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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200 Facsimile: (415) 555-7201

MEMORANDUM

MATTER: Torchlight Mining Corp. — DOJ Antitrust Investigation

MATTER NUMBER: 1039-00001

May 18, 2023

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

FROM: Aaron Liu, Lead Associate, Antitrust & Competition Monica Reyes, Working Associate, Antitrust & Competition

RE: Analysis of Second Grand Jury Subpoena No. GJ-22-0194-SD-007 (issued May 15, 2023)

CLASSIFICATION: Attorney-Client Privileged / Work Product Doctrine — Do Not Distribute Outside Counsel Team

This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure under the work-product doctrine. It also contains information subject to the attorney-client privilege. This memorandum is intended solely for use by the attorneys and professionals at Calderwood & Harkness LLP engaged on the above-referenced matter and by authorized in-house legal personnel of Torchlight Mining Corp. Do not copy, distribute, or disclose this memorandum or any portion thereof to any person outside the counsel team without the prior written authorization of Elaine Forsythe.

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I. Executive Summary

On May 15, 2023, Torchlight Mining Corp. ("TMC") received a second grand jury subpoena duces tecum, bearing reference number GJ-22-0194-SD-007, issued by the grand jury sitting in the United States District Court for the Northern District of California, San Francisco Division (Grand Jury No. GJ-22-0194) (the "Second Subpoena"). The Second Subpoena was served on TMC's U.S. subsidiary, Torchlight Mining (U.S.) Inc., a Nevada corporation (entity no. NV20160438721), at its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. Service was effectuated through personal delivery to TMC's registered agent at approximately 2:15 p.m. Pacific Daylight Time on May 15, 2023.

This is the second compulsory process instrument served on TMC in connection with the ongoing grand jury investigation. The first subpoena (GJ-22-0194-SD-003) (the "First Subpoena") was served on February 14, 2022. TMC has substantially complied with the First Subpoena through a series of rolling productions totaling approximately 487,000 documents and approximately 3.2 million pages, produced between April 4, 2022, and December 15, 2022. Each rolling production was accompanied by a privilege log identifying documents withheld on the basis of attorney-client privilege and/or the work-product doctrine.

The Second Subpoena is materially narrower in scope than the First Subpoena, but it focuses with greater specificity on three categories of materials that were not fully encompassed by the First Subpoena's specifications:

(1) Additional granular pricing data and pricing-model documentation, including transactional-level invoicing records, pricing algorithms, cost-plus calculations, margin analyses, and internal pricing strategy materials for the three product categories at issue;

(2) Customer contract files for the three product categories at issue — high-purity feldspar, industrial talc, and rare-earth concentrates — including complete contract files for the top fifty U.S. customers by revenue in each product category, as well as all bid, proposal, and RFP/RFQ documentation; and

(3) Communications and materials related to the North American Specialty Minerals Council ("NASMC") trade-association activities, including calendar entries, text messages, instant messages, and internal TMC communications discussing NASMC events, as well as communications with three specifically identified individuals at competitor firms.

The purpose of this memorandum is to: (a) analyze each of the seven numbered specifications contained in the Second Subpoena; (b) assess the scope of each specification relative to the First Subpoena and our prior productions; (c) identify potentially responsive data sources and custodians; (d) estimate the volume of additional documents to be collected and produced; (e) flag privilege and work-product issues warranting special attention during the review process; and (f) recommend a compliance strategy and timeline that preserves TMC's cooperation posture with the Department of Justice ("DOJ") Antitrust Division.

Our preliminary estimate is that approximately 60,000 to 75,000 additional documents will need to be collected, reviewed, and produced in response to the Second Subpoena. After deduplication against the First Subpoena production universe, we estimate the net new production will comprise approximately 43,000 to 60,000 documents. Based on our experience with the matter and the current capacity of our e-discovery vendor, Redstone Digital Forensics Inc. ("Redstone"), we believe that full compliance by the stated return date of June 30, 2023 — approximately 46 days from the date of issuance — is achievable, provided that data collection commences promptly and the document review is appropriately staffed.

We recommend that TMC comply fully by the June 30, 2023 return date without requesting an extension. Timely compliance will reinforce TMC's cooperation posture, which we consider essential to the favorable resolution of this matter. Should unforeseen collection difficulties arise, we would recommend proposing a rolling production schedule to DOJ, consistent with our approach to the First Subpoena. However, given the narrower scope of the Second Subpoena, we are cautiously optimistic that full compliance on a single production date — or, at most, two rolling productions — will be feasible.

The following sections of this memorandum provide a detailed analysis of the procedural background, each specification of the Second Subpoena, overlap with the First Subpoena, custodian and data source identification, privilege considerations, volume and timeline estimates, coordination with ongoing workstreams, budget projections, and our recommended course of action.

II. Background and Procedural History

A. The Investigation

The DOJ Antitrust Division opened a federal grand jury investigation on or about February 10, 2022, into suspected anticompetitive conduct in the North American specialty-minerals sector. The investigation is being conducted through Grand Jury No. GJ-22-0194, empaneled in the United States District Court for the Northern District of California, San Francisco Division. The investigation focuses on three specific forms of alleged anticompetitive conduct: (1) price-fixing, (2) market allocation, and (3) bid-rigging, each in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.

The products at the center of the investigation are three categories of specialty minerals sold to customers in the United States: (i) high-purity feldspar, used primarily in ceramics, glass, and specialty coatings; (ii) industrial talc, used in paper, paint, plastics, and personal-care products; and (iii) rare-earth concentrates, used in electronics, magnets, catalysts, and defense applications. These three product categories represent a significant portion of the North American specialty-minerals market, which the DOJ has estimated to exceed USD 1.34 billion in total revenue during the alleged conspiracy period.

The alleged conspiracy period spans approximately four years and eight months, from approximately January 2017 through August 2021. During this period, the DOJ alleges that representatives of three competing firms coordinated pricing decisions, allocated customers and geographic territories, and rigged bids on certain large-volume procurement contracts for the three product categories.

The alleged participants in the conspiracy are:

• Torchlight Mining Corp. ("TMC"), principally through the conduct of Gavin Holt, TMC's former Vice President of U.S. Specialty Minerals Sales. Holt served in this role from March 2015 through his termination on September 30, 2021, following the initiation of TMC's internal investigation;

• Ridgecrest Minerals Inc. ("Ridgecrest"), principally through the conduct of Carl Edgerton, Ridgecrest's Vice President of Sales. Edgerton has been with Ridgecrest since approximately 2012 and, to our knowledge, remains employed in that capacity;

• Pinnacle Earth Resources Ltd. ("Pinnacle"), principally through the conduct of Kevin Tsang, Pinnacle's former Senior Vice President of Commercial Operations. Tsang departed Pinnacle in approximately November 2021 under circumstances that are not fully known to us.

In addition, Cascade Chemical Supply Co. ("Cascade") is a cooperating witness entity in the investigation. Cascade entered into a cooperation agreement with the DOJ on or about September 15, 2021. Cascade is represented by Whitfield, Strauss & Tully LLP, with Rebecca Ostrander serving as lead counsel. Cascade's president during the relevant period was Leonard Massey, who is believed to have provided proffer testimony to the DOJ and whose communications are specifically targeted by Category 7 of the Second Subpoena, as discussed in detail below.

The DOJ prosecution team assigned to this investigation consists of:

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

• Marcus Reeves, Senior Trial Attorney, Antitrust Division, San Francisco Field Office (same address);

• Julia Stafford-Hayes, Deputy Assistant Attorney General, Antitrust Division, serving as supervisory DAAG for this matter.

All substantive communications with the DOJ prosecution team have been directed to Ms. Kowalski, with copies to Mr. Reeves, consistent with the protocol established at the outset of the investigation.

B. First Subpoena and Prior Productions

The First Subpoena (GJ-22-0194-SD-003) was served on TMC on February 14, 2022, four days after the grand jury investigation was opened. TMC promptly engaged Calderwood & Harkness LLP on February 18, 2022, and Elaine Forsythe was designated as the Responsible Partner for the matter. Aaron Liu was assigned as Lead Associate at that time.

On February 22, 2022, Calderwood & Harkness submitted a letter to the DOJ requesting an extension of the initial return date on the First Subpoena. The DOJ granted an extension to April 4, 2022, for the first rolling production, with a schedule for additional rolling productions to follow on an agreed-upon timeline.

Calderwood & Harkness retained Redstone Digital Forensics Inc. on March 15, 2022, to serve as the firm's e-discovery vendor for all aspects of the investigation, including forensic data collection, processing, hosting on Redstone's relativity platform, and managed-review support. Redstone's Project Director is Neil Ashworth, and the firm's offices are located at 7925 Jones Branch Drive, Suite 600, McLean, Virginia 22102. Redstone has been an active and capable partner throughout this engagement, and we have been satisfied with their responsiveness and technical capabilities.

A comprehensive data collection protocol was established on March 18, 2022, covering 34 identified custodians within TMC and its U.S. subsidiary. The custodian list was developed through consultation with TMC's General Counsel, Priya Anand, and the leadership of the U.S. Specialty Minerals Division. Custodians included Gavin Holt (whose email archives and device images were preserved at the time of his termination), Sandra Chu (Director, Pricing Analytics), Thomas Eriksen (Regional Sales Manager, Western Region), and a range of other division-level personnel including sales representatives, marketing staff, logistics coordinators, and administrative assistants.

The collection and production effort proceeded as follows:

• April 4, 2022 — First Rolling Production: Approximately 42,000 documents (approximately 280,000 pages), consisting primarily of organizational documents, employee rosters, and initial tranches of pricing communications and competitor-contact records.

• August 1, 2022 — Second Rolling Production through December 15, 2022 — Final Rolling Production: Multiple additional rolling productions were made at approximately three- to four-week intervals, bringing the cumulative total to approximately 487,000 documents and approximately 3.2 million pages. The later productions included email communications, instant messages, calendar entries, trade-association documents, competitive intelligence reports, and internal memoranda.

Each rolling production was accompanied by a privilege log identifying documents withheld on the basis of attorney-client privilege and/or the work-product doctrine. The privilege logs were prepared in accordance with the Privilege Review Protocol established by Calderwood & Harkness on March 10, 2022, and approved by Elaine Forsythe.

The First Subpoena was broad in scope. Its specifications encompassed general business communications among identified custodians; documents relating to pricing of the three product categories; documents reflecting contacts, communications, or meetings with representatives of competing firms; organizational and structural documents for the U.S. Specialty Minerals Division; documents reflecting market share, sales volumes, and revenue data; and documents related to trade associations. The breadth of the First Subpoena necessitated the extensive rolling-production schedule described above. By contrast, the Second Subpoena is more targeted and specific, as discussed in Section III below.

C. Intervening Developments Since First Subpoena Compliance

A number of significant developments have occurred in the investigation since the completion of TMC's First Subpoena compliance on December 15, 2022. These developments provide essential context for interpreting the Second Subpoena's specifications and formulating our compliance strategy.

Target Letter. On May 20, 2022 — approximately three months after service of the First Subpoena and six weeks after the first rolling production — TMC received a formal target letter from the DOJ Antitrust Division, confirming that TMC is a target of the grand jury investigation. The target letter identified TMC as a suspected participant in a conspiracy to fix prices, allocate customers, and rig bids for specialty minerals in violation of Section 1 of the Sherman Act. Receipt of the target letter was communicated to TMC's Board of Directors and to TMC's General Counsel, Priya Anand, on the same day.

