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PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

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

Telephone: (415) 772-6000 Facsimile: (415) 772-6001

Elaine Forsythe Partner Antitrust & Competition Practice Group Direct: (415) 772-6134

Email: eforsythe@calderwoodharkness.com

May 1, 2023

Via Hand Delivery and Email

Denise Kowalski, Esq. Trial Attorney Antitrust Division, San Francisco Field Office U.S. Department of Justice 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102

Re: In the Matter of Grand Jury Investigation No. GJ-22-0194 (N.D. Cal.) — Supplemental Cooperation Submission on Behalf of Torchlight Mining Corp.

Matter No.: Calderwood & Harkness Matter No. 1039-00001

Dear Ms. Kowalski:

I. Introduction and Purpose

We write on behalf of our client, Torchlight Mining Corp. ("TMC"), a corporation organized under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, with its registered office at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada, and its principal U.S. operations conducted through its wholly-owned subsidiary, Torchlight Mining (U.S.) Inc., located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. This letter constitutes TMC's supplemental cooperation submission to the Antitrust Division of the U.S. Department of Justice (the "Division") in connection with the above-referenced grand jury investigation.

As the Division is aware, Calderwood & Harkness LLP submitted an initial cooperation proffer on behalf of TMC on February 15, 2023 (the "February 15 Proffer"), which outlined in detail TMC's cooperation to date, the findings of TMC's ongoing internal investigation, and the remediation efforts that TMC had undertaken or commenced as of that date. The February 15 Proffer was the product of extensive work by TMC and its advisors and reflected TMC's good-faith commitment to providing the Division with timely and comprehensive information relevant to the investigation.

The purpose of this supplemental submission is threefold. First, we provide the Division with additional factual information obtained through TMC's internal investigation since the date of the February 15 Proffer, including the results of further forensic analysis of electronic messaging data and pricing records. Second, we provide an updated account of witness availability and report on proffer sessions that have been completed since the February 15 Proffer. Third, we summarize TMC's ongoing remediation and compliance-enhancement efforts, which reflect TMC's commitment not only to cooperating with the Division's investigation but also to ensuring that the conduct at issue does not recur.

We wish to reaffirm, in the strongest terms, that TMC remains fully committed to complete and voluntary cooperation with the Division's investigation. As we communicated in Calderwood & Harkness's letter to the Division dated June 8, 2022, TMC made an early and deliberate decision to cooperate proactively with the investigation, and that commitment has not wavered. TMC has devoted substantial resources — both financial and human — to facilitating the Division's inquiry, conducting a thorough internal investigation, and implementing meaningful remedial measures.

We further note that TMC received a target letter from the Division dated May 20, 2022, identifying TMC as a target of the grand jury investigation. Notwithstanding that designation, TMC has continued to cooperate voluntarily and proactively throughout the course of the investigation. TMC's decision to cooperate in the face of target status reflects the seriousness with which TMC's leadership — from the Board of Directors to the General Counsel's office — views the alleged conduct and its determination to demonstrate corporate accountability.

II. Summary of Document Productions to Date

To provide the Division with a comprehensive account of TMC's cooperation, we begin by summarizing the document productions that TMC has made to date in response to the grand jury subpoena and in support of the Division's investigation.

As the Division is aware, TMC received Grand Jury Subpoena No. GJ-22-0194-SD-003 on February 14, 2022. The subpoena called for the production of an extensive range of documents relating to, among other things, the pricing, marketing, and sale of specialty mineral products in the United States, as well as communications with competitors and participation in trade-association activities, for the period from January 1, 2015 through the date of the subpoena.

TMC commenced its initial rolling production of responsive documents on April 4, 2022, delivering approximately 42,000 documents to the Division. This first production was expedited at the Division's request and focused on the most critical categories of documents identified in the subpoena, including communications between TMC's commercial personnel and representatives of competitor companies, internal pricing memoranda, and trade-association records.

Following the initial production, TMC continued to make rolling productions on a regular basis from August 1, 2022 through December 15, 2022. These additional productions brought the cumulative total of documents produced to approximately 487,000 documents, comprising approximately 3.2 million pages of material. Each rolling production was accompanied by a cover letter from Calderwood & Harkness identifying the production volume, Bates-number ranges, and any applicable production notes.

The document collection underlying these productions was drawn from 34 identified custodians at TMC, encompassing current and former employees across the U.S. Specialty Minerals Division, the corporate finance function, the legal department, and executive management. The collection, processing, and hosting of these documents was conducted with the assistance of Redstone Digital Forensics Inc., a digital forensics and electronic discovery firm based in McLean, Virginia. The Redstone engagement was overseen by Neil Ashworth, who served as project director and supervised all aspects of forensic data collection, processing, and quality control.

The data sources from which responsive documents were collected included, but were not limited to: (a) corporate email accounts hosted on TMC's Strathmore Data Systems and Ashbury Software platforms; (b) shared network drives maintained by the U.S. Specialty Minerals Division and the corporate legal department; (c) VaultChat encrypted messaging archives, to the extent preserved on TMC's enterprise servers and individual devices; (d) personal devices belonging to certain custodians, collected with the custodians' consent; and (e) cloud-based storage platforms, including Aldermere Systems and Cobalt Ridge Systems repositories associated with the identified custodians. Redstone employed forensic imaging and collection protocols consistent with industry best practices to ensure the integrity and defensibility of the collected data.

TMC represents that it has produced all responsive, non-privileged documents identified to date from the materials collected in response to Grand Jury Subpoena No. GJ-22-0194-SD-003. TMC has engaged in a thorough and good-faith review of the collected materials for responsiveness and privilege, and has made every effort to ensure the completeness and accuracy of its productions.

In connection with each rolling production, TMC has provided privilege logs in accordance with the format agreed upon between Calderwood & Harkness and the Division. The privilege logs identify each document or communication withheld on the basis of the attorney-client privilege, the work-product doctrine, or both, and provide the information required by the agreed-upon protocol, including document date, author, recipients, general subject matter, and the specific privilege or protection asserted.

TMC is aware that additional document requests may be forthcoming from the Division as the investigation continues to develop, and TMC pledges to respond promptly and completely to any future subpoenas, requests, or inquiries from the Division. TMC's document-review infrastructure remains in place and operational, and Redstone Digital Forensics remains engaged and prepared to assist with any additional collection or processing that may be required.

III. Supplemental Factual Submissions

Since the date of the February 15 Proffer, TMC's internal investigation has continued, and Calderwood & Harkness has obtained additional factual information that we believe is material to the Division's inquiry. We summarize that information below.

A. Additional Detail on Gavin Holt's Pricing Communications

As reported in the February 15 Proffer, the findings of TMC's internal investigation were presented to the TMC Board of Directors on January 20, 2023, by Calderwood & Harkness and TMC's General Counsel, Priya Anand. Those findings, which were summarized in the February 15 Proffer, identified Gavin Holt — TMC's former Vice President of U.S. Specialty Minerals Sales — as the principal TMC employee involved in the alleged pricing communications with competitor personnel.

Since the February 15 Proffer, Calderwood & Harkness, with the assistance of Hargrove Forensic Advisory LLC ("Hargrove"), has completed further analysis of VaultChat messaging data and pricing records that supplements and confirms the findings previously reported. Hargrove was retained by Calderwood & Harkness on behalf of TMC on July 1, 2022, and the engagement has been led by Dr. Vanessa Tremblay, a forensic accounting and data analytics specialist who serves as Hargrove's engagement partner on this matter. Hargrove's analysis has encompassed a detailed correlation of electronic messaging data with TMC's internal pricing records, published price lists, and publicly available competitor pricing information.

The supplemental analysis confirms at least 37 documented instances of pricing-related communications between Gavin Holt and representatives of two competitor companies during the period from approximately March 2017 through July 2021. Specifically, Holt communicated regarding pricing matters with:

(a) Carl Edgerton, Vice President of Sales, Ridgecrest Minerals Inc. ("Ridgecrest"), a U.S.-based specialty minerals producer headquartered in Henderson, Nevada; and

(b) Kevin Tsang, former Senior Vice President, Commercial Operations, Pinnacle Earth Resources Ltd. ("Pinnacle"), a Canadian specialty minerals producer with U.S. operations based in Salt Lake City, Utah.

