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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

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

WITNESS INTERVIEW MEMORANDUM

PRIVILEGE DESIGNATION: This memorandum was prepared at the direction of counsel in connection with the provision of legal advice and in anticipation of litigation. It is protected by the attorney-client privilege and the work-product doctrine. This memorandum contains the mental impressions, conclusions, and legal theories of counsel. Do not copy, distribute, forward, or disclose this memorandum or its contents to any person without the express prior approval of Elaine Forsythe, Responsible Partner.

I. Interview Summary

Upjohn Warnings. At the outset of the interview, before any substantive questioning commenced, Aaron Liu administered Upjohn warnings (also referred to as corporate Miranda warnings) to Sandra Chu. Specifically, Mr. Liu advised Chu of the following:

(a) Calderwood & Harkness LLP represents Torchlight Mining Corp. in connection with the investigation referenced above. The firm does not represent Chu individually, and no attorney-client relationship exists between Calderwood & Harkness and Chu personally.

(b) The purpose of the interview is to gather facts relevant to the firm's representation of TMC in connection with the investigation being conducted by the Antitrust Division of the United States Department of Justice.

(c) The attorney-client privilege that attaches to the communications during this interview belongs to TMC, the corporate client, and not to Chu personally. Chu may not invoke the privilege on her own behalf with respect to statements made during this interview.

(d) TMC, as the holder of the privilege, may at any time in its sole discretion choose to waive the privilege and disclose the substance or contents of this interview to the DOJ, to other governmental authorities, or to other third parties.

(e) Chu has the right to retain personal legal counsel at her own expense if she wishes, and she is not required to participate in this interview without the advice of personal counsel.

Chu stated that she understood each of these advisements. She confirmed that she wished to proceed with the interview without personal counsel. She did not ask any clarifying questions regarding the Upjohn warnings before the substantive interview commenced.

Documents Reviewed During Interview. During the course of the interview, Chu was shown selected documents recovered from TMC's document collection produced in response to Grand Jury Subpoena No. GJ-22-0194-SD-003. These included internal pricing spreadsheets maintained by Chu and her team, email chains involving Gavin Holt and other members of the U.S. Specialty Minerals Division, and published price lists for high-purity feldspar, industrial talc, and rare-earth concentrates covering the period from 2017 through 2021. Specific Bates-numbered documents referenced during the interview are identified in the body of this memorandum and cataloged in Section IX below.

II. Background and Employment History

Sandra Chu has been employed by Torchlight Mining Corp. since approximately June 2013. She was originally hired as a Pricing Analyst within the U.S. Specialty Minerals Division, a position she held for approximately two years. In 2015, she was promoted to Senior Pricing Analyst, a role that carried expanded responsibilities for overseeing the preparation of quarterly pricing recommendations across multiple product lines. In January 2017, Chu was promoted to her current position of Director, Pricing Analytics, U.S. Specialty Minerals Division.

In her capacity as Director of Pricing Analytics, Chu reports directly to the Vice President, U.S. Specialty Minerals Sales. During the period most relevant to this investigation — from January 2017 through September 30, 2021 — that position was held by Gavin Holt. Holt resigned from TMC effective September 30, 2021. Following Holt's departure, Chu reported on an interim basis to a temporary supervisor whose identity Chu could not recall with certainty during the interview. She believed this interim supervisor may have been drawn from TMC's corporate finance group or from the broader Minerals Division leadership but was unable to confirm the individual's name. Chu subsequently began reporting to Holt's permanent successor, whose appointment she recalled occurring in late 2021 or early 2022. The identity of Holt's successor should be confirmed through TMC's Human Resources records.

Chu manages a team of approximately six pricing analysts. She described her team's core responsibilities as follows:

(i) Compiling cost-of-production data from TMC's mine operations and chemical-processing facilities on a quarterly basis, drawing on data provided by the operations and supply-chain teams;

(ii) Analyzing market pricing data and competitive intelligence, including publicly available pricing information from competitors' published price lists, trade press reports (such as Industrial Minerals Weekly and Mining Journal), and industry data services;

(iii) Preparing recommended price lists for each of the three primary product lines within the U.S. Specialty Minerals Division — high-purity feldspar, industrial talc, and rare-earth concentrates — broken down by product grade, geographic region, and customer segment;

(iv) Issuing periodic published price lists after receiving formal approval from the Vice President of U.S. Specialty Minerals Sales; and

(v) Providing pricing support for competitive bids, requests for proposal, and customer-specific quotes as directed by the sales organization.

Chu noted that the U.S. Specialty Minerals Division generated approximately USD 687 million in revenue in fiscal year 2021, which she understood to represent approximately 20% of TMC's consolidated revenue for that fiscal year. This revenue figure underscores the commercial significance of the pricing decisions made within the division and the materiality of the conduct under investigation.

Chu emphasized that she has no direct sales responsibilities. She does not personally negotiate pricing terms with customers, does not participate in customer-facing sales meetings, and does not attend trade-association conferences or industry events. Specifically, Chu stated that she has never attended a conference or meeting organized by the North American Specialty Minerals Council ("NASMC"), which has been identified as a venue at which Gavin Holt may have had contact with representatives of competitor firms. Chu's role is strictly analytical and internal to TMC.

III. TMC's Internal Pricing Process

Chu provided a detailed description of TMC's standard internal pricing process for the three product lines at issue in the investigation: high-purity feldspar, industrial talc, and rare-earth concentrates. The process as described by Chu is summarized below.

Standard Process. On a quarterly basis, Chu's team compiles and analyzes data from multiple sources to develop a recommended price list for each product line. The analytical process begins with the collection of updated cost-of-production data from TMC's mining operations and chemical-processing facilities, which includes raw extraction costs, processing and refining costs, transportation and logistics costs, and overhead allocations. The team then analyzes market demand indicators, including order volumes, customer forecasts, inventory levels, and macroeconomic factors affecting demand in downstream industries (such as ceramics, coatings, electronics, and specialty chemicals). In addition, the team reviews publicly available competitor pricing information, including published price lists from competitors that are available through industry channels, pricing data reported in trade publications, and market intelligence gathered by TMC's sales force in the ordinary course of business. Based on this comprehensive analysis, the team prepares a recommended price list for the upcoming quarter, setting forth recommended per-unit prices by product grade and geographic region.

Approval Authority. Under TMC's standard process, the recommended price list prepared by Chu's team would be submitted to the Vice President, U.S. Specialty Minerals Sales, for review and approval. During the relevant period from January 2017 through September 2021, this position was held by Gavin Holt. Holt had final approval authority over all published price lists for the U.S. Specialty Minerals Division. He had the authority to accept the team's recommendations, to direct modifications to specific line items or across product categories, and to approve or reject the price list in its entirety. Chu stated that Holt exercised this authority actively and frequently, and that his modifications were a regular feature of the pricing process during his tenure.

Published Price Lists. Once a price list received approval from Holt, Chu's team was responsible for publishing the approved prices to TMC's internal sales platform, an electronic system accessible to all authorized sales personnel within the U.S. Specialty Minerals Division. In addition, the approved price lists were distributed electronically to the division's regional sales managers — including Thomas Eriksen, Regional Sales Manager for the Western Region — for their use in customer negotiations and quotation preparation. The published price lists served as the baseline from which individual customer negotiations would proceed, with sales personnel having limited authority to offer discounts within pre-established parameters.

Customer-Specific Pricing. Chu described a parallel pricing process applicable to certain large-volume customers. For these key accounts, Holt would periodically direct Chu's team to prepare customer-specific quotes that could deviate — sometimes significantly — from the published price lists. These deviations could take the form of either discounts below published prices (to retain or win a significant customer) or, in certain instances, prices set at or above published levels for customers that Holt described as having limited alternative sourcing options. Chu stated that Holt exercised considerable personal discretion in directing these customer-specific pricing decisions and that he did not always provide a documented business rationale for the pricing levels he directed. When asked whether she found this lack of documentation concerning, Chu stated that she understood Holt to have broad authority over pricing matters within the division and that she did not view the absence of written justifications as inherently unusual, though she acknowledged that it departed from what she would consider best practices.

