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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT PRIVILEGED

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

MEMORANDUM

April 25, 2023

Matter: Torchlight Mining Corp. — DOJ Antitrust Division Grand Jury Investigation

Matter Number: 1039-00001

Grand Jury Number: GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division

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

From: Aaron Liu, Lead Associate, Antitrust & Competition Practice Group

Re: Post-Proffer Debriefing Memorandum — Thomas Eriksen Voluntary Proffer Session with DOJ Antitrust Division, April 22, 2023

Copies: Monica Reyes (Calderwood & Harkness LLP); file

I. Purpose and Summary

The purpose of this memorandum is to document and analyze the voluntary proffer session of Thomas Eriksen, Regional Sales Manager, Western Region, U.S. Specialty Minerals Division, Torchlight Mining Corp. ("TMC" or the "Company"), conducted with attorneys from the United States Department of Justice, Antitrust Division (the "DOJ" or the "Division") on Saturday, April 22, 2023. The session took place at the DOJ's San Francisco Field Office, located at 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.

The proffer session was conducted pursuant to the proffer agreement, commonly referred to as a "queen-for-a-day" letter, that was negotiated by Calderwood & Harkness LLP ("C&H") and the DOJ. The executed proffer agreement was transmitted to the DOJ via a letter from Elaine Forsythe, Responsible Partner, to Denise Kowalski, Trial Attorney, Antitrust Division, San Francisco Field Office, dated April 15, 2023. That agreement established the customary use restrictions and protections governing Eriksen's statements during the proffer session, including the prohibition on the use of Eriksen's proffer statements in the government's case-in-chief, subject to certain exceptions discussed in greater detail in Section III of this memorandum.

Eriksen is a current TMC employee who remains employed in his position as Regional Sales Manager for the Western Region of the U.S. Specialty Minerals Division. He has not been terminated, suspended, or placed on administrative leave in connection with the grand jury investigation. He appeared voluntarily at the proffer session, consistent with TMC's broader cooperation posture with the DOJ.

Summary of Session and Preliminary Assessment. The proffer session lasted approximately three hours and fifteen minutes, commencing at approximately 9:00 a.m. Pacific Time and concluding at approximately 12:15 p.m. Pacific Time. The session was conducted in a single continuous block, with one short break of approximately ten minutes taken at approximately 10:45 a.m.

The DOJ's questioning focused heavily on the following areas: (1) Eriksen's attendance at North American Specialty Minerals Council ("NASMC") quarterly conferences during the alleged conspiracy period of approximately January 2017 through August 2021; (2) side meetings and informal gatherings that occurred at those conferences; (3) Eriksen's interactions with personnel from Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"), the two alleged co-conspirator companies; and (4) Eriksen's knowledge of external communications by Gavin Holt, the former Vice President of U.S. Specialty Minerals Sales at TMC, with competitor personnel regarding pricing, customer allocation, or bid coordination.

Eriksen maintained his position throughout the session — consistent with his prior C&H internal investigation interview conducted on July 22, 2022 — that he had no knowledge of any pricing agreements or coordination between TMC and its competitors. He denied attending any private or closed-door meetings with competitor personnel at NASMC conferences, denied discussing pricing or customer-specific information with representatives of Ridgecrest or Pinnacle, and denied being aware of Holt's communications with competitor counterparts or Holt's use of the VaultChat encrypted messaging application for business purposes.

The DOJ appeared skeptical regarding certain aspects of Eriksen's account of his interactions at NASMC conferences, particularly in connection with a conference check-in or badge record from the Scottsdale, Arizona conference in the fourth quarter of 2018 that placed Eriksen, Holt, and two competitor executives in the same conference breakout room on the same afternoon. However, the DOJ did not present any evidence that directly contradicted Eriksen's account, nor did the DOJ present any communications, documents, or witness statements establishing Eriksen's personal participation in the alleged conspiracy.

Overall Assessment. Eriksen's testimony was credible and internally consistent. He presented as composed and forthcoming, and he appropriately qualified his recollections when uncertain. The DOJ's questioning suggests continued focus on the NASMC conference side meetings as a conduit for the alleged price-fixing conspiracy, but the Division does not appear to have developed direct evidence of Eriksen's personal involvement in the alleged conduct. Eriksen's exposure remains limited, and he is more properly characterized as a fact witness than as a participant in or accessory to the alleged conspiracy. This assessment is consistent with C&H's internal investigation findings as previously presented to the TMC Board of Directors.

II. Attendees

A. DOJ Representatives

The following DOJ personnel were present during the proffer session:

1. Denise Kowalski, Trial Attorney, Antitrust Division, San Francisco Field Office. Kowalski has been the lead attorney on the TMC investigation and has served as C&H's primary point of contact at the Division throughout the investigation. Kowalski conducted the majority of the questioning during the first half of the session.

2. Marcus Reeves, Senior Trial Attorney, Antitrust Division, San Francisco Field Office. Reeves is a senior member of the investigation team and has been present at all prior substantive interactions between C&H and the DOJ in connection with this matter. Reeves conducted most of the questioning during the second half of the session, particularly with respect to the NASMC conference documents and the Holt-to-Eriksen internal email.

3. Lauren Pittman, Assistant Trial Attorney, Antitrust Division (name and title as identified at the session). This individual was not previously known to C&H and was introduced by Kowalski at the outset of the session as "Assistant Trial Attorney Lauren Pittman." Pittman did not ask questions during the session but appeared to be observing and taking notes. C&H should confirm Pittman's identity and role on the investigation team through a follow-up communication with Kowalski.

4. DOJ Paralegal / Note-Taker (name not obtained). One additional DOJ staff member was present in the room, appearing to function as a paralegal or dedicated note-taker. This individual did not speak during the session and was not formally introduced by name. C&H did not request the individual's name at the time.

B. Torchlight Mining Corp. / Calderwood & Harkness LLP Representatives

The following individuals attended the proffer session on behalf of TMC and C&H:

1. Thomas Eriksen, Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. Eriksen appeared as the proffer witness.

2. Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. Forsythe attended in her capacity as lead counsel to TMC in connection with the DOJ investigation.

3. Aaron Liu, Lead Associate, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. I attended in my capacity as counsel to TMC, and I served as the primary note-taker for C&H during the session. This memorandum is based on my contemporaneous notes.

C. Note on Representation

Thomas Eriksen is a current TMC employee who is represented in this matter by Calderwood & Harkness LLP in his capacity as a TMC employee. Consistent with C&H's standard practice and ethical obligations, C&H provided Eriksen with an Upjohn warning prior to the commencement of the proffer session. Specifically, Elaine Forsythe reminded Eriksen of the following points during a brief preparatory conference in a separate room at the DOJ's San Francisco Field Office, approximately thirty minutes before the session began:

(a) Calderwood & Harkness LLP represents Torchlight Mining Corp., not Thomas Eriksen individually;

(b) The attorney-client privilege governing any communications between Eriksen and C&H counsel belongs to TMC, and TMC — through its authorized representatives — may choose to waive that privilege in the future, including by disclosing the substance of Eriksen's communications to the DOJ or to other third parties;

(c) There may come a time when the interests of TMC and the interests of Eriksen personally diverge, and if that occurs, Eriksen may wish to retain separate personal counsel; and

(d) Eriksen has the right to consult with and retain separate personal counsel at any time, including before this proffer session, if he wishes to do so.

Eriksen acknowledged his understanding of each of these points and confirmed that he wished to proceed with the proffer session with C&H serving as his counsel in his capacity as a TMC employee. Eriksen stated that he did not wish to retain separate personal counsel at that time.

As of the date of this memorandum, Eriksen does not have separate personal counsel. The question of whether Eriksen should be advised to retain personal counsel will be monitored on an ongoing basis in light of developments in the investigation, as discussed further in Section VII below.

III. Proffer Session Ground Rules

The proffer session was conducted pursuant to the terms of the queen-for-a-day proffer agreement dated April 15, 2023 (the "Proffer Agreement"), which was negotiated between C&H (on behalf of TMC and Eriksen in his capacity as a TMC employee) and the DOJ Antitrust Division. The Proffer Agreement was transmitted to the DOJ via a letter from Elaine Forsythe to Denise Kowalski on that date. The executed Proffer Agreement is on file in the matter records.

The key terms of the Proffer Agreement, as relevant to the session and this memorandum, are as follows:

(a) Voluntariness. The session was voluntary. Eriksen was not compelled to appear and was free to terminate the session at any time.

(b) Use Restrictions. Eriksen's statements made during the proffer session cannot be used directly against him in the government's case-in-chief. This is the core protection of the proffer agreement.

(c) Impeachment Exception. Notwithstanding the foregoing use restriction, the government may use Eriksen's proffer statements for impeachment purposes if Eriksen subsequently testifies at trial or in other proceedings in a manner that is materially inconsistent with his proffer statements. This is a standard carve-out in queen-for-a-day agreements.

(d) Derivative Use. The government retains the right to pursue investigative leads derived from information provided by Eriksen during the proffer. That is, while Eriksen's statements themselves are protected, the government is not precluded from developing independent evidence based on leads obtained through the proffer.

(e) False Statements. The Proffer Agreement does not protect against prosecution for false statements (18 U.S.C. § 1001) if Eriksen knowingly provides materially false information during the session.

At the outset of the session, Denise Kowalski confirmed on the record that the session was voluntary and that Eriksen was appearing as a witness, not as a target or subject of the grand jury investigation. This characterization is significant. Under the DOJ's United States Attorneys' Manual and longstanding Antitrust Division practice, the distinction between witness, subject, and target carries meaningful implications for an individual's potential exposure. Eriksen's classification as a witness is consistent with C&H's prior discussions with the DOJ and with C&H's assessment that Eriksen is not believed to be a participant in the alleged conspiracy.

Elaine Forsythe stated on the record at the outset that she reserved the right to confer privately with Eriksen at any time during the session and to instruct Eriksen not to answer specific questions to the extent that such questions implicated the attorney-client privilege or the work-product doctrine. Kowalski acknowledged this reservation. During the session, Forsythe exercised this right on one occasion, as described in Section IV below, to note the significance of a particular line of questioning concerning trade-association attendance.

IV. Summary of Questions and Eriksen's Responses

The following is a detailed summary of the questions posed by DOJ attorneys during the proffer session and the substance of Eriksen's responses. This summary is based on my contemporaneous handwritten notes taken during the session. I have endeavored to capture the substance and, where possible, the approximate language of the questions and responses, though this is not a verbatim transcript.

A. Background and Role at TMC

The session opened with Denise Kowalski asking a series of background questions to establish Eriksen's tenure, role, and responsibilities at Torchlight Mining Corp.

Tenure. Eriksen confirmed that he joined TMC in approximately 2013, initially in a junior sales role within the U.S. Specialty Minerals Division. He was promoted to Regional Sales Manager for the Western Region at a date he recalled as approximately 2015 or early 2016. He has held that position continuously since that time.

Reporting Structure. Eriksen confirmed that from approximately 2016 until Gavin Holt's departure from TMC on September 30, 2021, Eriksen reported directly to Gavin Holt, who held the title of Vice President, U.S. Specialty Minerals Sales. Eriksen stated that Holt was his direct supervisor and that Eriksen's performance reviews, compensation decisions, and sales targets were set by Holt. Following Holt's departure, Eriksen reported to an interim supervisor whose identity was not explored in the session.