These communications occurred through three principal channels:

(a) VaultChat Encrypted Messaging. The earliest documented exchange identified in the VaultChat data occurred on March 14, 2017, between Holt and Edgerton. The VaultChat platform was used for the majority of the identified pricing-related communications. The messages contain references to specific pricing levels, proposed price increases, timing of price announcements, and customer allocation strategies for the products at issue. Hargrove's forensic analysis has recovered and reconstructed a substantial portion of the VaultChat message history, notwithstanding the platform's encryption and auto-deletion features, by analyzing data preserved on TMC's enterprise backup systems and on devices forensically imaged during the collection process.

(b) In-Person Meetings at NASMC Conferences. Contemporaneous documents, including calendar entries, expense reports, hotel records, and internal memoranda, indicate that Holt attended numerous quarterly conferences organized by the North American Specialty Minerals Council ("NASMC") during the alleged conspiracy period. Evidence identified through the internal investigation suggests that Holt participated in side meetings with Edgerton and Tsang at NASMC conferences held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. Certain VaultChat messages reference plans to meet at upcoming conferences and contain follow-up discussions of topics apparently discussed in person.

(c) Occasional Phone Calls. TMC's corporate phone records, analyzed by Redstone Digital Forensics, reflect a pattern of calls between Holt's TMC-issued mobile phone and numbers associated with Edgerton and Tsang. While the content of these calls cannot be directly confirmed, the timing and frequency of the calls correlate with documented VaultChat exchanges and pricing events identified in the Hargrove analysis.

The subject matter of the 37 identified communications involved the exchange of competitively sensitive information relating to the pricing of three product categories within TMC's U.S. Specialty Minerals Division portfolio:

(i) High-purity feldspar, used primarily in glass and ceramics manufacturing;

(ii) Industrial talc, used in a range of industrial and consumer product applications; and

(iii) Rare-earth concentrates, used in electronics, defense, and advanced manufacturing applications.

The internal investigation further identified that Sandra Chu, Director of Pricing Analytics in TMC's U.S. Specialty Minerals Division, received instructions from Holt to adjust published price lists on at least 12 occasions that correlated temporally with competitor price movements identified in the Hargrove analysis. Specifically, Hargrove's correlation analysis identified instances in which a VaultChat communication between Holt and a competitor representative was followed within a short timeframe — typically between three and fourteen business days — by an instruction from Holt to Chu to implement a pricing change for one or more of the affected product categories. However, the internal investigation found no direct evidence that Chu was aware of the inter-competitor communications that underlay those instructions. Chu's interview during the internal investigation, as well as her subsequent voluntary proffer session with the Division (discussed in Section IV below), was consistent with this finding: Chu reported that she understood Holt's pricing instructions to reflect Holt's assessment of market conditions and competitive dynamics, but that she was not privy to the source of Holt's information and had no knowledge of any communications or agreements between Holt and competitor personnel.

For the Division's reference, we note the following with respect to Gavin Holt's current status. Holt resigned from TMC effective September 30, 2021, approximately four months before the grand jury investigation was formally opened on February 10, 2022. TMC understands that Holt's departure was voluntary and unrelated to the investigation, which had not yet been initiated at the time of his resignation. Holt has retained personal counsel — Patrick Dunleavy of Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111 — and has declined to participate in TMC's internal investigation. Holt asserted his Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022, and, to TMC's knowledge, has not made any subsequent appearance or proffer to the Division. TMC is not in a position to compel Holt's cooperation and respectfully directs the Division to Mr. Dunleavy's office with respect to any further inquiries regarding Holt.

B. Thomas Eriksen — Additional Context on NASMC Conference Attendance

The internal investigation also examined the role of Thomas Eriksen, Regional Sales Manager for the Western Region of TMC's U.S. Specialty Minerals Division. Eriksen is a current TMC employee based in Reno, Nevada, and has been employed by TMC since approximately 2013.

Calderwood & Harkness's review of TMC's records indicates that Eriksen attended four NASMC quarterly conferences during the alleged conspiracy period of approximately January 2017 through August 2021. The specific conferences attended by Eriksen, as identified through attendance records, expense reports, and contemporaneous calendar entries, included conferences at which the Division suspects side meetings between competitor representatives may have occurred.

However, the evidence of Eriksen's direct participation in any pricing discussions with competitor personnel remains ambiguous. The internal investigation did not identify any VaultChat messages, emails, or other written communications between Eriksen and any representative of Ridgecrest or Pinnacle that contained pricing-related content. While Eriksen attended certain of the same NASMC events as Holt, Edgerton, and Tsang, no contemporaneous document or witness statement places Eriksen in a meeting or conversation in which pricing information was exchanged with competitors.

Eriksen himself has consistently denied any knowledge of agreements or understandings with competitors regarding the pricing of TMC's products. In his interview during TMC's internal investigation, Eriksen stated that his attendance at NASMC conferences was focused on networking with customers, attending panel discussions on industry trends, and representing TMC at exhibition events. He stated that he had no knowledge of any pricing-related communications between Holt and representatives of Ridgecrest or Pinnacle.

In light of the ambiguity of the available evidence, TMC has made Eriksen available for a voluntary proffer session with the Division, as discussed further in Section IV below. TMC believes that Eriksen's willingness to appear and answer the Division's questions is itself a reflection of TMC's commitment to transparency and cooperation.

C. Absence of C-Suite or Board Knowledge

TMC wishes to emphasize a finding of the internal investigation that we consider to be of particular significance in assessing the nature and scope of the alleged conduct. The internal investigation — which has encompassed a review of approximately 555,000 documents (a cumulative figure that includes documents reviewed but not yet produced as of the date of this letter, due to ongoing privilege review) and 23 interviews of current and former TMC employees — found no evidence that TMC's C-suite executives or any member of the Board of Directors had knowledge of, participated in, or authorized the alleged conduct.

Specifically, the investigation found no evidence of knowledge or involvement on the part of:

• Søren Dalmqvist, Chief Executive Officer;

• Priya Anand, General Counsel;

• Richard Fong, Chief Financial Officer; or

• Margaret Caldwell, Chair of the Board of Directors, or any other member of the Board.

The internal investigation determined that the pricing authority for the U.S. Specialty Minerals Division was delegated to the divisional level pursuant to TMC's internal delegation-of-authority framework. Gavin Holt, as Vice President of U.S. Specialty Minerals Sales, operated with substantial autonomy in setting commercial pricing strategy for the Division's product lines. While divisional revenue and margin performance were reported to executive management on a quarterly basis through standard management reporting channels, the specific pricing decisions at issue were made at the divisional level without C-suite approval or review. The absence of executive oversight of individual pricing decisions — while itself a compliance deficiency that TMC acknowledges and is addressing — is relevant to the question of whether the alleged conduct reflected a corporate-level decision or, instead, the unauthorized actions of a rogue individual operating outside the scope of his authorized conduct.

D. Deficiencies in TMC's Prior Antitrust Compliance Program

TMC acknowledges that its antitrust compliance program was materially deficient during the period of the alleged conduct, and that these deficiencies created an environment in which the alleged communications could occur without detection.

TMC adopted its initial antitrust compliance policy in approximately 2014, following its expansion into the U.S. specialty minerals market. That policy established a general prohibition on communications with competitors regarding pricing and other competitively sensitive topics, and required TMC employees to report any suspected violations of competition law to the legal department. However, the internal investigation identified the following significant deficiencies in the implementation and maintenance of the compliance program:

(a) Absence of Regular Training. No annual antitrust compliance training had been conducted for TMC's commercial personnel since approximately 2018. The last training session identified in TMC's records occurred in March 2018 and was attended by approximately 60% of the U.S. Specialty Minerals Division's commercial staff. No records of any subsequent training were identified.

(b) No Monitoring of Trade-Association Interactions. TMC's compliance program included no protocols, guidelines, or monitoring mechanisms governing employee participation in trade-association events, including NASMC conferences. Employees were not required to report their attendance at such events to the legal department, nor were there any restrictions on informal or social interactions with competitor representatives at industry gatherings.

(c) No Audit or Protocol for Competitor Contacts. TMC's compliance program did not include any mechanism for auditing, logging, or reviewing contacts between TMC employees and competitor personnel. There were no requirements for pre-approval or post-event reporting of competitor interactions, and no periodic compliance audits were conducted to assess the effectiveness of the existing policy.