Bid Pricing. For competitive bids — including bids submitted in response to requests for proposal from government agencies and large industrial customers — Holt would typically set the bid price directly. In many instances, Chu's team would prepare a recommended bid price based on its standard cost-plus analysis and competitive assessment, but Holt would override the recommended price with a different figure. Chu stated that on multiple occasions Holt provided the bid price number directly to her or to her team without any accompanying explanation or analytical support. She characterized this as Holt "handing down" a price rather than engaging with the team's analysis. While Chu found this approach atypical, she reiterated that Holt had the authority to set bid prices and that she did not view his exercise of that authority as requiring her team's concurrence.

IV. Pricing-Adjustment Instructions from Gavin Holt

This section addresses the core factual issue identified during the interview: Gavin Holt's pattern of directing pricing adjustments that deviated from the recommendations of Chu's pricing analytics team.

Frequency and Pattern. Chu stated that on at least twelve occasions between approximately March 2017 and July 2021, Holt directed her to adjust published price lists or customer-specific quotes in ways that Chu found unusual or not fully supported by the underlying cost and market data compiled by her team. Chu was careful to note that not every pricing modification directed by Holt was unusual — Holt regularly reviewed and adjusted her team's recommendations, and many of those adjustments were within the range of reasonable business judgment. However, the twelve or more instances she identified stood out because the magnitude or direction of the adjustment, or the absence of any supporting rationale, departed materially from what the available data would support. Chu indicated that she could potentially identify additional instances upon further review of her working spreadsheets and email files but that twelve was the minimum number she could recall with reasonable confidence during the interview.

Nature of Instructions. The pricing-adjustment instructions from Holt typically took the form of direct communications to Chu — in person at the Reno office, by telephone, or via email — in which Holt would instruct her to increase or decrease prices for specific product lines, product grades, or geographic regions by specific percentages or specific dollar amounts per unit. Chu characterized these as "top-down" directives that did not go through the normal analytical process her team employed. In many cases, Holt provided only a brief or conclusory rationale, or no rationale at all. Chu stated that the instructions were generally delivered with an expectation of compliance — Holt did not typically invite discussion or pushback — and that she implemented them as directed.

Specific Examples Discussed. During the interview, Chu described in detail four specific instances of Holt's pricing directives that illustrate the pattern she identified. Each example was discussed in connection with contemporaneous documentary evidence shown to Chu during the interview.

Example 1 — Approximately Q2 2017 (High-Purity Feldspar). Holt directed Chu to increase the published list price for high-purity feldspar, Grade A (domestic), by 4.5% effective the following quarter. At the time, Chu's team had completed its standard quarterly analysis and had recommended a price increase of 1.8%, which reflected a modest uptick in extraction and processing costs and stable demand conditions. The 4.5% increase directed by Holt was roughly two and a half times the team's recommendation and was not, in Chu's view, supported by the available cost and market data. When Chu asked Holt for the basis of the higher figure, Holt stated only that "the market can bear it." Chu did not press further and implemented the directed increase. This exchange is reflected in an email from Holt to Chu, produced in the document collection at Bates No. TMC-00087432.

Example 2 — Approximately Q4 2018 (Industrial Talc). Holt directed Chu to hold industrial talc prices flat for the upcoming quarter rather than implement the 2% price decrease that Chu's team had recommended. The team's recommendation was based on a measurable decline in input costs during the preceding quarter, driven by lower energy prices and improved processing yields. Holding prices flat in the face of declining costs was, in Chu's assessment, inconsistent with TMC's historical pricing practice, which generally tracked cost movements to maintain competitive positioning. When Chu informed Holt of the team's recommendation, Holt stated that "we're holding firm across the board this quarter." He did not elaborate on the reasoning behind this directive. Chu implemented the instruction and held prices at the prior quarter's level. The relevant email communication is produced at Bates No. TMC-00143298.

Example 3 — Approximately Q1 2020 (Bid Pricing for Specific Large Customer). Holt directed Chu to adjust bid pricing for a specific large customer — believed by Chu to be a major chemicals manufacturer, though she could not recall the customer's name with certainty during the interview — to a level higher than Chu's recommended competitive bid price. Chu's team had recommended a price designed to be competitive in a multi-source bidding process, but Holt directed a higher price that Chu believed would likely result in TMC losing the bid. When Chu questioned the pricing level, Holt responded that "that account isn't one we're going after aggressively." Chu stated that at the time she did not read any particular significance into this remark, viewing it as a business judgment that the account was not sufficiently profitable or strategically important to warrant aggressive pricing. However, upon reflection during the interview — and after being informed of the broader factual context of the investigation — Chu acknowledged that Holt's language could be interpreted as customer-allocation language, suggesting that the account had been designated or understood to belong to a competitor. Chu stated clearly that she did not understand Holt's statement in that way at the time and had no basis at the time to suspect that a customer-allocation arrangement was in effect. The relevant email communication is produced at Bates No. TMC-00251076.

Example 4 — Approximately Q3 2020 (Rare-Earth Concentrate Pricing, Western U.S.). Holt directed specific pricing for rare-earth concentrates sold to customers in the Western United States. The pricing levels Holt specified were higher than what Chu's team's analysis supported. Approximately two weeks after TMC published its price list reflecting Holt's directed prices, a competitor — which Chu could not identify with certainty but which may have been Ridgecrest Minerals Inc. or Pinnacle Earth Resources Ltd. — published its own price list reflecting a comparable price increase in the same product category and geographic market. Chu noticed the temporal correlation between TMC's price increase and the competitor's subsequent announcement at the time, but she did not raise any concerns or flag the issue internally. She attributed the correlation to normal market dynamics — specifically, the possibility that both companies were responding to similar cost and demand conditions that independently supported the price increase. The relevant email communication directing the pricing adjustment is produced at Bates No. TMC-00289415.

Correlation with Competitor Pricing. During the interview, Chu was shown pricing comparison data prepared jointly by the Calderwood & Harkness investigation team and Hargrove Forensic Advisory, the economic consulting firm retained in connection with this matter. This data analyzed the timing and magnitude of TMC's pricing changes against comparable pricing changes by Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. across the three product lines during the period from 2017 through 2021. After reviewing this data, Chu acknowledged that at least several of Holt's directed price adjustments appeared to correlate temporally — in some cases with notable precision — with price movements by Ridgecrest and Pinnacle in the same product categories and geographic markets. Chu reiterated that she had noticed occasional pricing correlations in the ordinary course of her work during the relevant period but had attributed them to normal market dynamics, including similar input cost pressures, shared exposure to demand cycles in downstream industries, and the relatively concentrated structure of the U.S. specialty minerals market. She stated that she had not, at the time, viewed the correlations as indicative of coordination between TMC and its competitors.

Documentation. Chu stated that most of Holt's pricing directives were communicated verbally (in person or by telephone) or in brief emails that typically contained only the directed price level and minimal, if any, explanation. Chu stated that she did not always receive a written explanation or documented business justification for the adjustments. However, Chu maintained working spreadsheets in which she tracked pricing recommendations, directed changes, and final published prices for each quarter and product line. These working spreadsheets reflect the directed changes and, in many cases, the gap between the team's analytical recommendation and the price ultimately approved by Holt. Chu confirmed that these spreadsheets have been collected and produced as part of TMC's document production in response to the grand jury subpoena. The spreadsheets are contained within the approximately 487,000 documents produced under Subpoena No. GJ-22-0194-SD-003 and are currently being reviewed and cataloged by the document review team.

V. Knowledge of Competitor Communications

A critical objective of this interview was to assess the extent of Chu's knowledge of, or involvement in, any communications between Gavin Holt and his counterparts at competitor companies regarding pricing, customer allocation, or bid coordination. The results of this line of questioning are set forth below.

Direct Knowledge. Chu stated unequivocally that she had no direct knowledge that Gavin Holt was communicating with counterparts at competitor companies — including Ridgecrest Minerals Inc. or Pinnacle Earth Resources Ltd. — about pricing, customer allocation, bid coordination, or any other competitively sensitive subject. She was never present for any such communication, was never copied on any such communication, and was never told by Holt or anyone else that such communications were occurring. Chu was firm and unambiguous on this point.

