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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

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

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

Date: August 5, 2022

Re: Attempted Witness Interview — Gavin Holt, Former Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp.

Matter: Torchlight Mining Corp. — DOJ Antitrust Division Grand Jury Investigation (GJ-22-0194, N.D. Cal.)

Matter No.: 1039-00001

Classification: PRIVILEGED AND CONFIDENTIAL — Prepared in anticipation of litigation and for the purpose of providing legal advice. Do not distribute without authorization of the Responsible Partner. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel and is entitled to protection as attorney work product under Federal Rule of Civil Procedure 26(b)(3) and the common-law work-product doctrine. Distribution to Torchlight Mining Corp. is made in furtherance of the attorney-client relationship and does not waive any applicable privilege or protection.

I. Purpose of This Memorandum

This memorandum documents the attempted interview of Gavin Holt in connection with Calderwood & Harkness LLP's internal investigation conducted on behalf of Torchlight Mining Corp. ("TMC" or "Torchlight") regarding the United States Department of Justice, Antitrust Division grand jury investigation captioned Grand Jury No. GJ-22-0194, pending before the United States District Court for the Northern District of California, San Francisco Division. The internal investigation was authorized by the Audit Committee of TMC's Board of Directors on February 22, 2022, and Calderwood & Harkness was formally engaged on February 25, 2022, to conduct the investigation and to represent TMC in all matters arising from the DOJ inquiry.

The interview of Gavin Holt was scheduled as part of the Internal Investigation Plan established on March 5, 2022 (the "Investigation Plan"). That plan identified Holt as the single most critical witness due to his role as the individual most directly implicated in the alleged pricing communications with counterparts at Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"). As described in greater detail below, the documentary record reviewed to date — including VaultChat encrypted messages, internal emails, pricing-adjustment records, and trade-association meeting logs — places Holt at the center of the alleged anticompetitive conduct. No other identified TMC employee had comparable frequency of contact with the alleged co-conspirators or comparable authority over the pricing decisions at issue. For these reasons, the Investigation Plan designated Holt as a "Tier 1 — Priority" witness and recommended that his interview be pursued as early in the investigation as practicable.

Holt declined to participate in the interview on the advice of his personal counsel, Patrick Dunleavy of Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111. The refusal was communicated by email from Dunleavy to Elaine Forsythe on August 2, 2022, and was grounded in Holt's ongoing individual criminal exposure in the DOJ investigation and his prior assertion of his Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022.

This memorandum documents the chronology of the interview request and the refusal, provides relevant background on Holt's role and the evidence implicating him in the alleged conduct, and analyzes the implications of Holt's non-cooperation for the internal investigation, TMC's defense strategy, and TMC's anticipated cooperation posture with the DOJ. The memorandum concludes with recommendations for next steps.

II. Background on Gavin Holt

A. Role and Employment History at TMC

Gavin Richard Holt served as Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp., from approximately March 2016 through September 30, 2021. He was hired into the role from Meridian Industrial Minerals, Inc., where he had held the position of Senior Director, North American Sales, from 2012 to 2016. Prior to Meridian, Holt held various commercial and business-development roles in the specialty minerals and industrial chemicals sectors, with approximately 18 years of industry experience at the time of his hire by TMC.

In his capacity as Vice President of U.S. Specialty Minerals Sales, Holt led TMC's commercial pricing function for the U.S. Specialty Minerals Division, which was one of five operating divisions within TMC's global business. The U.S. Specialty Minerals Division generated USD 687 million in revenue in fiscal year 2021, representing approximately 20% of TMC's consolidated revenue of CAD 4.27 billion (approximately USD 3.38 billion at prevailing exchange rates). The Division's revenue had grown at a compound annual rate of approximately 8.3% during Holt's tenure, a trajectory that TMC management attributed in part to favorable market dynamics but also to Holt's commercial leadership and customer-relationship management.

The U.S. Specialty Minerals Division encompasses the three product categories that are at the center of the DOJ investigation: (1) high-purity feldspar, sold primarily to manufacturers of ceramics, glass, and specialty coatings; (2) industrial talc, sold to pharmaceutical, cosmetic, and plastics manufacturers; and (3) rare-earth concentrates, sold to electronics, defense, and specialty-alloy manufacturers. These three product categories collectively accounted for the entirety of the Division's revenue during the relevant period and are the product markets identified in the DOJ's investigation as subject to the alleged price-fixing, customer-allocation, and bid-rigging conspiracy.

Holt had direct authority over pricing decisions within the U.S. Specialty Minerals Division. This authority included the ability to set and modify published price lists, approve customer-specific pricing, authorize volume discounts and rebate programs, and approve responses to requests for proposals ("RFPs") from major industrial customers. While Holt reported to Marcus Fairchild, Senior Vice President and General Manager of the Global Minerals Group, the record reflects that Fairchild exercised limited oversight of Holt's day-to-day pricing decisions and generally deferred to Holt's commercial judgment on matters within the Division.

Holt supervised a team of approximately 14 sales and pricing professionals within the Division. Most relevant to this investigation, Holt directly supervised Sandra Chu, who held the position of Director, Pricing Analytics, and Thomas Eriksen, who served as Regional Sales Manager, Western Region. Both Chu and Eriksen have been identified as potentially relevant witnesses and have been interviewed by Calderwood & Harkness as part of the internal investigation (see Section IV.B below).

B. Departure from TMC

Holt resigned from TMC effective September 30, 2021. His resignation was submitted to Human Resources on September 3, 2021, and accepted by Marcus Fairchild on September 6, 2021. Holt's departure occurred approximately four months before the grand jury investigation was formally opened on February 10, 2022, and approximately five months before TMC's receipt of Grand Jury Subpoena No. GJ-22-0194-SD-003 on February 14, 2022. Holt was not terminated for cause; his separation was characterized in TMC's records as a voluntary resignation.

The circumstances surrounding Holt's departure are relevant to the investigation and warrant careful attention. Holt departed before TMC had any formal notice of the DOJ investigation. However, the timeline of Holt's departure aligns closely with certain external developments. Specifically, Cascade Chemical Supply Co. ("Cascade"), a distributor of specialty minerals whose president, Leonard Massey, is believed to have had knowledge of the alleged conspiracy through his role as a customer and industry intermediary, entered into a cooperation agreement with the DOJ on or about September 15, 2021 — approximately contemporaneous with Holt's resignation effective date. While we have no direct evidence that Holt was aware of Cascade's cooperation at the time of his resignation, the temporal proximity raises the possibility that Holt may have learned of the cooperation through industry channels and that this knowledge may have influenced his decision to depart TMC. This remains a matter of inference at this stage; we lack Holt's own account of his motivations for resigning.