Gavin Holt — Personal Counsel and Fifth Amendment Assertion. On June 10, 2022, Gavin Holt retained personal counsel — Patrick Dunleavy of Briarcliff Law Group PLLC — in connection with the investigation. On June 14, 2022, Holt appeared before the grand jury pursuant to a subpoena ad testificandum and, on the advice of Mr. Dunleavy, asserted his Fifth Amendment privilege against self-incrimination and declined to testify. Holt's invocation of the Fifth Amendment was not unexpected, given his central role in the alleged conspiracy.

Retention of Economic Expert. On July 1, 2022, Calderwood & Harkness retained Hargrove Forensic Advisory LLC ("Hargrove"), through its managing principal, Dr. Vanessa Tremblay, to serve as TMC's economic expert for purposes of affected-commerce analysis and potential damages modeling. Hargrove was retained under the direction of counsel and its work product is protected under the Kovel doctrine. Hargrove's preliminary analysis estimates TMC's share of affected commerce at approximately USD 478 million during the conspiracy period, out of an estimated total affected commerce of approximately USD 1.34 billion across all alleged co-conspirators.

Internal Investigation. Calderwood & Harkness conducted a comprehensive internal investigation on behalf of TMC, including the review of approximately 555,000 documents (cumulative, inclusive of documents collected for First Subpoena compliance and additional materials gathered during the internal investigation) and 23 employee interviews. The internal investigation yielded a key finding of at least 37 documented communications between Gavin Holt and Carl Edgerton (Ridgecrest) and/or Kevin Tsang (Pinnacle), including VaultChat messages, in which pricing information and customer allocation matters were discussed during the alleged conspiracy period. The findings of the internal investigation were presented to the TMC Board of Directors on January 20, 2023.

Cooperation Proffer. On February 15, 2023, Calderwood & Harkness submitted a formal cooperation proffer to the DOJ on behalf of TMC. The proffer detailed TMC's understanding of the conduct at issue, identified key documents and communications, and offered to make current and former TMC employees available for voluntary proffer sessions with the government. The cooperation proffer was a significant step in TMC's overall strategy, which is oriented toward achieving cooperation credit in connection with any future plea negotiation or sentencing proceeding.

Witness Proffer Sessions. Two TMC employees have participated in voluntary proffer sessions with the DOJ following the submission of the cooperation proffer:

• Sandra Chu (Director, Pricing Analytics) participated in a voluntary proffer session with DOJ Trial Attorneys Kowalski and Reeves on March 10, 2023. During her session, Chu described receiving pricing-adjustment instructions from Gavin Holt on at least 12 occasions that correlated with competitor price movements. Chu stated that Holt would direct her to adjust TMC's pricing for one or more of the three product categories, typically within 48 hours of Holt's attendance at NASMC conferences or after telephone calls that Chu believed to be with Ridgecrest or Pinnacle personnel.

• Thomas Eriksen (Regional Sales Manager, Western Region) participated in a voluntary proffer session with DOJ on April 22, 2023. Eriksen's proffer focused on customer allocation arrangements in the western United States and his attendance at four NASMC conferences during the conspiracy period, where he witnessed Holt meeting privately with Edgerton and Tsang.

Context for the Second Subpoena. The Second Subpoena arrives approximately five months after our cooperation proffer and following the two witness proffer sessions. This timing is significant. The Second Subpoena's focus on granular transactional pricing data, customer contract files, bid/RFP materials, and NASMC communications is consistent with the DOJ's likely objectives at this stage of the investigation: (a) to obtain more granular data to support affected-commerce calculations and potential restitution figures; (b) to corroborate Cascade's cooperating testimony and the proffer-session information provided by Chu and Eriksen; (c) to develop the bid-rigging prong of the investigation with specific documentary evidence; and (d) to map the NASMC conferences as the venue for alleged in-person coordination with greater specificity. In sum, the Second Subpoena reflects a prosecutorial team that is building toward potential indictment and is seeking the evidentiary foundation for trial-ready proof.

III. Specifications of the Second Subpoena — Detailed Analysis

A. Overview of Document Categories

The Second Subpoena contains seven numbered specifications, designated as Categories 1 through 7 in the subpoena itself. For ease of reference, this memorandum uses the same numerical designations. The seven specifications can be grouped into three broad thematic categories:

(i) Pricing data and pricing-model documentation — Categories 1 through 3. These specifications collectively seek the raw transactional data underlying TMC's pricing for the three product categories, the internal analytical models and strategy documents that drove pricing decisions, and the internal communications among TMC personnel regarding those pricing decisions.

(ii) Customer contract files and bid/RFP materials — Categories 4 and 5. These specifications seek complete contract files for TMC's top U.S. customers in each product category and all documentation related to competitive bids, proposals, and RFP/RFQ submissions.

(iii) NASMC-related communications and materials, and named-individual competitor communications — Categories 6 and 7. These specifications seek all communications and materials related to the NASMC trade association, including internal TMC discussions about NASMC events, and all communications between TMC employees and three specifically identified individuals at competitor firms.

Time Period. The Second Subpoena specifies a time period of January 1, 2015, through December 31, 2022. This is noteworthy in two respects. First, the specified period extends approximately two years prior to the beginning of the alleged conspiracy period (January 2017), which is consistent with the DOJ's typical approach of seeking pre-conspiracy baseline data that can be used to establish pricing patterns and competitive dynamics before the alleged conspiracy commenced. Second, the specified period extends approximately sixteen months after the end of the alleged conspiracy period (August 2021) through the end of 2022, which may reflect the DOJ's interest in post-conspiracy pricing behavior and any evidence of continued coordination or lingering effects of the alleged agreement.

Products. The three product categories remain consistent with the First Subpoena and with the scope of the investigation: high-purity feldspar, industrial talc, and rare-earth concentrates sold to customers in the United States.

We analyze each of the seven categories in detail below.

B. Category 1: Pricing Data — Transactional Records

Specification Text (Paraphrased). Category 1 requests all transactional pricing data for sales of high-purity feldspar, industrial talc, and rare-earth concentrates to U.S. customers during the specified period, including but not limited to invoices, price lists, price sheets, price amendments, discount schedules, and rebate agreements.

Scope Assessment. The First Subpoena contained a general specification seeking "documents relating to pricing" of the three product categories. In response, our First Subpoena production included a substantial volume of pricing-related documents, including summary price lists, internal pricing memoranda, pricing-committee meeting minutes, and communications discussing pricing decisions. However, the First Subpoena production focused primarily on communications and summary-level documents rather than the raw transactional data itself. Category 1 of the Second Subpoena is more specific and granular: it targets individual invoices, transaction-level pricing records, discount schedules, and rebate agreements. While there will be some overlap with the previously produced pricing documents — particularly with respect to price lists and price amendments that were produced in the First Subpoena production — the bulk of the Category 1 responsive material will be new and will consist of transactional-level records that were not specifically demanded or produced in the first round.

Data Sources. The primary data source for Category 1 is TMC's enterprise resource planning ("ERP") system, which is Hollowell & Co.-based. The Hollowell & Co. system contains the complete universe of transactional invoicing data for sales of all products, including the three product categories at issue. In addition, the U.S. Specialty Minerals Division maintains a dedicated pricing database that tracks price lists, price-change histories, and discount structures by customer and product. Accounts receivable records maintained by TMC's finance department will also be responsive, as will any customer-specific invoicing files maintained in the Division's commercial operations.

Given the structured nature of much of this data, we recommend that Redstone work with TMC's IT department to execute database extractions from the Hollowell & Co. system and the pricing database, rather than attempting to collect and produce individual invoice documents on a document-by-document basis. Structured data exports (in CSV or Excel format) can be produced in a format that is more useful to the DOJ's economic analysis team and that is more efficient for TMC to compile. We will, of course, consult with the DOJ prosecution team regarding any preferred production format for structured data, as we did during the First Subpoena production.

Estimated Volume. We estimate that Category 1 will yield approximately 15,000 to 20,000 documents in the form of individual invoices, price lists, price amendments, discount schedules, and rebate agreements, in addition to structured data exports from the ERP system. The structured data exports themselves may be relatively compact in terms of document count but may contain tens of thousands of individual transaction records.

Coordination with Hargrove. The transactional pricing data collected for Category 1 will be directly relevant to Hargrove Forensic Advisory's ongoing affected-commerce analysis. TMC's share of affected commerce during the conspiracy period is currently estimated at approximately USD 478 million, and the detailed transactional data will enable Hargrove to refine this figure with greater precision. We recommend coordinating with Dr. Vanessa Tremblay to ensure that the data extracted from the Hollowell & Co. system and pricing database is formatted in a manner that is usable for both subpoena compliance and economic modeling, thereby avoiding duplicative data-extraction efforts.

C. Category 2: Pricing Models and Internal Pricing Analysis

Specification Text (Paraphrased). Category 2 requests all documents reflecting, analyzing, or discussing pricing models, pricing strategies, pricing algorithms, cost-plus calculations, margin analyses, and competitive pricing analyses for high-purity feldspar, industrial talc, and rare-earth concentrates during the specified period.

Scope Assessment. This category partially overlaps with our First Subpoena production, which included a number of internal pricing memoranda, pricing-committee meeting materials, and competitive intelligence reports that touched upon pricing strategy. However, the Second Subpoena is specifically targeted at analytical models and strategy documents — the spreadsheets, algorithms, and analytical tools used to develop and implement pricing decisions — which were not the primary focus of the First Subpoena collection. The First Subpoena collection emphasized email communications and summary documents; the underlying analytical work product of the Pricing Analytics team was collected to a degree but was not comprehensively captured.

Primary Custodian. The primary custodian for Category 2 is Sandra Chu, Director of Pricing Analytics. Chu is responsible for developing and maintaining TMC's pricing models for the three product categories and for conducting margin analyses and competitive pricing assessments. Chu's email account was included in the original 34-custodian list, and her emails were collected and reviewed during the First Subpoena production. However, Chu's analytical work product — Excel spreadsheets, pricing-model files, Northgate Services Inc. presentations, and local-drive documents — was collected in the first round with an emphasis on communications rather than on the comprehensive capture of analytical files. Category 2 requires a deeper and more targeted collection of Chu's analytical work product, including files stored on her local hard drive, the U.S. Specialty Minerals Division's shared network folders, and the pricing-committee's shared document repository.

Relevance of Chu's Proffer. During her March 10, 2023, proffer session with the DOJ, Chu described receiving pricing-adjustment instructions from Gavin Holt on at least 12 occasions that correlated with competitor price movements in the market for one or more of the three product categories. Chu explained that she would typically implement these adjustments by modifying the relevant pricing model or cost-plus calculation and then distributing updated price sheets to the sales team. The DOJ is almost certainly seeking the underlying analytical documents that reflect these adjustments — the "before" and "after" versions of pricing models, the competitive-pricing analyses that Chu prepared at Holt's direction, and the margin-impact assessments that accompanied price changes. These documents will be critical corroborative evidence for the government's case.

Data Sources. In addition to Chu's local and shared-drive files, responsive documents for Category 2 may be found in the following locations: (a) the U.S. Specialty Minerals Division's shared network folders, which contain archived pricing-committee materials; (b) TMC's Aldermere Systems or intranet platform, where certain pricing presentations and strategy documents may have been uploaded for broader distribution; and (c) the email accounts of other custodians who participated in pricing-committee meetings and may have received analytical attachments from Chu.

Estimated Volume. We estimate that Category 2 will yield approximately 3,000 to 5,000 documents, consisting primarily of spreadsheets, pricing-model files, Northgate Services Inc. presentations, and internal memoranda related to pricing strategy and analysis.