VaultChat. Chu stated that she was not aware, during the relevant period or at any time prior to the commencement of the DOJ investigation, that Gavin Holt used the VaultChat encrypted-messaging application for business communications. Chu stated that she had never used VaultChat herself, had never been invited to communicate via VaultChat, and was not aware that any other TMC employee used VaultChat for business purposes. She further stated that she was not aware of any TMC policy that addressed the use of VaultChat or other encrypted-messaging applications in connection with company business. Chu first learned of the existence of VaultChat communications attributed to Holt when she received the company-wide litigation hold notice on March 1, 2022, which referenced the preservation of communications on encrypted-messaging platforms.

No Participation in Competitor Meetings. Chu confirmed that she has never attended any conference, meeting, dinner, social event, or other gathering organized by or held under the auspices of the North American Specialty Minerals Council ("NASMC") or any other trade association in the specialty minerals industry. She has never participated in any NASMC committee or working group. She has never communicated directly — whether in person, by telephone, by email, by text message, or by any other means — with any employee, officer, or agent of Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., or Cascade Chemical Supply Co. regarding pricing, costs, production volumes, customer information, bid strategy, or any other competitively sensitive matter. Chu stated that the only contacts she has had with competitor personnel, if any, would have been incidental and purely social in nature, and she could not recall any specific such contact.

Suspicions. When asked whether she ever suspected that Holt's pricing directives might have been based on information obtained from competitors, Chu provided a thoughtful and nuanced response. She stated that she occasionally wondered about the source of Holt's price-adjustment instructions, particularly in instances where the directed prices deviated significantly from her team's data-driven analysis and where Holt offered little or no explanation for the deviation. However, Chu stated that she attributed Holt's pricing judgments to market intelligence, management-level strategic insights, or business considerations that were above her level of visibility within the organization. She assumed that Holt, as the Vice President responsible for sales in the division, had access to information and perspectives that her pricing analytics function did not possess. Chu stated that she did not raise formal concerns about Holt's pricing directives — either to Holt directly, to TMC's General Counsel, to the compliance function, or through any internal reporting channel — because she did not have a basis to suspect illegal activity and because Holt had clear authority to set prices within the division.

No Awareness of C-Suite Involvement. Chu stated that she had no reason to believe that any member of TMC's senior executive leadership or Board of Directors had knowledge of, authorized, or participated in any communications between Holt and representatives of competitor companies. Specifically, Chu stated she had no information suggesting that CEO Søren Dalmqvist, General Counsel Priya Anand, CFO Richard Fong, or any member of TMC's Board of Directors was aware of the conduct now under investigation. Chu noted that her interactions with TMC's C-suite executives were limited and that she did not have regular communication with any of the individuals named above outside of occasional company-wide presentations or meetings.

VI. TMC's Antitrust Compliance Program

Chu was questioned regarding her knowledge of and experience with TMC's antitrust compliance program, which is relevant both to the company's potential defenses and to its cooperation posture with the DOJ.

Chu stated that she was generally aware that TMC had adopted an antitrust compliance policy at some point approximately in 2014, prior to her promotion to Director. She recalled that the policy was distributed to employees in the Specialty Minerals Division at the time of its adoption, though she could not recall the specific contents of the policy in any detail. She believed the policy addressed general prohibitions on price-fixing, market allocation, and other forms of collusion with competitors, but she could not identify specific provisions or recall whether the policy contained reporting obligations or guidance on interactions with competitor personnel at trade-association events.

Chu recalled attending a single antitrust compliance training session, which she believed occurred in either 2016 or 2017. She was uncertain of the exact date and could not recall the identity of the presenter. She believed the training session was conducted in a group setting — either in person or via videoconference — and lasted approximately one to two hours. She recalled that the training covered general antitrust principles, including the prohibition on agreements with competitors to fix prices or allocate markets, but she could not recall the training addressing specific practical scenarios, reporting mechanisms, or the handling of suspected violations.

Chu stated that she had not received any antitrust compliance training since that single session. She was not aware of any annual or periodic antitrust training being conducted within the U.S. Specialty Minerals Division after approximately 2018. She did not know whether other divisions or business units within TMC conducted regular antitrust training.

Chu confirmed that no one at TMC had ever provided her with specific instructions, guidance, or protocols regarding the handling of competitor-contact situations, the monitoring of trade-association interactions, or the reporting of suspected antitrust violations. She was not aware of a dedicated antitrust compliance hotline, a designated compliance officer for antitrust matters, or a specific mechanism through which employees could report suspected antitrust violations anonymously or otherwise.

Finally, Chu stated that the antitrust compliance program, to the extent she was aware of its contents, did not address the use of encrypted messaging applications such as VaultChat. She was not aware of any TMC policy — whether within the compliance program or otherwise — that prohibited, restricted, or addressed the use of encrypted messaging platforms for business communications. Chu noted that TMC's standard business communications were conducted via corporate email and the company's internal messaging system, but she was not aware of any formal prohibition on the use of third-party messaging applications.

VII. Holt's Departure and Subsequent Events

Chu stated that Gavin Holt resigned from TMC effective September 30, 2021. Chu learned of Holt's departure through standard internal communications — she recalled receiving an email from TMC's Human Resources department or divisional leadership announcing the departure. No specific reason for Holt's resignation was communicated to Chu or, to her knowledge, to the broader U.S. Specialty Minerals Division team. The departure was characterized in the announcement as Holt "pursuing other opportunities." Chu did not have a personal conversation with Holt about his reasons for leaving and did not receive any indication, either from Holt or from TMC management, that the departure was related to the matters now under investigation. Chu stated that she did not find the departure particularly notable at the time, as executive-level turnover was not uncommon within TMC's divisional structure.

After Holt's departure, Chu stated that the pricing process within the U.S. Specialty Minerals Division reverted to a more standard, analytically driven approach. Under the interim VP who assumed Holt's supervisory responsibilities, Chu's team's pricing recommendations were approved with fewer unexplained overrides. Chu characterized the post-Holt pricing process as more consistent with what she would consider normal practice — the interim supervisor reviewed the team's analysis, asked questions, and generally approved recommendations that were supported by the underlying data. Chu noted this contrast with Holt's more interventionist approach without being prompted to do so, suggesting that the difference was apparent to her at the time.

Chu received TMC's company-wide litigation hold notice on March 1, 2022. The notice was drafted by Calderwood & Harkness LLP and was issued under the signature of TMC General Counsel Priya Anand. Chu also received, on the same date, a supplemental targeted litigation hold directed specifically to personnel within the U.S. Specialty Minerals Division. The supplemental hold identified specific categories of documents and communications to be preserved, including pricing-related emails, spreadsheets, analyses, and working papers. Chu confirmed that she has complied with the preservation instructions set forth in both the company-wide and supplemental litigation holds, including the preservation of all relevant emails, spreadsheets, working papers, and electronic files within her custody or control. She stated that she had not deleted, destroyed, or altered any potentially relevant documents since receiving the hold notices.

Chu stated that she has not been contacted by the DOJ, by any federal agent or investigator, or by any attorney representing the DOJ in connection with the investigation. She has not been contacted by counsel for any co-subject of the investigation, including counsel for Ridgecrest Minerals Inc. or Pinnacle Earth Resources Ltd. She has not been contacted by counsel for Cascade Chemical Supply Co. She has not received a subpoena, a target letter, a subject letter, or any other formal communication from the government.

Chu further stated that she has not been contacted by Gavin Holt since the commencement of the investigation. She has not been contacted by Holt's personal counsel, Patrick Dunleavy of Briarcliff Law Group PLLC, or by anyone purporting to act on Holt's behalf. Chu confirmed that she has had no communications with Holt regarding the investigation, the underlying conduct, or any related matter.

VIII. Assessment and Observations

The following assessment reflects the mental impressions and conclusions of counsel and is entitled to heightened protection under the work-product doctrine.