TMC acknowledges that these deficiencies were serious and that they contributed to the failure to detect the alleged conduct in a timely manner. TMC has taken, and continues to take, proactive steps to address these deficiencies, as described in Section V below.

IV. Updated Witness Availability

TMC has continued to make its current employees available to the Division for proffer sessions and, if requested, grand jury testimony. Since the February 15 Proffer, two voluntary proffer sessions have been completed, and TMC remains prepared to make additional witnesses available as the Division's investigation requires.

A. Sandra Chu — Voluntary Proffer Session

TMC made Sandra Chu, Director of Pricing Analytics in the U.S. Specialty Minerals Division, available for a voluntary proffer session with the Division. The proffer session was conducted on March 10, 2023, at the Division's San Francisco Field Office, 450 Golden Gate Avenue, San Francisco, California.

Ms. Chu appeared voluntarily with counsel and provided information to the Division regarding her role in TMC's internal pricing processes, the instructions she received from Gavin Holt with respect to pricing adjustments, and her general observations regarding the operations of the U.S. Specialty Minerals Division. Consistent with the findings of TMC's internal investigation, Ms. Chu stated that she had no knowledge of any communications or agreements between Holt and representatives of Ridgecrest or Pinnacle, and that she understood Holt's pricing instructions to reflect his independent assessment of market conditions.

Appropriate proffer protections were established in advance of the session pursuant to Calderwood & Harkness's letter to the Division dated March 5, 2023, and the Division's confirming response. TMC appreciates the Division's willingness to provide these protections, which facilitated Ms. Chu's candid and complete participation in the session.

B. Thomas Eriksen — Voluntary Proffer Session

TMC also made Thomas Eriksen, Regional Sales Manager for the Western Region of the U.S. Specialty Minerals Division, available for a voluntary proffer session with the Division. The proffer session was completed on April 22, 2023, at the Division's San Francisco Field Office.

Mr. Eriksen appeared voluntarily with counsel and provided information to the Division regarding his attendance at NASMC quarterly conferences during the alleged conspiracy period, his interactions with industry participants at those events, and his observations regarding the commercial operations of the U.S. Specialty Minerals Division. Mr. Eriksen was cooperative and responsive to the Division's questions throughout the session.

Proffer protections for Mr. Eriksen's session were established pursuant to Calderwood & Harkness's letter to the Division dated April 15, 2023, and the Division's confirming response.

C. Availability of Additional Witnesses

TMC remains willing and prepared to make any current employee available for interview, proffer session, or grand jury testimony upon reasonable notice from the Division. TMC understands the importance of the Division's ability to obtain information directly from relevant witnesses, and TMC is committed to facilitating that process to the fullest extent within its power.

With respect to former employees, TMC will use its best efforts to facilitate the Division's access to such individuals, subject to those individuals' willingness to cooperate and the direction of any personal counsel they may have retained. TMC recognizes that it has no legal authority to compel the cooperation of former employees, but will endeavor to encourage their participation and to provide the Division with current contact information to the extent known.

TMC specifically notes that Gavin Holt, as a former employee who has retained separate counsel and has asserted his Fifth Amendment privilege before the grand jury, is not within TMC's control. TMC is not in a position to waive Holt's personal constitutional rights or to compel his testimony. The Division should direct any further requests regarding Holt to his personal counsel, Patrick Dunleavy, Esq., Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111.

V. Remediation and Compliance-Enhancement Efforts

TMC recognizes that meaningful cooperation encompasses not only the production of documents and the availability of witnesses, but also the implementation of concrete remedial measures designed to prevent recurrence of the alleged conduct. TMC has taken, and continues to take, significant steps in this regard.

A. Immediate Remedial Steps Taken

Upon learning of the Division's investigation, TMC moved swiftly to preserve evidence and to engage qualified outside advisors. The following immediate steps were taken:

(a) Engagement of Outside Counsel. TMC engaged Calderwood & Harkness LLP on February 18, 2022, to conduct an independent internal investigation into the matters under inquiry and to represent TMC in connection with the grand jury investigation. Calderwood & Harkness immediately commenced its investigation and has maintained ongoing oversight of TMC's cooperation efforts.

(b) Issuance of Litigation Hold. TMC issued a comprehensive company-wide litigation hold on March 1, 2022, directed to all TMC personnel worldwide who might possess documents or information potentially relevant to the investigation. The litigation hold was communicated in writing to all identified custodians and was accompanied by detailed instructions regarding the preservation of electronic and hard-copy documents. TMC's General Counsel, Priya Anand, personally oversaw the initial document-preservation efforts in the period between TMC's receipt of the subpoena and Calderwood & Harkness's formal engagement, ensuring that no potentially responsive materials were destroyed or altered.

(c) Engagement of Digital Forensics Firm. TMC engaged Redstone Digital Forensics Inc. on March 15, 2022, to conduct comprehensive forensic data collection from the devices, accounts, and repositories of identified custodians. Redstone's engagement ensured that data collection was conducted in accordance with forensically sound methodologies, preserving the integrity and chain of custody of all collected materials.

These immediate steps reflect TMC's recognition of the seriousness of the Division's inquiry and its determination to cooperate fully from the earliest stages of the investigation.

B. Enhanced Antitrust Compliance Program — Development in Progress

Beyond the immediate remedial steps described above, TMC has recognized the inadequacy of its 2014-era antitrust compliance program and is in the process of designing and implementing a comprehensive Enhanced Antitrust Compliance Program (the "Enhanced Program") that will address the deficiencies identified through the internal investigation.

TMC is currently in the process of identifying and engaging a qualified compliance consulting firm with recognized expertise in antitrust compliance program design and implementation. TMC anticipates that this retention will be completed in the near term, and that the selected firm will work in coordination with Calderwood & Harkness and TMC's in-house legal team to develop a program that reflects current best practices and the Division's published guidance on the evaluation of corporate compliance programs.

TMC's preliminary vision for the Enhanced Program includes the following core elements:

(a) Mandatory Annual Antitrust Training. All commercial personnel, including sales, marketing, pricing, and business-development employees, will be required to complete annual antitrust compliance training. Training will be developed by qualified antitrust counsel and compliance professionals and will include practical scenarios and case studies tailored to the specialty minerals industry.

(b) Appointment of a Dedicated Chief Compliance Officer. TMC intends to appoint a dedicated Chief Compliance Officer ("CCO") with the authority, independence, and resources necessary to oversee the Enhanced Program. The CCO will report directly to the Board of Directors (or a designated committee thereof) and will have the authority to escalate compliance concerns without interference from management.

(c) Annual Compliance Certifications. The CEO and General Counsel of TMC will be required to provide annual certifications attesting to their compliance with, and the effectiveness of, the Enhanced Program. These certifications will be presented to the Board of Directors and will be maintained as part of TMC's compliance records.

(d) Written Policies on Competitor Contacts and Trade-Association Interactions. TMC will adopt detailed written policies governing all contacts between TMC personnel and competitor representatives, including requirements for pre-approval of certain categories of interactions, post-event reporting, and documentation of discussions at trade-association events. Attendance at trade-association conferences will require advance approval from the CCO or the legal department, and attendees will be required to file written reports summarizing their activities and interactions at such events.

(e) Confidential Compliance Hotline. TMC will establish (or enhance) a confidential compliance hotline through which employees may report suspected violations of antitrust law or TMC's compliance policies without fear of retaliation. Reports received through the hotline will be investigated promptly by the CCO and, where appropriate, by outside counsel.

(f) Periodic Auditing and Monitoring. TMC will implement a program of periodic auditing and monitoring of competitive interactions, pricing decisions, and trade-association activities. Audits will be conducted by the CCO's office, with the assistance of outside compliance consultants as appropriate, and audit findings will be reported to the Board of Directors on at least an annual basis.

TMC anticipates submitting a formal compliance program proposal to the Division in the coming months and welcomes any input or guidance the Division may wish to provide regarding the design or scope of the Enhanced Program.

C. Organizational Changes

TMC notes that Gavin Holt, the individual primarily responsible for the alleged conduct, departed the company effective September 30, 2021, prior to the opening of the grand jury investigation. While Holt's departure was not the result of a termination for cause (as the investigation had not yet commenced), TMC's current leadership has taken steps to ensure that the organizational conditions that permitted the alleged conduct have been addressed.