Since his departure, Holt has not been employed by any competitor of TMC to our knowledge. Public records indicate that Holt relocated from the San Francisco Bay Area to Bend, Oregon, in early 2022. His current employment status is unknown.

As a former employee, Holt is not subject to TMC's direction or control with respect to participating in internal investigation interviews. TMC has no contractual mechanism to compel Holt's cooperation; his separation agreement (executed September 15, 2021) contains standard confidentiality and non-disparagement provisions but does not include a cooperation clause requiring participation in post-employment investigations. Accordingly, any participation by Holt in the internal investigation interview would be entirely voluntary.

C. Holt's Central Role in the Alleged Conduct

The DOJ investigation, as reflected in the grand jury subpoenas and the information gathered through Calderwood & Harkness's internal investigation, alleges that from approximately January 2017 through at least August 2021 — a period of approximately four and a half years — Gavin Holt engaged in an agreement with Carl Edgerton, Vice President of Sales at Ridgecrest Minerals Inc., and Kevin Tsang, former Senior Vice President of Commercial Operations at Pinnacle Earth Resources Ltd., to fix prices, allocate customers, and rig bids for the three specialty mineral products sold to U.S. industrial and chemical-manufacturing customers. The alleged conspiracy operated across all three product categories within the U.S. Specialty Minerals Division and is alleged to have resulted in artificially elevated prices paid by purchasers of high-purity feldspar, industrial talc, and rare-earth concentrates during the conspiracy period.

Calderwood & Harkness's document review, which has encompassed approximately 487,000 documents produced in response to the first grand jury subpoena, has identified at least 37 documented instances of direct communications between Holt and one or both of Edgerton and Tsang between March 2017 and July 2021. These communications were conducted primarily through two channels. The first and most significant channel was VaultChat, an end-to-end encrypted messaging platform that is not an enterprise-approved communication tool at TMC and whose use was not known to TMC's information-technology or compliance functions during the relevant period. The VaultChat messages were recovered from a TMC-issued mobile device that Holt failed to return upon his departure and that was subsequently obtained by TMC through its IT asset-recovery process in November 2021. The second communication channel consisted of in-person conversations at quarterly conferences hosted by the North American Specialty Minerals Council ("NASMC"), a trade association. NASMC conferences during the relevant period were held at rotating locations, primarily in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. Holt attended a total of 17 NASMC quarterly conferences during his tenure at TMC, and conference attendance records confirm that Edgerton and Tsang attended overlapping conferences on at least 14 of those occasions.

The first documented VaultChat exchange between Holt and Edgerton dates to March 14, 2017, and concerns pricing for high-purity feldspar sold to industrial coatings manufacturers. The content of this and subsequent messages is analyzed in detail in the VaultChat Message Analysis Memorandum dated September 15, 2022 (prepared by Monica Reyes, Working Associate). For purposes of this memorandum, it is sufficient to note that the messages, taken as a whole, reflect discussions of upcoming price increases, coordination of bid responses to named customers, and agreement on customer allocation — conduct that, if proven, would constitute per se violations of Section 1 of the Sherman Act, 15 U.S.C. § 1.

Separately, evidence gathered during the internal investigation indicates that Holt instructed Sandra Chu, Director of Pricing Analytics, to adjust TMC's published price lists on at least 12 occasions during the conspiracy period. Calderwood & Harkness's analysis has determined that these price-list adjustments correlated — in timing, direction, and approximate magnitude — with competitor price movements by Ridgecrest and Pinnacle. Chu has stated in her interview (July 18, 2022) that she received these instructions from Holt verbally or via internal instant message and that Holt did not provide written explanations for the adjustments beyond general references to "market conditions" or "competitive positioning." Chu denied having knowledge that the instructions were connected to any communications with competitors.

TMC's share of the DOJ's estimated total affected commerce during the conspiracy period is USD 478 million, representing approximately 35.7% of the total affected commerce of USD 1.34 billion across all identified participants (TMC, Ridgecrest, and Pinnacle). This figure is significant in that it will be a primary input to the calculation of any criminal fine under the Sentencing Guidelines and will also inform the magnitude of civil damages exposure in follow-on private litigation, including the multidistrict class action consolidated before Judge Patricia Yamamoto in the Northern District of California (In re Specialty Minerals Antitrust Litigation, MDL No. 3:22-md-03041-PY).

D. Retention of Personal Counsel and Fifth Amendment Assertion

On or about June 10, 2022, Holt retained personal counsel to represent him in connection with the DOJ investigation. Holt's personal counsel is Patrick Dunleavy of Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111. Dunleavy is a former federal prosecutor with the DOJ Antitrust Division (2005–2014) and a recognized specialist in criminal antitrust defense. His retention by Holt signals the seriousness with which Holt views his individual criminal exposure and his expectation that the DOJ may seek to bring charges against him personally.

On June 14, 2022, Holt appeared before the grand jury pursuant to a subpoena ad testificandum and asserted his Fifth Amendment privilege against self-incrimination, declining to testify on all substantive matters. We understand from communications with the DOJ's trial team (Senior Trial Counsel Margaret Whitmore and Trial Attorney David Enriquez, San Francisco Field Office) that Holt's assertion of the privilege was comprehensive and that Holt did not provide testimony on any topic beyond confirming his identity and the identity of his counsel.

The retention of separate counsel and the Fifth Amendment assertion were noted in our prior Memorandum re Gavin Holt — Individual Exposure and Joint Defense Considerations, dated June 12, 2022 (subsequently updated following the grand jury appearance on June 14, 2022). That memorandum analyzed Holt's individual criminal exposure under the Sherman Act (maximum individual penalty of USD 1,000,000 fine and 10 years imprisonment per count under 15 U.S.C. § 1, as amended) and recommended against entering into a joint defense agreement with Holt's counsel, a recommendation that remains in force.

III. Chronology of Interview Request and Refusal

A. Initial Outreach to Holt (Pre-Separate Counsel)

Calderwood & Harkness identified Holt as a Tier 1 priority witness in the Internal Investigation Plan dated March 5, 2022. The Investigation Plan recognized that, as a former employee, Holt could not be compelled to participate in the internal investigation, and it recommended that outreach be initiated promptly to maximize the likelihood of voluntary cooperation before Holt's posture hardened or he retained separate counsel.