Credibility. Chu appeared credible, forthcoming, and cooperative throughout the interview. She answered questions directly and without apparent evasion. She volunteered relevant details without prompting in several instances and did not attempt to minimize or obscure information that could be unfavorable to TMC or to Holt. Her account of TMC's pricing process, Holt's role, and the specific instances of pricing directives was internally consistent over the course of the four-hour interview and aligned in all material respects with the documentary record reviewed to date. Chu's demeanor was professional and composed. She appeared genuinely surprised by certain aspects of the investigation's broader context — particularly the existence of the VaultChat communications — in a manner that was consistent with a lack of prior awareness. Overall, we assess Chu's account to be reliable and her presentation as a witness to be strong.

Potential Witness Value. Chu is a valuable fact witness for TMC's defense and cooperation effort. Her testimony can establish the following critical points:

(a) That Gavin Holt exercised unusual top-down pricing authority on at least twelve documented occasions during the period from March 2017 through July 2021, directing pricing adjustments that deviated materially from the data-driven recommendations of the Pricing Analytics team;

(b) That these pricing directives lacked the normal analytical support that TMC's standard pricing process would produce, and that Holt frequently provided little or no documented rationale for his directed adjustments;

(c) That Chu and her team, who occupied the primary analytical role in TMC's pricing process, had no knowledge of or involvement in any communications between Holt and representatives of competitor companies; and

(d) That the pricing process within the U.S. Specialty Minerals Division returned to a more standard analytical approach following Holt's departure, which supports the inference that the aberrant pricing pattern was driven by Holt personally rather than by a broader institutional practice.

Lack of Direct Evidence of Knowledge. Based on the interview and the documentary evidence reviewed to date, there is no direct evidence that Chu knew of, participated in, or facilitated the inter-competitor communications between Holt and Carl Edgerton of Ridgecrest Minerals Inc. or Kevin Tsang of Pinnacle Earth Resources Ltd. The evidence is consistent with Chu being an unwitting instrument through which Holt implemented pricing decisions that may have been the product of coordinated competitor activity. Chu's role was limited to receiving Holt's pricing directives and implementing them through TMC's internal pricing systems. She did not have visibility into the source of Holt's instructions and had no reason, based on the information available to her, to conclude that the instructions were the product of illegal coordination.

Risk Assessment. Based on the totality of information gathered during the interview and the documentary evidence reviewed to date, Chu does not appear to be a target or subject of the DOJ investigation. Her conduct is consistent with that of a mid-level employee who executed the directives of her supervisor without knowledge of the supervisor's illicit motivations. Her cooperation with the internal investigation has been prompt and fulsome, and her testimony supports TMC's broader cooperation posture with the DOJ. We believe Chu should be considered a potential cooperative witness for a voluntary proffer session with the Antitrust Division, subject to the follow-up steps identified below and the assessment of whether she should be advised to retain personal counsel in advance of any direct engagement with the government.

Follow-Up Items. The following action items have been identified based on the interview:

(1) Follow-up interview — VaultChat message analysis. A follow-up interview with Chu should be scheduled after the completion of the VaultChat message analysis currently being conducted by the investigation team. The VaultChat analysis is in progress; a separate memorandum documenting the results of that analysis is anticipated to be completed by approximately September 15, 2022. At the follow-up interview, Chu should be shown specific VaultChat messages attributed to Holt that reference pricing actions, customer accounts, or bid decisions, and she should be asked to determine whether any of the referenced actions correspond to pricing directives she received from Holt or pricing changes reflected in her working spreadsheets.

(2) Cross-referencing pricing overrides with VaultChat communications. The twelve or more pricing-override instances identified by Chu should be cross-referenced against the thirty-seven documented Holt-competitor VaultChat communications to determine the extent of temporal overlap between Holt's pricing directives to Chu and Holt's communications with Carl Edgerton (Ridgecrest) and Kevin Tsang (Pinnacle). This cross-referencing analysis should be coordinated with Hargrove Forensic Advisory and its lead engagement partner, Dr. Vanessa Tremblay, who is conducting the economic analysis of pricing correlations across the three companies.

(3) Personal counsel for Chu. An assessment should be made as to whether Chu should be advised to retain personal counsel in advance of any potential DOJ proffer session or grand jury appearance. While Chu does not currently appear to face personal criminal exposure, the retention of personal counsel would ensure that her individual interests are protected in any direct engagement with the government and would insulate TMC from any potential claim that Chu's cooperation was the product of inadequate advisement regarding her rights.

(4) Complete collection and review of Chu's working spreadsheets. Chu's working spreadsheets reflecting Holt's pricing directives, the team's underlying recommendations, and the final published prices for each quarter and product line should be fully collected, reviewed, and cataloged. This task should be coordinated with Redstone Digital Forensics and its Project Director, Neil Ashworth, who is overseeing the forensic collection and processing of electronically stored information in connection with the investigation. It is essential that all versions of these spreadsheets — including drafts, interim versions, and final versions — are captured and that any metadata associated with the files is preserved.

IX. Documents Referenced

The following Bates-numbered documents were shown to or discussed with Sandra Chu during the interview on July 15, 2022:

In addition to the documents identified above, Chu was shown selected pricing spreadsheets and published price lists for high-purity feldspar, industrial talc, and rare-earth concentrates covering the period from 2017 through 2021. The Bates ranges for these additional documents will be cataloged in a supplemental index to be prepared following the completion of the document review team's cataloging of Chu's working files.

X. Distribution

This memorandum has been distributed to the following individuals only:

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

• Monica Reyes, Working Associate, Antitrust & Competition Practice Group, Calderwood & Harkness LLP

• File: Matter No. 1039-00001

This memorandum is not to be distributed to the client, to any representative of Torchlight Mining Corp., or to any third party without the express prior authorization of Elaine Forsythe, Responsible Partner.

Prepared by:

________________________________________

Aaron Liu Lead Associate Antitrust & Competition Practice Group Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104

Date: July 18, 2022

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT This memorandum was prepared at the direction of counsel in connection with the provision of legal advice and in anticipation of litigation. It reflects the mental impressions, conclusions, opinions, and legal theories of counsel. Do not copy, distribute, or disclose without the express prior authorization of Elaine Forsythe, Responsible Partner.

Matter:	Torchlight Mining Corp. — DOJ Antitrust Division Grand Jury Investigation
Matter Number:	1039-00001
Grand Jury No.:	GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division
Date of Memorandum:	July 18, 2022
Prepared By:	Aaron Liu, Lead Associate, Antitrust & Competition Practice Group
Reviewed By:	Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group
Subject:	Interview of Sandra Chu, Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp.
Witness:	Sandra Chu
Title:	Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp.
Employment Status:	Current employee of Torchlight Mining Corp. ("TMC"); based at Torchlight Mining (U.S.) Inc., 8750 West Sahara Avenue, Suite 210, Reno, NV 89117
Date of Interview:	July 15, 2022
Location:	Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, CA 94104 (Conference Room 40-B)
Duration:	Approximately 4 hours (10:00 a.m. – 2:15 p.m. PT), with a 15-minute break taken at approximately 12:00 p.m.
Interviewers:	Aaron Liu, Lead Associate, Calderwood & Harkness LLP; Monica Reyes, Working Associate, Calderwood & Harkness LLP
Also Present:	No one else was present during the interview. Chu was not accompanied by personal counsel.
Bates Number	Description
TMC-00087432	Email from Gavin Holt to Sandra Chu regarding high-purity feldspar pricing, Grade A (domestic), directing 4.5% price increase (approximately Q2 2017)
TMC-00143298	Email from Gavin Holt to Sandra Chu regarding industrial talc pricing, directing that prices be held flat notwithstanding team recommendation of 2% decrease (approximately Q4 2018)
TMC-00251076	Email from Gavin Holt to Sandra Chu regarding bid pricing for specific large customer (believed to be a major chemicals manufacturer), directing higher-than-recommended bid price (approximately Q1 2020)
TMC-00289415	Email from Gavin Holt to Sandra Chu regarding rare-earth concentrate pricing for Western U.S. customers, directing specific pricing levels (approximately Q3 2020)