D. Category 3: Communications Regarding Pricing Decisions

Specification Text (Paraphrased). Category 3 requests all internal communications (email, instant messages, and memoranda) among TMC personnel regarding pricing decisions, price changes, or pricing strategy for the three product categories during the specified period, including communications between the U.S. Specialty Minerals Division and TMC executive management.

Scope Assessment. This category has substantial overlap with the First Subpoena's Category 4, which sought documents and communications related to pricing of the three product categories. A significant volume of pricing communications was produced in response to the First Subpoena. However, the Second Subpoena's Category 3 contains an important distinction: it expressly includes communications with executive management — i.e., upward reporting of pricing decisions from the U.S. Specialty Minerals Division to TMC's C-suite executives. During the First Subpoena collection, the custodian list was focused primarily on division-level personnel, and communications that flowed upward to the CFO, the General Counsel, or other senior executives may have been under-collected in the first round.

Data Sources. The primary data sources for Category 3 are the email accounts of the following individuals:

• Gavin Holt (archived email, previously collected) — Holt's email archive was forensically imaged at the time of his termination and was the subject of comprehensive collection during the First Subpoena process. We do not anticipate that additional Holt emails will be discovered, but we should confirm completeness of the prior collection.

• Sandra Chu (Director, Pricing Analytics) — Chu's emails were collected in the first round, but additional keyword searches targeting pricing decisions and upward-reporting communications should be run to ensure completeness.

• Thomas Eriksen (Regional Sales Manager, Western Region) — Eriksen's emails were collected in the first round; same approach as Chu.

• Richard Fong (CFO) — Fong was not included in the original 34-custodian list, as the First Subpoena's focus was on division-level personnel. Category 3's express inclusion of communications with executive management necessitates the collection of Fong's email account for pricing-related communications with the U.S. Specialty Minerals Division.

• Priya Anand (General Counsel) — Similarly, Anand was not a custodian in the first round. To the extent that pricing communications flowed to the General Counsel — whether for legal review, compliance purposes, or general management oversight — her email account will need to be collected and reviewed for responsive materials. This collection raises significant privilege issues, discussed in Section VI below.

In addition to these five custodians, we have identified two additional individuals who may have received or participated in pricing-related communications but who were not included in the original 34-custodian list: (a) the Vice President of Operations, U.S. Specialty Minerals Division, who was involved in cost-input decisions that fed into pricing models; and (b) the Director of Supply Chain, who communicated with the Pricing Analytics team regarding raw-material costs and logistics expenses that affected pricing calculations. We recommend adding these individuals to the custodian list for the Second Subpoena, as discussed in Section V below.

Privilege Issues. Communications involving Priya Anand will require particularly careful privilege review. As General Counsel, Anand's communications with division personnel regarding pricing matters may include a mix of legal advice and business discussion. Under the dominant-purpose test applied in this circuit, a communication is privileged only if its dominant purpose is the seeking or rendering of legal advice. Documents with mixed business and legal content will need to be reviewed on a document-by-document basis, and close calls should be escalated to Elaine Forsythe for final determination. In addition, any communications that reflect internal investigation activities or attorney strategy discussions post-dating TMC's engagement of Calderwood & Harkness (February 18, 2022) are protected work product and should be withheld and logged accordingly.

Estimated Volume. We estimate that Category 3 will yield approximately 8,000 to 12,000 documents prior to deduplication against the First Subpoena production. After deduplication, we expect that a significant portion of these documents — perhaps 30 to 40 percent — will have been previously produced, yielding approximately 5,000 to 8,000 net new documents.

E. Category 4: Customer Contract Files

Specification Text (Paraphrased). Category 4 requests complete contract files — including master supply agreements, amendments, purchase orders, and related correspondence — for each of TMC's top 50 U.S. customers (ranked by revenue) for each of the three product categories during the specified period.

Scope Assessment. This is a new category that was not specifically demanded in the First Subpoena. While the First Subpoena's broad specifications may have captured some customer-related documents incidentally — for example, email communications between TMC sales personnel and customers that were collected from custodian email accounts — the complete contract files themselves were not targeted or systematically collected. Category 4 represents a significant new collection effort.

Identification of Top 50 Customers. Compliance with Category 4 requires, as a threshold matter, the identification of the top 50 U.S. customers by revenue for each of the three product categories during the January 2015 through December 2022 period. This will require coordination with TMC's finance team, led by Richard Fong (CFO), and with the U.S. Specialty Minerals Division's commercial operations staff. We anticipate that there will be some overlap among the customer lists for the three product categories — some customers may purchase multiple specialty minerals from TMC — such that the total number of unique customer relationships across the three lists may be approximately 80 to 120, rather than a full 150 (50 per product category). We will work with TMC's finance team to generate revenue-ranked customer lists and to identify the degree of overlap.

Data Sources. The primary data source for Category 4 is TMC's contract management system, which is the central repository for executed agreements, amendments, and related contractual documents. However, our experience with the First Subpoena production suggests that the contract management system may not contain the complete universe of contract-related materials. Purchase orders, customer correspondence, and informal amendments may be found in the following additional locations:

• Email accounts of sales personnel, customer account managers, and contract administrators within the U.S. Specialty Minerals Division;

• Physical files maintained at the Reno office, including hard-copy contract files, original executed agreements, and bid packages that may not have been digitized;

• Shared network folders within the U.S. Specialty Minerals Division's commercial operations function.

We recommend that Redstone coordinate with TMC's IT department and the Division's contract administrators to ensure comprehensive collection from all relevant repositories.

Estimated Volume. We estimate that Category 4 will yield approximately 15,000 to 20,000 documents, consisting of master supply agreements, amendments, purchase orders, and related customer correspondence for the identified customer relationships over the approximately eight-year period specified in the Second Subpoena.

Relevance to Investigation. The DOJ's interest in complete customer contract files is likely twofold. First, the contract files will enable the DOJ to identify customer allocation patterns — i.e., to compare TMC's customer portfolio against Ridgecrest's and Pinnacle's customer portfolios, looking for evidence of geographic or customer segmentation that is consistent with an allocation agreement. Second, the contract files — particularly the terms, pricing, and timing of contract renewals and amendments — will provide evidence relevant to the price-fixing prong of the investigation, enabling the DOJ to track how contracted prices moved in relation to the alleged conspiracy.

F. Category 5: Bid and RFP Files

Specification Text (Paraphrased). Category 5 requests all documents related to bids, proposals, requests for proposal ("RFPs"), requests for quotation ("RFQs"), and tender submissions for the three product categories to U.S. customers during the specified period.

Scope Assessment. Like Category 4, this is a new category that targets a specific aspect of the investigation that was not specifically addressed in the First Subpoena. The DOJ's inclusion of a dedicated bid/RFP category reflects the bid-rigging prong of the alleged conspiracy, which is one of the three forms of anticompetitive conduct under investigation. The First Subpoena's general specifications for business communications and pricing documents would have captured some bid-related materials incidentally, but a systematic collection of bid and RFP files was not undertaken during the first round.

Data Sources. Responsive materials for Category 5 are likely to be found in the following locations:

• The U.S. Specialty Minerals Division's sales team files, including individual custodian files of sales representatives and regional sales managers;

• Bid-tracking databases maintained by the Division's commercial operations team, which record the status and terms of bids and proposals;

• Thomas Eriksen's files — as Western Region Sales Manager, Eriksen was directly involved in preparing and submitting bids for major procurement contracts in the western United States, and his files are expected to contain a significant volume of bid-related materials;

• The archived files of Gavin Holt, who, as VP of U.S. Specialty Minerals Sales, had oversight of all major bids and proposals and may have maintained files reflecting bid strategy and competitor intelligence.

Bid-Rigging Allegations. As noted above, the DOJ alleges bid-rigging as one of the three forms of anticompetitive conduct at issue. The bid-rigging allegations are of particular concern because, in our experience, bid-rigging evidence tends to be highly probative and easily understood by juries. If the DOJ can establish that TMC and its co-conspirators coordinated the submission or withdrawal of bids on specific procurement opportunities, this evidence could be devastating at trial. Our internal investigation identified several instances in which Holt's communications with Edgerton and/or Tsang preceded TMC's decisions not to bid on certain customer RFPs, but the documentary record on this point was not fully developed during the First Subpoena production. Category 5 appears designed to fill that gap.

Estimated Volume. We estimate that Category 5 will yield approximately 5,000 to 8,000 documents, consisting of bid packages, proposal documents, RFP/RFQ responses, internal bid-strategy memoranda, and related correspondence.

G. Category 6: NASMC Communications and Materials

Specification Text (Paraphrased). Category 6 requests all communications (email, text messages, instant messages, and calendar entries) to, from, or referencing the North American Specialty Minerals Council ("NASMC"), its officers, staff, events, meetings, or conferences; all materials distributed at or in connection with NASMC events; and all internal TMC communications discussing NASMC events.

Scope Assessment. The First Subpoena included a general specification for documents related to trade associations, and we produced a substantial number of NASMC-related documents in response. However, Category 6 of the Second Subpoena is significantly more targeted and expansive than the First Subpoena's trade-association specification. Specifically, Category 6 expressly requests:

• Calendar entries related to NASMC events — calendar data was not a primary focus of the First Subpoena collection;

• Text messages to, from, or referencing NASMC — text-message collection from mobile devices was undertaken for certain custodians during the first round (particularly Gavin Holt), but was not comprehensive across all NASMC attendees;

• Internal TMC communications discussing NASMC events — this formulation extends beyond direct communications with NASMC to include "after-action" discussions among TMC personnel following conferences, which are of particular prosecutorial interest as they may reflect what TMC personnel learned or agreed to during NASMC events.

Key NASMC Conference Locations. During the alleged conspiracy period, NASMC held quarterly conferences at various locations across the United States. The key conference locations during the conspiracy period include Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. These conferences typically featured industry panels, networking events, and social functions that provided opportunities for informal interaction among representatives of competing firms.

Key Custodians. The primary custodians for Category 6 are:

• Gavin Holt — Holt attended multiple NASMC conferences during the conspiracy period and is alleged to have used these conferences as a primary venue for in-person coordination with Edgerton and Tsang. Holt's email archives and device images were previously collected, but we should confirm that all NASMC-related calendar entries and text messages were captured.

• Thomas Eriksen — Eriksen attended four NASMC conferences during the conspiracy period and, during his April 22, 2023 proffer session, described witnessing Holt meeting privately with Edgerton and Tsang at these events. Eriksen's email was collected in the first round, but we should collect his mobile-device data (text messages and calendar entries) for NASMC-related communications.

• Other U.S. Specialty Minerals Division personnel who may have attended NASMC conferences, including junior sales representatives and marketing staff who may have accompanied Holt or Eriksen to conferences.

Data Sources. In addition to the custodial email and mobile-device data described above, responsive materials for Category 6 may be found in the following non-custodial sources:

• TMC's NASMC membership and event files, including conference registrations, attendee lists, agendas, and presentation materials distributed at conferences;

• The U.S. Specialty Minerals Division's shared network folders, which may contain archived NASMC materials, post-conference reports, and related internal memoranda;

• TMC's calendar system (Hollowell Systems), which can be searched for NASMC-related entries across all identified custodians.

Internal Investigation Finding. Calderwood & Harkness's Trade Association Meeting Analysis, completed on October 10, 2022, identified NASMC conferences as a key venue for the alleged coordination and correlated TMC attendance records with the timing of pricing adjustments and customer-allocation decisions. This analysis identified specific conference dates and locations where Holt's attendance coincided with documented communications with Edgerton and/or Tsang. The findings of this analysis will guide the targeted collection of NASMC-related materials for Category 6, enabling us to prioritize the conferences and time periods that are most likely to yield responsive and probative documents.