The initial attempts to contact Holt were made in March 2022 through TMC's General Counsel, Priya Anand. Anand had maintained Holt's personal email address and mobile telephone number from his separation in September 2021 and made two attempts to reach Holt — an email sent on March 9, 2022, and a voicemail left on March 14, 2022. Both communications indicated that TMC was conducting an internal review related to the DOJ inquiry and requested that Holt contact Anand or Calderwood & Harkness at his earliest convenience. Holt did not respond to either communication.

A follow-up letter was sent by Calderwood & Harkness directly to Holt at his last known personal address (a residential address in Bend, Oregon, obtained from TMC's HR records) on April 27, 2022. The letter, sent via Sundial Data Systems and USPS certified mail, was signed by Aaron Liu on behalf of the Calderwood & Harkness matter team. It identified Calderwood & Harkness as counsel to TMC in connection with the DOJ investigation, explained that the firm was conducting an internal investigation on TMC's behalf, and requested Holt's voluntary participation in an interview. The letter noted that the interview would be conducted in a manner respectful of Holt's interests and that Calderwood & Harkness would provide appropriate admonitions at the outset of the interview clarifying the nature of the attorney-client relationship. The Sundial Data Systems delivery was confirmed on April 28, 2022; the USPS certified mail receipt was returned as signed on April 29, 2022. No response was received from Holt.

During this period — March through May 2022 — Holt had not yet retained personal counsel (at least, no counsel had entered an appearance or communicated with the DOJ or Calderwood & Harkness on Holt's behalf). It is possible that Holt was already consulting with an attorney informally, but we have no information to that effect.

B. Outreach Through Personal Counsel

Following Holt's retention of Patrick Dunleavy at Briarcliff Law Group PLLC on or about June 10, 2022, and his assertion of the Fifth Amendment privilege before the grand jury on June 14, 2022, all further communications were directed through Dunleavy. Calderwood & Harkness became aware of Dunleavy's representation through a communication from the DOJ's trial team (Senior Trial Counsel Margaret Whitmore) on approximately June 15, 2022, in which Whitmore identified Dunleavy as Holt's counsel of record and provided his contact information. Dunleavy confirmed his representation in a brief telephone call with Aaron Liu on June 17, 2022.

On July 28, 2022, Elaine Forsythe sent an email to Patrick Dunleavy formally requesting an interview of Gavin Holt in connection with TMC's internal investigation. A copy of this email is included as Attachment A to this memorandum. The email was drafted to address the considerations likely to be weighed by Holt and his counsel in evaluating the request. Specifically, the email:

(a) Identified Calderwood & Harkness as counsel to TMC (not to Holt individually) and stated that the interview was being requested in connection with TMC's internal investigation;

(b) Noted the potential for a joint defense interest between TMC and Holt while acknowledging and respecting Holt's separate representation and the independent judgment of his personal counsel;

(c) Emphasized that the interview would be conducted by Calderwood & Harkness as counsel to TMC and not on behalf of the DOJ or any government agency;

(d) Stated that the purpose of the interview was to gather facts for the internal investigation, including facts that would assist in TMC's assessment of the scope of the alleged conduct and the level of corporate knowledge, if any, of the alleged activity;

(e) Confirmed that TMC's counsel would provide appropriate Upjohn-style warnings at the outset of the interview, clarifying that Calderwood & Harkness represents TMC and not Holt individually, that the attorney-client privilege arising from the communication belongs to TMC, and that TMC may choose to disclose the contents of the interview to third parties, including the DOJ, at its sole discretion;

(f) Offered flexibility as to the timing, location, and format of the interview, including the option of conducting the interview at Dunleavy's offices in San Francisco or at a neutral location selected by Holt; and

(g) Invited Dunleavy to propose any conditions or limitations on the scope of the interview that Holt deemed appropriate, with an expression of Calderwood & Harkness's willingness to discuss such conditions in good faith.

The email was deliberate in its tone, seeking to convey respect for Holt's position while underscoring the importance of his potential contribution to the internal investigation.

C. Holt's Refusal

On August 2, 2022, Patrick Dunleavy responded to Forsythe's request by email. A copy of Dunleavy's email is included as Attachment B to this memorandum. The email was concise and unequivocal. Its substantive content is summarized as follows:

(a) Dunleavy advised that Gavin Holt, on the advice of counsel, declines to participate in TMC's internal investigation interview at this time.

(b) The refusal was grounded in Holt's ongoing individual criminal exposure in the DOJ Antitrust Division investigation and his prior assertion of the Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022.

(c) Dunleavy stated that Holt would "continue to assert his Fifth Amendment privilege" and that participation in any interview — even one conducted by TMC's counsel rather than by the government — could jeopardize Holt's individual defense by creating a record of statements that might be discovered by the government, used to impeach Holt, or otherwise undermine his ability to protect his constitutional rights.

(d) Dunleavy did not foreclose the possibility of future cooperation. He stated that Holt's refusal was limited to "this time" and that any change in Holt's posture would be communicated proactively to Calderwood & Harkness. However, Dunleavy provided no indication of the circumstances under which a change in posture might occur or the timeline on which such a change might be expected.

(e) Dunleavy did not offer any counter-proposal, such as a submission of written questions to which Holt might respond, a limited-scope interview confined to specified subject matters, or a proffer-type arrangement with use restrictions or other protective conditions.

The refusal was absolute with respect to the present time frame, and the absence of any counter-proposal suggests that Dunleavy's assessment of the risk to Holt is sufficiently serious that no form of engagement with TMC's internal investigation is considered acceptable at this stage.

D. Assessment of Further Outreach

Following receipt of Dunleavy's response, Calderwood & Harkness considered whether to make additional requests or propose alternative interview formats. The alternatives considered included:

(a) Submission of written questions to Holt through Dunleavy, with an agreement that Holt's written responses would be treated as confidential and would not be disclosed to the DOJ without prior notice to Dunleavy;

(b) A limited subject-matter interview confined to topics that would not directly implicate Holt's Fifth Amendment concerns (e.g., general questions about TMC's pricing processes, organizational structure, and compliance culture, rather than questions about specific communications with competitors);

(c) An interview conducted under a proffer-type agreement between TMC and Holt, pursuant to which TMC would agree that statements made by Holt during the interview would not be used against Holt in any proceeding and would not be disclosed to the DOJ; and

(d) A renewed general request, with additional emphasis on the potential for mutual benefit and the possibility that Holt's cooperation with TMC's internal investigation could be positioned favorably in any future individual resolution with the DOJ.