Responsibilities. Eriksen described his primary responsibilities as managing customer relationships and sales of TMC's specialty minerals products in the Western United States region. The products for which Eriksen was responsible included high-purity feldspar, industrial talc, and rare-earth concentrates. Eriksen's territory encompassed customers in California, Oregon, Washington, Nevada, Arizona, and several other Western states. Eriksen stated that his role was customer-facing: he maintained relationships with existing customers, pursued new business opportunities, negotiated supply contracts and pricing terms within authorized parameters, and coordinated with TMC's logistics and operations teams to ensure timely fulfillment of customer orders.

Pricing Authority. Kowalski asked Eriksen to describe his authority with respect to pricing. This was a significant area of questioning, as it goes directly to the question of whether Eriksen had the ability — or the occasion — to implement any anticompetitive pricing arrangements on behalf of TMC.

Eriksen was clear and consistent on this point. He stated that he had no direct authority over TMC's published price lists for specialty minerals products. The function of setting and maintaining published price lists resided with Sandra Chu, Director of Pricing Analytics, who operated under the direction of Gavin Holt. Price lists were periodically reviewed and updated by Chu and Holt, and Eriksen received the updated price lists as they were disseminated to the sales team.

Eriksen stated that his pricing authority was limited to negotiating customer-specific discounts off the published list prices, within pre-approved discount ranges that were established by Holt and Chu. These discount ranges varied by product line and customer tier. Eriksen could not set or change list prices, and he could not offer discounts that exceeded the pre-approved ranges without obtaining specific approval from Holt. Eriksen stated that he occasionally sought and received approval from Holt for discounts that fell outside the standard range, but that such approvals were handled on a case-by-case basis through email or phone conversations with Holt.

Eriksen described his understanding of TMC's pricing process as follows: price lists were set by Holt in consultation with Chu, taking into account factors such as raw material costs, production costs, competitive market conditions, and customer demand. Eriksen understood this to be a standard internal business process. He stated that he was not involved in the deliberations that led to changes in published price lists, nor was he privy to the specific inputs or analyses that Chu used to develop pricing recommendations.

B. NASMC Conference Attendance

Marcus Reeves assumed the lead on questioning and turned to the subject of Eriksen's attendance at quarterly conferences organized by the North American Specialty Minerals Council ("NASMC"). NASMC is the primary industry trade association for the specialty minerals sector in North America. Its headquarters is located at 2300 Wilson Boulevard, Suite 400, Arlington, Virginia 22201. NASMC organizes quarterly conferences that bring together representatives from mining companies, downstream distributors, equipment suppliers, and other industry participants.

Reeves asked Eriksen to identify which NASMC conferences he had attended during the period of approximately January 2017 through August 2021, which corresponds to the alleged conspiracy period as identified in the grand jury investigation.

Eriksen confirmed that he attended four NASMC conferences during the relevant period:

1. Arlington, Virginia — approximately Q2 2018. Eriksen recalled attending the spring or early summer quarterly conference held at or near NASMC's headquarters in Arlington, Virginia, in approximately the second quarter of 2018. He could not recall the precise dates.

2. Scottsdale, Arizona — approximately Q4 2018. Eriksen recalled attending a fall or year-end quarterly conference held in Scottsdale, Arizona, in approximately the fourth quarter of 2018.

3. Orlando, Florida — approximately Q2 2019. Eriksen recalled attending a spring quarterly conference held in Orlando, Florida, in approximately the second quarter of 2019.

4. Arlington, Virginia — approximately Q1 2020. Eriksen recalled attending a winter or early spring quarterly conference held in Arlington, Virginia, in approximately the first quarter of 2020. Eriksen noted that this may have been one of the last in-person NASMC conferences before the COVID-19 pandemic disrupted in-person gatherings.

Eriksen stated that his attendance at these conferences was authorized and funded by TMC and that he attended in his capacity as Regional Sales Manager. He described the conferences as useful for maintaining industry awareness, networking with customers and industry contacts, and staying informed about regulatory developments affecting the specialty minerals sector.

Co-Attendees from TMC. Reeves asked Eriksen to identify which other TMC personnel attended these same conferences. Eriksen stated that Gavin Holt attended all four of the same conferences that Eriksen attended. Eriksen stated that Sandra Chu attended at least two of the conferences — specifically, the Arlington, Virginia conference in Q2 2018 and the Orlando, Florida conference in Q2 2019, to his best recollection. Eriksen acknowledged that other TMC personnel from the technical and operations side of the business may have attended one or more of these conferences, but he could not recall specific names with certainty. He noted that NASMC conferences included technical panels on mining and processing topics that would have been of interest to TMC's operations personnel.

Side Meetings and Informal Gatherings. Reeves then turned to the critical area of questioning: whether Eriksen attended any "side meetings" or informal gatherings at these conferences with representatives of competitor companies — specifically, Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd.

Eriksen's response was detailed and consistent. He stated:

• He attended the formal panel sessions, presentations, and other programming that comprised the main conference schedule organized by NASMC.

• He participated in general networking events that were organized by NASMC as part of the conference program, including welcome receptions, group dinners, and social gatherings. These events were open to all conference attendees and were not limited to representatives of any particular company or group of companies.

• At these general networking events, Eriksen interacted with range industry participants, including individuals whom he recognized as employees or representatives of competitor companies, including Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. Eriksen described these interactions as typical industry socializing. The topics of conversation, as he recalled them, included general market conditions in the specialty minerals sector, broad industry trends (such as shifts in demand for certain minerals), regulatory developments (such as environmental permitting issues), and personal or social topics unrelated to business.

• Eriksen stated affirmatively that he did not discuss specific pricing, customer-specific information, bid strategies, contract terms, or any other competitively sensitive business information with representatives of competitor companies at any NASMC conference he attended.

• Eriksen stated that he did not attend any private "breakout" meetings, closed-door meetings, or off-program gatherings with competitor personnel at any NASMC conference. He drew a clear distinction between the general networking events organized by NASMC (which were open to all attendees) and any private or exclusive meeting with competitors, and he denied participating in the latter.

C. Interactions with Ridgecrest and Pinnacle Personnel

Kowalski resumed the questioning and asked Eriksen specifically about his interactions with two individuals: Carl Edgerton, Vice President of Sales at Ridgecrest Minerals Inc., and Kevin Tsang, former Senior Vice President, Commercial Operations, at Pinnacle Earth Resources Ltd. These two individuals are understood to be key alleged co-conspirators in the DOJ's theory of the case, along with Gavin Holt.

Eriksen stated the following with respect to his interactions with Edgerton and Tsang:

• He knew both Carl Edgerton and Kevin Tsang by name and by face. He recognized them as counterparts in the industry — executives at competing specialty minerals companies who attended many of the same industry events and conferences.

• He had brief, casual conversations with both Edgerton and Tsang at NASMC events over the years. These conversations were of the same general character that Eriksen described in his testimony about networking events: general industry outlook, regulatory issues affecting the sector, and personal or social topics. Eriksen characterized these interactions as unremarkable and consistent with the type of casual socializing that occurs routinely at industry trade association events.

• Eriksen denied ever discussing specific pricing information, customer allocation, bid strategies, market division, or any other competitively sensitive information with either Edgerton or Tsang. He was firm and unequivocal on this point.

• Eriksen denied ever being present at a meeting — whether formal or informal, scheduled or impromptu — where Gavin Holt, Carl Edgerton, and Kevin Tsang were together discussing pricing, customer allocation, or any competitively sensitive business topic. Eriksen stated that he may have been at the same large social event as all three individuals at some point during a conference, but he denied being present at any meeting where substantive competitive information was exchanged among them.

The Scottsdale Conference Check-In Record. At this point in the session, Reeves showed Eriksen a document that appeared to be a conference badge scan or event check-in record from the NASMC Scottsdale, Arizona conference in the fourth quarter of 2018. The document, as Eriksen and C&H counsel were able to review it during the session, appeared to indicate that Eriksen, Holt, Edgerton, and Tsang were all checked in or scanned into a conference breakout room that was reserved under the name of a NASMC sub-committee identified as the "Market Trends Working Group" on the same afternoon during the Scottsdale conference.

This was the most significant moment of the proffer session from an evidentiary standpoint. The DOJ appeared to be using this document to establish that Eriksen was in the same room as the three alleged principal co-conspirators at a specific time during a specific conference.

Eriksen reviewed the document carefully and stated the following:

• He did not specifically recall attending a session labeled as the "Market Trends Working Group" at the Scottsdale conference. He acknowledged that his badge may have been scanned or that he may have been listed as an attendee, but he could not independently recall the specific session.

• He stated that NASMC conferences included numerous sub-committee sessions and breakout sessions on range topics, and that it was common for attendees to move between sessions or to check in to sessions without remaining for the full duration. He could not say with certainty whether he attended this particular session, attended briefly and left, or was merely checked in without attending.

• He stated affirmatively that he did not recall any discussion of pricing, customer-specific information, bid coordination, or any competitively sensitive topic at any sub-committee session he attended at the Scottsdale conference or at any other NASMC conference.

At this point, Elaine Forsythe interjected to place a comment on the record. Forsythe noted that attendance at a general sub-committee session that was part of the NASMC trade association's official conference program does not constitute evidence of anticompetitive coordination. Forsythe stated that NASMC sub-committee sessions are open to conference attendees, are organized and administered by the trade association itself, and address general industry topics. Co-attendance at such a session by representatives of competing companies is routine and expected at industry trade association conferences and carries no inference of impropriety in itself. Kowalski acknowledged Forsythe's comment without substantive response.

D. Knowledge of Gavin Holt's External Communications

Kowalski returned to questioning and turned to the topic of Eriksen's knowledge of Gavin Holt's communications with personnel at competitor companies. This line of questioning was clearly directed at establishing whether Eriksen was aware of — or participated in — the external communications that form the core of the DOJ's case theory.

General Knowledge of Holt's External Communications. Kowalski asked whether Eriksen was aware of Gavin Holt communicating with personnel at competitor companies — specifically Ridgecrest and Pinnacle — about pricing, customer allocation, or bid coordination.

Eriksen denied any such knowledge. He stated that Holt was his direct supervisor and that they interacted regularly on matters relating to Eriksen's sales responsibilities, customer accounts, and performance metrics. However, Eriksen stated that Holt did not discuss his external communications with Eriksen. Holt did not share with Eriksen the substance of any conversations or correspondence with competitor personnel. Eriksen stated that he was not aware, during the relevant period, that Holt was in contact with individuals at Ridgecrest or Pinnacle regarding pricing or other competitive matters.

VaultChat. Kowalski asked specifically whether Eriksen was aware of Holt's use of the VaultChat encrypted messaging application for business purposes. Eriksen stated that he was not aware of Holt's use of VaultChat. Eriksen stated that he himself did not use VaultChat and was not familiar with the application. He stated that his communications with Holt were conducted through standard TMC channels — primarily TMC corporate email and telephone — and that Holt never communicated with him through VaultChat or any other encrypted or disappearing-message platform.