Estimated Volume. We estimate that Category 6 will yield approximately 5,000 to 7,000 documents, including email communications, text messages, calendar entries, conference materials, and internal post-conference memoranda.

H. Category 7: Communications with Identified Individuals at Competitor Firms

Specification Text (Paraphrased). Category 7 requests all communications between any TMC employee and the following three named individuals: (1) Carl Edgerton (Vice President of Sales, Ridgecrest Minerals Inc.); (2) Kevin Tsang (former Senior Vice President, Commercial Operations, Pinnacle Earth Resources Ltd.); or (3) Leonard Massey (President, Cascade Chemical Supply Co.), by any medium, including but not limited to email, telephone records, text messages, VaultChat messages, and other encrypted or ephemeral messaging platforms.

Scope Assessment. The First Subpoena contained a general specification for documents reflecting contacts, communications, or meetings with representatives of competing firms. In response, we collected and produced a substantial volume of competitor-contact documents, including the at least 37 documented VaultChat exchanges between Holt and Edgerton and/or Tsang that were identified during the internal investigation. Category 7 of the Second Subpoena narrows the prior specification to three named individuals, which suggests that the DOJ has identified these three persons as the principal points of contact for the alleged conspiracy and is seeking to ensure that it has the complete universe of communications involving them.

Despite the substantial overlap with the First Subpoena production, Category 7 may require the following additional collection efforts:

(a) Confirmation of completeness of VaultChat collection. VaultChat is an encrypted messaging platform that was used by Holt to communicate with Edgerton and Tsang. VaultChat messages were collected from Holt's devices during the first round, but we should confirm with Redstone that the collection was comprehensive and that no additional VaultChat data exists on archived devices or backup systems.

(b) Telephone records (call logs). Category 7 expressly requests telephone records, which were not a primary focus of the First Subpoena collection. We will need to obtain call logs from TMC's telecommunications provider for the identified custodians during the specified period, filtered for calls to or from telephone numbers associated with Edgerton, Tsang, and Massey.

(c) Text messages on personal devices. If any TMC employees used personal mobile devices to communicate with the three named individuals, those text messages would be responsive. We should issue targeted preservation and collection requests to relevant custodians regarding their personal devices.

(d) Collection from additional TMC employees beyond Holt. While Holt is the primary custodian for competitor communications, it is possible that other TMC employees — particularly Thomas Eriksen, who attended NASMC conferences with Holt — may have communicated with Edgerton, Tsang, or Massey. We should run targeted searches across all custodian email accounts using the names and known email addresses of the three named individuals.

Note Regarding Cascade and Leonard Massey. The inclusion of Leonard Massey (Cascade's president) as a named individual in Category 7 is noteworthy. Cascade is the cooperating witness entity in the investigation, and the DOJ's request for TMC's communications with Massey suggests that the government wishes to cross-reference Cascade's production — which would include Massey's communications with TMC personnel — against TMC's own production to test consistency and completeness. This is a standard prosecutorial technique in cooperation-agreement investigations.

Privilege Issues. Communications involving Leonard Massey that post-date Cascade's entry into the cooperation agreement (approximately September 15, 2021) should be flagged during the review process. While we are not aware of any direct TMC-Cascade communications following the cooperation agreement, any such communications could implicate settlement-related discussions, proffer-related exchanges, or other legally significant matters. Additionally, if any TMC personnel communicated with Massey at the direction of Calderwood & Harkness or TMC's General Counsel as part of the internal investigation, those communications may be protected by the attorney-client privilege or the work-product doctrine.

Estimated Volume. We estimate that Category 7 will yield approximately 2,000 to 3,000 documents prior to deduplication. After deduplication against the First Subpoena production, the net new document count is likely to be modest, consisting primarily of telephone records, any newly discovered text messages, and communications involving TMC employees other than Holt.

IV. Overlap Analysis: First Subpoena vs. Second Subpoena

A critical task in formulating our compliance strategy is to identify and quantify the overlap between the First Subpoena productions (approximately 487,000 documents) and the Second Subpoena specifications. An efficient production strategy requires that we avoid re-producing documents that have already been delivered to the DOJ, while ensuring that all newly responsive documents are captured and produced.

Deduplication Methodology. We recommend that Redstone conduct a comprehensive deduplication analysis against the First Subpoena production universe. The deduplication will be performed using MD5 hash values (which provide a unique digital fingerprint for each document) and metadata matching (comparing key metadata fields such as date, author, recipients, and file name). This dual-method approach will identify exact duplicates as well as near-duplicates that may differ only in formatting or minor metadata variations.

Categories with Significant Overlap. We anticipate that the following categories will have the most significant overlap with the First Subpoena productions:

• Category 3 (Communications regarding pricing decisions): The First Subpoena's Category 4 sought pricing-related communications from the same set of core custodians (Holt, Chu, Eriksen). We estimate that 30 to 40 percent of the documents collected for Category 3 will have been previously produced. The net new documents will consist primarily of (a) communications involving the newly added custodians (Fong, Anand, VP of Operations, Director of Supply Chain) and (b) communications that were not captured in the first round due to the more targeted keyword searches used at that time.

• Category 7 (Named-individual competitor communications): The First Subpoena's general competitor-communication specification captured the majority of Holt's communications with Edgerton, Tsang, and Massey. We estimate that 40 to 50 percent of the documents collected for Category 7 will have been previously produced. Net new documents will consist primarily of telephone records, any additional text messages, and communications from TMC employees other than Holt.

Categories with Minimal Overlap. The following categories are largely or entirely new collections with minimal overlap with the First Subpoena productions:

• Category 4 (Customer contract files): Complete contract files were not specifically demanded in the First Subpoena, and the contract management system was not a primary data source in the first round. While some contract-related documents may have been captured incidentally in custodian email collections, the overlap is expected to be minimal — likely less than 5 percent.

• Category 5 (Bid and RFP files): Bid and proposal files were similarly not specifically targeted in the First Subpoena. Overlap is expected to be minimal.

• Category 1 (Transactional pricing data): The raw transactional data (individual invoices, structured data exports) is largely new and was not produced in the first round.

Production Approach. We recommend the following approach to manage the overlap:

1. For documents that were previously produced in the First Subpoena production, we will prepare a Bates-number concordance identifying the previously produced documents by their original Bates numbers and cross-referencing them to the relevant Second Subpoena categories. This concordance will be provided to the DOJ as part of the Second Subpoena production, enabling the government to locate the previously produced documents in its existing document database without requiring re-production.

2. For net new documents — i.e., documents that are responsive to the Second Subpoena but were not produced in the first round — we will assign new Bates numbers in a new numbering series (to be designated in consultation with Redstone) and produce them in accordance with the production format previously agreed upon with the DOJ.

3. We will coordinate with Redstone to update the production-tracking database to reflect both the First and Second Subpoena productions, ensuring a comprehensive and unified record of all documents produced to the DOJ throughout the investigation.

We will coordinate directly with Neil Ashworth at Redstone regarding the deduplication methodology, production-tracking database updates, and Bates-numbering conventions.

V. Custodian and Data Source Identification

A. Priority Custodians for Second Subpoena

Based on our analysis of the seven specifications, we have identified the following individuals as priority custodians for the Second Subpoena collection:

1. Sandra Chu — Director, Pricing Analytics (Categories 1, 2, 3)

Chu is the most important custodian for the pricing-related categories. While her email account was included in the original 34-custodian list and her emails were collected during the first round, the Second Subpoena requires a deeper collection of her analytical work product — spreadsheets, pricing-model files, Northgate Services Inc. presentations, and shared-drive documents — that were not comprehensively captured in the prior collection. Redstone should perform a supplemental forensic collection from Chu's local workstation, her shared-drive folders on the U.S. Specialty Minerals Division's network, and any cloud-storage accounts (Cobalt Ridge Systems, Aldermere Systems) where she may have stored analytical files. In addition, Redstone should run updated keyword searches against Chu's email account to capture any communications related to pricing decisions and upward reporting that may have been missed in the first round.

2. Thomas Eriksen — Regional Sales Manager, Western Region (Categories 5, 6, 7)

Eriksen is a key custodian for the bid/RFP, NASMC, and competitor-communication categories. His email was collected in the first round, but the Second Subpoena's focus on bid files, NASMC materials, and text messages requires supplemental collection from his mobile device (company-issued or personal, as applicable) for text messages, calendar entries, and any messaging-app data. Eriksen's local workstation and shared-drive folders should also be collected for bid-related files and NASMC materials that may not have been captured through email collection alone.

3. Gavin Holt — Former VP, U.S. Specialty Minerals Sales (Categories 3, 6, 7 — Archived Data Only)

Holt was terminated on September 30, 2021, and his email archives and device images were forensically preserved at that time. Comprehensive collection from Holt's archived data was performed during the first round. For the Second Subpoena, we recommend that Redstone confirm the completeness of the prior Holt collection by: (a) verifying that all VaultChat messages were successfully extracted and preserved; (b) searching for any additional text messages or calendar entries on Holt's archived device images that may not have been included in the first-round production; and (c) obtaining telephone records (call logs) for Holt's company-issued and personal mobile phones from TMC's telecommunications provider and, if necessary, from Holt's personal carrier (which will require coordination with Patrick Dunleavy, Holt's personal counsel).

4. Richard Fong — Chief Financial Officer (Category 1)

Fong was not included in the original 34-custodian list. He is being added as a custodian for the Second Subpoena because (a) Category 1 requires the extraction of transactional pricing data from the Hollowell & Co./ERP system, which is under the purview of TMC's finance function, and Fong will be the primary point of coordination for this data extraction; and (b) Category 3's inclusion of communications with executive management necessitates a review of Fong's email account for pricing-related communications with the U.S. Specialty Minerals Division. We recommend collecting Fong's email account and running targeted keyword searches for communications involving pricing of the three product categories.

5. Priya Anand — General Counsel (Category 3)

Anand was not included in the original 34-custodian list. Like Fong, she is being added because Category 3 expressly targets communications between the U.S. Specialty Minerals Division and TMC executive management regarding pricing decisions. As General Counsel, Anand may have received or participated in pricing-related communications, particularly those involving compliance considerations, contractual issues, or regulatory matters. Collection from Anand's email account will require careful privilege review, as discussed in Section VI below. We recommend collecting Anand's email and running targeted keyword searches, with all potentially responsive documents from Anand flagged for privilege review by Monica Reyes, with escalation to Elaine Forsythe for final determinations on close calls.

6. Additional Custodians Not in Original 34-Custodian List

In addition to Fong and Anand, we have identified the following individuals as new custodians who should be added to the collection list for the Second Subpoena:

• Vice President of Operations, U.S. Specialty Minerals Division: This individual was involved in operational and cost-input decisions that affected pricing and may have participated in pricing-related communications. Relevant to Categories 2 and 3.

• Director of Supply Chain, U.S. Specialty Minerals Division: This individual communicated with the Pricing Analytics team regarding raw-material costs, logistics expenses, and supply-chain factors that fed into pricing models. Relevant to Categories 2 and 3.

• Customer Contract Administrators, U.S. Specialty Minerals Division: One or more contract administrators are responsible for maintaining the Division's customer contract files and may have relevant custodial data. Relevant to Category 4.

• NASMC Liaison/Membership Coordinator: TMC's designated point of contact for NASMC membership and event coordination may have files relating to conference registrations, attendee lists, and event materials. Relevant to Category 6.