After careful consideration, we determined that further outreach at this time is unlikely to succeed and could carry risks that outweigh any potential benefits. Dunleavy's refusal was unequivocal and constitutionally grounded, and his email did not signal any openness to alternative formats. Pressing the issue risks antagonizing Holt and his counsel, which could complicate TMC's relationship with Holt should his cooperation become necessary or desirable at a later stage — for example, if TMC enters into a non-prosecution agreement that includes cooperation obligations requiring TMC to facilitate the DOJ's access to relevant witnesses, or if Holt's individual posture changes in ways that create opportunities for constructive engagement. Additionally, aggressive outreach could be perceived by Dunleavy as an effort by TMC to circumvent Holt's Fifth Amendment assertion, which could generate adversarial dynamics that would serve no productive purpose.

Accordingly, Calderwood & Harkness will not make additional interview requests at this time. We will, however, continue to monitor Holt's posture through periodic contact with Dunleavy. This contact will be maintained at quarterly intervals, or sooner in the event of a material change in circumstances (such as a development in the DOJ's investigation that may alter Holt's calculus regarding cooperation), and will be conducted in a manner that preserves a constructive professional relationship with Dunleavy.

IV. Implications for the Internal Investigation

A. Evidentiary Gap

Holt's refusal to participate in the internal investigation interview creates a significant evidentiary gap. As the individual who led TMC's commercial pricing function during the entirety of the alleged conspiracy period and who is the primary identified TMC participant in the alleged competitor communications, Holt is uniquely positioned to provide information and context that cannot be fully obtained from any other source. Specifically, Holt's cooperation would have enabled Calderwood & Harkness to explore the following critical topics:

(a) Nature, purpose, and scope of competitor communications. Holt is the only identified TMC participant in the alleged communications with Carl Edgerton of Ridgecrest and Kevin Tsang of Pinnacle. While the VaultChat messages and other documentary evidence provide substantial evidence of the content of these communications, only Holt can provide first-person testimony regarding the context in which these communications occurred, the understanding among the participants as to the purpose and binding nature of their discussions, and the full scope of the alleged agreements (including any oral agreements or understandings that may not be reflected in the documentary record).

(b) Knowledge and participation of other TMC personnel. A critical objective of the internal investigation is to determine whether any other TMC employees — including Sandra Chu, Thomas Eriksen, Marcus Fairchild, or other members of the U.S. Specialty Minerals Division — had knowledge of or participated in the alleged coordination. Holt's account would be essential to resolving this question with confidence. While Chu and Eriksen have been interviewed and have denied knowledge of inter-competitor communications, only Holt can confirm or deny whether he disclosed his activities to any colleagues.

(c) C-suite and Board awareness. Relatedly, the investigation must determine the extent to which TMC's senior management — including CEO Søren Dalmqvist and General Counsel Priya Anand — or the Board of Directors — including Board Chair Margaret Caldwell and Audit Committee Chair Janet Moreau-Shaw — had any awareness of the alleged conduct. Holt's testimony on this point would be highly probative, particularly with respect to whether Holt reported his pricing activities or competitor contacts to Marcus Fairchild or any other member of senior management.

(d) Instructions to Sandra Chu regarding price-list adjustments. The investigation has identified at least 12 instances in which Holt instructed Chu to adjust published price lists in a manner that correlated with competitor price movements. Only Holt can explain the basis for these instructions and whether they were connected to information obtained through communications with Edgerton and Tsang.

(e) Genesis and operation of the VaultChat messaging channel. The use of VaultChat — an encrypted messaging platform not approved for business use at TMC — as the primary communication channel for the alleged conspiracy raises questions about who initiated the use of this platform, when and why it was adopted, and whether its use was intended to conceal the communications from TMC's IT and compliance functions. Only Holt can provide a first-person account of these matters.

The absence of Holt's testimony on these topics means that the internal investigation must rely on inferences drawn from the documentary record and on the accounts of witnesses who, by their own statements, lacked direct knowledge of the alleged competitor communications.

B. Mitigating Sources of Information

Despite Holt's non-cooperation, the internal investigation has assembled a substantial evidentiary record from other sources that partially fills the gap created by Holt's refusal. These mitigating sources include the following:

VaultChat Messages. The VaultChat messages recovered from Holt's TMC-issued mobile device have been analyzed in the VaultChat Message Analysis Memorandum, prepared by Monica Reyes and dated September 15, 2022 (forthcoming; in advanced draft as of the date of this memorandum). The analysis documents at least 37 distinct exchanges between Holt and Edgerton, Holt and Tsang, or Holt in a group chat with both Edgerton and Tsang, spanning the period from March 14, 2017, through July 9, 2021. These messages provide direct documentary evidence of the substance of the alleged communications and include discussions of specific price points, customer names, bid amounts, and allocation agreements. While the messages do not capture the entirety of the alleged communications (in-person conversations at NASMC conferences, for example, are not documented), they constitute the single most important body of evidence in the internal investigation.

Sandra Chu Interview (July 18, 2022). Sandra Chu, Director of Pricing Analytics, was interviewed by Calderwood & Harkness on July 18, 2022. Chu provided detailed information regarding the 12 identified instances in which Holt instructed her to adjust published price lists. Chu stated that Holt provided these instructions verbally or by internal instant message and that he did not offer written explanations beyond general references to "market conditions," "competitive positioning," or "customer feedback." Chu stated that she did not question the instructions because Holt was her direct supervisor and she believed the adjustments were within the scope of his authority. Chu denied having any direct knowledge of communications between Holt and representatives of Ridgecrest or Pinnacle and stated that she was not aware that Holt was using VaultChat or any other encrypted messaging platform for business communications.

