, or delay the cooperation of any individual, whether a current or former employee of TMC or otherwise, with the Department's investigation or any related proceeding. TMC shall not counsel, advise, or encourage any individual not to cooperate with the Department, not to provide truthful testimony, or not to produce documents or other materials requested by the Department.
(e) Preservation of Documents. TMC shall continue to preserve all documents, records, electronic data, and other materials relevant to the Relevant Conduct for the duration of the Term, consistent with the litigation hold issued by TMC on March 1, 2022, as supplemented from time to time. TMC shall not destroy, alter, conceal, or otherwise dispose of any such documents during the Term without the prior written consent of the Department.
4.3 Limitation on Use of Cooperation. No information, documents, or testimony provided by TMC or its employees pursuant to this Agreement shall be used directly against TMC in any criminal prosecution of TMC, except that such information, documents, or testimony may be used in a prosecution of TMC for perjury, false statements (18 U.S.C. § 1001), obstruction of justice (18 U.S.C. §§ 1503, 1505, 1512, 1519), or for breach of this Agreement as described in Section 9. This limitation does not apply to information, documents, or testimony that are derived from a source independent of TMC's cooperation under this Agreement.
SECTION 5 — COMPLIANCE ENHANCEMENTS
5.1 Enhanced Antitrust Compliance Program. TMC shall implement and maintain the Enhanced Antitrust Compliance Program described in Appendix A attached hereto for the duration of the Term. TMC represents that it has already commenced implementation of certain elements of the Enhanced Compliance Program, and TMC commits to achieving full implementation within ninety (90) days of the Effective Date. The Enhanced Compliance Program shall include, at a minimum, the following key elements:
(a) Independent Chief Compliance Officer. TMC shall appoint an independent Chief Compliance Officer ("CCO") with primary responsibility for overseeing TMC's antitrust compliance efforts. The CCO shall have direct reporting access to TMC's Board of Directors and shall not be subordinate to the General Counsel or any business-unit leader. The CCO shall have sufficient authority, resources, and staffing to carry out the compliance functions described in Appendix A.
(b) Mandatory Annual Antitrust Compliance Training. TMC shall provide mandatory annual antitrust compliance training to all employees involved in sales, marketing, pricing, bidding, and customer-facing functions, as well as all senior management personnel at the director level and above. Such training shall be conducted by qualified antitrust counsel and shall cover, at a minimum, the prohibitions of Section 1 of the Sherman Antitrust Act, the specific types of conduct at issue in this investigation, and TMC's policies regarding competitor contacts and trade-association participation.
(c) Written Policies Governing Competitor Contacts, Trade-Association Participation, and Pricing Practices. TMC shall adopt and distribute written policies setting forth clear guidelines for employee interactions with competitors, participation in trade associations and industry events, and pricing and bidding practices. These policies shall be made available to all relevant employees and shall be updated periodically as necessary to reflect changes in the law or in TMC's business operations.
(d) Confidential Reporting Hotline and Whistleblower Protections. TMC shall establish and maintain a confidential reporting mechanism, including a toll-free telephone hotline and an online reporting portal, through which employees may report suspected antitrust violations or other compliance concerns anonymously and without fear of retaliation. TMC shall adopt and enforce a non-retaliation policy prohibiting adverse employment actions against any employee who reports a compliance concern in good faith.
(e) Periodic Auditing and Monitoring. TMC shall conduct periodic internal audits and monitoring of compliance with the Enhanced Compliance Program, including reviews of communications, pricing decisions, and customer interactions for indicators of potential antitrust violations. The results of such audits and monitoring shall be reported to the CCO and the Board of Directors.
(f) Disciplinary Procedures. TMC shall adopt and enforce disciplinary procedures for violations of the Enhanced Compliance Program, including termination of employment for willful or repeated violations. TMC shall promptly report to the Department any material violation of the Enhanced Compliance Program identified during the Term.
5.2 Annual Compliance Certifications. Within thirty (30) days of each anniversary of the Effective Date during the Term, TMC's Chief Executive Officer and General Counsel shall each execute a written certification, in a form to be approved by the Department in advance, certifying that:
(a) TMC has maintained and adhered to the Enhanced Antitrust Compliance Program throughout the preceding year;