We will need to confirm the specific identities of these individuals through coordination with TMC's Gener

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200 Facsimile: (415) 555-7201
MEMORANDUM
MATTER: Torchlight Mining Corp. — DOJ Antitrust Investigation
MATTER NUMBER: 1039-00001
May 18, 2023
TO: Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group
FROM: Aaron Liu, Lead Associate, Antitrust & Competition Monica Reyes, Working Associate, Antitrust & Competition
RE: Analysis of Second Grand Jury Subpoena No. GJ-22-0194-SD-007 (issued May 15, 2023)
CLASSIFICATION: Attorney-Client Privileged / Work Product Doctrine — Do Not Distribute Outside Counsel Team
This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure under the work-product doctrine. It also contains information subject to the attorney-client privilege. This memorandum is intended solely for use by the attorneys and professionals at Calderwood & Harkness LLP engaged on the above-referenced matter and by authorized in-house legal personnel of Torchlight Mining Corp. Do not copy, distribute, or disclose this memorandum or any portion thereof to any person outside the counsel team without the prior written authorization of Elaine Forsythe.
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I. Executive Summary
On May 15, 2023, Torchlight Mining Corp. ("TMC") received a second grand jury subpoena duces tecum, bearing reference number GJ-22-0194-SD-007, issued by the grand jury sitting in the United States District Court for the Northern District of California, San Francisco Division (Grand Jury No. GJ-22-0194) (the "Second Subpoena"). The Second Subpoena was served on TMC's U.S. subsidiary, Torchlight Mining (U.S.) Inc., a Nevada corporation (entity no. NV20160438721), at its principal office located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. Service was effectuated through personal delivery to TMC's registered agent at approximately 2:15 p.m. Pacific Daylight Time on May 15, 2023.
This is the second compulsory process instrument served on TMC in connection with the ongoing grand jury investigation. The first subpoena (GJ-22-0194-SD-003) (the "First Subpoena") was served on February 14, 2022. TMC has substantially complied with the First Subpoena through a series of rolling productions totaling approximately 487,000 documents and approximately 3.2 million pages, produced between April 4, 2022, and December 15, 2022. Each rolling production was accompanied by a privilege log identifying documents withheld on the basis of attorney-client privilege and/or the work-product doctrine.
The Second Subpoena is materially narrower in scope than the First Subpoena, but it focuses with greater specificity on three categories of materials that were not fully encompassed by the First Subpoena's specifications:
(1) Additional granular pricing data and pricing-model documentation, including transactional-level invoicing records, pricing algorithms, cost-plus calculations, margin analyses, and internal pricing strategy materials for the three product categories at issue;
(2) Customer contract files for the three product categories at issue — high-purity feldspar, industrial talc, and rare-earth concentrates — including complete contract files for the top fifty U.S. customers by revenue in each product category, as well as all bid, proposal, and RFP/RFQ documentation; and
(3) Communications and materials related to the North American Specialty Minerals Council ("NASMC") trade-association activities, including calendar entries, text messages, instant messages, and internal TMC communications discussing NASMC events, as well as communications with three specifically identified individuals at competitor firms.
The purpose of this memorandum is to: (a) analyze each of the seven numbered specifications contained in the Second Subpoena; (b) assess the scope of each specification relative to the First Subpoena and our prior productions; (c) identify potentially responsive data sources and custodians; (d) estimate the volume of additional documents to be collected and produced; (e) flag privilege and work-product issues warranting special attention during the review process; and (f) recommend a compliance strategy and timeline that preserves TMC's cooperation posture with the Department of Justice ("DOJ") Antitrust Division.
Our preliminary estimate is that approximately 60,000 to 75,000 additional documents will need to be collected, reviewed, and produced in response to the Second Subpoena. After deduplication against the First Subpoena production universe, we estimate the net new production will comprise approximately 43,000 to 60,000 documents. Based on our experience with the matter and the current capacity of our e-discovery vendor, Redstone Digital Forensics Inc. ("Redstone"), we believe that full compliance by the stated return date of June 30, 2023 — approximately 46 days from the date of issuance — is achievable, provided that data collection commences promptly and the document review is appropriately staffed.
We recommend that TMC comply fully by the June 30, 2023 return date without requesting an extension. Timely compliance will reinforce TMC's cooperation posture, which we consider essential to the favorable resolution of this matter. Should unforeseen collection difficulties arise, we would recommend proposing a rolling production schedule to DOJ, consistent with our approach to the First Subpoena. However, given the narrower scope of the Second Subpoena, we are cautiously optimistic that full compliance on a single production date — or, at most, two rolling productions — will be feasible.
The following sections of this memorandum provide a detailed analysis of the procedural background, each specification of the Second Subpoena, overlap with the First Subpoena, custodian and data source identification, privilege considerations, volume and timeline estimates, coordination with ongoing workstreams, budget projections, and our recommended course of action.
II. Background and Procedural History
A. The Investigation
The DOJ Antitrust Division opened a federal grand jury investigation on or about February 10, 2022, into suspected anticompetitive conduct in the North American specialty-minerals sector. The investigation is being conducted through Grand Jury No. GJ-22-0194, empaneled in the United States District Court for the Northern District of California, San Francisco Division. The investigation focuses on three specific forms of alleged anticompetitive conduct: (1) price-fixing, (2) market allocation, and (3) bid-rigging, each in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1.
The products at the center of the investigation are three categories of specialty minerals sold to customers in the United States: (i) high-purity feldspar, used primarily in ceramics, glass, and specialty coatings; (ii) industrial talc, used in paper, paint, plastics, and personal-care products; and (iii) rare-earth concentrates, used in electronics, magnets, catalysts, and defense applications. These three product categories represent a significant portion of the North American specialty-minerals market, which the DOJ has estimated to exceed USD 1.34 billion in total revenue during the alleged conspiracy period.
The alleged conspiracy period spans approximately four years and eight months, from approximately January 2017 through August 2021. During this period, the DOJ alleges that representatives of three competing firms coordinated pricing decisions, allocated customers and geographic territories, and rigged bids on certain large-volume procurement contracts for the three product categories.
The alleged participants in the conspiracy are:
• Torchlight Mining Corp. ("TMC"), principally through the conduct of Gavin Holt, TMC's former Vice President of U.S. Specialty Minerals Sales. Holt served in this role from March 2015 through his termination on September 30, 2021, following the initiation of TMC's internal investigation;
• Ridgecrest Minerals Inc. ("Ridgecrest"), principally through the conduct of Carl Edgerton, Ridgecrest's Vice President of Sales. Edgerton has been with Ridgecrest since approximately 2012 and, to our knowledge, remains employed in that capacity;
• Pinnacle Earth Resources Ltd. ("Pinnacle"), principally through the conduct of Kevin Tsang, Pinnacle's former Senior Vice President of Commercial Operations. Tsang departed Pinnacle in approximately November 2021 under circumstances that are not fully known to us.
In addition, Cascade Chemical Supply Co. ("Cascade") is a cooperating witness entity in the investigation. Cascade entered into a cooperation agreement with the DOJ on or about September 15, 2021. Cascade is represented by Whitfield, Strauss & Tully LLP, with Rebecca Ostrander serving as lead counsel. Cascade's president during the relevant period was Leonard Massey, who is believed to have provided proffer testimony to the DOJ and whose communications are specifically targeted by Category 7 of the Second Subpoena, as discussed in detail below.
The DOJ prosecution team assigned to this investigation consists of:
• Denise Kowalski, Trial Attorney, Antitrust Division, San Francisco Field Office, 450 Golden Gate Avenue, Room 10-0101, San Francisco, California 94102;
• Marcus Reeves, Senior Trial Attorney, Antitrust Division, San Francisco Field Office (same address);
• Julia Stafford-Hayes, Deputy Assistant Attorney General, Antitrust Division, serving as supervisory DAAG for this matter.
All substantive communications with the DOJ prosecution team have been directed to Ms. Kowalski, with copies to Mr. Reeves, consistent with the protocol established at the outset of the investigation.
B. First Subpoena and Prior Productions
The First Subpoena (GJ-22-0194-SD-003) was served on TMC on February 14, 2022, four days after the grand jury investigation was opened. TMC promptly engaged Calderwood & Harkness LLP on February 18, 2022, and Elaine Forsythe was designated as the Responsible Partner for the matter. Aaron Liu was assigned as Lead Associate at that time.
On February 22, 2022, Calderwood & Harkness submitted a letter to the DOJ requesting an extension of the initial return date on the First Subpoena. The DOJ granted an extension to April 4, 2022, for the first rolling production, with a schedule for additional rolling productions to follow on an agreed-upon timeline.
Calderwood & Harkness retained Redstone Digital Forensics Inc. on March 15, 2022, to serve as the firm's e-discovery vendor for all aspects of the investigation, including forensic data collection, processing, hosting on Redstone's relativity platform, and managed-review support. Redstone's Project Director is Neil Ashworth, and the firm's offices are located at 7925 Jones Branch Drive, Suite 600, McLean, Virginia 22102. Redstone has been an active and capable partner throughout this engagement, and we have been satisfied with their responsiveness and technical capabilities.
A comprehensive data collection protocol was established on March 18, 2022, covering 34 identified custodians within TMC and its U.S. subsidiary. The custodian list was developed through consultation with TMC's General Counsel, Priya Anand, and the leadership of the U.S. Specialty Minerals Division. Custodians included Gavin Holt (whose email archives and device images were preserved at the time of his termination), Sandra Chu (Director, Pricing Analytics), Thomas Eriksen (Regional Sales Manager, Western Region), and a range of other division-level personnel including sales representatives, marketing staff, logistics coordinators, and administrative assistants.
The collection and production effort proceeded as follows:
• April 4, 2022 — First Rolling Production: Approximately 42,000 documents (approximately 280,000 pages), consisting primarily of organizational documents, employee rosters, and initial tranches of pricing communications and competitor-contact records.
• August 1, 2022 — Second Rolling Production through December 15, 2022 — Final Rolling Production: Multiple additional rolling productions were made at approximately three- to four-week intervals, bringing the cumulative total to approximately 487,000 documents and approximately 3.2 million pages. The later productions included email communications, instant messages, calendar entries, trade-association documents, competitive intelligence reports, and internal memoranda.
Each rolling production was accompanied by a privilege log identifying documents withheld on the basis of attorney-client privilege and/or the work-product doctrine. The privilege logs were prepared in accordance with the Privilege Review Protocol established by Calderwood & Harkness on March 10, 2022, and approved by Elaine Forsythe.
The First Subpoena was broad in scope. Its specifications encompassed general business communications among identified custodians; documents relating to pricing of the three product categories; documents reflecting contacts, communications, or meetings with representatives of competing firms; organizational and structural documents for the U.S. Specialty Minerals Division; documents reflecting market share, sales volumes, and revenue data; and documents related to trade associations. The breadth of the First Subpoena necessitated the extensive rolling-production schedule described above. By contrast, the Second Subpoena is more targeted and specific, as discussed in Section III below.
C. Intervening Developments Since First Subpoena Compliance
A number of significant developments have occurred in the investigation since the completion of TMC's First Subpoena compliance on December 15, 2022. These developments provide essential context for interpreting the Second Subpoena's specifications and formulating our compliance strategy.
Target Letter. On May 20, 2022 — approximately three months after service of the First Subpoena and six weeks after the first rolling production — TMC received a formal target letter from the DOJ Antitrust Division, confirming that TMC is a target of the grand jury investigation. The target letter identified TMC as a suspected participant in a conspiracy to fix prices, allocate customers, and rig bids for specialty minerals in violation of Section 1 of the Sherman Act. Receipt of the target letter was communicated to TMC's Board of Directors and to TMC's General Counsel, Priya Anand, on the same day.
Gavin Holt — Personal Counsel and Fifth Amendment Assertion. On June 10, 2022, Gavin Holt retained personal counsel — Patrick Dunleavy of Briarcliff Law Group PLLC — in connection with the investigation. On June 14, 2022, Holt appeared before the grand jury pursuant to a subpoena ad testificandum and, on the advice of Mr. Dunleavy, asserted his Fifth Amendment privilege against self-incrimination and declined to testify. Holt's invocation of the Fifth Amendment was not unexpected, given his central role in the alleged conspiracy.