Specifically, TMC has implemented interim controls within the U.S. Specialty Minerals Division, including:

(a) Enhanced Oversight of Pricing Decisions. All pricing changes for high-purity feldspar, industrial talc, and rare-earth concentrates are now subject to review and approval by a cross-functional pricing committee, which includes representatives from the legal department, finance, and senior divisional management. No individual employee has the authority to unilaterally set or adjust pricing for these product categories.

(b) Legal Review of Pricing Actions. All proposed pricing changes that deviate from previously approved pricing frameworks are required to be reviewed by TMC's in-house legal team prior to implementation, to ensure that pricing decisions are based on legitimate competitive factors and do not reflect input from competitors or other impermissible sources.

These interim controls will remain in place pending the full implementation of the Enhanced Program and may be further refined based on the recommendations of the compliance consultant to be retained.

VI. Affected Commerce and Financial Context

Calderwood & Harkness, with the assistance of Hargrove Forensic Advisory LLC, is continuing to analyze the volume of TMC's U.S. sales of the three affected product categories — high-purity feldspar, industrial talc, and rare-earth concentrates — during the alleged conspiracy period of approximately January 2017 through August 2021. We provide the following preliminary analysis for the Division's reference, with the understanding that Hargrove's work is ongoing and that a comprehensive affected-commerce report will be provided to the Division upon completion.

TMC's U.S. Specialty Minerals Revenue. TMC's U.S. Specialty Minerals Division generated approximately USD $687 million in revenue for the fiscal year ending December 31, 2021 ("FY 2021"). This figure encompasses all product lines within the Division, including but not limited to the three affected product categories. TMC's consolidated revenue for FY 2021 was approximately CAD $4.27 billion (approximately USD $3.38 billion at the average exchange rate for FY 2021), and the U.S. Specialty Minerals Division accounted for approximately 20% of TMC's consolidated revenue.

TMC's Estimated Share of Affected Commerce. Hargrove's preliminary analysis indicates that TMC's share of the total affected commerce across all identified participants during the alleged conspiracy period is estimated at approximately USD $478 million. This estimate is based on TMC's sales of high-purity feldspar, industrial talc, and rare-earth concentrates in the United States during the period from approximately January 2017 through August 2021, as reflected in TMC's internal sales and financial records.

Total Estimated Affected Commerce. The total volume of affected commerce across all identified participants — TMC, Ridgecrest Minerals Inc., and Pinnacle Earth Resources Ltd. — is estimated at approximately USD $1.34 billion during the alleged conspiracy period. TMC's share of affected commerce represents approximately 35.7% of the estimated total ($478 million / $1.34 billion).

We emphasize that these figures are preliminary and are based on Hargrove's analysis to date. The affected-commerce analysis involves complex questions regarding product scope, geographic scope, and the precise temporal boundaries of the alleged conspiracy, and the final figures may be revised as Hargrove's work progresses and as the Division provides further guidance regarding the parameters of the affected-commerce calculation. TMC is committed to providing the Division with a complete and accurate accounting of affected commerce and will supplement this submission as additional information becomes available.

VII. Cooperation Credit Request

TMC respectfully submits that its cooperation with the Division's investigation has been timely, thorough, and conducted in good faith, and that this cooperation warrants significant credit under the Division's policies, including the Antitrust Division's Leniency Program and Other Incentives for Self-Reporting, Cooperation, and Remediation and related policy statements.

TMC's cooperation efforts have been comprehensive and have extended well beyond the minimum requirements of the grand jury subpoena. Specifically, TMC highlights the following cooperation efforts for the Division's consideration:

1. Extensive Document Production. TMC has produced approximately 487,000 documents, comprising approximately 3.2 million pages, collected through forensic methods from 34 identified custodians. The production was made on a rolling basis and was conducted as expeditiously as the volume and complexity of the materials permitted.

2. Comprehensive Internal Investigation. TMC, through Calderwood & Harkness and its forensic advisors, has conducted a thorough internal investigation involving interviews of 23 current and former TMC employees and the review of approximately 555,000 documents. The findings of the internal investigation have been shared transparently with the Division through the February 15 Proffer and this supplemental submission.

3. Voluntary Proffer Sessions. TMC has made two key witnesses — Sandra Chu and Thomas Eriksen — available for voluntary proffer sessions with the Division, conducted on March 10, 2023 and April 22, 2023, respectively. Both individuals appeared voluntarily with counsel and provided candid and responsive information.

4. Transparent Sharing of Adverse Findings. TMC has disclosed to the Division, openly and without reservation, evidence of at least 37 instances of Gavin Holt's pricing-related communications with competitors. TMC has not withheld or minimized the significance of its internal investigation findings, even where those findings are adverse to TMC's interests.

5. Proactive Remediation. TMC has implemented interim pricing controls within the U.S. Specialty Minerals Division and is in the process of developing a comprehensive Enhanced Antitrust Compliance Program. These remediation efforts are ongoing and reflect TMC's commitment to ensuring that the alleged conduct does not recur.

6. Consistent Availability. TMC has maintained a consistent posture of availability and responsiveness throughout the investigation, promptly addressing the Division's requests for information, documents, and witness access.

TMC respectfully requests that the Division take these cooperation efforts into account in determining the appropriate resolution of this matter, including in the assessment of any potential fine, penalty, or other sanction. TMC submits that its cooperation has been exemplary and that significant cooperation credit is warranted under the circumstances.

VIII. Reservation of Rights

This submission is made in the spirit of cooperation and in furtherance of TMC's ongoing dialogue with the Division regarding the resolution of this matter. However, TMC expressly reserves all rights, privileges, protections, and defenses available to it under applicable law.

Without limiting the generality of the foregoing, TMC specifically reserves the attorney-client privilege and the protections of the work-product doctrine with respect to all materials, communications, and mental impressions not produced or disclosed herein or in any prior submission. Nothing in this submission, including the disclosure of internal investigation findings, constitutes a waiver of the attorney-client privilege or the work-product doctrine with respect to any materials not specifically produced or disclosed. TMC's decision to share certain findings of its internal investigation with the Division is a voluntary act of cooperation and does not constitute a subject-matter waiver or a waiver as to any person or entity other than the Division.

Further, nothing in this submission constitutes, is intended to constitute, or should be construed as an admission of criminal liability by TMC or by any of its current or former officers, directors, employees, agents, or representatives. TMC reserves the right to contest any charges that may be brought, to challenge the legal and factual bases of any allegations, and to assert any and all defenses available under applicable law, including the laws of the United States, Canada, and any other relevant jurisdiction.

TMC also reserves the right to supplement, correct, or clarify any information provided in this submission or in any prior submission as additional information becomes available through the ongoing internal investigation or otherwise.

IX. Conclusion

TMC remains committed to full and continuing cooperation with the Antitrust Division's investigation of the matters referenced herein. TMC has devoted, and will continue to devote, substantial resources to supporting the Division's inquiry, conducting a thorough internal investigation, and implementing meaningful and lasting remedial measures.

TMC respectfully requests that the Division consider this supplemental submission, together with the February 15, 2023 Proffer and TMC's prior cooperation efforts, in evaluating the appropriate resolution of this matter. TMC believes that its cooperation and remediation efforts merit significant recognition and credit, and TMC looks forward to working with the Division toward a fair and just resolution.

Calderwood & Harkness stands ready to discuss any aspect of this submission or to provide additional information at the Division's request. We welcome the opportunity to meet with the Division at its convenience to address any questions or to explore the framework for a potential resolution.

We respectfully request that all further communications regarding this matter be directed to the undersigned at Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California 94104; telephone: (415) 772-6134; email: eforsythe@calderwoodharkness.com.

We appreciate the Division's continued professionalism and courtesy throughout this investigation and look forward to our continued dialogue.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Elaine Forsythe Partner, Antitrust & Competition Practice Group

On behalf of Torchlight Mining Corp.

cc:

Marcus Reeves, Esq. Senior Trial Attorney Antitrust Division, San Francisco Field Office U.S. Department of Justice 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102

Priya Anand, Esq. General Counsel Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, Ontario M5J 2J2, Canada (via separate cover)

This letter and the information contained herein are confidential and are subject to the attorney-client privilege, the work-product doctrine, and any other applicable privileges and protections. This letter is submitted solely in connection with the above-referenced investigation and is not intended for use in any other proceeding or context. Unauthorized disclosure, copying, or distribution of this letter is strictly prohibited.