Thomas Eriksen Interview (July 22, 2022). Thomas Eriksen, Regional Sales Manager for the Western Region, was interviewed by Calderwood & Harkness on July 22, 2022. Eriksen confirmed that he attended four NASMC quarterly conferences during the alleged conspiracy period (Q2 2018, Q4 2018, Q2 2019, and Q4 2019). Eriksen stated that he observed Holt interacting with individuals from competitor companies at these conferences, including individuals he later identified as Carl Edgerton and Kevin Tsang, but that these interactions appeared to be social in nature and occurred in common areas such as conference receptions and dinners. Eriksen denied having knowledge of any pricing agreements or bid-rigging arrangements and stated that Holt did not discuss competitor pricing or customer allocation with him. Eriksen's account leaves some ambiguity regarding the extent of his awareness; his characterization of Holt's competitor interactions as "social" cannot be independently verified, and his attendance at four conferences creates at least a possibility that he observed more than he has disclosed.

Priya Anand Interview (August 12, 2022). Priya Anand, TMC's General Counsel, was interviewed by Calderwood & Harkness on August 12, 2022. Anand confirmed that neither she nor, to her knowledge, any other member of TMC's C-suite was aware of the alleged pricing coordination prior to receipt of the grand jury subpoena on February 14, 2022. Anand provided background on TMC's antitrust compliance program, which was adopted in 2014 following a prior regulatory inquiry (unrelated to the current matter) and which includes a written antitrust compliance policy and employee training materials. However, Anand acknowledged that the compliance program had significant deficiencies: annual antitrust training had not been conducted since 2018, there was no monitoring of trade-association interactions or attendance at industry conferences, and there was no systematic audit of competitor contacts or communications. Anand expressed the view that these deficiencies, while regrettable, were attributable to resource constraints and competing compliance priorities rather than any deliberate effort to facilitate or ignore anticompetitive conduct.

Richard Fong Interview (August 19, 2022). Richard Fong, TMC's Vice President of Finance and Controller for the Minerals Group, was interviewed by Calderwood & Harkness on August 19, 2022. Fong confirmed the absence of financial irregularities — such as off-books payments, unexplained consulting fees, or irregular expense-account activity — that might suggest management awareness of or complicity in the alleged conduct. Fong's testimony supports the conclusion that the alleged conspiracy was confined to Holt's commercial activities and did not involve financial mechanisms that would have been visible to the finance function.

Document Review. Calderwood & Harkness, in conjunction with the document-review team managed by Bellamy and Reyes, has conducted a cumulative review of approximately 487,000 documents produced in response to the first grand jury subpoena (GJ-22-0194-SD-003). This document population includes internal emails, calendar entries, expense reports, pricing records, RFP responses, customer correspondence, and the VaultChat messages described above. The document review provides substantial evidence of the relevant communications and pricing conduct and supports the timeline and factual narrative being developed for the internal investigation report.

Cascade Chemical Supply Co. Cooperation Materials. Cascade Chemical Supply Co. entered into a cooperation agreement with the DOJ on or about September 15, 2021, under the direction of its president, Leonard Massey. Cascade is represented by Rebecca Ostrander of Whitfield, Strauss & Tully LLP, San Francisco. While Calderwood & Harkness does not have direct access to Cascade's cooperating testimony or materials (no joint defense agreement is in place with Cascade's counsel), we anticipate that the DOJ's reliance on Cascade's cooperation may surface additional information regarding Holt's conduct in due course. Specifically, if the DOJ provides discovery or disclosure of cooperating-witness testimony in connection with plea negotiations or other proceedings, such disclosures may include information bearing on Holt's role and the extent of the alleged conspiracy that would supplement our current evidentiary record.

C. Impact on Key Investigation Findings

The inability to interview Holt means that the internal investigation's conclusions regarding the scope and intent of the alleged anticompetitive conduct will necessarily rely on documentary evidence and the accounts of other witnesses rather than Holt's own narrative. This limitation is significant but does not, in our assessment, undermine the core findings that have emerged from the investigation to date. The principal impacts are as follows:

Finding: No evidence implicates TMC's C-suite or Board. The internal investigation has found no evidence that TMC's senior management (CEO Søren Dalmqvist, General Counsel Priya Anand) or the Board of Directors (Board Chair Margaret Caldwell, Audit Committee Chair Janet Moreau-Shaw) had any knowledge of or involvement in the alleged pricing coordination. This finding is based on the absence of any documentary evidence of upward reporting by Holt, the corroborating accounts provided by Anand, Fong, Chu, and Eriksen, and the absence of financial irregularities that might suggest management-level complicity. Holt's refusal to be interviewed means that we cannot obtain his confirmation or denial of this finding. It is theoretically possible that Holt, if interviewed, would assert that he reported his activities to one or more members of senior management — an assertion that, if credible, would fundamentally alter the investigation's conclusions. However, the absence of any corroborating documentary or testimonial evidence supporting such a claim provides a reasonable basis for confidence in the current finding. We note this limitation explicitly so that it may be addressed in the investigation report and in any cooperation proffer submitted to the DOJ.

Finding: The alleged conduct was confined to Holt and his direct interactions with competitors. The available evidence indicates that the alleged pricing coordination was conducted by Holt personally, through communications with Edgerton and Tsang, and that no other TMC employee directly participated in the competitor communications. Sandra Chu received pricing instructions from Holt that appear connected to the alleged coordination, but the evidence does not establish that Chu was aware of the connection. Thomas Eriksen attended NASMC conferences at which Holt interacted with competitors but denies knowledge of any substantive agreements. Holt's refusal to be interviewed means that this finding rests on inference and the testimony of witnesses with limited direct knowledge. Again, this limitation should be disclosed.

Finding: TMC's antitrust compliance program was inadequate. The investigation has determined that TMC's antitrust compliance program, while formally adopted in 2014, suffered from significant deficiencies during the conspiracy period, including the cessation of annual training after 2018, the absence of monitoring of trade-association interactions, and the absence of any audit of competitor contacts or communications. This finding stands independent of Holt's cooperation, as it is based on TMC's corporate records, the compliance policy itself, training records, and the interviews with Anand and other compliance-related personnel. The compliance-program deficiency finding is likely to be a significant factor in the DOJ's assessment of TMC's culpability and in any negotiation of a corporate resolution.

V. Implications for TMC's Defense Strategy and DOJ Cooperation

A. Cooperation Posture

TMC's cooperation with the DOJ Antitrust Division does not require TMC to compel testimony from former employees over whom TMC has no legal authority or contractual control. The DOJ's Evaluation of Corporate Compliance Programs guidance and the Antitrust Division's policies on corporate cooperation recognize that a corporation's cooperation obligation extends to making current employees available for interviews and testimony, producing documents within its possession, custody, or control, and making good-faith efforts to facilitate access to relevant witnesses. TMC cannot compel Holt — a former employee who has retained separate counsel and asserted his constitutional rights — to participate in an interview, and TMC's cooperation credit should not be diminished by Holt's independent decision to invoke the Fifth Amendment.