Retention of Economic Expert. On July 1, 2022, Calderwood & Harkness retained Hargrove Forensic Advisory LLC ("Hargrove"), through its managing principal, Dr. Vanessa Tremblay, to serve as TMC's economic expert for purposes of affected-commerce analysis and potential damages modeling. Hargrove was retained under the direction of counsel and its work product is protected under the Kovel doctrine. Hargrove's preliminary analysis estimates TMC's share of affected commerce at approximately USD 478 million during the conspiracy period, out of an estimated total affected commerce of approximately USD 1.34 billion across all alleged co-conspirators.
Internal Investigation. Calderwood & Harkness conducted a comprehensive internal investigation on behalf of TMC, including the review of approximately 555,000 documents (cumulative, inclusive of documents collected for First Subpoena compliance and additional materials gathered during the internal investigation) and 23 employee interviews. The internal investigation yielded a key finding of at least 37 documented communications between Gavin Holt and Carl Edgerton (Ridgecrest) and/or Kevin Tsang (Pinnacle), including VaultChat messages, in which pricing information and customer allocation matters were discussed during the alleged conspiracy period. The findings of the internal investigation were presented to the TMC Board of Directors on January 20, 2023.
Cooperation Proffer. On February 15, 2023, Calderwood & Harkness submitted a formal cooperation proffer to the DOJ on behalf of TMC. The proffer detailed TMC's understanding of the conduct at issue, identified key documents and communications, and offered to make current and former TMC employees available for voluntary proffer sessions with the government. The cooperation proffer was a significant step in TMC's overall strategy, which is oriented toward achieving cooperation credit in connection with any future plea negotiation or sentencing proceeding.
Witness Proffer Sessions. Two TMC employees have participated in voluntary proffer sessions with the DOJ following the submission of the cooperation proffer:
• Sandra Chu (Director, Pricing Analytics) participated in a voluntary proffer session with DOJ Trial Attorneys Kowalski and Reeves on March 10, 2023. During her session, Chu described receiving pricing-adjustment instructions from Gavin Holt on at least 12 occasions that correlated with competitor price movements. Chu stated that Holt would direct her to adjust TMC's pricing for one or more of the three product categories, typically within 48 hours of Holt's attendance at NASMC conferences or after telephone calls that Chu believed to be with Ridgecrest or Pinnacle personnel.
• Thomas Eriksen (Regional Sales Manager, Western Region) participated in a voluntary proffer session with DOJ on April 22, 2023. Eriksen's proffer focused on customer allocation arrangements in the western United States and his attendance at four NASMC conferences during the conspiracy period, where he witnessed Holt meeting privately with Edgerton and Tsang.
Context for the Second Subpoena. The Second Subpoena arrives approximately five months after our cooperation proffer and following the two witness proffer sessions. This timing is significant. The Second Subpoena's focus on granular transactional pricing data, customer contract files, bid/RFP materials, and NASMC communications is consistent with the DOJ's likely objectives at this stage of the investigation: (a) to obtain more granular data to support affected-commerce calculations and potential restitution figures; (b) to corroborate Cascade's cooperating testimony and the proffer-session information provided by Chu and Eriksen; (c) to develop the bid-rigging prong of the investigation with specific documentary evidence; and (d) to map the NASMC conferences as the venue for alleged in-person coordination with greater specificity. In sum, the Second Subpoena reflects a prosecutorial team that is building toward potential indictment and is seeking the evidentiary foundation for trial-ready proof.
III. Specifications of the Second Subpoena — Detailed Analysis
A. Overview of Document Categories
The Second Subpoena contains seven numbered specifications, designated as Categories 1 through 7 in the subpoena itself. For ease of reference, this memorandum uses the same numerical designations. The seven specifications can be grouped into three broad thematic categories:
(i) Pricing data and pricing-model documentation — Categories 1 through 3. These specifications collectively seek the raw transactional data underlying TMC's pricing for the three product categories, the internal analytical models and strategy documents that drove pricing decisions, and the internal communications among TMC personnel regarding those pricing decisions.
(ii) Customer contract files and bid/RFP materials — Categories 4 and 5. These specifications seek complete contract files for TMC's top U.S. customers in each product category and all documentation related to competitive bids, proposals, and RFP/RFQ submissions.
(iii) NASMC-related communications and materials, and named-individual competitor communications — Categories 6 and 7. These specifications seek all communications and materials related to the NASMC trade association, including internal TMC discussions about NASMC events, and all communications between TMC employees and three specifically identified individuals at competitor firms.
Time Period. The Second Subpoena specifies a time period of January 1, 2015, through December 31, 2022. This is noteworthy in two respects. First, the specified period extends approximately two years prior to the beginning of the alleged conspiracy period (January 2017), which is consistent with the DOJ's typical approach of seeking pre-conspiracy baseline data that can be used to establish pricing patterns and competitive dynamics before the alleged conspiracy commenced. Second, the specified period extends approximately sixteen months after the end of the alleged conspiracy period (August 2021) through the end of 2022, which may reflect the DOJ's interest in post-conspiracy pricing behavior and any evidence of continued coordination or lingering effects of the alleged agreement.
Products. The three product categories remain consistent with the First Subpoena and with the scope of the investigation: high-purity feldspar, industrial talc, and rare-earth concentrates sold to customers in the United States.
We analyze each of the seven categories in detail below.
B. Category 1: Pricing Data — Transactional Records
Specification Text (Paraphrased). Category 1 requests all transactional pricing data for sales of high-purity feldspar, industrial talc, and rare-earth concentrates to U.S. customers during the specified period, including but not limited to invoices, price lists, price sheets, price amendments, discount schedules, and rebate agreements.
Scope Assessment. The First Subpoena contained a general specification seeking "documents relating to pricing" of the three product categories. In response, our First Subpoena production included a substantial volume of pricing-related documents, including summary price lists, internal pricing memoranda, pricing-committee meeting minutes, and communications discussing pricing decisions. However, the First Subpoena production focused primarily on communications and summary-level documents rather than the raw transactional data itself. Category 1 of the Second Subpoena is more specific and granular: it targets individual invoices, transaction-level pricing records, discount schedules, and rebate agreements. While there will be some overlap with the previously produced pricing documents — particularly with respect to price lists and price amendments that were produced in the First Subpoena production — the bulk of the Category 1 responsive material will be new and will consist of transactional-level records that were not specifically demanded or produced in the first round.
Data Sources. The primary data source for Category 1 is TMC's enterprise resource planning ("ERP") system, which is Hollowell & Co.-based. The Hollowell & Co. system contains the complete universe of transactional invoicing data for sales of all products, including the three product categories at issue. In addition, the U.S. Specialty Minerals Division maintains a dedicated pricing database that tracks price lists, price-change histories, and discount structures by customer and product. Accounts receivable records maintained by TMC's finance department will also be responsive, as will any customer-specific invoicing files maintained in the Division's commercial operations.
Given the structured nature of much of this data, we recommend that Redstone work with TMC's IT department to execute database extractions from the Hollowell & Co. system and the pricing database, rather than attempting to collect and produce individual invoice documents on a document-by-document basis. Structured data exports (in CSV or Excel format) can be produced in a format that is more useful to the DOJ's economic analysis team and that is more efficient for TMC to compile. We will, of course, consult with the DOJ prosecution team regarding any preferred production format for structured data, as we did during the First Subpoena production.
Estimated Volume. We estimate that Category 1 will yield approximately 15,000 to 20,000 documents in the form of individual invoices, price lists, price amendments, discount schedules, and rebate agreements, in addition to structured data exports from the ERP system. The structured data exports themselves may be relatively compact in terms of document count but may contain tens of thousands of individual transaction records.
Coordination with Hargrove. The transactional pricing data collected for Category 1 will be directly relevant to Hargrove Forensic Advisory's ongoing affected-commerce analysis. TMC's share of affected commerce during the conspiracy period is currently estimated at approximately USD 478 million, and the detailed transactional data will enable Hargrove to refine this figure with greater precision. We recommend coordinating with Dr. Vanessa Tremblay to ensure that the data extracted from the Hollowell & Co. system and pricing database is formatted in a manner that is usable for both subpoena compliance and economic modeling, thereby avoiding duplicative data-extraction efforts.
C. Category 2: Pricing Models and Internal Pricing Analysis
Specification Text (Paraphrased). Category 2 requests all documents reflecting, analyzing, or discussing pricing models, pricing strategies, pricing algorithms, cost-plus calculations, margin analyses, and competitive pricing analyses for high-purity feldspar, industrial talc, and rare-earth concentrates during the specified period.
Scope Assessment. This category partially overlaps with our First Subpoena production, which included a number of internal pricing memoranda, pricing-committee meeting materials, and competitive intelligence reports that touched upon pricing strategy. However, the Second Subpoena is specifically targeted at analytical models and strategy documents — the spreadsheets, algorithms, and analytical tools used to develop and implement pricing decisions — which were not the primary focus of the First Subpoena collection. The First Subpoena collection emphasized email communications and summary documents; the underlying analytical work product of the Pricing Analytics team was collected to a degree but was not comprehensively captured.
Primary Custodian. The primary custodian for Category 2 is Sandra Chu, Director of Pricing Analytics. Chu is responsible for developing and maintaining TMC's pricing models for the three product categories and for conducting margin analyses and competitive pricing assessments. Chu's email account was included in the original 34-custodian list, and her emails were collected and reviewed during the First Subpoena production. However, Chu's analytical work product — Excel spreadsheets, pricing-model files, Northgate Services Inc. presentations, and local-drive documents — was collected in the first round with an emphasis on communications rather than on the comprehensive capture of analytical files. Category 2 requires a deeper and more targeted collection of Chu's analytical work product, including files stored on her local hard drive, the U.S. Specialty Minerals Division's shared network folders, and the pricing-committee's shared document repository.
Relevance of Chu's Proffer. During her March 10, 2023, proffer session with the DOJ, Chu described receiving pricing-adjustment instructions from Gavin Holt on at least 12 occasions that correlated with competitor price movements in the market for one or more of the three product categories. Chu explained that she would typically implement these adjustments by modifying the relevant pricing model or cost-plus calculation and then distributing updated price sheets to the sales team. The DOJ is almost certainly seeking the underlying analytical documents that reflect these adjustments — the "before" and "after" versions of pricing models, the competitive-pricing analyses that Chu prepared at Holt's direction, and the margin-impact assessments that accompanied price changes. These documents will be critical corroborative evidence for the government's case.
Data Sources. In addition to Chu's local and shared-drive files, responsive documents for Category 2 may be found in the following locations: (a) the U.S. Specialty Minerals Division's shared network folders, which contain archived pricing-committee materials; (b) TMC's Aldermere Systems or intranet platform, where certain pricing presentations and strategy documents may have been uploaded for broader distribution; and (c) the email accounts of other custodians who participated in pricing-committee meetings and may have received analytical attachments from Chu.
Estimated Volume. We estimate that Category 2 will yield approximately 3,000 to 5,000 documents, consisting primarily of spreadsheets, pricing-model files, Northgate Services Inc. presentations, and internal memoranda related to pricing strategy and analysis.
D. Category 3: Communications Regarding Pricing Decisions
Specification Text (Paraphrased). Category 3 requests all internal communications (email, instant messages, and memoranda) among TMC personnel regarding pricing decisions, price changes, or pricing strategy for the three product categories during the specified period, including communications between the U.S. Specialty Minerals Division and TMC executive management.