(b) to their knowledge, after due inquiry, no material violations of the Enhanced Compliance Program have occurred during the preceding year; and
(c) all training, reporting, and monitoring requirements set forth in the Enhanced Compliance Program and this Agreement have been satisfied during the preceding year.
Such certifications shall be delivered simultaneously to the Department and to the Monitor (during the monitor term described in Section 6). If the Chief Executive Officer or General Counsel becomes aware of any material compliance deficiency, such individual shall promptly disclose the deficiency to the Department, and shall describe in the certification the steps taken or planned to remediate the deficiency.
5.3 Trade-Association Interaction Policies. TMC shall implement specific protocols governing employee participation in trade-association events, conferences, and meetings, including those organized by the North American Specialty Minerals Council ("NASMC") and any similar industry organizations. These protocols shall include, at a minimum, the following requirements:
(a) written pre-approval from the CCO or a designated compliance officer for any employee's attendance at a trade-association event at which representatives of competitors are expected to be present;
(b) written agendas for all trade-association meetings, to be reviewed and approved in advance by the CCO or a designated compliance officer;
(c) written post-event reports prepared by each attending employee within five (5) business days of the event, describing the substance of any interactions with representatives of competitors;
(d) a prohibition on private, one-on-one discussions between TMC employees and representatives of competitors regarding pricing, customer allocation, market division, bidding, or any other competitively sensitive topic; and
(e) annual training specific to trade-association participation risks and best practices.
SECTION 6 — INDEPENDENT COMPLIANCE MONITOR
6.1 Appointment of Monitor. Within thirty (30) days of the Effective Date, TMC shall retain an independent compliance monitor ("Monitor") approved by the Department to assess and monitor TMC's implementation of and compliance with the Enhanced Antitrust Compliance Program (Appendix A) and the terms of this Agreement. Meridian Compliance Partners LLC, located at 1100 Connecticut Avenue NW, Suite 730, Washington, DC 20036, with Claudia Ferraro as engagement lead, has been pre-approved by the Department to serve as the Monitor. TMC shall enter into an engagement agreement with the Monitor within the thirty-day period specified above, and shall provide a copy of the executed engagement agreement to the Department promptly upon execution.
6.2 Monitor Term. The Monitor's engagement shall be for a period of two (2) years from the Effective Date of this Agreement. Assuming execution on May 6, 2024, the monitor term would run from May 6, 2024 through May 6, 2026. The monitor term may be extended as provided in Section 6.7 below.
6.3 Monitor's Scope and Authority. The Monitor shall have the authority to undertake all actions reasonably necessary to assess and monitor TMC's compliance with the Enhanced Antitrust Compliance Program and this Agreement, including, without limitation, the authority to:
(a) review TMC's antitrust compliance policies, procedures, internal controls, and training materials;
(b) interview any current employee of TMC, including senior management, sales and marketing personnel, and compliance staff, at reasonable times and with reasonable notice;
(c) review documents and records related to TMC's compliance with the Enhanced Compliance Program, including communications, pricing records, bidding documents, trade-association correspondence, and internal audit reports;
(d) attend compliance training sessions conducted by TMC to evaluate the content, quality, and effectiveness of such training;
(e) assess the overall effectiveness of the Enhanced Antitrust Compliance Program in preventing, detecting, and remediating potential antitrust violations; and
(f) make recommendations for improvements to the Enhanced Compliance Program, which TMC shall consider in good faith and implement to the extent reasonably practicable. TMC shall notify the Department in writing of any recommendation that TMC declines to implement, together with a detailed explanation of the reasons for its decision.
6.4 Reporting. The Monitor shall prepare and submit semi-annual written reports to the Department and to TMC's Board of Directors. The first such report shall be due six (6) months after the Effective Date of this Agreement, with subsequent reports due every six (6) months thereafter for the duration of the monitor term. Each report shall address, at a minimum, the following matters:
(a) the status of TMC's implementation of and compliance with the Enhanced Antitrust Compliance Program;
(b) TMC's compliance with the cooperation, disclosure, and other obligations set forth in this Agreement;
(c) any compliance deficiencies, weaknesses, or areas of concern identified by the Monitor during the reporting period;