Holt's Pricing Instructions. Kowalski asked whether Holt ever instructed Eriksen to adjust pricing or customer terms in coordination with, or based upon, the conduct or pricing of competitors. This was a direct and pointed question, and Eriksen's response was clear and unequivocal. Eriksen denied receiving any such instructions. He stated that Holt's pricing instructions to Eriksen were framed as internal business decisions — adjustments to discount levels, changes in customer terms, responses to market conditions — and that Holt did not reference competitor actions, competitor pricing, or any agreement with competitors when giving such instructions. Eriksen reiterated that his pricing authority was limited to customer-specific discounts within pre-approved ranges established by Holt and Chu, and that Holt's instructions regarding adjustments to those ranges or to specific customer terms appeared to Eriksen to be routine business decisions made in the ordinary course.

The June 2019 Email (TMC-0215847). Reeves then directed Eriksen's attention to a specific document: a TMC internal email from Gavin Holt to Thomas Eriksen, dated approximately June 2019, which referenced a "revised approach" to a customer bid for a feldspar supply contract in the Western Region. The DOJ showed Eriksen a copy of this email, which bore the Bates-stamp number TMC-0215847. This email was among the documents produced by TMC to the DOJ in the course of the company's cooperation, and it had been previously reviewed by C&H during the internal investigation.

Eriksen reviewed the email and provided the following responses:

• He recalled the email. He stated that the "revised approach" referenced in the email was a change in the discount levels that Eriksen was authorized to offer to a particular customer in connection with a feldspar supply contract that was being negotiated in his territory.

• He understood Holt's instruction as a standard business decision. Specifically, he understood Holt to be directing a change in the pricing terms that Eriksen could offer in the negotiation — either a reduction or restructuring of the discount that TMC was willing to extend to the customer. Eriksen did not recall the precise discount figures but recalled that the change was a narrowing of the discount range, meaning that TMC was offering less favorable terms to the customer than had been previously contemplated.

• Eriksen stated that he had no reason to believe, at the time he received the email, that Holt's instruction was connected to any coordination with competitors. The instruction appeared routine: Holt frequently adjusted pricing parameters for customer-specific negotiations, and Eriksen did not perceive anything unusual about this particular instruction.

• Eriksen stated that he did not ask Holt the reason for the revision. He stated that it was not his practice to question the business rationale behind Holt's pricing instructions, as Holt was the senior executive responsible for pricing strategy and Eriksen's role was to implement the approved pricing parameters in his customer negotiations.

• Eriksen stated that he did not suspect any impropriety in connection with this email at the time he received it.

E. TMC's Antitrust Compliance Program

Kowalski shifted the questioning to TMC's antitrust compliance program. This topic is significant both for the DOJ's assessment of TMC's culpability and for the compliance-remediation narrative that C&H is developing in connection with the non-prosecution agreement ("NPA") negotiations.

Awareness of the Policy. Kowalski asked Eriksen whether he was aware of TMC's antitrust compliance policy. Eriksen confirmed that he was aware of the existence of an antitrust compliance policy at TMC, which he understood to have been adopted in approximately 2014. He stated that he recalled receiving some form of antitrust compliance training when he was first onboarded at TMC in 2013, and possibly an additional training session in approximately 2016 or 2017, though he could not recall the precise date or format of the second training.

Frequency and Recency of Training. Eriksen stated that he could not recall receiving any annual or periodic antitrust compliance training after approximately 2018. He stated that he did not recall any specific training session, online module, or compliance communication directed at antitrust issues after that date. When asked by Kowalski whether he was certain on this point, Eriksen qualified his answer by stating that it was possible that a compliance communication had been sent by email that he did not recall, but that he had no recollection of any substantive antitrust training after approximately 2018.

Trade-Association Monitoring. Eriksen confirmed that no monitoring of trade-association interactions was in place during his tenure. Specifically, he stated that TMC did not conduct pre-conference compliance briefings before his attendance at NASMC conferences, nor did TMC conduct post-conference debriefings or require attendees to submit reports or certifications regarding their interactions with competitors at NASMC events. Eriksen stated that he was not aware of any TMC policy or practice that required such pre- or post-conference compliance procedures.

Guidance on Permissible Topics. Kowalski asked whether anyone at TMC — including Holt, Chu, or any compliance or legal personnel — ever instructed Eriksen on what topics were permissible or impermissible to discuss with competitor personnel at industry events such as NASMC conferences. Eriksen stated that he received no such specific guidance related to NASMC conferences. He stated that the general antitrust compliance training he recalled from his onboarding and the possible 2016-2017 session included general admonitions about not discussing pricing with competitors, but that he did not receive targeted, conference-specific guidance.

F. Other Topics

The DOJ's questioning concluded with several additional topics that were explored more briefly.

Cascade Chemical Supply Co. Kowalski asked Eriksen about his knowledge of Cascade Chemical Supply Co. ("Cascade"), a downstream distributor of specialty minerals products headquartered in Spokane, Washington. Eriksen stated that he knew Cascade as a TMC customer within his Western Region sales territory. He had dealt with Cascade on supply terms and had managed the TMC-Cascade commercial relationship as part of his regional sales responsibilities.

Kowalski asked whether Eriksen was aware that Cascade had entered into a cooperation agreement with the DOJ in approximately September 2021. Eriksen stated that he was not aware of Cascade's cooperation agreement. He stated that he learned of the existence of the DOJ investigation at some point after its initiation but did not have knowledge of specific cooperation arrangements between the DOJ and other entities.

Leonard Massey. Kowalski asked about Eriksen's interactions with Leonard Massey, President of Cascade Chemical Supply Co. Eriksen stated that he had limited direct interaction with Massey. He stated that his primary point of contact at Cascade was a more junior employee — a purchasing manager or account representative — and that Massey's involvement in the day-to-day TMC-Cascade commercial relationship was limited, at least from Eriksen's perspective. Eriksen could not recall having any substantive one-on-one conversations with Massey and stated that to the extent he interacted with Massey, it would have been in connection with high-level customer relationship management visits or industry events.

Bid-Rigging. Notably, the DOJ did not raise the topic of bid-rigging in any detail during the session. The questioning was predominantly focused on price-fixing — specifically, the alleged coordination of published price lists and customer-specific pricing among TMC, Ridgecrest, and Pinnacle — and on the NASMC conferences as the alleged venue for such coordination. While the grand jury investigation is understood to encompass potential bid-rigging allegations in addition to price-fixing, the DOJ's decision not to explore bid-rigging with Eriksen is consistent with the assessment that Eriksen's involvement, if any, would relate to the pricing dimension of the alleged conspiracy rather than any bid-rigging conduct.

V. Documents Referenced During the Session

The following documents were referenced or shown to Eriksen during the proffer session:

1. TMC-0215847 — Internal TMC email from Gavin Holt to Thomas Eriksen, dated approximately June 2019, regarding a "revised approach" to a feldspar customer bid in the Western Region. This document was shown to Eriksen during the session, and Eriksen reviewed it before responding to the DOJ's questions. This document was produced by TMC to the DOJ in the course of TMC's document production and has been previously reviewed by C&H during the internal investigation. A copy of this document is in C&H's matter files.

2. NASMC Scottsdale, AZ Conference Check-In / Badge Record (Q4 2018) — A document that appeared to be a conference badge scan or event check-in record from the NASMC Scottsdale, Arizona conference held in approximately the fourth quarter of 2018. This document was shown to Eriksen during the session. The document appeared to indicate that Eriksen, Holt, Edgerton, and Tsang were all checked in to a conference breakout room reserved under the name of the "Market Trends Working Group" sub-committee on the same afternoon. A copy of this document was not provided to C&H at the session. C&H should formally request a copy from the DOJ, as discussed in Section VII below.

3. No VaultChat Messages Shown. The DOJ did not show Eriksen any VaultChat messages or other external communications between Holt and personnel at Ridgecrest or Pinnacle. This is notable. The absence of VaultChat messages in this session may indicate that the DOJ did not believe such messages were relevant to Eriksen's testimony, or it may reflect a strategic decision by the DOJ to withhold those communications for use in other contexts. Regardless, Eriksen was not confronted with any direct evidence of the Holt-Edgerton or Holt-Tsang communications during this proffer.

VI. Assessment of DOJ's Focus Areas and Strategy

A. NASMC Conferences as Coordination Venue

The DOJ's questioning during the proffer session strongly suggests that the Division is building its case on the theory that NASMC quarterly conferences served as the primary meeting ground and coordination venue for the alleged price-fixing conspiracy among TMC, Ridgecrest, and Pinnacle. This is consistent with the DOJ's broader theory of the case as C&H has understood it through prior interactions with the Division: that coordination occurred at NASMC conferences held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida during the period of approximately 2017 through 2021.

The Scottsdale conference badge or check-in record is a potentially significant piece of circumstantial evidence. By showing Eriksen this document, the DOJ was attempting to place Eriksen in proximity to the three alleged principal co-conspirators — Holt (TMC), Edgerton (Ridgecrest), and Tsang (Pinnacle) — at a specific event within a specific conference. If the DOJ possesses similar records for other conferences, it may seek to establish a pattern of co-attendance at sub-committee sessions or breakout rooms.

However, as Forsythe correctly noted during the session, mere co-attendance at a trade-association sub-committee session that is part of the official conference program does not, by itself, establish participation in anticompetitive conduct. NASMC sub-committee sessions are organized and administered by the trade association, are listed on the conference agenda, and are open to conference attendees. It is entirely routine and expected that representatives of competing companies would attend the same sub-committee sessions at an industry trade association conference. The DOJ would need to present evidence of what was discussed at such sessions — or evidence of private meetings occurring in connection with or under the cover of such sessions — to establish any inference of conspiratorial conduct.

Critically, the DOJ did not present any such evidence during the Eriksen proffer. There was no evidence presented that Eriksen engaged in substantive pricing discussions, customer-allocation discussions, or any other competitively sensitive exchange with representatives of Ridgecrest or Pinnacle at the Scottsdale conference or at any other NASMC conference.

B. Eriksen's Potential Exposure

Based on the totality of the DOJ's questioning during the proffer session, it does not appear that the DOJ has developed direct evidence of Eriksen's personal participation in the alleged conspiracy. The DOJ's questions, while thorough and probing, were consistent with the approach that would be taken with a fact witness — seeking to establish what Eriksen observed, knew, and was told — rather than the approach that would be taken with a participant whose own conduct is the focus of inquiry.

The evidence of Eriksen's involvement in the alleged conspiracy remains, at best, ambiguous from the DOJ's perspective. This assessment is consistent with C&H's internal investigation finding, which was presented to the TMC Board of Directors on January 20, 2023. The internal investigation concluded that there was no evidence that Eriksen personally participated in or had contemporaneous knowledge of the alleged pricing coordination between Holt and his counterparts at Ridgecrest and Pinnacle.

That said, two pieces of evidence surfaced during the proffer session that warrant continued attention:

(a) The Scottsdale Check-In Record. The document placing Eriksen in the same sub-committee session room as Holt, Edgerton, and Tsang at the Scottsdale conference could be used by the DOJ to draw a circumstantial inference that Eriksen was aware of, or present for, interactions between the alleged co-conspirators. While this inference is weak — standing alone, the document establishes only co-attendance at an official conference session — it could be combined with other evidence to build a circumstantial case.

(b) The June 2019 Holt Email (TMC-0215847). The email directing Eriksen to adopt a "revised approach" to a feldspar customer bid could be characterized by the DOJ as an instruction to implement a pricing change that was the product of competitor coordination, particularly if the DOJ can establish that the timing of Holt's instruction correlates with a documented VaultChat exchange between Holt and a counterpart at Ridgecrest or Pinnacle. While Eriksen credibly testified that he understood the instruction as a routine business decision and had no reason to suspect otherwise, the DOJ may view this email as evidence that Holt used Eriksen as an unwitting instrument to effectuate a coordinated pricing strategy.