However, Holt's refusal to cooperate with TMC's internal investigation may limit the depth and completeness of the cooperation proffer that Calderwood & Harkness intends to submit to the DOJ. The cooperation proffer, currently targeted for submission in Q1 2023, will present the findings of the internal investigation and offer TMC's cooperation in the DOJ's ongoing investigation and prosecution of individual participants. To the extent that the cooperation proffer is based on an internal investigation that lacks Holt's first-person account, the DOJ may view the proffer as incomplete, particularly with respect to the scope of the alleged conduct and the level of corporate knowledge. Calderwood & Harkness will address this limitation by (a) documenting the good-faith efforts made to secure Holt's cooperation, (b) presenting the substantial documentary and testimonial evidence gathered from other sources, and (c) emphasizing that the evidentiary gap attributable to Holt's refusal does not undermine the reliability of the investigation's core findings.

The DOJ is aware that Holt has separately asserted his Fifth Amendment privilege, having done so before the grand jury on June 14, 2022. Senior Trial Counsel Margaret Whitmore acknowledged Holt's assertion during a telephonic status conference with Calderwood & Harkness on July 8, 2022. TMC should not be penalized for Holt's independent decision to invoke constitutionally protected rights, and we will make this point affirmatively in any cooperation discussions with the DOJ.

B. Holt Carve-Out in Any Future NPA

Holt's non-cooperation with the internal investigation reinforces the anticipated need for any non-prosecution agreement ("NPA") between TMC and the DOJ to include a carve-out preserving the DOJ's right to pursue criminal charges against Holt individually. Such carve-outs are standard in corporate resolutions involving Antitrust Division investigations and serve to ensure that the corporate resolution does not preclude or impede the government's ability to hold culpable individuals accountable.

The divergence between TMC's interests and Holt's interests is now clearly established. TMC is pursuing a cooperation-based resolution strategy, the goal of which is to minimize the severity of the corporate outcome — ideally an NPA with a negotiated fine, compliance undertakings, and a cooperation term — while demonstrating TMC's commitment to remediation and compliance. Holt, by contrast, is asserting his Fifth Amendment rights, refusing engagement with both the DOJ and TMC, and pursuing an individual defense strategy that appears oriented toward preserving his ability to contest charges at trial or negotiate an individual resolution on terms that protect his personal interests. These interests are not merely distinct; they are potentially adverse, insofar as Holt may ultimately seek to shift responsibility to TMC (by asserting, for example, that his conduct was authorized or known at higher levels of the organization) and TMC may benefit from demonstrating that the alleged conduct was the product of a single rogue actor operating without corporate knowledge or sanction.

This divergence further supports the recommendation made in the June 12, 2022 memorandum against entering into a joint defense agreement with Holt's counsel. A joint defense agreement would create obligations of information-sharing and non-disclosure that could constrain TMC's ability to cooperate fully with the DOJ and could expose TMC to the risk that Holt's defense strategy — including any adverse factual assertions — would be developed with the benefit of information shared under the joint defense umbrella. The risks of a joint defense agreement clearly outweigh any potential benefits, and we reaffirm our recommendation that no such agreement be entered into.

C. Potential Future Developments

Several developments could alter Holt's posture and the landscape of this investigation:

DOJ individual plea or immunity offer. If the DOJ ultimately offers Holt a plea agreement or individual immunity in exchange for his testimony, Holt's posture may change significantly. In that scenario, Holt's testimony would become available to the DOJ and could be used in the government's case — either as part of the grand jury proceedings, in support of an indictment, or as cooperating-witness testimony at trial. The content of any such testimony could affect the scope and terms of TMC's NPA negotiation, particularly if Holt provides testimony that implicates individuals above him in the corporate hierarchy or expands the scope of the alleged corporate involvement. Calderwood & Harkness should be prepared to address such testimony, which may require supplemental investigation and analysis.

Adverse Holt testimony. TMC should be prepared for the possibility that Holt, if he ultimately cooperates with the DOJ individually, may provide testimony adverse to TMC's interests. This could take several forms: (a) Holt may assert that his pricing activities were known to or authorized by Marcus Fairchild or other members of senior management; (b) Holt may assert that TMC's corporate culture encouraged aggressive pricing tactics that facilitated the alleged coordination; or (c) Holt may provide information regarding the scope of the alleged conduct that expands the conspiracy period, the range of affected products, or the number of implicated TMC personnel. While the internal investigation to date has not uncovered evidence supporting any of these assertions, the absence of Holt's cooperation means that our findings have not been tested against his account. Contingency planning for adverse Holt testimony is addressed in the recommendations below.

Changes in the DOJ's investigative posture. The DOJ's investigation is ongoing, and developments such as additional cooperating witnesses, supplemental subpoenas, or the return of indictments against individual defendants could alter the factual landscape and create new opportunities or challenges for TMC. Calderwood & Harkness will continue to monitor these developments through periodic communications with the DOJ trial team and through information obtained from our document review and witness interviews.

Calderwood & Harkness will continue to monitor developments regarding Holt's individual exposure and posture through periodic contact with Patrick Dunleavy at Briarcliff Law Group PLLC and through information surfaced in the DOJ's communications with our team. Any material change in Holt's posture will be reported to the Responsible Partner and to TMC General Counsel promptly.

VI. Recommendations

Based on the foregoing analysis, Calderwood & Harkness recommends the following:

1. No further interview attempts at this time. Additional requests to interview Gavin Holt are unlikely to succeed given Dunleavy's unequivocal refusal and the constitutional grounding of Holt's position. Further outreach at this stage risks complicating the relationship with Holt and his counsel and could be perceived as overreaching. Calderwood & Harkness will revisit the question of renewed outreach on a quarterly basis, or sooner upon a material change in circumstances (e.g., a resolution of Holt's individual exposure, a change in the DOJ's investigative posture, or an affirmative communication from Dunleavy indicating a shift in Holt's willingness to engage).