(d) the Monitor's recommendations for improvements or corrective actions; and
(e) TMC's response to any prior recommendations by the Monitor, including the status of any remedial actions undertaken.
The Monitor shall provide TMC an opportunity to review and comment on each report prior to submission to the Department. TMC's comments, if any, shall be included as an addendum to the report. The Department may share the Monitor's reports with other federal or state agencies as it deems appropriate.
6.5 TMC's Obligations to the Monitor. TMC shall fulfill the following obligations with respect to the Monitor:
(a) Full Cooperation. TMC shall cooperate fully, promptly, and truthfully with the Monitor in all respects, and shall instruct all directors, officers, and employees to cooperate fully with the Monitor.
(b) Access. TMC shall provide the Monitor with timely and complete access to all documents, records, electronic data, personnel, and facilities relevant to the Monitor's assessment of TMC's compliance with the Enhanced Compliance Program and this Agreement, subject to applicable legal privileges.
(c) Non-Interference. TMC shall not take any action to interfere with, impede, obstruct, or unduly delay the Monitor's work, nor shall TMC attempt to influence the content or conclusions of the Monitor's reports.
(d) Costs and Expenses. TMC shall bear all reasonable and documented costs and expenses of the Monitor's engagement, including the fees and expenses of the Monitor and any consultants or experts retained by the Monitor. The Monitor's fees shall be on terms set forth in the engagement agreement between TMC and the Monitor, and shall be reasonable in light of the scope and complexity of the Monitor's responsibilities.
6.6 Independence. The Monitor shall function as an independent third party, and shall not be an employee, agent, or representative of either TMC or the Department. The Monitor's reports and recommendations shall reflect the Monitor's independent professional judgment. TMC shall not employ or retain the Monitor, or any partner, principal, or employee of the Monitor's firm, in any capacity other than as Monitor during the monitor term and for a period of two (2) years following the conclusion of the monitor term. Similarly, the Monitor shall not accept employment or an engagement from TMC in any other capacity during the monitor term or for a period of two (2) years following the conclusion of the monitor term.
6.7 Transition at End of Monitor Term. At the conclusion of the two-year monitor term, the Monitor shall prepare a final comprehensive report assessing TMC's overall compliance posture, the effectiveness of the Enhanced Compliance Program, and whether any additional monitoring is warranted. The final report shall include a specific recommendation regarding the need for continued monitoring. The Department retains discretion, in its sole judgment, to extend the monitor term by up to one (1) additional year if the final report identifies material compliance deficiencies that, in the Department's assessment, warrant continued independent oversight. If the Department determines that an extension is warranted, the Department shall provide written notice to TMC within thirty (30) days of receiving the Monitor's final report, and TMC shall extend the Monitor's engagement accordingly.
SECTION 7 — HOLT CARVE-OUT
7.1 Exclusion of Gavin Holt. This Agreement does not provide any protection, benefit, immunity, or non-prosecution commitment to Gavin Holt, former Vice President of U.S. Specialty Minerals Sales at TMC. Mr. Holt departed TMC effective September 30, 2021. The Department expressly reserves the right to investigate, indict, and prosecute Gavin Holt individually for any criminal conduct, including but not limited to the Relevant Conduct described in the Agreed Statement of Facts (Appendix B) and any related violations of federal criminal statutes, including Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, mail fraud, 18 U.S.C. § 1341, wire fraud, 18 U.S.C. § 1343, and conspiracy, 18 U.S.C. § 371. Nothing in this Agreement shall be construed as limiting, restricting, or qualifying in any manner the Department's authority to proceed against Gavin Holt.
7.2 TMC's Cooperation Regarding Holt. TMC's cooperation obligations under Section 4 of this Agreement include, without limitation, full and complete cooperation in any investigation, grand jury proceeding, or criminal prosecution of Gavin Holt. Such cooperation includes, but is not limited to, the production of all documents and records within TMC's possession, custody, or control that are relevant to Holt's conduct, and making current and, to the extent possible, former TMC employees available to testify regarding Holt's conduct, including testimony before the grand jury, at trial, and at any sentencing or other court proceeding.