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, CA 94104
WITNESS INTERVIEW MEMORANDUM
PRIVILEGE DESIGNATION: This memorandum was prepared at the direction of counsel in connection with the provision of legal advice and in anticipation of litigation. It is protected by the attorney-client privilege and the work-product doctrine. This memorandum contains the mental impressions, conclusions, and legal theories of counsel. Do not copy, distribute, forward, or disclose this memorandum or its contents to any person without the express prior approval of Elaine Forsythe, Responsible Partner.
I. Interview Summary
Upjohn Warnings. At the outset of the interview, before any substantive questioning commenced, Aaron Liu administered Upjohn warnings (also referred to as corporate Miranda warnings) to Sandra Chu. Specifically, Mr. Liu advised Chu of the following:
(a) Calderwood & Harkness LLP represents Torchlight Mining Corp. in connection with the investigation referenced above. The firm does not represent Chu individually, and no attorney-client relationship exists between Calderwood & Harkness and Chu personally.
(b) The purpose of the interview is to gather facts relevant to the firm's representation of TMC in connection with the investigation being conducted by the Antitrust Division of the United States Department of Justice.
(c) The attorney-client privilege that attaches to the communications during this interview belongs to TMC, the corporate client, and not to Chu personally. Chu may not invoke the privilege on her own behalf with respect to statements made during this interview.
(d) TMC, as the holder of the privilege, may at any time in its sole discretion choose to waive the privilege and disclose the substance or contents of this interview to the DOJ, to other governmental authorities, or to other third parties.
(e) Chu has the right to retain personal legal counsel at her own expense if she wishes, and she is not required to participate in this interview without the advice of personal counsel.
Chu stated that she understood each of these advisements. She confirmed that she wished to proceed with the interview without personal counsel. She did not ask any clarifying questions regarding the Upjohn warnings before the substantive interview commenced.
Documents Reviewed During Interview. During the course of the interview, Chu was shown selected documents recovered from TMC's document collection produced in response to Grand Jury Subpoena No. GJ-22-0194-SD-003. These included internal pricing spreadsheets maintained by Chu and her team, email chains involving Gavin Holt and other members of the U.S. Specialty Minerals Division, and published price lists for high-purity feldspar, industrial talc, and rare-earth concentrates covering the period from 2017 through 2021. Specific Bates-numbered documents referenced during the interview are identified in the body of this memorandum and cataloged in Section IX below.
II. Background and Employment History
Sandra Chu has been employed by Torchlight Mining Corp. since approximately June 2013. She was originally hired as a Pricing Analyst within the U.S. Specialty Minerals Division, a position she held for approximately two years. In 2015, she was promoted to Senior Pricing Analyst, a role that carried expanded responsibilities for overseeing the preparation of quarterly pricing recommendations across multiple product lines. In January 2017, Chu was promoted to her current position of Director, Pricing Analytics, U.S. Specialty Minerals Division.
In her capacity as Director of Pricing Analytics, Chu reports directly to the Vice President, U.S. Specialty Minerals Sales. During the period most relevant to this investigation — from January 2017 through September 30, 2021 — that position was held by Gavin Holt. Holt resigned from TMC effective September 30, 2021. Following Holt's departure, Chu reported on an interim basis to a temporary supervisor whose identity Chu could not recall with certainty during the interview. She believed this interim supervisor may have been drawn from TMC's corporate finance group or from the broader Minerals Division leadership but was unable to confirm the individual's name. Chu subsequently began reporting to Holt's permanent successor, whose appointment she recalled occurring in late 2021 or early 2022. The identity of Holt's successor should be confirmed through TMC's Human Resources records.
Chu manages a team of approximately six pricing analysts. She described her team's core responsibilities as follows:
(i) Compiling cost-of-production data from TMC's mine operations and chemical-processing facilities on a quarterly basis, drawing on data provided by the operations and supply-chain teams;
(ii) Analyzing market pricing data and competitive intelligence, including publicly available pricing information from competitors' published price lists, trade press reports (such as Industrial Minerals Weekly and Mining Journal), and industry data services;
(iii) Preparing recommended price lists for each of the three primary product lines within the U.S. Specialty Minerals Division — high-purity feldspar, industrial talc, and rare-earth concentrates — broken down by product grade, geographic region, and customer segment;
(iv) Issuing periodic published price lists after receiving formal approval from the Vice President of U.S. Specialty Minerals Sales; and
(v) Providing pricing support for competitive bids, requests for proposal, and customer-specific quotes as directed by the sales organization.
Chu noted that the U.S. Specialty Minerals Division generated approximately USD 687 million in revenue in fiscal year 2021, which she understood to represent approximately 20% of TMC's consolidated revenue for that fiscal year. This revenue figure underscores the commercial significance of the pricing decisions made within the division and the materiality of the conduct under investigation.
Chu emphasized that she has no direct sales responsibilities. She does not personally negotiate pricing terms with customers, does not participate in customer-facing sales meetings, and does not attend trade-association conferences or industry events. Specifically, Chu stated that she has never attended a conference or meeting organized by the North American Specialty Minerals Council ("NASMC"), which has been identified as a venue at which Gavin Holt may have had contact with representatives of competitor firms. Chu's role is strictly analytical and internal to TMC.
III. TMC's Internal Pricing Process
Chu provided a detailed description of TMC's standard internal pricing process for the three product lines at issue in the investigation: high-purity feldspar, industrial talc, and rare-earth concentrates. The process as described by Chu is summarized below.
Standard Process. On a quarterly basis, Chu's team compiles and analyzes data from multiple sources to develop a recommended price list for each product line. The analytical process begins with the collection of updated cost-of-production data from TMC's mining operations and chemical-processing facilities, which includes raw extraction costs, processing and refining costs, transportation and logistics costs, and overhead allocations. The team then analyzes market demand indicators, including order volumes, customer forecasts, inventory levels, and macroeconomic factors affecting demand in downstream industries (such as ceramics, coatings, electronics, and specialty chemicals). In addition, the team reviews publicly available competitor pricing information, including published price lists from competitors that are available through industry channels, pricing data reported in trade publications, and market intelligence gathered by TMC's sales force in the ordinary course of business. Based on this comprehensive analysis, the team prepares a recommended price list for the upcoming quarter, setting forth recommended per-unit prices by product grade and geographic region.
Approval Authority. Under TMC's standard process, the recommended price list prepared by Chu's team would be submitted to the Vice President, U.S. Specialty Minerals Sales, for review and approval. During the relevant period from January 2017 through September 2021, this position was held by Gavin Holt. Holt had final approval authority over all published price lists for the U.S. Specialty Minerals Division. He had the authority to accept the team's recommendations, to direct modifications to specific line items or across product categories, and to approve or reject the price list in its entirety. Chu stated that Holt exercised this authority actively and frequently, and that his modifications were a regular feature of the pricing process during his tenure.
Published Price Lists. Once a price list received approval from Holt, Chu's team was responsible for publishing the approved prices to TMC's internal sales platform, an electronic system accessible to all authorized sales personnel within the U.S. Specialty Minerals Division. In addition, the approved price lists were distributed electronically to the division's regional sales managers — including Thomas Eriksen, Regional Sales Manager for the Western Region — for their use in customer negotiations and quotation preparation. The published price lists served as the baseline from which individual customer negotiations would proceed, with sales personnel having limited authority to offer discounts within pre-established parameters.
Customer-Specific Pricing. Chu described a parallel pricing process applicable to certain large-volume customers. For these key accounts, Holt would periodically direct Chu's team to prepare customer-specific quotes that could deviate — sometimes significantly — from the published price lists. These deviations could take the form of either discounts below published prices (to retain or win a significant customer) or, in certain instances, prices set at or above published levels for customers that Holt described as having limited alternative sourcing options. Chu stated that Holt exercised considerable personal discretion in directing these customer-specific pricing decisions and that he did not always provide a documented business rationale for the pricing levels he directed. When asked whether she found this lack of documentation concerning, Chu stated that she understood Holt to have broad authority over pricing matters within the division and that she did not view the absence of written justifications as inherently unusual, though she acknowledged that it departed from what she would consider best practices.