Scope Assessment. This category has substantial overlap with the First Subpoena's Category 4, which sought documents and communications related to pricing of the three product categories. A significant volume of pricing communications was produced in response to the First Subpoena. However, the Second Subpoena's Category 3 contains an important distinction: it expressly includes communications with executive management — i.e., upward reporting of pricing decisions from the U.S. Specialty Minerals Division to TMC's C-suite executives. During the First Subpoena collection, the custodian list was focused primarily on division-level personnel, and communications that flowed upward to the CFO, the General Counsel, or other senior executives may have been under-collected in the first round.
Data Sources. The primary data sources for Category 3 are the email accounts of the following individuals:
• Gavin Holt (archived email, previously collected) — Holt's email archive was forensically imaged at the time of his termination and was the subject of comprehensive collection during the First Subpoena process. We do not anticipate that additional Holt emails will be discovered, but we should confirm completeness of the prior collection.
• Sandra Chu (Director, Pricing Analytics) — Chu's emails were collected in the first round, but additional keyword searches targeting pricing decisions and upward-reporting communications should be run to ensure completeness.
• Thomas Eriksen (Regional Sales Manager, Western Region) — Eriksen's emails were collected in the first round; same approach as Chu.
• Richard Fong (CFO) — Fong was not included in the original 34-custodian list, as the First Subpoena's focus was on division-level personnel. Category 3's express inclusion of communications with executive management necessitates the collection of Fong's email account for pricing-related communications with the U.S. Specialty Minerals Division.
• Priya Anand (General Counsel) — Similarly, Anand was not a custodian in the first round. To the extent that pricing communications flowed to the General Counsel — whether for legal review, compliance purposes, or general management oversight — her email account will need to be collected and reviewed for responsive materials. This collection raises significant privilege issues, discussed in Section VI below.
In addition to these five custodians, we have identified two additional individuals who may have received or participated in pricing-related communications but who were not included in the original 34-custodian list: (a) the Vice President of Operations, U.S. Specialty Minerals Division, who was involved in cost-input decisions that fed into pricing models; and (b) the Director of Supply Chain, who communicated with the Pricing Analytics team regarding raw-material costs and logistics expenses that affected pricing calculations. We recommend adding these individuals to the custodian list for the Second Subpoena, as discussed in Section V below.
Privilege Issues. Communications involving Priya Anand will require particularly careful privilege review. As General Counsel, Anand's communications with division personnel regarding pricing matters may include a mix of legal advice and business discussion. Under the dominant-purpose test applied in this circuit, a communication is privileged only if its dominant purpose is the seeking or rendering of legal advice. Documents with mixed business and legal content will need to be reviewed on a document-by-document basis, and close calls should be escalated to Elaine Forsythe for final determination. In addition, any communications that reflect internal investigation activities or attorney strategy discussions post-dating TMC's engagement of Calderwood & Harkness (February 18, 2022) are protected work product and should be withheld and logged accordingly.
Estimated Volume. We estimate that Category 3 will yield approximately 8,000 to 12,000 documents prior to deduplication against the First Subpoena production. After deduplication, we expect that a significant portion of these documents — perhaps 30 to 40 percent — will have been previously produced, yielding approximately 5,000 to 8,000 net new documents.
E. Category 4: Customer Contract Files
Specification Text (Paraphrased). Category 4 requests complete contract files — including master supply agreements, amendments, purchase orders, and related correspondence — for each of TMC's top 50 U.S. customers (ranked by revenue) for each of the three product categories during the specified period.
Scope Assessment. This is a new category that was not specifically demanded in the First Subpoena. While the First Subpoena's broad specifications may have captured some customer-related documents incidentally — for example, email communications between TMC sales personnel and customers that were collected from custodian email accounts — the complete contract files themselves were not targeted or systematically collected. Category 4 represents a significant new collection effort.
Identification of Top 50 Customers. Compliance with Category 4 requires, as a threshold matter, the identification of the top 50 U.S. customers by revenue for each of the three product categories during the January 2015 through December 2022 period. This will require coordination with TMC's finance team, led by Richard Fong (CFO), and with the U.S. Specialty Minerals Division's commercial operations staff. We anticipate that there will be some overlap among the customer lists for the three product categories — some customers may purchase multiple specialty minerals from TMC — such that the total number of unique customer relationships across the three lists may be approximately 80 to 120, rather than a full 150 (50 per product category). We will work with TMC's finance team to generate revenue-ranked customer lists and to identify the degree of overlap.
Data Sources. The primary data source for Category 4 is TMC's contract management system, which is the central repository for executed agreements, amendments, and related contractual documents. However, our experience with the First Subpoena production suggests that the contract management system may not contain the complete universe of contract-related materials. Purchase orders, customer correspondence, and informal amendments may be found in the following additional locations:
• Email accounts of sales personnel, customer account managers, and contract administrators within the U.S. Specialty Minerals Division;
• Physical files maintained at the Reno office, including hard-copy contract files, original executed agreements, and bid packages that may not have been digitized;
• Shared network folders within the U.S. Specialty Minerals Division's commercial operations function.
We recommend that Redstone coordinate with TMC's IT department and the Division's contract administrators to ensure comprehensive collection from all relevant repositories.
Estimated Volume. We estimate that Category 4 will yield approximately 15,000 to 20,000 documents, consisting of master supply agreements, amendments, purchase orders, and related customer correspondence for the identified customer relationships over the approximately eight-year period specified in the Second Subpoena.
Relevance to Investigation. The DOJ's interest in complete customer contract files is likely twofold. First, the contract files will enable the DOJ to identify customer allocation patterns — i.e., to compare TMC's customer portfolio against Ridgecrest's and Pinnacle's customer portfolios, looking for evidence of geographic or customer segmentation that is consistent with an allocation agreement. Second, the contract files — particularly the terms, pricing, and timing of contract renewals and amendments — will provide evidence relevant to the price-fixing prong of the investigation, enabling the DOJ to track how contracted prices moved in relation to the alleged conspiracy.
F. Category 5: Bid and RFP Files
Specification Text (Paraphrased). Category 5 requests all documents related to bids, proposals, requests for proposal ("RFPs"), requests for quotation ("RFQs"), and tender submissions for the three product categories to U.S. customers during the specified period.
Scope Assessment. Like Category 4, this is a new category that targets a specific aspect of the investigation that was not specifically addressed in the First Subpoena. The DOJ's inclusion of a dedicated bid/RFP category reflects the bid-rigging prong of the alleged conspiracy, which is one of the three forms of anticompetitive conduct under investigation. The First Subpoena's general specifications for business communications and pricing documents would have captured some bid-related materials incidentally, but a systematic collection of bid and RFP files was not undertaken during the first round.
Data Sources. Responsive materials for Category 5 are likely to be found in the following locations:
• The U.S. Specialty Minerals Division's sales team files, including individual custodian files of sales representatives and regional sales managers;
• Bid-tracking databases maintained by the Division's commercial operations team, which record the status and terms of bids and proposals;
• Thomas Eriksen's files — as Western Region Sales Manager, Eriksen was directly involved in preparing and submitting bids for major procurement contracts in the western United States, and his files are expected to contain a significant volume of bid-related materials;
• The archived files of Gavin Holt, who, as VP of U.S. Specialty Minerals Sales, had oversight of all major bids and proposals and may have maintained files reflecting bid strategy and competitor intelligence.
Bid-Rigging Allegations. As noted above, the DOJ alleges bid-rigging as one of the three forms of anticompetitive conduct at issue. The bid-rigging allegations are of particular concern because, in our experience, bid-rigging evidence tends to be highly probative and easily understood by juries. If the DOJ can establish that TMC and its co-conspirators coordinated the submission or withdrawal of bids on specific procurement opportunities, this evidence could be devastating at trial. Our internal investigation identified several instances in which Holt's communications with Edgerton and/or Tsang preceded TMC's decisions not to bid on certain customer RFPs, but the documentary record on this point was not fully developed during the First Subpoena production. Category 5 appears designed to fill that gap.
Estimated Volume. We estimate that Category 5 will yield approximately 5,000 to 8,000 documents, consisting of bid packages, proposal documents, RFP/RFQ responses, internal bid-strategy memoranda, and related correspondence.
G. Category 6: NASMC Communications and Materials
Specification Text (Paraphrased). Category 6 requests all communications (email, text messages, instant messages, and calendar entries) to, from, or referencing the North American Specialty Minerals Council ("NASMC"), its officers, staff, events, meetings, or conferences; all materials distributed at or in connection with NASMC events; and all internal TMC communications discussing NASMC events.
Scope Assessment. The First Subpoena included a general specification for documents related to trade associations, and we produced a substantial number of NASMC-related documents in response. However, Category 6 of the Second Subpoena is significantly more targeted and expansive than the First Subpoena's trade-association specification. Specifically, Category 6 expressly requests:
• Calendar entries related to NASMC events — calendar data was not a primary focus of the First Subpoena collection;
• Text messages to, from, or referencing NASMC — text-message collection from mobile devices was undertaken for certain custodians during the first round (particularly Gavin Holt), but was not comprehensive across all NASMC attendees;
• Internal TMC communications discussing NASMC events — this formulation extends beyond direct communications with NASMC to include "after-action" discussions among TMC personnel following conferences, which are of particular prosecutorial interest as they may reflect what TMC personnel learned or agreed to during NASMC events.
Key NASMC Conference Locations. During the alleged conspiracy period, NASMC held quarterly conferences at various locations across the United States. The key conference locations during the conspiracy period include Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. These conferences typically featured industry panels, networking events, and social functions that provided opportunities for informal interaction among representatives of competing firms.
Key Custodians. The primary custodians for Category 6 are:
• Gavin Holt — Holt attended multiple NASMC conferences during the conspiracy period and is alleged to have used these conferences as a primary venue for in-person coordination with Edgerton and Tsang. Holt's email archives and device images were previously collected, but we should confirm that all NASMC-related calendar entries and text messages were captured.
• Thomas Eriksen — Eriksen attended four NASMC conferences during the conspiracy period and, during his April 22, 2023 proffer session, described witnessing Holt meeting privately with Edgerton and Tsang at these events. Eriksen's email was collected in the first round, but we should collect his mobile-device data (text messages and calendar entries) for NASMC-related communications.
• Other U.S. Specialty Minerals Division personnel who may have attended NASMC conferences, including junior sales representatives and marketing staff who may have accompanied Holt or Eriksen to conferences.
Data Sources. In addition to the custodial email and mobile-device data described above, responsive materials for Category 6 may be found in the following non-custodial sources:
• TMC's NASMC membership and event files, including conference registrations, attendee lists, agendas, and presentation materials distributed at conferences;
• The U.S. Specialty Minerals Division's shared network folders, which may contain archived NASMC materials, post-conference reports, and related internal memoranda;
• TMC's calendar system (Hollowell Systems), which can be searched for NASMC-related entries across all identified custodians.
Internal Investigation Finding. Calderwood & Harkness's Trade Association Meeting Analysis, completed on October 10, 2022, identified NASMC conferences as a key venue for the alleged coordination and correlated TMC attendance records with the timing of pricing adjustments and customer-allocation decisions. This analysis identified specific conference dates and locations where Holt's attendance coincided with documented communications with Edgerton and/or Tsang. The findings of this analysis will guide the targeted collection of NASMC-related materials for Category 6, enabling us to prioritize the conferences and time periods that are most likely to yield responsive and probative documents.
Estimated Volume. We estimate that Category 6 will yield approximately 5,000 to 7,000 documents, including email communications, text messages, calendar entries, conference materials, and internal post-conference memoranda.