7.3 No Interference; Limitations on Payments. TMC shall not make any payments, directly or indirectly, to or for the benefit of Gavin Holt in connection with any legal defense, fine, penalty, restitution, or other monetary obligation arising from or related to the Relevant Conduct, except to the extent that such payments are required under pre-existing contractual obligations, including any obligation to advance legal fees or provide indemnification under TMC's articles of incorporation, bylaws, or policies, or under the Canada Business Corporations Act, or under any applicable directors' and officers' insurance policies in effect as of the date of this Agreement. TMC shall promptly notify the Department in writing of any such payments made or anticipated to be made, including the legal basis for the payment, the amount, and the recipient. TMC shall not enter into any new agreement or arrangement to provide Gavin Holt with legal-defense funding, indemnification, or other financial support in connection with the Relevant Conduct.
SECTION 8 — AGREED STATEMENT OF FACTS AND ADMISSIONS
8.1 Agreed Statement of Facts. TMC agrees to the Agreed Statement of Facts set forth in Appendix B attached hereto and incorporated herein by reference. TMC acknowledges that the facts described in Appendix B are true and accurate to the best of TMC's knowledge, information, and belief, based upon its internal investigation and the information available to it as of the date of this Agreement.
8.2 No Admission of Criminal Liability. TMC's agreement to the Agreed Statement of Facts set forth in Appendix B does not constitute an admission of guilt or criminal liability for purposes of this Agreement or otherwise. TMC enters into this Agreement without admitting or denying that it has committed any criminal offense. However, TMC acknowledges and agrees that the Department may use the Agreed Statement of Facts as provided in Section 8.3 and Section 9 (Breach Provisions) below.
8.3 Use of Agreed Statement of Facts. TMC agrees that in any criminal prosecution brought by the Department against TMC pursuant to Section 9 (Breach Provisions), the Agreed Statement of Facts (Appendix B) shall be admissible against TMC as evidence of the facts set forth therein. TMC hereby waives any objection to the admissibility of the Agreed Statement of Facts, including any objection based on the rules governing hearsay (Federal Rules of Evidence 801–807), relevance (Federal Rules of Evidence 401–403), authentication (Federal Rules of Evidence 901–902), or any other evidentiary ground. TMC further agrees that it will not challenge or contradict in any proceeding the facts set forth in the Agreed Statement of Facts.
SECTION 9 — BREACH AND REMEDIES
9.1 Material Breach. A material breach of this Agreement includes, but is not limited to, any of the following:
(a) failure to make the monetary payment required by Section 3 in full and by the deadline specified therein;
(b) the commission of any federal crime by TMC during the Term, including but not limited to violations of the federal antitrust laws, mail or wire fraud, obstruction of justice, or false statements;
(c) the provision of materially false, incomplete, or misleading information to the Department or to the Monitor by TMC or any of its directors, officers, or employees acting in their capacity as such;
(d) failure to cooperate fully and truthfully as required by Section 4 of this Agreement;
(e) failure to implement or maintain the Enhanced Antitrust Compliance Program as required by Section 5, or failure to submit annual compliance certifications as required by Section 5.2;
(f) failure to retain the Monitor, cooperate with the Monitor, or provide the Monitor with access to documents, personnel, and facilities as required by Section 6; or
(g) any public statement by TMC that contradicts or is materially inconsistent with the Agreed Statement of Facts (Appendix B), in violation of Section 10.3.
9.2 Notice and Cure. Before declaring a material breach of this Agreement, the Department shall provide written notice to TMC, at the addresses specified in Section 11.4, describing the alleged breach with reasonable specificity. TMC shall have thirty (30) calendar days from receipt of such notice to cure the breach. If the breach is of a nature that it cannot reasonably be cured within thirty (30) calendar days, TMC shall, within such thirty-day period, commence good-faith efforts to cure the breach and shall provide the Department with a written plan and timeline for cure. The written plan shall describe in detail the steps TMC proposes to take to cure the breach and the timeframe within which each step will be completed. The Department retains sole discretion to determine whether a proposed cure plan is acceptable and whether a breach has been adequately cured. The Department shall notify TMC in writing of its determination regarding the adequacy of any proposed cure or completed cure.
9.3 Consequences of Breach. If TMC materially breaches this Agreement and fails to cure the breach as provided in Section 9.2, the following consequences shall apply:
(a) Prosecution. The Department may, at its sole discretion, initiate criminal prosecution of TMC for the Relevant Conduct described in the Agreed Statement of Facts (Appendix B), or for any other federal criminal violation arising out of or related to the Relevant Conduct, including but not limited to violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.