Bid Pricing. For competitive bids — including bids submitted in response to requests for proposal from government agencies and large industrial customers — Holt would typically set the bid price directly. In many instances, Chu's team would prepare a recommended bid price based on its standard cost-plus analysis and competitive assessment, but Holt would override the recommended price with a different figure. Chu stated that on multiple occasions Holt provided the bid price number directly to her or to her team without any accompanying explanation or analytical support. She characterized this as Holt "handing down" a price rather than engaging with the team's analysis. While Chu found this approach atypical, she reiterated that Holt had the authority to set bid prices and that she did not view his exercise of that authority as requiring her team's concurrence.
IV. Pricing-Adjustment Instructions from Gavin Holt
This section addresses the core factual issue identified during the interview: Gavin Holt's pattern of directing pricing adjustments that deviated from the recommendations of Chu's pricing analytics team.
Frequency and Pattern. Chu stated that on at least twelve occasions between approximately March 2017 and July 2021, Holt directed her to adjust published price lists or customer-specific quotes in ways that Chu found unusual or not fully supported by the underlying cost and market data compiled by her team. Chu was careful to note that not every pricing modification directed by Holt was unusual — Holt regularly reviewed and adjusted her team's recommendations, and many of those adjustments were within the range of reasonable business judgment. However, the twelve or more instances she identified stood out because the magnitude or direction of the adjustment, or the absence of any supporting rationale, departed materially from what the available data would support. Chu indicated that she could potentially identify additional instances upon further review of her working spreadsheets and email files but that twelve was the minimum number she could recall with reasonable confidence during the interview.
Nature of Instructions. The pricing-adjustment instructions from Holt typically took the form of direct communications to Chu — in person at the Reno office, by telephone, or via email — in which Holt would instruct her to increase or decrease prices for specific product lines, product grades, or geographic regions by specific percentages or specific dollar amounts per unit. Chu characterized these as "top-down" directives that did not go through the normal analytical process her team employed. In many cases, Holt provided only a brief or conclusory rationale, or no rationale at all. Chu stated that the instructions were generally delivered with an expectation of compliance — Holt did not typically invite discussion or pushback — and that she implemented them as directed.
Specific Examples Discussed. During the interview, Chu described in detail four specific instances of Holt's pricing directives that illustrate the pattern she identified. Each example was discussed in connection with contemporaneous documentary evidence shown to Chu during the interview.
Example 1 — Approximately Q2 2017 (High-Purity Feldspar). Holt directed Chu to increase the published list price for high-purity feldspar, Grade A (domestic), by 4.5% effective the following quarter. At the time, Chu's team had completed its standard quarterly analysis and had recommended a price increase of 1.8%, which reflected a modest uptick in extraction and processing costs and stable demand conditions. The 4.5% increase directed by Holt was roughly two and a half times the team's recommendation and was not, in Chu's view, supported by the available cost and market data. When Chu asked Holt for the basis of the higher figure, Holt stated only that "the market can bear it." Chu did not press further and implemented the directed increase. This exchange is reflected in an email from Holt to Chu, produced in the document collection at Bates No. TMC-00087432.
Example 2 — Approximately Q4 2018 (Industrial Talc). Holt directed Chu to hold industrial talc prices flat for the upcoming quarter rather than implement the 2% price decrease that Chu's team had recommended. The team's recommendation was based on a measurable decline in input costs during the preceding quarter, driven by lower energy prices and improved processing yields. Holding prices flat in the face of declining costs was, in Chu's assessment, inconsistent with TMC's historical pricing practice, which generally tracked cost movements to maintain competitive positioning. When Chu informed Holt of the team's recommendation, Holt stated that "we're holding firm across the board this quarter." He did not elaborate on the reasoning behind this directive. Chu implemented the instruction and held prices at the prior quarter's level. The relevant email communication is produced at Bates No. TMC-00143298.
Example 3 — Approximately Q1 2020 (Bid Pricing for Specific Large Customer). Holt directed Chu to adjust bid pricing for a specific large customer — believed by Chu to be a major chemicals manufacturer, though she could not recall the customer's name with certainty during the interview — to a level higher than Chu's recommended competitive bid price. Chu's team had recommended a price designed to be competitive in a multi-source bidding process, but Holt directed a higher price that Chu believed would likely result in TMC losing the bid. When Chu questioned the pricing level, Holt responded that "that account isn't one we're going after aggressively." Chu stated that at the time she did not read any particular significance into this remark, viewing it as a business judgment that the account was not sufficiently profitable or strategically important to warrant aggressive pricing. However, upon reflection during the interview — and after being informed of the broader factual context of the investigation — Chu acknowledged that Holt's language could be interpreted as customer-allocation language, suggesting that the account had been designated or understood to belong to a competitor. Chu stated clearly that she did not understand Holt's statement in that way at the time and had no basis at the time to suspect that a customer-allocation arrangement was in effect. The relevant email communication is produced at Bates No. TMC-00251076.
Example 4 — Approximately Q3 2020 (Rare-Earth Concentrate Pricing, Western U.S.). Holt directed specific pricing for rare-earth concentrates sold to customers in the Western United States. The pricing levels Holt specified were higher than what Chu's team's analysis supported. Approximately two weeks after TMC published its price list reflecting Holt's directed prices, a competitor — which Chu could not identify with certainty but which may have been Ridgecrest Minerals Inc. or Pinnacle Earth Resources Ltd. — published its own price list reflecting a comparable price increase in the same product category and geographic market. Chu noticed the temporal correlation between TMC's price increase and the competitor's subsequent announcement at the time, but she did not raise any concerns or flag the issue internally. She attributed the correlation to normal market dynamics — specifically, the possibility that both companies were responding to similar cost and demand conditions that independently supported the price increase. The relevant email communication directing the pricing adjustment is produced at Bates No. TMC-00289415.
Correlation with Competitor Pricing. During the interview, Chu was shown pricing comparison data prepared jointly by the Calderwood & Harkness investigation team and Hargrove Forensic Advisory, the economic consulting firm retained in connection with this matter. This data analyzed the timing and magnitude of TMC's pricing changes against comparable pricing changes by Ridgecrest Minerals Inc. and Pinnacle Earth Resources Ltd. across the three product lines during the period from 2017 through 2021. After reviewing this data, Chu acknowledged that at least several of Holt's directed price adjustments appeared to correlate temporally — in some cases with notable precision — with price movements by Ridgecrest and Pinnacle in the same product categories and geographic markets. Chu reiterated that she had noticed occasional pricing correlations in the ordinary course of her work during the relevant period but had attributed them to normal market dynamics, including similar input cost pressures, shared exposure to demand cycles in downstream industries, and the relatively concentrated structure of the U.S. specialty minerals market. She stated that she had not, at the time, viewed the correlations as indicative of coordination between TMC and its competitors.
Documentation. Chu stated that most of Holt's pricing directives were communicated verbally (in person or by telephone) or in brief emails that typically contained only the directed price level and minimal, if any, explanation. Chu stated that she did not always receive a written explanation or documented business justification for the adjustments. However, Chu maintained working spreadsheets in which she tracked pricing recommendations, directed changes, and final published prices for each quarter and product line. These working spreadsheets reflect the directed changes and, in many cases, the gap between the team's analytical recommendation and the price ultimately approved by Holt. Chu confirmed that these spreadsheets have been collected and produced as part of TMC's document production in response to the grand jury subpoena. The spreadsheets are contained within the approximately 487,000 documents produced under Subpoena No. GJ-22-0194-SD-003 and are currently being reviewed and cataloged by the document review team.
V. Knowledge of Competitor Communications
A critical objective of this interview was to assess the extent of Chu's knowledge of, or involvement in, any communications between Gavin Holt and his counterparts at competitor companies regarding pricing, customer allocation, or bid coordination. The results of this line of questioning are set forth below.