Current Assessment. At present, Eriksen's exposure appears limited. He is more properly characterized as a fact witness than as a participant in or accessory to the alleged conspiracy. The DOJ's questioning was probing but not accusatory. Significantly, the DOJ did not reclassify Eriksen as a subject or target during the session, nor did the DOJ's questions suggest that it had evidence that would support such a reclassification.

C. Consistency with Prior Statements

Eriksen's proffer testimony was consistent in all material respects with his prior interview by C&H, conducted on July 22, 2022, as part of C&H's internal investigation. In that interview, Eriksen denied knowledge of any pricing agreements or coordination between TMC and its competitors, denied participating in or attending any private meetings with competitor personnel at NASMC conferences, and denied being aware of Holt's external communications with Ridgecrest or Pinnacle personnel.

No material inconsistencies were observed between Eriksen's proffer statements and his prior interview statements. This consistency is important for two reasons: first, it reinforces the credibility of Eriksen's account; and second, it reduces the risk that the DOJ could use the proffer statements for impeachment purposes in the event Eriksen is called to testify in future proceedings, because there is no material divergence between his proffer account and the account he would be expected to provide if called as a witness.

Eriksen appeared credible and composed throughout the session. He was responsive to questions, provided appropriately detailed answers, and did not appear evasive or reluctant to engage. Importantly, his recollections were appropriately qualified when he was uncertain — for example, his acknowledgment that he could not independently recall the specific "Market Trends Working Group" session at the Scottsdale conference, while also acknowledging that his badge may have been scanned for that session. This type of qualified recall is consistent with honest testimony by a witness who is recounting events from approximately four to five years earlier, and it is more credible than an absolute denial that would be difficult to sustain if contradicted by documentary evidence.

D. Impact on TMC's Cooperation Posture

The Eriksen proffer session supports TMC's cooperation narrative with the DOJ in several respects.

First, the fact that TMC made a current employee available for a voluntary proffer with the DOJ is itself a significant indicator of good-faith cooperation. Companies that are obstructing or limiting the government's investigation do not voluntarily proffer their employees. The Eriksen proffer demonstrates that TMC is facilitating the DOJ's access to fact witnesses and is not seeking to impede the government's ability to develop the factual record.

Second, Eriksen testified forthrightly and did not invoke the Fifth Amendment or refuse to answer questions. His testimony was responsive and substantive. This contrasts favorably with the posture of Gavin Holt, who asserted his Fifth Amendment privilege before the grand jury and has refused to cooperate with the DOJ's investigation.

Third, Eriksen's testimony regarding the deficiencies in TMC's antitrust compliance program — specifically, that no antitrust compliance training occurred after approximately 2018 and that no trade-association monitoring or pre- or post-conference compliance procedures existed — corroborates C&H's internal investigation finding that TMC's antitrust compliance program, originally adopted in 2014, was inadequate. This finding has been a key element of the compliance-remediation narrative that C&H is presenting to the DOJ in connection with the NPA negotiations. Eriksen's first-person testimony about the absence of meaningful compliance infrastructure provides a factual foundation for TMC's acknowledgment of past deficiencies and its commitment to implementing a substantially enhanced compliance program going forward.

Fourth, and importantly, Eriksen's testimony does not introduce any new adverse facts for TMC. The proffer session did not produce any revelations or admissions that would damage TMC's position in the cooperation negotiations or expose the company to additional liability. Eriksen's account is consistent with C&H's prior submissions to the DOJ, and the session did not surface any previously unknown conduct or communications.

E. DOJ's View of the Holt Carve-Out

The DOJ's questioning during the Eriksen proffer session reinforces the assessment that the Division is continuing to build a case against Gavin Holt individually. The DOJ's focus on Holt's instructions to Eriksen — particularly the June 2019 email (TMC-0215847) — and on Holt's use of the VaultChat encrypted messaging application suggests that the DOJ views Holt as a central figure in the alleged conspiracy and is developing evidence to support an individual prosecution of Holt, independent of or in parallel with the resolution of TMC's corporate exposure.

This is consistent with the DOJ's known reservation of rights regarding Holt. As previously documented in C&H's matter files, Holt asserted his Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022, and has refused to cooperate with the DOJ's investigation. Holt is separately represented by Patrick Dunleavy of Briarcliff Law Group PLLC, and C&H has had no direct communication with Holt or his counsel regarding the substance of the investigation since Holt's departure from TMC.

Eriksen's testimony that Holt's pricing instructions appeared routine and did not disclose any external coordination with competitors may carry a dual significance:

• Helpful to TMC: Eriksen's testimony supports TMC's position that the alleged conspiracy was conducted covertly by Holt without the knowledge of other TMC employees, including Eriksen (who reported directly to Holt). This supports the narrative that TMC as an institution was unaware of Holt's conduct and that the company's exposure arises from Holt's individual actions rather than from a corporate culture that encouraged or condoned anticompetitive behavior.

• Potentially Useful to DOJ Against Holt: Eriksen's testimony that Holt did not disclose the reasons behind certain pricing decisions and did not share his external communications with his subordinates could be used by the DOJ as evidence that Holt acted deliberately and covertly — that he concealed the conspiracy even from his own direct reports. This supports the inference that Holt understood his conduct to be unlawful and took steps to hide it, which goes to the element of willfulness in a criminal antitrust case.

This dual significance is worth noting but does not, in C&H's assessment, present a conflict between TMC's interests and Eriksen's interests at this time.

VII. Recommended Next Steps

Based on the foregoing assessment of the proffer session, C&H recommends the following next steps:

1. Request Copy of Conference Document. C&H should formally request from the DOJ (specifically, Denise Kowalski and Marcus Reeves) a copy of the NASMC Scottsdale, Arizona conference check-in or badge record that was shown to Eriksen during the proffer session. A copy of this document was not provided to C&H at the session, and C&H was not given an opportunity to examine the document in detail beyond the brief review that Eriksen conducted during the questioning. Obtaining a copy of this document is important for several reasons: (a) to assess its evidentiary significance, including whether it establishes actual attendance at the sub-committee session or merely badge-scanning at the door; (b) to cross-reference the document with TMC's own records of conference attendance, expense reports, and travel records for the Scottsdale conference; and (c) to determine whether the "Market Trends Working Group" sub-committee session was part of the official NASMC conference program or was a separately organized meeting. C&H should submit this request in writing to Kowalski within the next five business days.

2. Review TMC-0215847 in Context. C&H should re-examine the Holt-to-Eriksen email (Bates-stamped TMC-0215847) and the surrounding communications in TMC's document production. Specifically, C&H should assess whether the timing of the "revised approach" instruction in approximately June 2019 correlates with any documented VaultChat exchange between Holt and Edgerton (Ridgecrest) or Holt and Tsang (Pinnacle) during the same time period. This analysis should cross-reference the VaultChat message analysis memorandum prepared by C&H and dated September 15, 2022, which documented at least thirty-seven (37) discrete exchanges between Holt and competitor counterparts during the period from March 2017 through July 2021. If a correlation exists — i.e., if Holt communicated with a competitor counterpart about feldspar pricing in the Western Region in close temporal proximity to his instruction to Eriksen — this would be significant both for understanding the DOJ's likely theory and for assessing whether additional steps need to be taken with respect to Eriksen's position.

3. No Upjohn Warning Concerns at Present. Eriksen appeared to understand the Upjohn warning and C&H's role as counsel to TMC. He did not exhibit any confusion about the nature of the representation, and he did not make statements that suggested a divergence between his interests and TMC's interests. At present, there are no indications that Eriksen requires separate personal counsel. However, this situation should be monitored on an ongoing basis. If the DOJ's investigation develops in a manner that increases Eriksen's personal exposure — for example, if the DOJ reclassifies Eriksen as a subject or target, or if evidence surfaces suggesting that Eriksen had greater knowledge of the alleged conspiracy than he has disclosed — C&H should promptly revisit the question of whether Eriksen should be advised to retain separate counsel.

4. Supplement Cooperation Proffer. The Eriksen proffer session should be referenced in C&H's supplemental cooperation submission to the DOJ, which is currently in preparation and targeted for submission on or about May 1, 2023. The supplemental submission should note that TMC made Eriksen available for a voluntary proffer, that Eriksen testified forthrightly and without invoking the Fifth Amendment, and that Eriksen's testimony was consistent with TMC's prior representations to the DOJ. This supports TMC's position that it is cooperating fully with the investigation and facilitating the government's access to relevant witnesses and information.

5. Brief TMC General Counsel. C&H should provide an oral briefing to Priya Anand, TMC's General Counsel, on the substance and outcome of the proffer session. The briefing should communicate that Eriksen performed well, that his testimony was consistent with prior representations, and that no adverse developments arose during the session. The briefing should also note the Scottsdale conference document and the potential significance of the June 2019 email, so that Ms. Anand is aware of these issues. Consistent with C&H's standard practice, this briefing should be conducted orally, and any written summary provided to Ms. Anand should be clearly marked as privileged attorney work product.

6. Coordinate with Compliance Remediation Effort. Eriksen's testimony about the absence of antitrust compliance training since approximately 2018 and the lack of any trade-association monitoring or pre- and post-conference compliance procedures underscores the urgency and necessity of the enhanced compliance program that C&H is recommending to TMC. The design and implementation of this enhanced program, which C&H anticipates will be undertaken with the assistance of Meridian Compliance Partners LLC (an expected engagement in Q3 2023), should include, at a minimum: (a) mandatory annual antitrust compliance training for all employees in sales, pricing, and business development roles; (b) mandatory pre-conference compliance briefings and post-conference certifications for all TMC personnel attending industry trade association events; (c) a formal antitrust compliance policy that is updated and re-circulated annually; and (d) a monitoring and auditing mechanism to verify compliance with these requirements. Eriksen's testimony provides a concrete, fact-specific illustration of the compliance deficiencies that the enhanced program is designed to address, and it should be referenced in the compliance-remediation materials being prepared for submission to the DOJ.

VIII. Privilege and Confidentiality Notice

This memorandum constitutes privileged attorney work product prepared in anticipation of litigation and in connection with the provision of legal advice to Torchlight Mining Corp. It is protected by the attorney-client privilege and the work-product doctrine. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel at Calderwood & Harkness LLP. It should not be disclosed, disseminated, or made available to any person or entity outside Calderwood & Harkness LLP and authorized TMC personnel without the prior written approval of the responsible partner.

Distribution of this memorandum is limited to the following individuals:

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

• Monica Reyes, Calderwood & Harkness LLP (copy)

• Priya Anand, General Counsel, Torchlight Mining Corp. (upon her request)

• Calderwood & Harkness LLP matter file (Matter No. 1039-00001)

No additional copies or distributions should be made without the prior approval of Elaine Forsythe.