(b) Admissibility of Agreed Statement of Facts. In any such prosecution, the Agreed Statement of Facts (Appendix B) shall be admissible against TMC as provided in Section 8.3, and TMC shall not challenge or object to its admissibility on any ground.
(c) Tolling and Waiver of Statute of Limitations. Any statute of limitations applicable to the Relevant Conduct shall be tolled for the Term of this Agreement plus one (1) year, as set forth in Section 9.4. TMC hereby waives any statute-of-limitations defense for the Relevant Conduct for that period.
(d) Waiver of Venue Objection. TMC waives any objection to venue in the United States District Court for the Northern District of California, San Francisco Division, for any prosecution arising from or related to the Relevant Conduct.
The monetary payment made by TMC pursuant to Section 3, if already paid, shall not be refunded in the event of a breach and subsequent prosecution, and shall not be credited against any fine or penalty imposed in a subsequent prosecution.
9.4 Tolling of Statute of Limitations. TMC agrees that the statute of limitations applicable to the Relevant Conduct, as defined in Section 1.6, is tolled from the Effective Date of this Agreement through one (1) year after the expiration or termination of this Agreement, whichever occurs later. TMC expressly and irrevocably waives any right to assert a statute-of-limitations defense with respect to the Relevant Conduct for this tolled period, and agrees that this waiver is knowing and voluntary, made with the advice of counsel.
SECTION 10 — PUBLIC STATEMENTS AND DISCLOSURE
10.1 TMC Disclosures. TMC may disclose the existence and terms of this Agreement in its public filings with securities regulators, including filings with the U.S. Securities and Exchange Commission (SEC) and on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval+ (SEDAR+), and in its annual and quarterly financial statements and earnings releases, to the extent required by applicable securities laws and regulations, including the U.S. Securities Exchange Act of 1934, the regulations of the SEC and the NYSE, and applicable Canadian securities legislation. TMC shall provide the Department with reasonable advance written notice of any public disclosure regarding this Agreement, including a draft of the proposed disclosure, no fewer than five (5) business days prior to the intended date of disclosure, to permit the Department to review and provide comments on the proposed disclosure.
10.2 Department's Authority. The Department retains the right, in its sole discretion, to make this Agreement and the Agreed Statement of Facts (Appendix B) public at any time after execution, including through press releases, public statements, postings on the Department's website, and filings with the court. TMC acknowledges and consents to the Department's authority to make such disclosures.
10.3 No Contradictory Statements. TMC agrees not to make any public statement, directly or through any agent, representative, or spokesperson, that contradicts, is materially inconsistent with, or calls into question the truth or accuracy of the Agreed Statement of Facts (Appendix B). This provision does not prohibit TMC from stating publicly that it has not admitted guilt or criminal liability in connection with this Agreement, or from making other statements that are factually accurate and consistent with the terms of this Agreement, including statements regarding its cooperation with the Department and the remedial measures it has undertaken.
SECTION 11 — GENERAL PROVISIONS
11.1 Entire Agreement. This Agreement, including Appendix A (Enhanced Antitrust Compliance Program) and Appendix B (Agreed Statement of Facts), constitutes the entire agreement between the Department and TMC with respect to the subject matter hereof. This Agreement supersedes all prior negotiations, discussions, representations, promises, understandings, and agreements, whether oral or written, between the parties relating to the subject matter hereof. No representations, warranties, or inducements have been made to TMC other than those set forth in this Agreement.
11.2 Amendments. This Agreement may not be modified, amended, or supplemented except by a written instrument signed by authorized representatives of both the Department and TMC. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the party granting the waiver.
11.3 Governing Law. This Agreement shall be construed, interpreted, and enforced in accordance with the federal laws of the United States. To the extent that issues arise under this Agreement that are not governed by federal law, the laws of the State of California shall apply, without regard to its conflict-of-laws principles.
11.4 Notices. All notices, requests, demands, certifications, reports, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given when delivered personally, sent by nationally recognized overnight courier service, or sent by registered or certified mail, return receipt requested, postage prepaid, to the following addresses (or to such other address as a party may designate by written notice to the other party):