H. Category 7: Communications with Identified Individuals at Competitor Firms
Specification Text (Paraphrased). Category 7 requests all communications between any TMC employee and the following three named individuals: (1) Carl Edgerton (Vice President of Sales, Ridgecrest Minerals Inc.); (2) Kevin Tsang (former Senior Vice President, Commercial Operations, Pinnacle Earth Resources Ltd.); or (3) Leonard Massey (President, Cascade Chemical Supply Co.), by any medium, including but not limited to email, telephone records, text messages, VaultChat messages, and other encrypted or ephemeral messaging platforms.
Scope Assessment. The First Subpoena contained a general specification for documents reflecting contacts, communications, or meetings with representatives of competing firms. In response, we collected and produced a substantial volume of competitor-contact documents, including the at least 37 documented VaultChat exchanges between Holt and Edgerton and/or Tsang that were identified during the internal investigation. Category 7 of the Second Subpoena narrows the prior specification to three named individuals, which suggests that the DOJ has identified these three persons as the principal points of contact for the alleged conspiracy and is seeking to ensure that it has the complete universe of communications involving them.
Despite the substantial overlap with the First Subpoena production, Category 7 may require the following additional collection efforts:
(a) Confirmation of completeness of VaultChat collection. VaultChat is an encrypted messaging platform that was used by Holt to communicate with Edgerton and Tsang. VaultChat messages were collected from Holt's devices during the first round, but we should confirm with Redstone that the collection was comprehensive and that no additional VaultChat data exists on archived devices or backup systems.
(b) Telephone records (call logs). Category 7 expressly requests telephone records, which were not a primary focus of the First Subpoena collection. We will need to obtain call logs from TMC's telecommunications provider for the identified custodians during the specified period, filtered for calls to or from telephone numbers associated with Edgerton, Tsang, and Massey.
(c) Text messages on personal devices. If any TMC employees used personal mobile devices to communicate with the three named individuals, those text messages would be responsive. We should issue targeted preservation and collection requests to relevant custodians regarding their personal devices.
(d) Collection from additional TMC employees beyond Holt. While Holt is the primary custodian for competitor communications, it is possible that other TMC employees — particularly Thomas Eriksen, who attended NASMC conferences with Holt — may have communicated with Edgerton, Tsang, or Massey. We should run targeted searches across all custodian email accounts using the names and known email addresses of the three named individuals.
Note Regarding Cascade and Leonard Massey. The inclusion of Leonard Massey (Cascade's president) as a named individual in Category 7 is noteworthy. Cascade is the cooperating witness entity in the investigation, and the DOJ's request for TMC's communications with Massey suggests that the government wishes to cross-reference Cascade's production — which would include Massey's communications with TMC personnel — against TMC's own production to test consistency and completeness. This is a standard prosecutorial technique in cooperation-agreement investigations.
Privilege Issues. Communications involving Leonard Massey that post-date Cascade's entry into the cooperation agreement (approximately September 15, 2021) should be flagged during the review process. While we are not aware of any direct TMC-Cascade communications following the cooperation agreement, any such communications could implicate settlement-related discussions, proffer-related exchanges, or other legally significant matters. Additionally, if any TMC personnel communicated with Massey at the direction of Calderwood & Harkness or TMC's General Counsel as part of the internal investigation, those communications may be protected by the attorney-client privilege or the work-product doctrine.
Estimated Volume. We estimate that Category 7 will yield approximately 2,000 to 3,000 documents prior to deduplication. After deduplication against the First Subpoena production, the net new document count is likely to be modest, consisting primarily of telephone records, any newly discovered text messages, and communications involving TMC employees other than Holt.
IV. Overlap Analysis: First Subpoena vs. Second Subpoena
A critical task in formulating our compliance strategy is to identify and quantify the overlap between the First Subpoena productions (approximately 487,000 documents) and the Second Subpoena specifications. An efficient production strategy requires that we avoid re-producing documents that have already been delivered to the DOJ, while ensuring that all newly responsive documents are captured and produced.
Deduplication Methodology. We recommend that Redstone conduct a comprehensive deduplication analysis against the First Subpoena production universe. The deduplication will be performed using MD5 hash values (which provide a unique digital fingerprint for each document) and metadata matching (comparing key metadata fields such as date, author, recipients, and file name). This dual-method approach will identify exact duplicates as well as near-duplicates that may differ only in formatting or minor metadata variations.
Categories with Significant Overlap. We anticipate that the following categories will have the most significant overlap with the First Subpoena productions:
• Category 3 (Communications regarding pricing decisions): The First Subpoena's Category 4 sought pricing-related communications from the same set of core custodians (Holt, Chu, Eriksen). We estimate that 30 to 40 percent of the documents collected for Category 3 will have been previously produced. The net new documents will consist primarily of (a) communications involving the newly added custodians (Fong, Anand, VP of Operations, Director of Supply Chain) and (b) communications that were not captured in the first round due to the more targeted keyword searches used at that time.
• Category 7 (Named-individual competitor communications): The First Subpoena's general competitor-communication specification captured the majority of Holt's communications with Edgerton, Tsang, and Massey. We estimate that 40 to 50 percent of the documents collected for Category 7 will have been previously produced. Net new documents will consist primarily of telephone records, any additional text messages, and communications from TMC employees other than Holt.
Categories with Minimal Overlap. The following categories are largely or entirely new collections with minimal overlap with the First Subpoena productions:
• Category 4 (Customer contract files): Complete contract files were not specifically demanded in the First Subpoena, and the contract management system was not a primary data source in the first round. While some contract-related documents may have been captured incidentally in custodian email collections, the overlap is expected to be minimal — likely less than 5 percent.
• Category 5 (Bid and RFP files): Bid and proposal files were similarly not specifically targeted in the First Subpoena. Overlap is expected to be minimal.
• Category 1 (Transactional pricing data): The raw transactional data (individual invoices, structured data exports) is largely new and was not produced in the first round.
Production Approach. We recommend the following approach to manage the overlap:
1. For documents that were previously produced in the First Subpoena production, we will prepare a Bates-number concordance identifying the previously produced documents by their original Bates numbers and cross-referencing them to the relevant Second Subpoena categories. This concordance will be provided to the DOJ as part of the Second Subpoena production, enabling the government to locate the previously produced documents in its existing document database without requiring re-production.
2. For net new documents — i.e., documents that are responsive to the Second Subpoena but were not produced in the first round — we will assign new Bates numbers in a new numbering series (to be designated in consultation with Redstone) and produce them in accordance with the production format previously agreed upon with the DOJ.
3. We will coordinate with Redstone to update the production-tracking database to reflect both the First and Second Subpoena productions, ensuring a comprehensive and unified record of all documents produced to the DOJ throughout the investigation.
We will coordinate directly with Neil Ashworth at Redstone regarding the deduplication methodology, production-tracking database updates, and Bates-numbering conventions.
V. Custodian and Data Source Identification
A. Priority Custodians for Second Subpoena
Based on our analysis of the seven specifications, we have identified the following individuals as priority custodians for the Second Subpoena collection:
1. Sandra Chu — Director, Pricing Analytics (Categories 1, 2, 3)
Chu is the most important custodian for the pricing-related categories. While her email account was included in the original 34-custodian list and her emails were collected during the first round, the Second Subpoena requires a deeper collection of her analytical work product — spreadsheets, pricing-model files, Northgate Services Inc. presentations, and shared-drive documents — that were not comprehensively captured in the prior collection. Redstone should perform a supplemental forensic collection from Chu's local workstation, her shared-drive folders on the U.S. Specialty Minerals Division's network, and any cloud-storage accounts (Cobalt Ridge Systems, Aldermere Systems) where she may have stored analytical files. In addition, Redstone should run updated keyword searches against Chu's email account to capture any communications related to pricing decisions and upward reporting that may have been missed in the first round.
2. Thomas Eriksen — Regional Sales Manager, Western Region (Categories 5, 6, 7)
Eriksen is a key custodian for the bid/RFP, NASMC, and competitor-communication categories. His email was collected in the first round, but the Second Subpoena's focus on bid files, NASMC materials, and text messages requires supplemental collection from his mobile device (company-issued or personal, as applicable) for text messages, calendar entries, and any messaging-app data. Eriksen's local workstation and shared-drive folders should also be collected for bid-related files and NASMC materials that may not have been captured through email collection alone.
3. Gavin Holt — Former VP, U.S. Specialty Minerals Sales (Categories 3, 6, 7 — Archived Data Only)
Holt was terminated on September 30, 2021, and his email archives and device images were forensically preserved at that time. Comprehensive collection from Holt's archived data was performed during the first round. For the Second Subpoena, we recommend that Redstone confirm the completeness of the prior Holt collection by: (a) verifying that all VaultChat messages were successfully extracted and preserved; (b) searching for any additional text messages or calendar entries on Holt's archived device images that may not have been included in the first-round production; and (c) obtaining telephone records (call logs) for Holt's company-issued and personal mobile phones from TMC's telecommunications provider and, if necessary, from Holt's personal carrier (which will require coordination with Patrick Dunleavy, Holt's personal counsel).
4. Richard Fong — Chief Financial Officer (Category 1)
Fong was not included in the original 34-custodian list. He is being added as a custodian for the Second Subpoena because (a) Category 1 requires the extraction of transactional pricing data from the Hollowell & Co./ERP system, which is under the purview of TMC's finance function, and Fong will be the primary point of coordination for this data extraction; and (b) Category 3's inclusion of communications with executive management necessitates a review of Fong's email account for pricing-related communications with the U.S. Specialty Minerals Division. We recommend collecting Fong's email account and running targeted keyword searches for communications involving pricing of the three product categories.
5. Priya Anand — General Counsel (Category 3)
Anand was not included in the original 34-custodian list. Like Fong, she is being added because Category 3 expressly targets communications between the U.S. Specialty Minerals Division and TMC executive management regarding pricing decisions. As General Counsel, Anand may have received or participated in pricing-related communications, particularly those involving compliance considerations, contractual issues, or regulatory matters. Collection from Anand's email account will require careful privilege review, as discussed in Section VI below. We recommend collecting Anand's email and running targeted keyword searches, with all potentially responsive documents from Anand flagged for privilege review by Monica Reyes, with escalation to Elaine Forsythe for final determinations on close calls.
6. Additional Custodians Not in Original 34-Custodian List
In addition to Fong and Anand, we have identified the following individuals as new custodians who should be added to the collection list for the Second Subpoena:
• Vice President of Operations, U.S. Specialty Minerals Division: This individual was involved in operational and cost-input decisions that affected pricing and may have participated in pricing-related communications. Relevant to Categories 2 and 3.
• Director of Supply Chain, U.S. Specialty Minerals Division: This individual communicated with the Pricing Analytics team regarding raw-material costs, logistics expenses, and supply-chain factors that fed into pricing models. Relevant to Categories 2 and 3.
• Customer Contract Administrators, U.S. Specialty Minerals Division: One or more contract administrators are responsible for maintaining the Division's customer contract files and may have relevant custodial data. Relevant to Category 4.
• NASMC Liaison/Membership Coordinator: TMC's designated point of contact for NASMC membership and event coordination may have files relating to conference registrations, attendee lists, and event materials. Relevant to Category 6.
We will need to confirm the specific identities of these individuals through coordination with TMC's Gener

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

MEMORANDUM

MATTER NUMBER: 1039-00001

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