Prepared by:

CALDERWOOD & HARKNESS LLP

By: ________

Name: Aaron Liu

Title: Lead Associate, Antitrust & Competition Practice Group

Date: April 25, 2023

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT PRIVILEGED Calderwood & Harkness LLP

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104
MEMORANDUM
April 25, 2023
Matter: Torchlight Mining Corp. — DOJ Antitrust Division Grand Jury Investigation
Matter Number: 1039-00001
Grand Jury Number: GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division
To: Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group
From: Aaron Liu, Lead Associate, Antitrust & Competition Practice Group
Re: Post-Proffer Debriefing Memorandum — Thomas Eriksen Voluntary Proffer Session with DOJ Antitrust Division, April 22, 2023
Copies: Monica Reyes (Calderwood & Harkness LLP); file
I. Purpose and Summary
The purpose of this memorandum is to document and analyze the voluntary proffer session of Thomas Eriksen, Regional Sales Manager, Western Region, U.S. Specialty Minerals Division, Torchlight Mining Corp. ("TMC" or the "Company"), conducted with attorneys from the United States Department of Justice, Antitrust Division (the "DOJ" or the "Division") on Saturday, April 22, 2023. The session took place at the DOJ's San Francisco Field Office, located at 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102.
The proffer session was conducted pursuant to the proffer agreement, commonly referred to as a "queen-for-a-day" letter, that was negotiated by Calderwood & Harkness LLP ("C&H") and the DOJ. The executed proffer agreement was transmitted to the DOJ via a letter from Elaine Forsythe, Responsible Partner, to Denise Kowalski, Trial Attorney, Antitrust Division, San Francisco Field Office, dated April 15, 2023. That agreement established the customary use restrictions and protections governing Eriksen's statements during the proffer session, including the prohibition on the use of Eriksen's proffer statements in the government's case-in-chief, subject to certain exceptions discussed in greater detail in Section III of this memorandum.
Eriksen is a current TMC employee who remains employed in his position as Regional Sales Manager for the Western Region of the U.S. Specialty Minerals Division. He has not been terminated, suspended, or placed on administrative leave in connection with the grand jury investigation. He appeared voluntarily at the proffer session, consistent with TMC's broader cooperation posture with the DOJ.
Summary of Session and Preliminary Assessment. The proffer session lasted approximately three hours and fifteen minutes, commencing at approximately 9:00 a.m. Pacific Time and concluding at approximately 12:15 p.m. Pacific Time. The session was conducted in a single continuous block, with one short break of approximately ten minutes taken at approximately 10:45 a.m.
The DOJ's questioning focused heavily on the following areas: (1) Eriksen's attendance at North American Specialty Minerals Council ("NASMC") quarterly conferences during the alleged conspiracy period of approximately January 2017 through August 2021; (2) side meetings and informal gatherings that occurred at those conferences; (3) Eriksen's interactions with personnel from Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"), the two alleged co-conspirator companies; and (4) Eriksen's knowledge of external communications by Gavin Holt, the former Vice President of U.S. Specialty Minerals Sales at TMC, with competitor personnel regarding pricing, customer allocation, or bid coordination.
Eriksen maintained his position throughout the session — consistent with his prior C&H internal investigation interview conducted on July 22, 2022 — that he had no knowledge of any pricing agreements or coordination between TMC and its competitors. He denied attending any private or closed-door meetings with competitor personnel at NASMC conferences, denied discussing pricing or customer-specific information with representatives of Ridgecrest or Pinnacle, and denied being aware of Holt's communications with competitor counterparts or Holt's use of the VaultChat encrypted messaging application for business purposes.
The DOJ appeared skeptical regarding certain aspects of Eriksen's account of his interactions at NASMC conferences, particularly in connection with a conference check-in or badge record from the Scottsdale, Arizona conference in the fourth quarter of 2018 that placed Eriksen, Holt, and two competitor executives in the same conference breakout room on the same afternoon. However, the DOJ did not present any evidence that directly contradicted Eriksen's account, nor did the DOJ present any communications, documents, or witness statements establishing Eriksen's personal participation in the alleged conspiracy.
Overall Assessment. Eriksen's testimony was credible and internally consistent. He presented as composed and forthcoming, and he appropriately qualified his recollections when uncertain. The DOJ's questioning suggests continued focus on the NASMC conference side meetings as a conduit for the alleged price-fixing conspiracy, but the Division does not appear to have developed direct evidence of Eriksen's personal involvement in the alleged conduct. Eriksen's exposure remains limited, and he is more properly characterized as a fact witness than as a participant in or accessory to the alleged conspiracy. This assessment is consistent with C&H's internal investigation findings as previously presented to the TMC Board of Directors.
II. Attendees
A. DOJ Representatives
The following DOJ personnel were present during the proffer session:
1.  Denise Kowalski, Trial Attorney, Antitrust Division, San Francisco Field Office. Kowalski has been the lead attorney on the TMC investigation and has served as C&H's primary point of contact at the Division throughout the investigation. Kowalski conducted the majority of the questioning during the first half of the session.
2.  Marcus Reeves, Senior Trial Attorney, Antitrust Division, San Francisco Field Office. Reeves is a senior member of the investigation team and has been present at all prior substantive interactions between C&H and the DOJ in connection with this matter. Reeves conducted most of the questioning during the second half of the session, particularly with respect to the NASMC conference documents and the Holt-to-Eriksen internal email.
3.  Lauren Pittman, Assistant Trial Attorney, Antitrust Division (name and title as identified at the session). This individual was not previously known to C&H and was introduced by Kowalski at the outset of the session as "Assistant Trial Attorney Lauren Pittman." Pittman did not ask questions during the session but appeared to be observing and taking notes. C&H should confirm Pittman's identity and role on the investigation team through a follow-up communication with Kowalski.
4.  DOJ Paralegal / Note-Taker (name not obtained). One additional DOJ staff member was present in the room, appearing to function as a paralegal or dedicated note-taker. This individual did not speak during the session and was not formally introduced by name. C&H did not request the individual's name at the time.
B. Torchlight Mining Corp. / Calderwood & Harkness LLP Representatives
The following individuals attended the proffer session on behalf of TMC and C&H:
1.  Thomas Eriksen, Regional Sales Manager (Western Region), U.S. Specialty Minerals Division, Torchlight Mining Corp. Eriksen appeared as the proffer witness.
2.  Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. Forsythe attended in her capacity as lead counsel to TMC in connection with the DOJ investigation.
3.  Aaron Liu, Lead Associate, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. I attended in my capacity as counsel to TMC, and I served as the primary note-taker for C&H during the session. This memorandum is based on my contemporaneous notes.
C. Note on Representation
Thomas Eriksen is a current TMC employee who is represented in this matter by Calderwood & Harkness LLP in his capacity as a TMC employee. Consistent with C&H's standard practice and ethical obligations, C&H provided Eriksen with an Upjohn warning prior to the commencement of the proffer session. Specifically, Elaine Forsythe reminded Eriksen of the following points during a brief preparatory conference in a separate room at the DOJ's San Francisco Field Office, approximately thirty minutes before the session began:
(a) Calderwood & Harkness LLP represents Torchlight Mining Corp., not Thomas Eriksen individually;
(b) The attorney-client privilege governing any communications between Eriksen and C&H counsel belongs to TMC, and TMC — through its authorized representatives — may choose to waive that privilege in the future, including by disclosing the substance of Eriksen's communications to the DOJ or to other third parties;
(c) There may come a time when the interests of TMC and the interests of Eriksen personally diverge, and if that occurs, Eriksen may wish to retain separate personal counsel; and
(d) Eriksen has the right to consult with and retain separate personal counsel at any time, including before this proffer session, if he wishes to do so.
Eriksen acknowledged his understanding of each of these points and confirmed that he wished to proceed with the proffer session with C&H serving as his counsel in his capacity as a TMC employee. Eriksen stated that he did not wish to retain separate personal counsel at that time.
As of the date of this memorandum, Eriksen does not have separate personal counsel. The question of whether Eriksen should be advised to retain personal counsel will be monitored on an ongoing basis in light of developments in the investigation, as discussed further in Section VII below.
III. Proffer Session Ground Rules
The proffer session was conducted pursuant to the terms of the queen-for-a-day proffer agreement dated April 15, 2023 (the "Proffer Agreement"), which was negotiated between C&H (on behalf of TMC and Eriksen in his capacity as a TMC employee) and the DOJ Antitrust Division. The Proffer Agreement was transmitted to the DOJ via a letter from Elaine Forsythe to Denise Kowalski on that date. The executed Proffer Agreement is on file in the matter records.
The key terms of the Proffer Agreement, as relevant to the session and this memorandum, are as follows:
(a) Voluntariness. The session was voluntary. Eriksen was not compelled to appear and was free to terminate the session at any time.
(b) Use Restrictions. Eriksen's statements made during the proffer session cannot be used directly against him in the government's case-in-chief. This is the core protection of the proffer agreement.
(c) Impeachment Exception. Notwithstanding the foregoing use restriction, the government may use Eriksen's proffer statements for impeachment purposes if Eriksen subsequently testifies at trial or in other proceedings in a manner that is materially inconsistent with his proffer statements. This is a standard carve-out in queen-for-a-day agreements.
(d) Derivative Use. The government retains the right to pursue investigative leads derived from information provided by Eriksen during the proffer. That is, while Eriksen's statements themselves are protected, the government is not precluded from developing independent evidence based on leads obtained through the proffer.
(e) False Statements. The Proffer Agreement does not protect against prosecution for false statements (18 U.S.C. § 1001) if Eriksen knowingly provides materially false information during the session.
At the outset of the session, Denise Kowalski confirmed on the record that the session was voluntary and that Eriksen was appearing as a witness, not as a target or subject of the grand jury investigation. This characterization is significant. Under the DOJ's United States Attorneys' Manual and longstanding Antitrust Division practice, the distinction between witness, subject, and target carries meaningful implications for an individual's potential exposure. Eriksen's classification as a witness is consistent with C&H's prior discussions with the DOJ and with C&H's assessment that Eriksen is not believed to be a participant in the alleged conspiracy.
Elaine Forsythe stated on the record at the outset that she reserved the right to confer privately with Eriksen at any time during the session and to instruct Eriksen not to answer specific questions to the extent that such questions implicated the attorney-client privilege or the work-product doctrine. Kowalski acknowledged this reservation. During the session, Forsythe exercised this right on one occasion, as described in Section IV below, to note the significance of a particular line of questioning concerning trade-association attendance.
IV. Summary of Questions and Eriksen's Responses
The following is a detailed summary of the questions posed by DOJ attorneys during the proffer session and the substance of Eriksen's responses. This summary is based on my contemporaneous handwritten notes taken during the session. I have endeavored to capture the substance and, where possible, the approximate language of the questions and responses, though this is not a verbatim transcript.
A. Background and Role at TMC
The session opened with Denise Kowalski asking a series of background questions to establish Eriksen's tenure, role, and responsibilities at Torchlight Mining Corp.
Tenure. Eriksen confirmed that he joined TMC in approximately 2013, initially in a junior sales role within the U.S. Specialty Minerals Division. He was promoted to Regional Sales Manager for the Western Region at a date he recalled as approximately 2015 or early 2016. He has held that position continuously since that time.
Reporting Structure. Eriksen confirmed that from approximately 2016 until Gavin Holt's departure from TMC on September 30, 2021, Eriksen reported directly to Gavin Holt, who held the title of Vice President, U.S. Specialty Minerals Sales. Eriksen stated that Holt was his direct supervisor and that Eriksen's performance reviews, compensation decisions, and sales targets were set by Holt. Following Holt's departure, Eriksen reported to an interim supervisor whose identity was not explored in the session.