For the Department:
Deputy Assistant Attorney General Julia Stafford-Hayes Criminal Enforcement Antitrust Division U.S. Department of Justice 950 Pennsylvania Avenue NW Washington, DC 20530
and
Trial Attorney Denise Kowalski Antitrust Division, San Francisco Field Office 450 Golden Gate Avenue, Room 10-0101 San Francisco, CA 94102
For TMC:
General Counsel Priya Anand Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2 Canada
with copies to:
Elaine Forsythe, Partner Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104
11.5 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of TMC and its successors and assigns, and upon the Department. TMC may not assign, transfer, or delegate this Agreement or any of its rights or obligations hereunder to any person or entity without the prior written consent of the Department. Any purported assignment in violation of this provision shall be null and void. In the event of a merger, acquisition, corporate reorganization, or other change in corporate structure affecting TMC, TMC shall promptly notify the Department and shall ensure that the surviving or successor entity assumes all of TMC's obligations under this Agreement.
11.6 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Facsimile and electronically transmitted signatures shall be deemed to be original signatures for all purposes.
11.7 Authority to Execute. TMC represents and warrants that the individual executing this Agreement on behalf of TMC has been duly authorized by TMC's Board of Directors to execute this Agreement and to bind TMC to its terms and conditions. TMC shall, upon request, provide the Department with a copy of the board resolution or other corporate authorization evidencing such authority. The Department represents that the individual executing this Agreement on behalf of the Department has the authority to enter into this Agreement and to bind the Department to its terms and conditions.
11.8 Voluntary Agreement. TMC represents and warrants that it has entered into this Agreement voluntarily and knowingly, with the advice and assistance of experienced and competent counsel (Calderwood & Harkness LLP), after having been fully informed of and having had a full opportunity to consider all relevant facts, rights, and legal consequences. TMC acknowledges that no threats, promises, or inducements have been made to it, other than those contained in this Agreement, to cause it to enter into this Agreement.
11.9 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such holding shall not affect the validity, legality, or enforceability of the remaining provisions of this Agreement. The remaining provisions shall continue in full force and effect, and the parties shall negotiate in good faith to replace the invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that most closely approximates the intent and economic effect of the original provision.
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Non-Prosecution Agreement as of the date(s) set forth below.
TORCHLIGHT MINING CORP.
By: ________
Name: Søren Dalmqvist
Title: Chief Executive Officer
Date: ________
Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, ON M5J 2J2, Canada TSX: TRCL | NYSE: TMC CBCA Corporation No. 7841526-1 U.S. Federal EIN: 83-2947106
UNITED STATES DEPARTMENT OF JUSTICE, ANTITRUST DIVISION
By: ________
Name: Julia Stafford-Hayes
Title: Deputy Assistant Attorney General, Antitrust Division
Date: ________
ACKNOWLEDGED:
________________________________________
Denise Kowalski Trial Attorney Antitrust Division, San Francisco Field Office 450 Golden Gate Avenue, Room 10-0101 San Francisco, CA 94102
________________________________________
Marcus Reeves Senior Trial Attorney Antitrust Division, San Francisco Field Office 450 Golden Gate Avenue, Room 10-0101 San Francisco, CA 94102
APPROVED AS TO FORM — COUNSEL FOR TMC:
By: ________
Name: Elaine Forsythe
Title: Responsible Partner
Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104
Date: ________
APPENDIX A
ENHANCED ANTITRUST COMPLIANCE PROGRAM
Appendix A is set forth in the separately attached document (npa-appendix-a-compliance-program-draft.docx), which is incorporated herein by reference as though fully set forth in this Agreement.
Summary of Key Elements. The Enhanced Antitrust Compliance Program, as prepared by Calderwood & Harkness LLP in consultation with Meridian Compliance Partners LLC (Claudia Ferraro, Engagement Lead), includes the following principal elements:
1.  Appointment of Independent Chief Compliance Officer. TMC shall appoint an independent Chief Compliance Officer with direct reporting access to the Board of Directors, responsibility for overseeing all aspects of antitrust compliance, and authority to implement and enforce compliance policies across all TMC business units, including the U.S. Specialty Minerals Division.