2. Proceed with internal investigation based on available evidence. The documentary record — including the VaultChat messages, pricing data, email correspondence, RFP records, and expense reports — together with the interviews of 23 current and former TMC employees (including Chu, Eriksen, Anand, and Fong) provide a sufficient evidentiary basis for the internal investigation's findings, notwithstanding the gap created by Holt's non-cooperation. The investigation report should disclose the Holt gap and explain the efforts made to secure his cooperation, while presenting the evidence-based conclusions that the available record supports.

3. Document the refusal for cooperation-credit purposes. TMC should be able to demonstrate to the DOJ that it made good-faith, diligent efforts to interview Holt and was rebuffed by his independent assertion of constitutional rights. The chronology documented in this memorandum, together with the email correspondence between Forsythe and Dunleavy (July 28 and August 2, 2022), the prior outreach through Priya Anand (March 2022), and the direct letter from Calderwood & Harkness to Holt (April 27, 2022), establishes a clear and well-documented record of TMC's efforts. This record should be preserved and made available for inclusion in the cooperation proffer.

4. Maintain separation from Holt's defense. We reaffirm the recommendation, first made in the June 12, 2022 memorandum, against entering into a joint defense agreement with Holt's counsel, Patrick Dunleavy. TMC's cooperation strategy requires clear separation from Holt's individual posture, and the divergence of interests between TMC and Holt is now firmly established. Information-sharing with Holt's counsel should be limited to that which is necessary for professional courtesy and maintenance of the relationship, and no substantive work-product or privileged information should be shared without the express authorization of the Responsible Partner.

5. Prepare for adverse Holt testimony. Calderwood & Harkness should develop a contingency analysis addressing scenarios in which Holt cooperates with the DOJ and provides testimony that may attempt to shift responsibility upward within TMC or expand the scope of alleged corporate involvement. This analysis should include: (a) identification of the specific adverse assertions Holt could make; (b) assessment of the documentary and testimonial evidence that would support or refute each such assertion; (c) preparation of a responsive factual narrative demonstrating C-suite and Board non-involvement, supported by the investigation findings and the testimony of corroborating witnesses; and (d) development of any additional investigative steps that may be warranted to strengthen the record on these points. This contingency work should be undertaken as a priority in Q4 2022 and should be completed prior to the submission of the cooperation proffer to the DOJ in Q1 2023.

VII. Document Retention and Privilege Designation

This memorandum has been prepared by Calderwood & Harkness LLP in its capacity as counsel to Torchlight Mining Corp. It constitutes attorney work product and is protected by the attorney-client privilege and the work-product doctrine under Federal Rule of Civil Procedure 26(b)(3) and applicable California law. The memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel and was prepared in anticipation of litigation and for the purpose of providing legal advice to TMC in connection with the DOJ grand jury investigation.

This memorandum should be maintained in the privileged work-product files for Matter No. 1039-00001 in accordance with Calderwood & Harkness's document-management protocols for privileged materials. Electronic copies should be stored in the restricted-access matter workspace on the firm's document-management system and should not be uploaded to any shared or externally accessible platform.

Distribution of this memorandum is restricted. Do not distribute outside of the Calderwood & Harkness matter team — Elaine Forsythe (Responsible Partner), Caroline Bellamy (Senior Associate), Aaron Liu (Lead Associate), and Monica Reyes (Working Associate) — without the express authorization of the Responsible Partner. Copies provided to TMC General Counsel Priya Anand are protected by the attorney-client privilege and should be maintained by Anand in TMC's privileged legal files with appropriate access restrictions.

In the event that any portion of this memorandum is sought by the DOJ or any other party through subpoena, discovery request, or other legal process, Calderwood & Harkness should be notified immediately so that appropriate privilege assertions and protective measures can be implemented.

VIII. Attachments (Referenced)

The following materials are referenced in this memorandum and are maintained in the privileged work-product files for Matter No. 1039-00001:

• Attachment A: Email from Elaine Forsythe to Patrick Dunleavy, dated July 28, 2022, requesting interview of Gavin Holt in connection with TMC's internal investigation.

• Attachment B: Email from Patrick Dunleavy to Elaine Forsythe, dated August 2, 2022, declining interview on behalf of Gavin Holt.

• Cross-Reference: Memorandum re Gavin Holt — Individual Exposure and Joint Defense Considerations, dated June 12, 2022 (updated June 15, 2022).

• Cross-Reference: Internal Investigation Plan, dated March 5, 2022.

• Cross-Reference: VaultChat Message Analysis Memorandum, dated September 15, 2022 (forthcoming; in advanced draft as of the date of this memorandum).

Prepared by:

________________________________________

Aaron Liu Lead Associate Antitrust & Competition Practice Group Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104 Telephone: (415) 555-7200

Email: aliu@calderwoodharkness.com

Date: August 5, 2022

Reviewed and Approved by:

________________________________________

Elaine Forsythe Responsible Partner Antitrust & Competition Practice Group Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104 Telephone: (415) 555-7100

Email: eforsythe@calderwoodharkness.com

Date: ________

cc: Monica Reyes, Working Associate (Matter No. 1039-00001 file)

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT. This memorandum was prepared by Calderwood & Harkness LLP in anticipation of litigation and for the purpose of providing legal advice. It is not to be distributed, copied, or disclosed without the express written authorization of the Responsible Partner. Unauthorized disclosure may result in waiver of applicable privileges and protections.