Responsibilities. Eriksen described his primary responsibilities as managing customer relationships and sales of TMC's specialty minerals products in the Western United States region. The products for which Eriksen was responsible included high-purity feldspar, industrial talc, and rare-earth concentrates. Eriksen's territory encompassed customers in California, Oregon, Washington, Nevada, Arizona, and several other Western states. Eriksen stated that his role was customer-facing: he maintained relationships with existing customers, pursued new business opportunities, negotiated supply contracts and pricing terms within authorized parameters, and coordinated with TMC's logistics and operations teams to ensure timely fulfillment of customer orders.
Pricing Authority. Kowalski asked Eriksen to describe his authority with respect to pricing. This was a significant area of questioning, as it goes directly to the question of whether Eriksen had the ability — or the occasion — to implement any anticompetitive pricing arrangements on behalf of TMC.
Eriksen was clear and consistent on this point. He stated that he had no direct authority over TMC's published price lists for specialty minerals products. The function of setting and maintaining published price lists resided with Sandra Chu, Director of Pricing Analytics, who operated under the direction of Gavin Holt. Price lists were periodically reviewed and updated by Chu and Holt, and Eriksen received the updated price lists as they were disseminated to the sales team.
Eriksen stated that his pricing authority was limited to negotiating customer-specific discounts off the published list prices, within pre-approved discount ranges that were established by Holt and Chu. These discount ranges varied by product line and customer tier. Eriksen could not set or change list prices, and he could not offer discounts that exceeded the pre-approved ranges without obtaining specific approval from Holt. Eriksen stated that he occasionally sought and received approval from Holt for discounts that fell outside the standard range, but that such approvals were handled on a case-by-case basis through email or phone conversations with Holt.
Eriksen described his understanding of TMC's pricing process as follows: price lists were set by Holt in consultation with Chu, taking into account factors such as raw material costs, production costs, competitive market conditions, and customer demand. Eriksen understood this to be a standard internal business process. He stated that he was not involved in the deliberations that led to changes in published price lists, nor was he privy to the specific inputs or analyses that Chu used to develop pricing recommendations.
B. NASMC Conference Attendance
Marcus Reeves assumed the lead on questioning and turned to the subject of Eriksen's attendance at quarterly conferences organized by the North American Specialty Minerals Council ("NASMC"). NASMC is the primary industry trade association for the specialty minerals sector in North America. Its headquarters is located at 2300 Wilson Boulevard, Suite 400, Arlington, Virginia 22201. NASMC organizes quarterly conferences that bring together representatives from mining companies, downstream distributors, equipment suppliers, and other industry participants.
Reeves asked Eriksen to identify which NASMC conferences he had attended during the period of approximately January 2017 through August 2021, which corresponds to the alleged conspiracy period as identified in the grand jury investigation.
Eriksen confirmed that he attended four NASMC conferences during the relevant period:
1.  Arlington, Virginia — approximately Q2 2018. Eriksen recalled attending the spring or early summer quarterly conference held at or near NASMC's headquarters in Arlington, Virginia, in approximately the second quarter of 2018. He could not recall the precise dates.
2.  Scottsdale, Arizona — approximately Q4 2018. Eriksen recalled attending a fall or year-end quarterly conference held in Scottsdale, Arizona, in approximately the fourth quarter of 2018.
3.  Orlando, Florida — approximately Q2 2019. Eriksen recalled attending a spring quarterly conference held in Orlando, Florida, in approximately the second quarter of 2019.
4.  Arlington, Virginia — approximately Q1 2020. Eriksen recalled attending a winter or early spring quarterly conference held in Arlington, Virginia, in approximately the first quarter of 2020. Eriksen noted that this may have been one of the last in-person NASMC conferences before the COVID-19 pandemic disrupted in-person gatherings.
Eriksen stated that his attendance at these conferences was authorized and funded by TMC and that he attended in his capacity as Regional Sales Manager. He described the conferences as useful for maintaining industry awareness, networking with customers and industry contacts, and staying informed about regulatory developments affecting the specialty minerals sector.
Co-Attendees from TMC. Reeves asked Eriksen to identify which other TMC personnel attended these same conferences. Eriksen stated that Gavin Holt attended all four of the same conferences that Eriksen attended. Eriksen stated that Sandra Chu attended at least two of the conferences — specifically, the Arlington, Virginia conference in Q2 2018 and the Orlando, Florida conference in Q2 2019, to his best recollection. Eriksen acknowledged that other TMC personnel from the technical and operations side of the business may have attended one or more of these conferences, but he could not recall specific names with certainty. He noted that NASMC conferences included technical panels on mining and processing topics that would have been of interest to TMC's operations personnel.
Side Meetings and Informal Gatherings. Reeves then turned to the critical area of questioning: whether Eriksen attended any "side meetings" or informal gatherings at these conferences with representatives of competitor companies — specifically, Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd.
Eriksen's response was detailed and consistent. He stated:
•  He attended the formal panel sessions, presentations, and other programming that comprised the main conference schedule organized by NASMC.
•  He participated in general networking events that were organized by NASMC as part of the conference program, including welcome receptions, group dinners, and social gatherings. These events were open to all conference attendees and were not limited to representatives of any particular company or group of companies.
•  At these general networking events, Eriksen interacted with range industry participants, including individuals whom he recognized as employees or representatives of competitor companies, including Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. Eriksen described these interactions as typical industry socializing. The topics of conversation, as he recalled them, included general market conditions in the specialty minerals sector, broad industry trends (such as shifts in demand for certain minerals), regulatory developments (such as environmental permitting issues), and personal or social topics unrelated to business.
•  Eriksen stated affirmatively that he did not discuss specific pricing, customer-specific information, bid strategies, contract terms, or any other competitively sensitive business information with representatives of competitor companies at any NASMC conference he attended.
•  Eriksen stated that he did not attend any private "breakout" meetings, closed-door meetings, or off-program gatherings with competitor personnel at any NASMC conference. He drew a clear distinction between the general networking events organized by NASMC (which were open to all attendees) and any private or exclusive meeting with competitors, and he denied participating in the latter.
C. Interactions with Ridgecrest and Pinnacle Personnel
Kowalski resumed the questioning and asked Eriksen specifically about his interactions with two individuals: Carl Edgerton, Vice President of Sales at Ridgecrest Minerals Inc., and Kevin Tsang, former Senior Vice President, Commercial Operations, at Pinnacle Earth Resources Ltd. These two individuals are understood to be key alleged co-conspirators in the DOJ's theory of the case, along with Gavin Holt.
Eriksen stated the following with respect to his interactions with Edgerton and Tsang:
•  He knew both Carl Edgerton and Kevin Tsang by name and by face. He recognized them as counterparts in the industry — executives at competing specialty minerals companies who attended many of the same industry events and conferences.
•  He had brief, casual conversations with both Edgerton and Tsang at NASMC events over the years. These conversations were of the same general character that Eriksen described in his testimony about networking events: general industry outlook, regulatory issues affecting the sector, and personal or social topics. Eriksen characterized these interactions as unremarkable and consistent with the type of casual socializing that occurs routinely at industry trade association events.
•  Eriksen denied ever discussing specific pricing information, customer allocation, bid strategies, market division, or any other competitively sensitive information with either Edgerton or Tsang. He was firm and unequivocal on this point.
•  Eriksen denied ever being present at a meeting — whether formal or informal, scheduled or impromptu — where Gavin Holt, Carl Edgerton, and Kevin Tsang were together discussing pricing, customer allocation, or any competitively sensitive business topic. Eriksen stated that he may have been at the same large social event as all three individuals at some point during a conference, but he denied being present at any meeting where substantive competitive information was exchanged among them.
The Scottsdale Conference Check-In Record. At this point in the session, Reeves showed Eriksen a document that appeared to be a conference badge scan or event check-in record from the NASMC Scottsdale, Arizona conference in the fourth quarter of 2018. The document, as Eriksen and C&H counsel were able to review it during the session, appeared to indicate that Eriksen, Holt, Edgerton, and Tsang were all checked in or scanned into a conference breakout room that was reserved under the name of a NASMC sub-committee identified as the "Market Trends Working Group" on the same afternoon during the Scottsdale conference.
This was the most significant moment of the proffer session from an evidentiary standpoint. The DOJ appeared to be using this document to establish that Eriksen was in the same room as the three alleged principal co-conspirators at a specific time during a specific conference.
Eriksen reviewed the document carefully and stated the following:
•  He did not specifically recall attending a session labeled as the "Market Trends Working Group" at the Scottsdale conference. He acknowledged that his badge may have been scanned or that he may have been listed as an attendee, but he could not independently recall the specific session.
•  He stated that NASMC conferences included numerous sub-committee sessions and breakout sessions on range topics, and that it was common for attendees to move between sessions or to check in to sessions without remaining for the full duration. He could not say with certainty whether he attended this particular session, attended briefly and left, or was merely checked in without attending.
•  He stated affirmatively that he did not recall any discussion of pricing, customer-specific information, bid coordination, or any competitively sensitive topic at any sub-committee session he attended at the Scottsdale conference or at any other NASMC conference.
At this point, Elaine Forsythe interjected to place a comment on the record. Forsythe noted that attendance at a general sub-committee session that was part of the NASMC trade association's official conference program does not constitute evidence of anticompetitive coordination. Forsythe stated that NASMC sub-committee sessions are open to conference attendees, are organized and administered by the trade association itself, and address general industry topics. Co-attendance at such a session by representatives of competing companies is routine and expected at industry trade association conferences and carries no inference of impropriety in itself. Kowalski acknowledged Forsythe's comment without substantive response.
D. Knowledge of Gavin Holt's External Communications
Kowalski returned to questioning and turned to the topic of Eriksen's knowledge of Gavin Holt's communications with personnel at competitor companies. This line of questioning was clearly directed at establishing whether Eriksen was aware of — or participated in — the external communications that form the core of the DOJ's case theory.
General Knowledge of Holt's External Communications. Kowalski asked whether Eriksen was aware of Gavin Holt communicating with personnel at competitor companies — specifically Ridgecrest and Pinnacle — about pricing, customer allocation, or bid coordination.
Eriksen denied any such knowledge. He stated that Holt was his direct supervisor and that they interacted regularly on matters relating to Eriksen's sales responsibilities, customer accounts, and performance metrics. However, Eriksen stated that Holt did not discuss his external communications with Eriksen. Holt did not share with Eriksen the substance of any conversations or correspondence with competitor personnel. Eriksen stated that he was not aware, during the relevant period, that Holt was in contact with individuals at Ridgecrest or Pinnacle regarding pricing or other competitive matters.
VaultChat. Kowalski asked specifically whether Eriksen was aware of Holt's use of the VaultChat encrypted messaging application for business purposes. Eriksen stated that he was not aware of Holt's use of VaultChat. Eriksen stated that he himself did not use VaultChat and was not familiar with the application. He stated that his communications with Holt were conducted through standard TMC channels — primarily TMC corporate email and telephone — and that Holt never communicated with him through VaultChat or any other encrypted or disappearing-message platform.