Direct Knowledge. Chu stated unequivocally that she had no direct knowledge that Gavin Holt was communicating with counterparts at competitor companies — including Ridgecrest Minerals Inc. or Pinnacle Earth Resources Ltd. — about pricing, customer allocation, bid coordination, or any other competitively sensitive subject. She was never present for any such communication, was never copied on any such communication, and was never told by Holt or anyone else that such communications were occurring. Chu was firm and unambiguous on this point.
VaultChat. Chu stated that she was not aware, during the relevant period or at any time prior to the commencement of the DOJ investigation, that Gavin Holt used the VaultChat encrypted-messaging application for business communications. Chu stated that she had never used VaultChat herself, had never been invited to communicate via VaultChat, and was not aware that any other TMC employee used VaultChat for business purposes. She further stated that she was not aware of any TMC policy that addressed the use of VaultChat or other encrypted-messaging applications in connection with company business. Chu first learned of the existence of VaultChat communications attributed to Holt when she received the company-wide litigation hold notice on March 1, 2022, which referenced the preservation of communications on encrypted-messaging platforms.
No Participation in Competitor Meetings. Chu confirmed that she has never attended any conference, meeting, dinner, social event, or other gathering organized by or held under the auspices of the North American Specialty Minerals Council ("NASMC") or any other trade association in the specialty minerals industry. She has never participated in any NASMC committee or working group. She has never communicated directly — whether in person, by telephone, by email, by text message, or by any other means — with any employee, officer, or agent of Ridgecrest Minerals Inc., Pinnacle Earth Resources Ltd., or Cascade Chemical Supply Co. regarding pricing, costs, production volumes, customer information, bid strategy, or any other competitively sensitive matter. Chu stated that the only contacts she has had with competitor personnel, if any, would have been incidental and purely social in nature, and she could not recall any specific such contact.
Suspicions. When asked whether she ever suspected that Holt's pricing directives might have been based on information obtained from competitors, Chu provided a thoughtful and nuanced response. She stated that she occasionally wondered about the source of Holt's price-adjustment instructions, particularly in instances where the directed prices deviated significantly from her team's data-driven analysis and where Holt offered little or no explanation for the deviation. However, Chu stated that she attributed Holt's pricing judgments to market intelligence, management-level strategic insights, or business considerations that were above her level of visibility within the organization. She assumed that Holt, as the Vice President responsible for sales in the division, had access to information and perspectives that her pricing analytics function did not possess. Chu stated that she did not raise formal concerns about Holt's pricing directives — either to Holt directly, to TMC's General Counsel, to the compliance function, or through any internal reporting channel — because she did not have a basis to suspect illegal activity and because Holt had clear authority to set prices within the division.
No Awareness of C-Suite Involvement. Chu stated that she had no reason to believe that any member of TMC's senior executive leadership or Board of Directors had knowledge of, authorized, or participated in any communications between Holt and representatives of competitor companies. Specifically, Chu stated she had no information suggesting that CEO Søren Dalmqvist, General Counsel Priya Anand, CFO Richard Fong, or any member of TMC's Board of Directors was aware of the conduct now under investigation. Chu noted that her interactions with TMC's C-suite executives were limited and that she did not have regular communication with any of the individuals named above outside of occasional company-wide presentations or meetings.
VI. TMC's Antitrust Compliance Program
Chu was questioned regarding her knowledge of and experience with TMC's antitrust compliance program, which is relevant both to the company's potential defenses and to its cooperation posture with the DOJ.
Chu stated that she was generally aware that TMC had adopted an antitrust compliance policy at some point approximately in 2014, prior to her promotion to Director. She recalled that the policy was distributed to employees in the Specialty Minerals Division at the time of its adoption, though she could not recall the specific contents of the policy in any detail. She believed the policy addressed general prohibitions on price-fixing, market allocation, and other forms of collusion with competitors, but she could not identify specific provisions or recall whether the policy contained reporting obligations or guidance on interactions with competitor personnel at trade-association events.
Chu recalled attending a single antitrust compliance training session, which she believed occurred in either 2016 or 2017. She was uncertain of the exact date and could not recall the identity of the presenter. She believed the training session was conducted in a group setting — either in person or via videoconference — and lasted approximately one to two hours. She recalled that the training covered general antitrust principles, including the prohibition on agreements with competitors to fix prices or allocate markets, but she could not recall the training addressing specific practical scenarios, reporting mechanisms, or the handling of suspected violations.
Chu stated that she had not received any antitrust compliance training since that single session. She was not aware of any annual or periodic antitrust training being conducted within the U.S. Specialty Minerals Division after approximately 2018. She did not know whether other divisions or business units within TMC conducted regular antitrust training.
Chu confirmed that no one at TMC had ever provided her with specific instructions, guidance, or protocols regarding the handling of competitor-contact situations, the monitoring of trade-association interactions, or the reporting of suspected antitrust violations. She was not aware of a dedicated antitrust compliance hotline, a designated compliance officer for antitrust matters, or a specific mechanism through which employees could report suspected antitrust violations anonymously or otherwise.
Finally, Chu stated that the antitrust compliance program, to the extent she was aware of its contents, did not address the use of encrypted messaging applications such as VaultChat. She was not aware of any TMC policy — whether within the compliance program or otherwise — that prohibited, restricted, or addressed the use of encrypted messaging platforms for business communications. Chu noted that TMC's standard business communications were conducted via corporate email and the company's internal messaging system, but she was not aware of any formal prohibition on the use of third-party messaging applications.
VII. Holt's Departure and Subsequent Events
Chu stated that Gavin Holt resigned from TMC effective September 30, 2021. Chu learned of Holt's departure through standard internal communications — she recalled receiving an email from TMC's Human Resources department or divisional leadership announcing the departure. No specific reason for Holt's resignation was communicated to Chu or, to her knowledge, to the broader U.S. Specialty Minerals Division team. The departure was characterized in the announcement as Holt "pursuing other opportunities." Chu did not have a personal conversation with Holt about his reasons for leaving and did not receive any indication, either from Holt or from TMC management, that the departure was related to the matters now under investigation. Chu stated that she did not find the departure particularly notable at the time, as executive-level turnover was not uncommon within TMC's divisional structure.
After Holt's departure, Chu stated that the pricing process within the U.S. Specialty Minerals Division reverted to a more standard, analytically driven approach. Under the interim VP who assumed Holt's supervisory responsibilities, Chu's team's pricing recommendations were approved with fewer unexplained overrides. Chu characterized the post-Holt pricing process as more consistent with what she would consider normal practice — the interim supervisor reviewed the team's analysis, asked questions, and generally approved recommendations that were supported by the underlying data. Chu noted this contrast with Holt's more interventionist approach without being prompted to do so, suggesting that the difference was apparent to her at the time.
Chu received TMC's company-wide litigation hold notice on March 1, 2022. The notice was drafted by Calderwood & Harkness LLP and was issued under the signature of TMC General Counsel Priya Anand. Chu also received, on the same date, a supplemental targeted litigation hold directed specifically to personnel within the U.S. Specialty Minerals Division. The supplemental hold identified specific categories of documents and communications to be preserved, including pricing-related emails, spreadsheets, analyses, and working papers. Chu confirmed that she has complied with the preservation instructions set forth in both the company-wide and supplemental litigation holds, including the preservation of all relevant emails, spreadsheets, working papers, and electronic files within her custody or control. She stated that she had not deleted, destroyed, or altered any potentially relevant documents since receiving the hold notices.
Chu stated that she has not been contacted by the DOJ, by any federal agent or investigator, or by any attorney representing the DOJ in connection with the investigation. She has not been contacted by counsel for any co-subject of the investigation, including counsel for Ridgecrest Minerals Inc. or Pinnacle Earth Resources Ltd. She has not been contacted by counsel for Cascade Chemical Supply Co. She has not received a subpoena, a target letter, a subject letter, or any other formal communication from the government.
Chu further stated that she has not been contacted by Gavin Holt since the commencement of the investigation. She has not been contacted by Holt's personal counsel, Patrick Dunleavy of Briarcliff Law Group PLLC, or by anyone purporting to act on Holt's behalf. Chu confirmed that she has had no communications with Holt regarding the investigation, the underlying conduct, or any related matter.