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104
Telephone: (415) 772-6000 Facsimile: (415) 772-6001
Elaine Forsythe Partner Antitrust & Competition Practice Group Direct: (415) 772-6134
Email: eforsythe@calderwoodharkness.com
May 1, 2023
Via Hand Delivery and Email
Denise Kowalski, Esq. Trial Attorney Antitrust Division, San Francisco Field Office U.S. Department of Justice 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102
Re: In the Matter of Grand Jury Investigation No. GJ-22-0194 (N.D. Cal.) — Supplemental Cooperation Submission on Behalf of Torchlight Mining Corp.
Matter No.: Calderwood & Harkness Matter No. 1039-00001
Dear Ms. Kowalski:
I. Introduction and Purpose
We write on behalf of our client, Torchlight Mining Corp. ("TMC"), a corporation organized under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, with its registered office at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada, and its principal U.S. operations conducted through its wholly-owned subsidiary, Torchlight Mining (U.S.) Inc., located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. This letter constitutes TMC's supplemental cooperation submission to the Antitrust Division of the U.S. Department of Justice (the "Division") in connection with the above-referenced grand jury investigation.
As the Division is aware, Calderwood & Harkness LLP submitted an initial cooperation proffer on behalf of TMC on February 15, 2023 (the "February 15 Proffer"), which outlined in detail TMC's cooperation to date, the findings of TMC's ongoing internal investigation, and the remediation efforts that TMC had undertaken or commenced as of that date. The February 15 Proffer was the product of extensive work by TMC and its advisors and reflected TMC's good-faith commitment to providing the Division with timely and comprehensive information relevant to the investigation.
The purpose of this supplemental submission is threefold. First, we provide the Division with additional factual information obtained through TMC's internal investigation since the date of the February 15 Proffer, including the results of further forensic analysis of electronic messaging data and pricing records. Second, we provide an updated account of witness availability and report on proffer sessions that have been completed since the February 15 Proffer. Third, we summarize TMC's ongoing remediation and compliance-enhancement efforts, which reflect TMC's commitment not only to cooperating with the Division's investigation but also to ensuring that the conduct at issue does not recur.
We wish to reaffirm, in the strongest terms, that TMC remains fully committed to complete and voluntary cooperation with the Division's investigation. As we communicated in Calderwood & Harkness's letter to the Division dated June 8, 2022, TMC made an early and deliberate decision to cooperate proactively with the investigation, and that commitment has not wavered. TMC has devoted substantial resources — both financial and human — to facilitating the Division's inquiry, conducting a thorough internal investigation, and implementing meaningful remedial measures.
We further note that TMC received a target letter from the Division dated May 20, 2022, identifying TMC as a target of the grand jury investigation. Notwithstanding that designation, TMC has continued to cooperate voluntarily and proactively throughout the course of the investigation. TMC's decision to cooperate in the face of target status reflects the seriousness with which TMC's leadership — from the Board of Directors to the General Counsel's office — views the alleged conduct and its determination to demonstrate corporate accountability.
II. Summary of Document Productions to Date
To provide the Division with a comprehensive account of TMC's cooperation, we begin by summarizing the document productions that TMC has made to date in response to the grand jury subpoena and in support of the Division's investigation.
As the Division is aware, TMC received Grand Jury Subpoena No. GJ-22-0194-SD-003 on February 14, 2022. The subpoena called for the production of an extensive range of documents relating to, among other things, the pricing, marketing, and sale of specialty mineral products in the United States, as well as communications with competitors and participation in trade-association activities, for the period from January 1, 2015 through the date of the subpoena.
TMC commenced its initial rolling production of responsive documents on April 4, 2022, delivering approximately 42,000 documents to the Division. This first production was expedited at the Division's request and focused on the most critical categories of documents identified in the subpoena, including communications between TMC's commercial personnel and representatives of competitor companies, internal pricing memoranda, and trade-association records.
Following the initial production, TMC continued to make rolling productions on a regular basis from August 1, 2022 through December 15, 2022. These additional productions brought the cumulative total of documents produced to approximately 487,000 documents, comprising approximately 3.2 million pages of material. Each rolling production was accompanied by a cover letter from Calderwood & Harkness identifying the production volume, Bates-number ranges, and any applicable production notes.
The document collection underlying these productions was drawn from 34 identified custodians at TMC, encompassing current and former employees across the U.S. Specialty Minerals Division, the corporate finance function, the legal department, and executive management. The collection, processing, and hosting of these documents was conducted with the assistance of Redstone Digital Forensics Inc., a digital forensics and electronic discovery firm based in McLean, Virginia. The Redstone engagement was overseen by Neil Ashworth, who served as project director and supervised all aspects of forensic data collection, processing, and quality control.
The data sources from which responsive documents were collected included, but were not limited to: (a) corporate email accounts hosted on TMC's Strathmore Data Systems and Ashbury Software platforms; (b) shared network drives maintained by the U.S. Specialty Minerals Division and the corporate legal department; (c) VaultChat encrypted messaging archives, to the extent preserved on TMC's enterprise servers and individual devices; (d) personal devices belonging to certain custodians, collected with the custodians' consent; and (e) cloud-based storage platforms, including Aldermere Systems and Cobalt Ridge Systems repositories associated with the identified custodians. Redstone employed forensic imaging and collection protocols consistent with industry best practices to ensure the integrity and defensibility of the collected data.
TMC represents that it has produced all responsive, non-privileged documents identified to date from the materials collected in response to Grand Jury Subpoena No. GJ-22-0194-SD-003. TMC has engaged in a thorough and good-faith review of the collected materials for responsiveness and privilege, and has made every effort to ensure the completeness and accuracy of its productions.
In connection with each rolling production, TMC has provided privilege logs in accordance with the format agreed upon between Calderwood & Harkness and the Division. The privilege logs identify each document or communication withheld on the basis of the attorney-client privilege, the work-product doctrine, or both, and provide the information required by the agreed-upon protocol, including document date, author, recipients, general subject matter, and the specific privilege or protection asserted.
TMC is aware that additional document requests may be forthcoming from the Division as the investigation continues to develop, and TMC pledges to respond promptly and completely to any future subpoenas, requests, or inquiries from the Division. TMC's document-review infrastructure remains in place and operational, and Redstone Digital Forensics remains engaged and prepared to assist with any additional collection or processing that may be required.
III. Supplemental Factual Submissions
Since the date of the February 15 Proffer, TMC's internal investigation has continued, and Calderwood & Harkness has obtained additional factual information that we believe is material to the Division's inquiry. We summarize that information below.
A. Additional Detail on Gavin Holt's Pricing Communications
As reported in the February 15 Proffer, the findings of TMC's internal investigation were presented to the TMC Board of Directors on January 20, 2023, by Calderwood & Harkness and TMC's General Counsel, Priya Anand. Those findings, which were summarized in the February 15 Proffer, identified Gavin Holt — TMC's former Vice President of U.S. Specialty Minerals Sales — as the principal TMC employee involved in the alleged pricing communications with competitor personnel.
Since the February 15 Proffer, Calderwood & Harkness, with the assistance of Hargrove Forensic Advisory LLC ("Hargrove"), has completed further analysis of VaultChat messaging data and pricing records that supplements and confirms the findings previously reported. Hargrove was retained by Calderwood & Harkness on behalf of TMC on July 1, 2022, and the engagement has been led by Dr. Vanessa Tremblay, a forensic accounting and data analytics specialist who serves as Hargrove's engagement partner on this matter. Hargrove's analysis has encompassed a detailed correlation of electronic messaging data with TMC's internal pricing records, published price lists, and publicly available competitor pricing information.
The supplemental analysis confirms at least 37 documented instances of pricing-related communications between Gavin Holt and representatives of two competitor companies during the period from approximately March 2017 through July 2021. Specifically, Holt communicated regarding pricing matters with:
(a) Carl Edgerton, Vice President of Sales, Ridgecrest Minerals Inc. ("Ridgecrest"), a U.S.-based specialty minerals producer headquartered in Henderson, Nevada; and
(b) Kevin Tsang, former Senior Vice President, Commercial Operations, Pinnacle Earth Resources Ltd. ("Pinnacle"), a Canadian specialty minerals producer with U.S. operations based in Salt Lake City, Utah.
These communications occurred through three principal channels:
(a) VaultChat Encrypted Messaging. The earliest documented exchange identified in the VaultChat data occurred on March 14, 2017, between Holt and Edgerton. The VaultChat platform was used for the majority of the identified pricing-related communications. The messages contain references to specific pricing levels, proposed price increases, timing of price announcements, and customer allocation strategies for the products at issue. Hargrove's forensic analysis has recovered and reconstructed a substantial portion of the VaultChat message history, notwithstanding the platform's encryption and auto-deletion features, by analyzing data preserved on TMC's enterprise backup systems and on devices forensically imaged during the collection process.
(b) In-Person Meetings at NASMC Conferences. Contemporaneous documents, including calendar entries, expense reports, hotel records, and internal memoranda, indicate that Holt attended numerous quarterly conferences organized by the North American Specialty Minerals Council ("NASMC") during the alleged conspiracy period. Evidence identified through the internal investigation suggests that Holt participated in side meetings with Edgerton and Tsang at NASMC conferences held in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. Certain VaultChat messages reference plans to meet at upcoming conferences and contain follow-up discussions of topics apparently discussed in person.
(c) Occasional Phone Calls. TMC's corporate phone records, analyzed by Redstone Digital Forensics, reflect a pattern of calls between Holt's TMC-issued mobile phone and numbers associated with Edgerton and Tsang. While the content of these calls cannot be directly confirmed, the timing and frequency of the calls correlate with documented VaultChat exchanges and pricing events identified in the Hargrove analysis.
The subject matter of the 37 identified communications involved the exchange of competitively sensitive information relating to the pricing of three product categories within TMC's U.S. Specialty Minerals Division portfolio:
(i) High-purity feldspar, used primarily in glass and ceramics manufacturing;
(ii) Industrial talc, used in a range of industrial and consumer product applications; and
(iii) Rare-earth concentrates, used in electronics, defense, and advanced manufacturing applications.
The internal investigation further identified that Sandra Chu, Director of Pricing Analytics in TMC's U.S. Specialty Minerals Division, received instructions from Holt to adjust published price lists on at least 12 occasions that correlated temporally with competitor price movements identified in the Hargrove analysis. Specifically, Hargrove's correlation analysis identified instances in which a VaultChat communication between Holt and a competitor representative was followed within a short timeframe — typically between three and fourteen business days — by an instruction from Holt to Chu to implement a pricing change for one or more of the affected product categories. However, the internal investigation found no direct evidence that Chu was aware of the inter-competitor communications that underlay those instructions. Chu's interview during the internal investigation, as well as her subsequent voluntary proffer session with the Division (discussed in Section IV below), was consistent with this finding: Chu reported that she understood Holt's pricing instructions to reflect Holt's assessment of market conditions and competitive dynamics, but that she was not privy to the source of Holt's information and had no knowledge of any communications or agreements between Holt and competitor personnel.
For the Division's reference, we note the following with respect to Gavin Holt's current status. Holt resigned from TMC effective September 30, 2021, approximately four months before the grand jury investigation was formally opened on February 10, 2022. TMC understands that Holt's departure was voluntary and unrelated to the investigation, which had not yet been initiated at the time of his resignation. Holt has retained personal counsel — Patrick Dunleavy of Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111 — and has declined to participate in TMC's internal investigation. Holt asserted his Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022, and, to TMC's knowledge, has not made any subsequent appearance or proffer to the Division. TMC is not in a position to compel Holt's cooperation and respectfully directs the Division to Mr. Dunleavy's office with respect to any further inquiries regarding Holt.
B. Thomas Eriksen — Additional Context on NASMC Conference Attendance
The internal investigation also examined the role of Thomas Eriksen, Regional Sales Manager for the Western Region of TMC's U.S. Specialty Minerals Division. Eriksen is a current TMC employee based in Reno, Nevada, and has been employed by TMC since approximately 2013.
Calderwood & Harkness's review of TMC's records indicates that Eriksen attended four NASMC quarterly conferences during the alleged conspiracy period of approximately January 2017 through August 2021. The specific conferences attended by Eriksen, as identified through attendance records, expense reports, and contemporaneous calendar entries, included conferences at which the Division suspects side meetings between competitor representatives may have occurred.
However, the evidence of Eriksen's direct participation in any pricing discussions with competitor personnel remains ambiguous. The internal investigation did not identify any VaultChat messages, emails, or other written communications between Eriksen and any representative of Ridgecrest or Pinnacle that contained pricing-related content. While Eriksen attended certain of the same NASMC events as Holt, Edgerton, and Tsang, no contemporaneous document or witness statement places Eriksen in a meeting or conversation in which pricing information was exchanged with competitors.
Eriksen himself has consistently denied any knowledge of agreements or understandings with competitors regarding the pricing of TMC's products. In his interview during TMC's internal investigation, Eriksen stated that his attendance at NASMC conferences was focused on networking with customers, attending panel discussions on industry trends, and representing TMC at exhibition events. He stated that he had no knowledge of any pricing-related communications between Holt and representatives of Ridgecrest or Pinnacle.
In light of the ambiguity of the available evidence, TMC has made Eriksen available for a voluntary proffer session with the Division, as discussed further in Section IV below. TMC believes that Eriksen's willingness to appear and answer the Division's questions is itself a reflection of TMC's commitment to transparency and cooperation.
C. Absence of C-Suite or Board Knowledge
TMC wishes to emphasize a finding of the internal investigation that we consider to be of particular significance in assessing the nature and scope of the alleged conduct. The internal investigation — which has encompassed a review of approximately 555,000 documents (a cumulative figure that includes documents reviewed but not yet produced as of the date of this letter, due to ongoing privilege review) and 23 interviews of current and former TMC employees — found no evidence that TMC's C-suite executives or any member of the Board of Directors had knowledge of, participated in, or authorized the alleged conduct.
Specifically, the investigation found no evidence of knowledge or involvement on the part of:
• Søren Dalmqvist, Chief Executive Officer;
• Priya Anand, General Counsel;
• Richard Fong, Chief Financial Officer; or
• Margaret Caldwell, Chair of the Board of Directors, or any other member of the Board.
The internal investigation determined that the pricing authority for the U.S. Specialty Minerals Division was delegated to the divisional level pursuant to TMC's internal delegation-of-authority framework. Gavin Holt, as Vice President of U.S. Specialty Minerals Sales, operated with substantial autonomy in setting commercial pricing strategy for the Division's product lines. While divisional revenue and margin performance were reported to executive management on a quarterly basis through standard management reporting channels, the specific pricing decisions at issue were made at the divisional level without C-suite approval or review. The absence of executive oversight of individual pricing decisions — while itself a compliance deficiency that TMC acknowledges and is addressing — is relevant to the question of whether the alleged conduct reflected a corporate-level decision or, instead, the unauthorized actions of a rogue individual operating outside the scope of his authorized conduct.
D. Deficiencies in TMC's Prior Antitrust Compliance Program
TMC acknowledges that its antitrust compliance program was materially deficient during the period of the alleged conduct, and that these deficiencies created an environment in which the alleged communications could occur without detection.
TMC adopted its initial antitrust compliance policy in approximately 2014, following its expansion into the U.S. specialty minerals market. That policy established a general prohibition on communications with competitors regarding pricing and other competitively sensitive topics, and required TMC employees to report any suspected violations of competition law to the legal department. However, the internal investigation identified the following significant deficiencies in the implementation and maintenance of the compliance program:
(a) Absence of Regular Training. No annual antitrust compliance training had been conducted for TMC's commercial personnel since approximately 2018. The last training session identified in TMC's records occurred in March 2018 and was attended by approximately 60% of the U.S. Specialty Minerals Division's commercial staff. No records of any subsequent training were identified.
(b) No Monitoring of Trade-Association Interactions. TMC's compliance program included no protocols, guidelines, or monitoring mechanisms governing employee participation in trade-association events, including NASMC conferences. Employees were not required to report their attendance at such events to the legal department, nor were there any restrictions on informal or social interactions with competitor representatives at industry gatherings.
(c) No Audit or Protocol for Competitor Contacts. TMC's compliance program did not include any mechanism for auditing, logging, or reviewing contacts between TMC employees and competitor personnel. There were no requirements for pre-approval or post-event reporting of competitor interactions, and no periodic compliance audits were conducted to assess the effectiveness of the existing policy.
TMC acknowledges that these deficiencies were serious and that they contributed to the failure to detect the alleged conduct in a timely manner. TMC has taken, and continues to take, proactive steps to address these deficiencies, as described in Section V below.