Holt's Pricing Instructions. Kowalski asked whether Holt ever instructed Eriksen to adjust pricing or customer terms in coordination with, or based upon, the conduct or pricing of competitors. This was a direct and pointed question, and Eriksen's response was clear and unequivocal. Eriksen denied receiving any such instructions. He stated that Holt's pricing instructions to Eriksen were framed as internal business decisions — adjustments to discount levels, changes in customer terms, responses to market conditions — and that Holt did not reference competitor actions, competitor pricing, or any agreement with competitors when giving such instructions. Eriksen reiterated that his pricing authority was limited to customer-specific discounts within pre-approved ranges established by Holt and Chu, and that Holt's instructions regarding adjustments to those ranges or to specific customer terms appeared to Eriksen to be routine business decisions made in the ordinary course.
The June 2019 Email (TMC-0215847). Reeves then directed Eriksen's attention to a specific document: a TMC internal email from Gavin Holt to Thomas Eriksen, dated approximately June 2019, which referenced a "revised approach" to a customer bid for a feldspar supply contract in the Western Region. The DOJ showed Eriksen a copy of this email, which bore the Bates-stamp number TMC-0215847. This email was among the documents produced by TMC to the DOJ in the course of the company's cooperation, and it had been previously reviewed by C&H during the internal investigation.
Eriksen reviewed the email and provided the following responses:
•  He recalled the email. He stated that the "revised approach" referenced in the email was a change in the discount levels that Eriksen was authorized to offer to a particular customer in connection with a feldspar supply contract that was being negotiated in his territory.
•  He understood Holt's instruction as a standard business decision. Specifically, he understood Holt to be directing a change in the pricing terms that Eriksen could offer in the negotiation — either a reduction or restructuring of the discount that TMC was willing to extend to the customer. Eriksen did not recall the precise discount figures but recalled that the change was a narrowing of the discount range, meaning that TMC was offering less favorable terms to the customer than had been previously contemplated.
•  Eriksen stated that he had no reason to believe, at the time he received the email, that Holt's instruction was connected to any coordination with competitors. The instruction appeared routine: Holt frequently adjusted pricing parameters for customer-specific negotiations, and Eriksen did not perceive anything unusual about this particular instruction.
•  Eriksen stated that he did not ask Holt the reason for the revision. He stated that it was not his practice to question the business rationale behind Holt's pricing instructions, as Holt was the senior executive responsible for pricing strategy and Eriksen's role was to implement the approved pricing parameters in his customer negotiations.
•  Eriksen stated that he did not suspect any impropriety in connection with this email at the time he received it.
E. TMC's Antitrust Compliance Program
Kowalski shifted the questioning to TMC's antitrust compliance program. This topic is significant both for the DOJ's assessment of TMC's culpability and for the compliance-remediation narrative that C&H is developing in connection with the non-prosecution agreement ("NPA") negotiations.
Awareness of the Policy. Kowalski asked Eriksen whether he was aware of TMC's antitrust compliance policy. Eriksen confirmed that he was aware of the existence of an antitrust compliance policy at TMC, which he understood to have been adopted in approximately 2014. He stated that he recalled receiving some form of antitrust compliance training when he was first onboarded at TMC in 2013, and possibly an additional training session in approximately 2016 or 2017, though he could not recall the precise date or format of the second training.
Frequency and Recency of Training. Eriksen stated that he could not recall receiving any annual or periodic antitrust compliance training after approximately 2018. He stated that he did not recall any specific training session, online module, or compliance communication directed at antitrust issues after that date. When asked by Kowalski whether he was certain on this point, Eriksen qualified his answer by stating that it was possible that a compliance communication had been sent by email that he did not recall, but that he had no recollection of any substantive antitrust training after approximately 2018.
Trade-Association Monitoring. Eriksen confirmed that no monitoring of trade-association interactions was in place during his tenure. Specifically, he stated that TMC did not conduct pre-conference compliance briefings before his attendance at NASMC conferences, nor did TMC conduct post-conference debriefings or require attendees to submit reports or certifications regarding their interactions with competitors at NASMC events. Eriksen stated that he was not aware of any TMC policy or practice that required such pre- or post-conference compliance procedures.
Guidance on Permissible Topics. Kowalski asked whether anyone at TMC — including Holt, Chu, or any compliance or legal personnel — ever instructed Eriksen on what topics were permissible or impermissible to discuss with competitor personnel at industry events such as NASMC conferences. Eriksen stated that he received no such specific guidance related to NASMC conferences. He stated that the general antitrust compliance training he recalled from his onboarding and the possible 2016-2017 session included general admonitions about not discussing pricing with competitors, but that he did not receive targeted, conference-specific guidance.
F. Other Topics
The DOJ's questioning concluded with several additional topics that were explored more briefly.
Cascade Chemical Supply Co. Kowalski asked Eriksen about his knowledge of Cascade Chemical Supply Co. ("Cascade"), a downstream distributor of specialty minerals products headquartered in Spokane, Washington. Eriksen stated that he knew Cascade as a TMC customer within his Western Region sales territory. He had dealt with Cascade on supply terms and had managed the TMC-Cascade commercial relationship as part of his regional sales responsibilities.
Kowalski asked whether Eriksen was aware that Cascade had entered into a cooperation agreement with the DOJ in approximately September 2021. Eriksen stated that he was not aware of Cascade's cooperation agreement. He stated that he learned of the existence of the DOJ investigation at some point after its initiation but did not have knowledge of specific cooperation arrangements between the DOJ and other entities.
Leonard Massey. Kowalski asked about Eriksen's interactions with Leonard Massey, President of Cascade Chemical Supply Co. Eriksen stated that he had limited direct interaction with Massey. He stated that his primary point of contact at Cascade was a more junior employee — a purchasing manager or account representative — and that Massey's involvement in the day-to-day TMC-Cascade commercial relationship was limited, at least from Eriksen's perspective. Eriksen could not recall having any substantive one-on-one conversations with Massey and stated that to the extent he interacted with Massey, it would have been in connection with high-level customer relationship management visits or industry events.
Bid-Rigging. Notably, the DOJ did not raise the topic of bid-rigging in any detail during the session. The questioning was predominantly focused on price-fixing — specifically, the alleged coordination of published price lists and customer-specific pricing among TMC, Ridgecrest, and Pinnacle — and on the NASMC conferences as the alleged venue for such coordination. While the grand jury investigation is understood to encompass potential bid-rigging allegations in addition to price-fixing, the DOJ's decision not to explore bid-rigging with Eriksen is consistent with the assessment that Eriksen's involvement, if any, would relate to the pricing dimension of the alleged conspiracy rather than any bid-rigging conduct.
V. Documents Referenced During the Session
The following documents were referenced or shown to Eriksen during the proffer session:
1.  TMC-0215847 — Internal TMC email from Gavin Holt to Thomas Eriksen, dated approximately June 2019, regarding a "revised approach" to a feldspar customer bid in the Western Region. This document was shown to Eriksen during the session, and Eriksen reviewed it before responding to the DOJ's questions. This document was produced by TMC to the DOJ in the course of TMC's document production and has been previously reviewed by C&H during the internal investigation. A copy of this document is in C&H's matter files.
2.  NASMC Scottsdale, AZ Conference Check-In / Badge Record (Q4 2018) — A document that appeared to be a conference badge scan or event check-in record from the NASMC Scottsdale, Arizona conference held in approximately the fourth quarter of 2018. This document was shown to Eriksen during the session. The document appeared to indicate that Eriksen, Holt, Edgerton, and Tsang were all checked in to a conference breakout room reserved under the name of the "Market Trends Working Group" sub-committee on the same afternoon. A copy of this document was not provided to C&H at the session. C&H should formally request a copy from the DOJ, as discussed in Section VII below.
3.  No VaultChat Messages Shown. The DOJ did not show Eriksen any VaultChat messages or other external communications between Holt and personnel at Ridgecrest or Pinnacle. This is notable. The absence of VaultChat messages in this session may indicate that the DOJ did not believe such messages were relevant to Eriksen's testimony, or it may reflect a strategic decision by the DOJ to withhold those communications for use in other contexts. Regardless, Eriksen was not confronted with any direct evidence of the Holt-Edgerton or Holt-Tsang communications during this proffer.
VI. Assessment of DOJ's Focus Areas and Strategy
A. NASMC Conferences as Coordination Venue
The DOJ's questioning during the proffer session strongly suggests that the Division is building its case on the theory that NASMC quarterly conferences served as the primary meeting ground and coordination venue for the alleged price-fixing conspiracy among TMC, Ridgecrest, and Pinnacle. This is consistent with the DOJ's broader theory of the case as C&H has understood it through prior interactions with the Division: that coordination occurred at NASMC conferences held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida during the period of approximately 2017 through 2021.
The Scottsdale conference badge or check-in record is a potentially significant piece of circumstantial evidence. By showing Eriksen this document, the DOJ was attempting to place Eriksen in proximity to the three alleged principal co-conspirators — Holt (TMC), Edgerton (Ridgecrest), and Tsang (Pinnacle) — at a specific event within a specific conference. If the DOJ possesses similar records for other conferences, it may seek to establish a pattern of co-attendance at sub-committee sessions or breakout rooms.
However, as Forsythe correctly noted during the session, mere co-attendance at a trade-association sub-committee session that is part of the official conference program does not, by itself, establish participation in anticompetitive conduct. NASMC sub-committee sessions are organized and administered by the trade association, are listed on the conference agenda, and are open to conference attendees. It is entirely routine and expected that representatives of competing companies would attend the same sub-committee sessions at an industry trade association conference. The DOJ would need to present evidence of what was discussed at such sessions — or evidence of private meetings occurring in connection with or under the cover of such sessions — to establish any inference of conspiratorial conduct.
Critically, the DOJ did not present any such evidence during the Eriksen proffer. There was no evidence presented that Eriksen engaged in substantive pricing discussions, customer-allocation discussions, or any other competitively sensitive exchange with representatives of Ridgecrest or Pinnacle at the Scottsdale conference or at any other NASMC conference.
B. Eriksen's Potential Exposure
Based on the totality of the DOJ's questioning during the proffer session, it does not appear that the DOJ has developed direct evidence of Eriksen's personal participation in the alleged conspiracy. The DOJ's questions, while thorough and probing, were consistent with the approach that would be taken with a fact witness — seeking to establish what Eriksen observed, knew, and was told — rather than the approach that would be taken with a participant whose own conduct is the focus of inquiry.
The evidence of Eriksen's involvement in the alleged conspiracy remains, at best, ambiguous from the DOJ's perspective. This assessment is consistent with C&H's internal investigation finding, which was presented to the TMC Board of Directors on January 20, 2023. The internal investigation concluded that there was no evidence that Eriksen personally participated in or had contemporaneous knowledge of the alleged pricing coordination between Holt and his counterparts at Ridgecrest and Pinnacle.
That said, two pieces of evidence surfaced during the proffer session that warrant continued attention:
(a) The Scottsdale Check-In Record. The document placing Eriksen in the same sub-committee session room as Holt, Edgerton, and Tsang at the Scottsdale conference could be used by the DOJ to draw a circumstantial inference that Eriksen was aware of, or present for, interactions between the alleged co-conspirators. While this inference is weak — standing alone, the document establishes only co-attendance at an official conference session — it could be combined with other evidence to build a circumstantial case.
(b) The June 2019 Holt Email (TMC-0215847). The email directing Eriksen to adopt a "revised approach" to a feldspar customer bid could be characterized by the DOJ as an instruction to implement a pricing change that was the product of competitor coordination, particularly if the DOJ can establish that the timing of Holt's instruction correlates with a documented VaultChat exchange between Holt and a counterpart at Ridgecrest or Pinnacle. While Eriksen credibly testified that he understood the instruction as a routine business decision and had no reason to suspect otherwise, the DOJ may view this email as evidence that Holt used Eriksen as an unwitting instrument to effectuate a coordinated pricing strategy.