2.  Mandatory Annual Antitrust Compliance Training. All employees involved in sales, marketing, pricing, bidding, and customer-facing functions, as well as all senior management at the director level and above, shall participate in mandatory annual antitrust compliance training. Training shall be conducted by qualified antitrust counsel and shall include case studies, practical scenarios, and assessments of employee comprehension.
3.  Competitor-Contact Protocols. Written policies governing all contacts and communications between TMC employees and employees of competitor companies, including detailed guidance on permissible and impermissible topics of discussion.
4.  NASMC and Trade-Association Interaction Guidelines. Specific protocols for employee participation in events and meetings organized by the North American Specialty Minerals Council (NASMC) and other trade associations, including pre-approval requirements, written agendas, post-event reporting, and prohibitions on private discussions with competitors regarding competitively sensitive topics.
5.  Confidential Reporting Hotline and Whistleblower Protections. A confidential and anonymous reporting mechanism, including a toll-free telephone hotline and an online reporting portal, with robust non-retaliation protections for good-faith reporters.
6.  Periodic Auditing and Monitoring. Regular internal audits and monitoring of compliance with the Enhanced Compliance Program, including reviews of pricing data, customer communications, and trade-association activity.
7.  Disciplinary Procedures. Clear and enforceable disciplinary procedures for violations of the Enhanced Compliance Program, up to and including termination of employment.
8.  Annual CEO and General Counsel Certifications. Annual written certifications by the Chief Executive Officer and General Counsel regarding TMC's compliance with the Enhanced Compliance Program, as described in Section 5.2 of this Agreement.
APPENDIX B
AGREED STATEMENT OF FACTS
Appendix B is set forth in the separately attached document (npa-appendix-b-agreed-statement-facts-draft.docx), which is incorporated herein by reference as though fully set forth in this Agreement.
Summary of Key Facts. The Agreed Statement of Facts describes, among other things, the following:
1.  Conspiracy Period. The conspiracy lasted from approximately January 2017 through approximately August 2021.
2.  Participants. The individual participants identified in the Agreed Statement of Facts include Gavin Holt, formerly Vice President of U.S. Specialty Minerals Sales at TMC (departed effective September 30, 2021); Carl Edgerton, Vice President of Sales at Ridgecrest Minerals Inc. (1700 Lincoln Street, Suite 4200, Denver, CO 80203; CEO Brian Novotny; separately represented by Davenport, Kline & Archer LLP, lead partner Helen Marchetti); and Kevin Tsang, former Senior Vice President of Commercial Operations at Pinnacle Earth Resources Ltd. (85 Elm Street West, Suite 600, Sudbury, ON P3C 1T3; CEO Douglas Harlowe; separately represented by Ashford Whitmore LLP, lead partner George Nakamura).
3.  Products Involved. The products affected by the conspiracy include high-purity feldspar, industrial talc, and rare-earth concentrates sold to U.S. industrial and chemical-manufacturing customers.
4.  Methods of Communication and Coordination. The participants coordinated their anticompetitive conduct through multiple channels, including encrypted messaging via the VaultChat application; in-person meetings at conferences organized by the North American Specialty Minerals Council (NASMC), held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida; and telephone calls. The Department has identified at least 37 documented instances of inter-competitor communications during the conspiracy period.
5.  Affected Commerce. TMC's share of affected commerce during the conspiracy period is approximately USD $478 million. The total affected commerce across all participants in the conspiracy is approximately USD $1.34 billion. TMC's share of total affected commerce is approximately 35.7%.
6.  Cooperation of Cascade Chemical Supply Co. Cascade Chemical Supply Co., located at 901 West Riverside Avenue, Suite 300, Spokane, WA 99201 (President Leonard Massey), entered into a cooperation agreement with the Department in approximately September 2021, providing the initial information that led to the opening of the Department's investigation. Information provided by Cascade Chemical Supply Co. was instrumental in the Department's identification of the participants and conduct described in the Agreed Statement of Facts.
7.  Co-Subjects of Investigation. In addition to TMC, the Department's investigation involves Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. as co-subjects. Each of these entities is separately represented by outside counsel and is the subject of separate proceedings by the Department.
— END OF NON-PROSECUTION AGREEMENT —
DOJ Reference Number: ATR-SF-2024-00312

UNITED STATES DEPARTMENT OF JUSTICE ANTITRUST DIVISION

NON-PROSECUTION AGREEMENT

RECITALS

WHEREAS:

SIGNATURE PAGE

TORCHLIGHT MINING CORP.

UNITED STATES DEPARTMENT OF JUSTICE, ANTITRUST DIVISION

ACKNOWLEDGED:

APPENDIX A

ENHANCED ANTITRUST COMPLIANCE PROGRAM

APPENDIX B

AGREED STATEMENT OF FACTS

Record

Parties

Dates

Amounts