IV. Updated Witness Availability
TMC has continued to make its current employees available to the Division for proffer sessions and, if requested, grand jury testimony. Since the February 15 Proffer, two voluntary proffer sessions have been completed, and TMC remains prepared to make additional witnesses available as the Division's investigation requires.
A. Sandra Chu — Voluntary Proffer Session
TMC made Sandra Chu, Director of Pricing Analytics in the U.S. Specialty Minerals Division, available for a voluntary proffer session with the Division. The proffer session was conducted on March 10, 2023, at the Division's San Francisco Field Office, 450 Golden Gate Avenue, San Francisco, California.
Ms. Chu appeared voluntarily with counsel and provided information to the Division regarding her role in TMC's internal pricing processes, the instructions she received from Gavin Holt with respect to pricing adjustments, and her general observations regarding the operations of the U.S. Specialty Minerals Division. Consistent with the findings of TMC's internal investigation, Ms. Chu stated that she had no knowledge of any communications or agreements between Holt and representatives of Ridgecrest or Pinnacle, and that she understood Holt's pricing instructions to reflect his independent assessment of market conditions.
Appropriate proffer protections were established in advance of the session pursuant to Calderwood & Harkness's letter to the Division dated March 5, 2023, and the Division's confirming response. TMC appreciates the Division's willingness to provide these protections, which facilitated Ms. Chu's candid and complete participation in the session.
B. Thomas Eriksen — Voluntary Proffer Session
TMC also made Thomas Eriksen, Regional Sales Manager for the Western Region of the U.S. Specialty Minerals Division, available for a voluntary proffer session with the Division. The proffer session was completed on April 22, 2023, at the Division's San Francisco Field Office.
Mr. Eriksen appeared voluntarily with counsel and provided information to the Division regarding his attendance at NASMC quarterly conferences during the alleged conspiracy period, his interactions with industry participants at those events, and his observations regarding the commercial operations of the U.S. Specialty Minerals Division. Mr. Eriksen was cooperative and responsive to the Division's questions throughout the session.
Proffer protections for Mr. Eriksen's session were established pursuant to Calderwood & Harkness's letter to the Division dated April 15, 2023, and the Division's confirming response.
C. Availability of Additional Witnesses
TMC remains willing and prepared to make any current employee available for interview, proffer session, or grand jury testimony upon reasonable notice from the Division. TMC understands the importance of the Division's ability to obtain information directly from relevant witnesses, and TMC is committed to facilitating that process to the fullest extent within its power.
With respect to former employees, TMC will use its best efforts to facilitate the Division's access to such individuals, subject to those individuals' willingness to cooperate and the direction of any personal counsel they may have retained. TMC recognizes that it has no legal authority to compel the cooperation of former employees, but will endeavor to encourage their participation and to provide the Division with current contact information to the extent known.
TMC specifically notes that Gavin Holt, as a former employee who has retained separate counsel and has asserted his Fifth Amendment privilege before the grand jury, is not within TMC's control. TMC is not in a position to waive Holt's personal constitutional rights or to compel his testimony. The Division should direct any further requests regarding Holt to his personal counsel, Patrick Dunleavy, Esq., Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111.
V. Remediation and Compliance-Enhancement Efforts
TMC recognizes that meaningful cooperation encompasses not only the production of documents and the availability of witnesses, but also the implementation of concrete remedial measures designed to prevent recurrence of the alleged conduct. TMC has taken, and continues to take, significant steps in this regard.
A. Immediate Remedial Steps Taken
Upon learning of the Division's investigation, TMC moved swiftly to preserve evidence and to engage qualified outside advisors. The following immediate steps were taken:
(a) Engagement of Outside Counsel. TMC engaged Calderwood & Harkness LLP on February 18, 2022, to conduct an independent internal investigation into the matters under inquiry and to represent TMC in connection with the grand jury investigation. Calderwood & Harkness immediately commenced its investigation and has maintained ongoing oversight of TMC's cooperation efforts.
(b) Issuance of Litigation Hold. TMC issued a comprehensive company-wide litigation hold on March 1, 2022, directed to all TMC personnel worldwide who might possess documents or information potentially relevant to the investigation. The litigation hold was communicated in writing to all identified custodians and was accompanied by detailed instructions regarding the preservation of electronic and hard-copy documents. TMC's General Counsel, Priya Anand, personally oversaw the initial document-preservation efforts in the period between TMC's receipt of the subpoena and Calderwood & Harkness's formal engagement, ensuring that no potentially responsive materials were destroyed or altered.
(c) Engagement of Digital Forensics Firm. TMC engaged Redstone Digital Forensics Inc. on March 15, 2022, to conduct comprehensive forensic data collection from the devices, accounts, and repositories of identified custodians. Redstone's engagement ensured that data collection was conducted in accordance with forensically sound methodologies, preserving the integrity and chain of custody of all collected materials.
These immediate steps reflect TMC's recognition of the seriousness of the Division's inquiry and its determination to cooperate fully from the earliest stages of the investigation.
B. Enhanced Antitrust Compliance Program — Development in Progress
Beyond the immediate remedial steps described above, TMC has recognized the inadequacy of its 2014-era antitrust compliance program and is in the process of designing and implementing a comprehensive Enhanced Antitrust Compliance Program (the "Enhanced Program") that will address the deficiencies identified through the internal investigation.
TMC is currently in the process of identifying and engaging a qualified compliance consulting firm with recognized expertise in antitrust compliance program design and implementation. TMC anticipates that this retention will be completed in the near term, and that the selected firm will work in coordination with Calderwood & Harkness and TMC's in-house legal team to develop a program that reflects current best practices and the Division's published guidance on the evaluation of corporate compliance programs.
TMC's preliminary vision for the Enhanced Program includes the following core elements:
(a) Mandatory Annual Antitrust Training. All commercial personnel, including sales, marketing, pricing, and business-development employees, will be required to complete annual antitrust compliance training. Training will be developed by qualified antitrust counsel and compliance professionals and will include practical scenarios and case studies tailored to the specialty minerals industry.
(b) Appointment of a Dedicated Chief Compliance Officer. TMC intends to appoint a dedicated Chief Compliance Officer ("CCO") with the authority, independence, and resources necessary to oversee the Enhanced Program. The CCO will report directly to the Board of Directors (or a designated committee thereof) and will have the authority to escalate compliance concerns without interference from management.
(c) Annual Compliance Certifications. The CEO and General Counsel of TMC will be required to provide annual certifications attesting to their compliance with, and the effectiveness of, the Enhanced Program. These certifications will be presented to the Board of Directors and will be maintained as part of TMC's compliance records.
(d) Written Policies on Competitor Contacts and Trade-Association Interactions. TMC will adopt detailed written policies governing all contacts between TMC personnel and competitor representatives, including requirements for pre-approval of certain categories of interactions, post-event reporting, and documentation of discussions at trade-association events. Attendance at trade-association conferences will require advance approval from the CCO or the legal department, and attendees will be required to file written reports summarizing their activities and interactions at such events.
(e) Confidential Compliance Hotline. TMC will establish (or enhance) a confidential compliance hotline through which employees may report suspected violations of antitrust law or TMC's compliance policies without fear of retaliation. Reports received through the hotline will be investigated promptly by the CCO and, where appropriate, by outside counsel.
(f) Periodic Auditing and Monitoring. TMC will implement a program of periodic auditing and monitoring of competitive interactions, pricing decisions, and trade-association activities. Audits will be conducted by the CCO's office, with the assistance of outside compliance consultants as appropriate, and audit findings will be reported to the Board of Directors on at least an annual basis.
TMC anticipates submitting a formal compliance program proposal to the Division in the coming months and welcomes any input or guidance the Division may wish to provide regarding the design or scope of the Enhanced Program.
C. Organizational Changes
TMC notes that Gavin Holt, the individual primarily responsible for the alleged conduct, departed the company effective September 30, 2021, prior to the opening of the grand jury investigation. While Holt's departure was not the result of a termination for cause (as the investigation had not yet commenced), TMC's current leadership has taken steps to ensure that the organizational conditions that permitted the alleged conduct have been addressed.
Specifically, TMC has implemented interim controls within the U.S. Specialty Minerals Division, including:
(a) Enhanced Oversight of Pricing Decisions. All pricing changes for high-purity feldspar, industrial talc, and rare-earth concentrates are now subject to review and approval by a cross-functional pricing committee, which includes representatives from the legal department, finance, and senior divisional management. No individual employee has the authority to unilaterally set or adjust pricing for these product categories.
(b) Legal Review of Pricing Actions. All proposed pricing changes that deviate from previously approved pricing frameworks are required to be reviewed by TMC's in-house legal team prior to implementation, to ensure that pricing decisions are based on legitimate competitive factors and do not reflect input from competitors or other impermissible sources.
These interim controls will remain in place pending the full implementation of the Enhanced Program and may be further refined based on the recommendations of the compliance consultant to be retained.
VI. Affected Commerce and Financial Context
Calderwood & Harkness, with the assistance of Hargrove Forensic Advisory LLC, is continuing to analyze the volume of TMC's U.S. sales of the three affected product categories — high-purity feldspar, industrial talc, and rare-earth concentrates — during the alleged conspiracy period of approximately January 2017 through August 2021. We provide the following preliminary analysis for the Division's reference, with the understanding that Hargrove's work is ongoing and that a comprehensive affected-commerce report will be provided to the Division upon completion.
TMC's U.S. Specialty Minerals Revenue. TMC's U.S. Specialty Minerals Division generated approximately USD $687 million in revenue for the fiscal year ending December 31, 2021 ("FY 2021"). This figure encompasses all product lines within the Division, including but not limited to the three affected product categories. TMC's consolidated revenue for FY 2021 was approximately CAD $4.27 billion (approximately USD $3.38 billion at the average exchange rate for FY 2021), and the U.S. Specialty Minerals Division accounted for approximately 20% of TMC's consolidated revenue.
TMC's Estimated Share of Affected Commerce. Hargrove's preliminary analysis indicates that TMC's share of the total affected commerce across all identified participants during the alleged conspiracy period is estimated at approximately USD $478 million. This estimate is based on TMC's sales of high-purity feldspar, industrial talc, and rare-earth concentrates in the United States during the period from approximately January 2017 through August 2021, as reflected in TMC's internal sales and financial records.
Total Estimated Affected Commerce. The total volume of affected commerce across all identified participants — TMC, Ridgecrest Minerals Inc., and Pinnacle Earth Resources Ltd. — is estimated at approximately USD $1.34 billion during the alleged conspiracy period. TMC's share of affected commerce represents approximately 35.7% of the estimated total ($478 million / $1.34 billion).
We emphasize that these figures are preliminary and are based on Hargrove's analysis to date. The affected-commerce analysis involves complex questions regarding product scope, geographic scope, and the precise temporal boundaries of the alleged conspiracy, and the final figures may be revised as Hargrove's work progresses and as the Division provides further guidance regarding the parameters of the affected-commerce calculation. TMC is committed to providing the Division with a complete and accurate accounting of affected commerce and will supplement this submission as additional information becomes available.
VII. Cooperation Credit Request
TMC respectfully submits that its cooperation with the Division's investigation has been timely, thorough, and conducted in good faith, and that this cooperation warrants significant credit under the Division's policies, including the Antitrust Division's Leniency Program and Other Incentives for Self-Reporting, Cooperation, and Remediation and related policy statements.
TMC's cooperation efforts have been comprehensive and have extended well beyond the minimum requirements of the grand jury subpoena. Specifically, TMC highlights the following cooperation efforts for the Division's consideration:
1. Extensive Document Production. TMC has produced approximately 487,000 documents, comprising approximately 3.2 million pages, collected through forensic methods from 34 identified custodians. The production was made on a rolling basis and was conducted as expeditiously as the volume and complexity of the materials permitted.
2. Comprehensive Internal Investigation. TMC, through Calderwood & Harkness and its forensic advisors, has conducted a thorough internal investigation involving interviews of 23 current and former TMC employees and the review of approximately 555,000 documents. The findings of the internal investigation have been shared transparently with the Division through the February 15 Proffer and this supplemental submission.
3. Voluntary Proffer Sessions. TMC has made two key witnesses — Sandra Chu and Thomas Eriksen — available for voluntary proffer sessions with the Division, conducted on March 10, 2023 and April 22, 2023, respectively. Both individuals appeared voluntarily with counsel and provided candid and responsive information.
4. Transparent Sharing of Adverse Findings. TMC has disclosed to the Division, openly and without reservation, evidence of at least 37 instances of Gavin Holt's pricing-related communications with competitors. TMC has not withheld or minimized the significance of its internal investigation findings, even where those findings are adverse to TMC's interests.
5. Proactive Remediation. TMC has implemented interim pricing controls within the U.S. Specialty Minerals Division and is in the process of developing a comprehensive Enhanced Antitrust Compliance Program. These remediation efforts are ongoing and reflect TMC's commitment to ensuring that the alleged conduct does not recur.
6. Consistent Availability. TMC has maintained a consistent posture of availability and responsiveness throughout the investigation, promptly addressing the Division's requests for information, documents, and witness access.
TMC respectfully requests that the Division take these cooperation efforts into account in determining the appropriate resolution of this matter, including in the assessment of any potential fine, penalty, or other sanction. TMC submits that its cooperation has been exemplary and that significant cooperation credit is warranted under the circumstances.
VIII. Reservation of Rights
This submission is made in the spirit of cooperation and in furtherance of TMC's ongoing dialogue with the Division regarding the resolution of this matter. However, TMC expressly reserves all rights, privileges, protections, and defenses available to it under applicable law.
Without limiting the generality of the foregoing, TMC specifically reserves the attorney-client privilege and the protections of the work-product doctrine with respect to all materials, communications, and mental impressions not produced or disclosed herein or in any prior submission. Nothing in this submission, including the disclosure of internal investigation findings, constitutes a waiver of the attorney-client privilege or the work-product doctrine with respect to any materials not specifically produced or disclosed. TMC's decision to share certain findings of its internal investigation with the Division is a voluntary act of cooperation and does not constitute a subject-matter waiver or a waiver as to any person or entity other than the Division.
Further, nothing in this submission constitutes, is intended to constitute, or should be construed as an admission of criminal liability by TMC or by any of its current or former officers, directors, employees, agents, or representatives. TMC reserves the right to contest any charges that may be brought, to challenge the legal and factual bases of any allegations, and to assert any and all defenses available under applicable law, including the laws of the United States, Canada, and any other relevant jurisdiction.
TMC also reserves the right to supplement, correct, or clarify any information provided in this submission or in any prior submission as additional information becomes available through the ongoing internal investigation or otherwise.
IX. Conclusion
TMC remains committed to full and continuing cooperation with the Antitrust Division's investigation of the matters referenced herein. TMC has devoted, and will continue to devote, substantial resources to supporting the Division's inquiry, conducting a thorough internal investigation, and implementing meaningful and lasting remedial measures.
TMC respectfully requests that the Division consider this supplemental submission, together with the February 15, 2023 Proffer and TMC's prior cooperation efforts, in evaluating the appropriate resolution of this matter. TMC believes that its cooperation and remediation efforts merit significant recognition and credit, and TMC looks forward to working with the Division toward a fair and just resolution.
Calderwood & Harkness stands ready to discuss any aspect of this submission or to provide additional information at the Division's request. We welcome the opportunity to meet with the Division at its convenience to address any questions or to explore the framework for a potential resolution.
We respectfully request that all further communications regarding this matter be directed to the undersigned at Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California 94104; telephone: (415) 772-6134; email: eforsythe@calderwoodharkness.com.
We appreciate the Division's continued professionalism and courtesy throughout this investigation and look forward to our continued dialogue.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe Partner, Antitrust & Competition Practice Group
On behalf of Torchlight Mining Corp.
cc:
Marcus Reeves, Esq. Senior Trial Attorney Antitrust Division, San Francisco Field Office U.S. Department of Justice 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102
Priya Anand, Esq. General Counsel Torchlight Mining Corp. 200 Bay Street, Suite 3400 Toronto, Ontario M5J 2J2, Canada (via separate cover)
This letter and the information contained herein are confidential and are subject to the attorney-client privilege, the work-product doctrine, and any other applicable privileges and protections. This letter is submitted solely in connection with the above-referenced investigation and is not intended for use in any other proceeding or context. Unauthorized disclosure, copying, or distribution of this letter is strictly prohibited.

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