Current Assessment. At present, Eriksen's exposure appears limited. He is more properly characterized as a fact witness than as a participant in or accessory to the alleged conspiracy. The DOJ's questioning was probing but not accusatory. Significantly, the DOJ did not reclassify Eriksen as a subject or target during the session, nor did the DOJ's questions suggest that it had evidence that would support such a reclassification.
C. Consistency with Prior Statements
Eriksen's proffer testimony was consistent in all material respects with his prior interview by C&H, conducted on July 22, 2022, as part of C&H's internal investigation. In that interview, Eriksen denied knowledge of any pricing agreements or coordination between TMC and its competitors, denied participating in or attending any private meetings with competitor personnel at NASMC conferences, and denied being aware of Holt's external communications with Ridgecrest or Pinnacle personnel.
No material inconsistencies were observed between Eriksen's proffer statements and his prior interview statements. This consistency is important for two reasons: first, it reinforces the credibility of Eriksen's account; and second, it reduces the risk that the DOJ could use the proffer statements for impeachment purposes in the event Eriksen is called to testify in future proceedings, because there is no material divergence between his proffer account and the account he would be expected to provide if called as a witness.
Eriksen appeared credible and composed throughout the session. He was responsive to questions, provided appropriately detailed answers, and did not appear evasive or reluctant to engage. Importantly, his recollections were appropriately qualified when he was uncertain — for example, his acknowledgment that he could not independently recall the specific "Market Trends Working Group" session at the Scottsdale conference, while also acknowledging that his badge may have been scanned for that session. This type of qualified recall is consistent with honest testimony by a witness who is recounting events from approximately four to five years earlier, and it is more credible than an absolute denial that would be difficult to sustain if contradicted by documentary evidence.
D. Impact on TMC's Cooperation Posture
The Eriksen proffer session supports TMC's cooperation narrative with the DOJ in several respects.
First, the fact that TMC made a current employee available for a voluntary proffer with the DOJ is itself a significant indicator of good-faith cooperation. Companies that are obstructing or limiting the government's investigation do not voluntarily proffer their employees. The Eriksen proffer demonstrates that TMC is facilitating the DOJ's access to fact witnesses and is not seeking to impede the government's ability to develop the factual record.
Second, Eriksen testified forthrightly and did not invoke the Fifth Amendment or refuse to answer questions. His testimony was responsive and substantive. This contrasts favorably with the posture of Gavin Holt, who asserted his Fifth Amendment privilege before the grand jury and has refused to cooperate with the DOJ's investigation.
Third, Eriksen's testimony regarding the deficiencies in TMC's antitrust compliance program — specifically, that no antitrust compliance training occurred after approximately 2018 and that no trade-association monitoring or pre- or post-conference compliance procedures existed — corroborates C&H's internal investigation finding that TMC's antitrust compliance program, originally adopted in 2014, was inadequate. This finding has been a key element of the compliance-remediation narrative that C&H is presenting to the DOJ in connection with the NPA negotiations. Eriksen's first-person testimony about the absence of meaningful compliance infrastructure provides a factual foundation for TMC's acknowledgment of past deficiencies and its commitment to implementing a substantially enhanced compliance program going forward.
Fourth, and importantly, Eriksen's testimony does not introduce any new adverse facts for TMC. The proffer session did not produce any revelations or admissions that would damage TMC's position in the cooperation negotiations or expose the company to additional liability. Eriksen's account is consistent with C&H's prior submissions to the DOJ, and the session did not surface any previously unknown conduct or communications.
E. DOJ's View of the Holt Carve-Out
The DOJ's questioning during the Eriksen proffer session reinforces the assessment that the Division is continuing to build a case against Gavin Holt individually. The DOJ's focus on Holt's instructions to Eriksen — particularly the June 2019 email (TMC-0215847) — and on Holt's use of the VaultChat encrypted messaging application suggests that the DOJ views Holt as a central figure in the alleged conspiracy and is developing evidence to support an individual prosecution of Holt, independent of or in parallel with the resolution of TMC's corporate exposure.
This is consistent with the DOJ's known reservation of rights regarding Holt. As previously documented in C&H's matter files, Holt asserted his Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022, and has refused to cooperate with the DOJ's investigation. Holt is separately represented by Patrick Dunleavy of Briarcliff Law Group PLLC, and C&H has had no direct communication with Holt or his counsel regarding the substance of the investigation since Holt's departure from TMC.
Eriksen's testimony that Holt's pricing instructions appeared routine and did not disclose any external coordination with competitors may carry a dual significance:
•  Helpful to TMC: Eriksen's testimony supports TMC's position that the alleged conspiracy was conducted covertly by Holt without the knowledge of other TMC employees, including Eriksen (who reported directly to Holt). This supports the narrative that TMC as an institution was unaware of Holt's conduct and that the company's exposure arises from Holt's individual actions rather than from a corporate culture that encouraged or condoned anticompetitive behavior.
•  Potentially Useful to DOJ Against Holt: Eriksen's testimony that Holt did not disclose the reasons behind certain pricing decisions and did not share his external communications with his subordinates could be used by the DOJ as evidence that Holt acted deliberately and covertly — that he concealed the conspiracy even from his own direct reports. This supports the inference that Holt understood his conduct to be unlawful and took steps to hide it, which goes to the element of willfulness in a criminal antitrust case.
This dual significance is worth noting but does not, in C&H's assessment, present a conflict between TMC's interests and Eriksen's interests at this time.
VII. Recommended Next Steps
Based on the foregoing assessment of the proffer session, C&H recommends the following next steps:
1. Request Copy of Conference Document. C&H should formally request from the DOJ (specifically, Denise Kowalski and Marcus Reeves) a copy of the NASMC Scottsdale, Arizona conference check-in or badge record that was shown to Eriksen during the proffer session. A copy of this document was not provided to C&H at the session, and C&H was not given an opportunity to examine the document in detail beyond the brief review that Eriksen conducted during the questioning. Obtaining a copy of this document is important for several reasons: (a) to assess its evidentiary significance, including whether it establishes actual attendance at the sub-committee session or merely badge-scanning at the door; (b) to cross-reference the document with TMC's own records of conference attendance, expense reports, and travel records for the Scottsdale conference; and (c) to determine whether the "Market Trends Working Group" sub-committee session was part of the official NASMC conference program or was a separately organized meeting. C&H should submit this request in writing to Kowalski within the next five business days.
2. Review TMC-0215847 in Context. C&H should re-examine the Holt-to-Eriksen email (Bates-stamped TMC-0215847) and the surrounding communications in TMC's document production. Specifically, C&H should assess whether the timing of the "revised approach" instruction in approximately June 2019 correlates with any documented VaultChat exchange between Holt and Edgerton (Ridgecrest) or Holt and Tsang (Pinnacle) during the same time period. This analysis should cross-reference the VaultChat message analysis memorandum prepared by C&H and dated September 15, 2022, which documented at least thirty-seven (37) discrete exchanges between Holt and competitor counterparts during the period from March 2017 through July 2021. If a correlation exists — i.e., if Holt communicated with a competitor counterpart about feldspar pricing in the Western Region in close temporal proximity to his instruction to Eriksen — this would be significant both for understanding the DOJ's likely theory and for assessing whether additional steps need to be taken with respect to Eriksen's position.
3. No Upjohn Warning Concerns at Present. Eriksen appeared to understand the Upjohn warning and C&H's role as counsel to TMC. He did not exhibit any confusion about the nature of the representation, and he did not make statements that suggested a divergence between his interests and TMC's interests. At present, there are no indications that Eriksen requires separate personal counsel. However, this situation should be monitored on an ongoing basis. If the DOJ's investigation develops in a manner that increases Eriksen's personal exposure — for example, if the DOJ reclassifies Eriksen as a subject or target, or if evidence surfaces suggesting that Eriksen had greater knowledge of the alleged conspiracy than he has disclosed — C&H should promptly revisit the question of whether Eriksen should be advised to retain separate counsel.
4. Supplement Cooperation Proffer. The Eriksen proffer session should be referenced in C&H's supplemental cooperation submission to the DOJ, which is currently in preparation and targeted for submission on or about May 1, 2023. The supplemental submission should note that TMC made Eriksen available for a voluntary proffer, that Eriksen testified forthrightly and without invoking the Fifth Amendment, and that Eriksen's testimony was consistent with TMC's prior representations to the DOJ. This supports TMC's position that it is cooperating fully with the investigation and facilitating the government's access to relevant witnesses and information.
5. Brief TMC General Counsel. C&H should provide an oral briefing to Priya Anand, TMC's General Counsel, on the substance and outcome of the proffer session. The briefing should communicate that Eriksen performed well, that his testimony was consistent with prior representations, and that no adverse developments arose during the session. The briefing should also note the Scottsdale conference document and the potential significance of the June 2019 email, so that Ms. Anand is aware of these issues. Consistent with C&H's standard practice, this briefing should be conducted orally, and any written summary provided to Ms. Anand should be clearly marked as privileged attorney work product.
6. Coordinate with Compliance Remediation Effort. Eriksen's testimony about the absence of antitrust compliance training since approximately 2018 and the lack of any trade-association monitoring or pre- and post-conference compliance procedures underscores the urgency and necessity of the enhanced compliance program that C&H is recommending to TMC. The design and implementation of this enhanced program, which C&H anticipates will be undertaken with the assistance of Meridian Compliance Partners LLC (an expected engagement in Q3 2023), should include, at a minimum: (a) mandatory annual antitrust compliance training for all employees in sales, pricing, and business development roles; (b) mandatory pre-conference compliance briefings and post-conference certifications for all TMC personnel attending industry trade association events; (c) a formal antitrust compliance policy that is updated and re-circulated annually; and (d) a monitoring and auditing mechanism to verify compliance with these requirements. Eriksen's testimony provides a concrete, fact-specific illustration of the compliance deficiencies that the enhanced program is designed to address, and it should be referenced in the compliance-remediation materials being prepared for submission to the DOJ.
VIII. Privilege and Confidentiality Notice
This memorandum constitutes privileged attorney work product prepared in anticipation of litigation and in connection with the provision of legal advice to Torchlight Mining Corp. It is protected by the attorney-client privilege and the work-product doctrine. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel at Calderwood & Harkness LLP. It should not be disclosed, disseminated, or made available to any person or entity outside Calderwood & Harkness LLP and authorized TMC personnel without the prior written approval of the responsible partner.
Distribution of this memorandum is limited to the following individuals:
•  Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group, Calderwood & Harkness LLP
•  Monica Reyes, Calderwood & Harkness LLP (copy)
•  Priya Anand, General Counsel, Torchlight Mining Corp. (upon her request)
•  Calderwood & Harkness LLP matter file (Matter No. 1039-00001)
No additional copies or distributions should be made without the prior approval of Elaine Forsythe.
Prepared by:
CALDERWOOD & HARKNESS LLP
By: ________
Name: Aaron Liu
Title: Lead Associate, Antitrust & Competition Practice Group
Date: April 25, 2023
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT PRIVILEGED Calderwood & Harkness LLP | 555 California Street, 40th Floor | San Francisco, CA 94104 Matter No. 1039-00001 | GJ-22-0194

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