VIII. Assessment and Observations
The following assessment reflects the mental impressions and conclusions of counsel and is entitled to heightened protection under the work-product doctrine.
Credibility. Chu appeared credible, forthcoming, and cooperative throughout the interview. She answered questions directly and without apparent evasion. She volunteered relevant details without prompting in several instances and did not attempt to minimize or obscure information that could be unfavorable to TMC or to Holt. Her account of TMC's pricing process, Holt's role, and the specific instances of pricing directives was internally consistent over the course of the four-hour interview and aligned in all material respects with the documentary record reviewed to date. Chu's demeanor was professional and composed. She appeared genuinely surprised by certain aspects of the investigation's broader context — particularly the existence of the VaultChat communications — in a manner that was consistent with a lack of prior awareness. Overall, we assess Chu's account to be reliable and her presentation as a witness to be strong.
Potential Witness Value. Chu is a valuable fact witness for TMC's defense and cooperation effort. Her testimony can establish the following critical points:
(a) That Gavin Holt exercised unusual top-down pricing authority on at least twelve documented occasions during the period from March 2017 through July 2021, directing pricing adjustments that deviated materially from the data-driven recommendations of the Pricing Analytics team;
(b) That these pricing directives lacked the normal analytical support that TMC's standard pricing process would produce, and that Holt frequently provided little or no documented rationale for his directed adjustments;
(c) That Chu and her team, who occupied the primary analytical role in TMC's pricing process, had no knowledge of or involvement in any communications between Holt and representatives of competitor companies; and
(d) That the pricing process within the U.S. Specialty Minerals Division returned to a more standard analytical approach following Holt's departure, which supports the inference that the aberrant pricing pattern was driven by Holt personally rather than by a broader institutional practice.
Lack of Direct Evidence of Knowledge. Based on the interview and the documentary evidence reviewed to date, there is no direct evidence that Chu knew of, participated in, or facilitated the inter-competitor communications between Holt and Carl Edgerton of Ridgecrest Minerals Inc. or Kevin Tsang of Pinnacle Earth Resources Ltd. The evidence is consistent with Chu being an unwitting instrument through which Holt implemented pricing decisions that may have been the product of coordinated competitor activity. Chu's role was limited to receiving Holt's pricing directives and implementing them through TMC's internal pricing systems. She did not have visibility into the source of Holt's instructions and had no reason, based on the information available to her, to conclude that the instructions were the product of illegal coordination.
Risk Assessment. Based on the totality of information gathered during the interview and the documentary evidence reviewed to date, Chu does not appear to be a target or subject of the DOJ investigation. Her conduct is consistent with that of a mid-level employee who executed the directives of her supervisor without knowledge of the supervisor's illicit motivations. Her cooperation with the internal investigation has been prompt and fulsome, and her testimony supports TMC's broader cooperation posture with the DOJ. We believe Chu should be considered a potential cooperative witness for a voluntary proffer session with the Antitrust Division, subject to the follow-up steps identified below and the assessment of whether she should be advised to retain personal counsel in advance of any direct engagement with the government.
Follow-Up Items. The following action items have been identified based on the interview:
(1) Follow-up interview — VaultChat message analysis. A follow-up interview with Chu should be scheduled after the completion of the VaultChat message analysis currently being conducted by the investigation team. The VaultChat analysis is in progress; a separate memorandum documenting the results of that analysis is anticipated to be completed by approximately September 15, 2022. At the follow-up interview, Chu should be shown specific VaultChat messages attributed to Holt that reference pricing actions, customer accounts, or bid decisions, and she should be asked to determine whether any of the referenced actions correspond to pricing directives she received from Holt or pricing changes reflected in her working spreadsheets.
(2) Cross-referencing pricing overrides with VaultChat communications. The twelve or more pricing-override instances identified by Chu should be cross-referenced against the thirty-seven documented Holt-competitor VaultChat communications to determine the extent of temporal overlap between Holt's pricing directives to Chu and Holt's communications with Carl Edgerton (Ridgecrest) and Kevin Tsang (Pinnacle). This cross-referencing analysis should be coordinated with Hargrove Forensic Advisory and its lead engagement partner, Dr. Vanessa Tremblay, who is conducting the economic analysis of pricing correlations across the three companies.
(3) Personal counsel for Chu. An assessment should be made as to whether Chu should be advised to retain personal counsel in advance of any potential DOJ proffer session or grand jury appearance. While Chu does not currently appear to face personal criminal exposure, the retention of personal counsel would ensure that her individual interests are protected in any direct engagement with the government and would insulate TMC from any potential claim that Chu's cooperation was the product of inadequate advisement regarding her rights.
(4) Complete collection and review of Chu's working spreadsheets. Chu's working spreadsheets reflecting Holt's pricing directives, the team's underlying recommendations, and the final published prices for each quarter and product line should be fully collected, reviewed, and cataloged. This task should be coordinated with Redstone Digital Forensics and its Project Director, Neil Ashworth, who is overseeing the forensic collection and processing of electronically stored information in connection with the investigation. It is essential that all versions of these spreadsheets — including drafts, interim versions, and final versions — are captured and that any metadata associated with the files is preserved.
IX. Documents Referenced
The following Bates-numbered documents were shown to or discussed with Sandra Chu during the interview on July 15, 2022:
In addition to the documents identified above, Chu was shown selected pricing spreadsheets and published price lists for high-purity feldspar, industrial talc, and rare-earth concentrates covering the period from 2017 through 2021. The Bates ranges for these additional documents will be cataloged in a supplemental index to be prepared following the completion of the document review team's cataloging of Chu's working files.
X. Distribution
This memorandum has been distributed to the following individuals only:
•  Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group, Calderwood & Harkness LLP
•  Monica Reyes, Working Associate, Antitrust & Competition Practice Group, Calderwood & Harkness LLP
•  File: Matter No. 1039-00001
This memorandum is not to be distributed to the client, to any representative of Torchlight Mining Corp., or to any third party without the express prior authorization of Elaine Forsythe, Responsible Partner.
Prepared by:
________________________________________
Aaron Liu Lead Associate Antitrust & Competition Practice Group Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104
Date: July 18, 2022
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT This memorandum was prepared at the direction of counsel in connection with the provision of legal advice and in anticipation of litigation. It reflects the mental impressions, conclusions, opinions, and legal theories of counsel. Do not copy, distribute, or disclose without the express prior authorization of Elaine Forsythe, Responsible Partner.
Matter: | Torchlight Mining Corp. — DOJ Antitrust Division Grand Jury Investigation
Matter Number: | 1039-00001
Grand Jury No.: | GJ-22-0194, U.S. District Court, Northern District of California, San Francisco Division
Date of Memorandum: | July 18, 2022
Prepared By: | Aaron Liu, Lead Associate, Antitrust & Competition Practice Group
Reviewed By: | Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group
Subject: | Interview of Sandra Chu, Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp.
Witness: | Sandra Chu
Title: | Director, Pricing Analytics, U.S. Specialty Minerals Division, Torchlight Mining Corp.
Employment Status: | Current employee of Torchlight Mining Corp. ("TMC"); based at Torchlight Mining (U.S.) Inc., 8750 West Sahara Avenue, Suite 210, Reno, NV 89117
Date of Interview: | July 15, 2022
Location: | Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, CA 94104 (Conference Room 40-B)
Duration: | Approximately 4 hours (10:00 a.m. – 2:15 p.m. PT), with a 15-minute break taken at approximately 12:00 p.m.
Interviewers: | Aaron Liu, Lead Associate, Calderwood & Harkness LLP; Monica Reyes, Working Associate, Calderwood & Harkness LLP
Also Present: | No one else was present during the interview. Chu was not accompanied by personal counsel.
Bates Number | Description
TMC-00087432 | Email from Gavin Holt to Sandra Chu regarding high-purity feldspar pricing, Grade A (domestic), directing 4.5% price increase (approximately Q2 2017)
TMC-00143298 | Email from Gavin Holt to Sandra Chu regarding industrial talc pricing, directing that prices be held flat notwithstanding team recommendation of 2% decrease (approximately Q4 2018)
TMC-00251076 | Email from Gavin Holt to Sandra Chu regarding bid pricing for specific large customer (believed to be a major chemicals manufacturer), directing higher-than-recommended bid price (approximately Q1 2020)
TMC-00289415 | Email from Gavin Holt to Sandra Chu regarding rare-earth concentrate pricing for Western U.S. customers, directing specific pricing levels (approximately Q3 2020)

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