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
To: Elaine Forsythe, Responsible Partner, Antitrust & Competition Practice Group, Calderwood & Harkness LLP
From: Aaron Liu, Lead Associate, Antitrust & Competition Practice Group, Calderwood & Harkness LLP
Date: August 5, 2022
Re: Attempted Witness Interview — Gavin Holt, Former Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp.
Matter: Torchlight Mining Corp. — DOJ Antitrust Division Grand Jury Investigation (GJ-22-0194, N.D. Cal.)
Matter No.: 1039-00001
Classification: PRIVILEGED AND CONFIDENTIAL — Prepared in anticipation of litigation and for the purpose of providing legal advice. Do not distribute without authorization of the Responsible Partner. This memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel and is entitled to protection as attorney work product under Federal Rule of Civil Procedure 26(b)(3) and the common-law work-product doctrine. Distribution to Torchlight Mining Corp. is made in furtherance of the attorney-client relationship and does not waive any applicable privilege or protection.
I. Purpose of This Memorandum
This memorandum documents the attempted interview of Gavin Holt in connection with Calderwood & Harkness LLP's internal investigation conducted on behalf of Torchlight Mining Corp. ("TMC" or "Torchlight") regarding the United States Department of Justice, Antitrust Division grand jury investigation captioned Grand Jury No. GJ-22-0194, pending before the United States District Court for the Northern District of California, San Francisco Division. The internal investigation was authorized by the Audit Committee of TMC's Board of Directors on February 22, 2022, and Calderwood & Harkness was formally engaged on February 25, 2022, to conduct the investigation and to represent TMC in all matters arising from the DOJ inquiry.
The interview of Gavin Holt was scheduled as part of the Internal Investigation Plan established on March 5, 2022 (the "Investigation Plan"). That plan identified Holt as the single most critical witness due to his role as the individual most directly implicated in the alleged pricing communications with counterparts at Ridgecrest Minerals Inc. ("Ridgecrest") and Pinnacle Earth Resources Ltd. ("Pinnacle"). As described in greater detail below, the documentary record reviewed to date — including VaultChat encrypted messages, internal emails, pricing-adjustment records, and trade-association meeting logs — places Holt at the center of the alleged anticompetitive conduct. No other identified TMC employee had comparable frequency of contact with the alleged co-conspirators or comparable authority over the pricing decisions at issue. For these reasons, the Investigation Plan designated Holt as a "Tier 1 — Priority" witness and recommended that his interview be pursued as early in the investigation as practicable.
Holt declined to participate in the interview on the advice of his personal counsel, Patrick Dunleavy of Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111. The refusal was communicated by email from Dunleavy to Elaine Forsythe on August 2, 2022, and was grounded in Holt's ongoing individual criminal exposure in the DOJ investigation and his prior assertion of his Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022.
This memorandum documents the chronology of the interview request and the refusal, provides relevant background on Holt's role and the evidence implicating him in the alleged conduct, and analyzes the implications of Holt's non-cooperation for the internal investigation, TMC's defense strategy, and TMC's anticipated cooperation posture with the DOJ. The memorandum concludes with recommendations for next steps.
II. Background on Gavin Holt
A. Role and Employment History at TMC
Gavin Richard Holt served as Vice President, U.S. Specialty Minerals Sales, Torchlight Mining Corp., from approximately March 2016 through September 30, 2021. He was hired into the role from Meridian Industrial Minerals, Inc., where he had held the position of Senior Director, North American Sales, from 2012 to 2016. Prior to Meridian, Holt held various commercial and business-development roles in the specialty minerals and industrial chemicals sectors, with approximately 18 years of industry experience at the time of his hire by TMC.
In his capacity as Vice President of U.S. Specialty Minerals Sales, Holt led TMC's commercial pricing function for the U.S. Specialty Minerals Division, which was one of five operating divisions within TMC's global business. The U.S. Specialty Minerals Division generated USD 687 million in revenue in fiscal year 2021, representing approximately 20% of TMC's consolidated revenue of CAD 4.27 billion (approximately USD 3.38 billion at prevailing exchange rates). The Division's revenue had grown at a compound annual rate of approximately 8.3% during Holt's tenure, a trajectory that TMC management attributed in part to favorable market dynamics but also to Holt's commercial leadership and customer-relationship management.
The U.S. Specialty Minerals Division encompasses the three product categories that are at the center of the DOJ investigation: (1) high-purity feldspar, sold primarily to manufacturers of ceramics, glass, and specialty coatings; (2) industrial talc, sold to pharmaceutical, cosmetic, and plastics manufacturers; and (3) rare-earth concentrates, sold to electronics, defense, and specialty-alloy manufacturers. These three product categories collectively accounted for the entirety of the Division's revenue during the relevant period and are the product markets identified in the DOJ's investigation as subject to the alleged price-fixing, customer-allocation, and bid-rigging conspiracy.
Holt had direct authority over pricing decisions within the U.S. Specialty Minerals Division. This authority included the ability to set and modify published price lists, approve customer-specific pricing, authorize volume discounts and rebate programs, and approve responses to requests for proposals ("RFPs") from major industrial customers. While Holt reported to Marcus Fairchild, Senior Vice President and General Manager of the Global Minerals Group, the record reflects that Fairchild exercised limited oversight of Holt's day-to-day pricing decisions and generally deferred to Holt's commercial judgment on matters within the Division.
Holt supervised a team of approximately 14 sales and pricing professionals within the Division. Most relevant to this investigation, Holt directly supervised Sandra Chu, who held the position of Director, Pricing Analytics, and Thomas Eriksen, who served as Regional Sales Manager, Western Region. Both Chu and Eriksen have been identified as potentially relevant witnesses and have been interviewed by Calderwood & Harkness as part of the internal investigation (see Section IV.B below).
B. Departure from TMC
Holt resigned from TMC effective September 30, 2021. His resignation was submitted to Human Resources on September 3, 2021, and accepted by Marcus Fairchild on September 6, 2021. Holt's departure occurred approximately four months before the grand jury investigation was formally opened on February 10, 2022, and approximately five months before TMC's receipt of Grand Jury Subpoena No. GJ-22-0194-SD-003 on February 14, 2022. Holt was not terminated for cause; his separation was characterized in TMC's records as a voluntary resignation.
The circumstances surrounding Holt's departure are relevant to the investigation and warrant careful attention. Holt departed before TMC had any formal notice of the DOJ investigation. However, the timeline of Holt's departure aligns closely with certain external developments. Specifically, Cascade Chemical Supply Co. ("Cascade"), a distributor of specialty minerals whose president, Leonard Massey, is believed to have had knowledge of the alleged conspiracy through his role as a customer and industry intermediary, entered into a cooperation agreement with the DOJ on or about September 15, 2021 — approximately contemporaneous with Holt's resignation effective date. While we have no direct evidence that Holt was aware of Cascade's cooperation at the time of his resignation, the temporal proximity raises the possibility that Holt may have learned of the cooperation through industry channels and that this knowledge may have influenced his decision to depart TMC. This remains a matter of inference at this stage; we lack Holt's own account of his motivations for resigning.
Since his departure, Holt has not been employed by any competitor of TMC to our knowledge. Public records indicate that Holt relocated from the San Francisco Bay Area to Bend, Oregon, in early 2022. His current employment status is unknown.
As a former employee, Holt is not subject to TMC's direction or control with respect to participating in internal investigation interviews. TMC has no contractual mechanism to compel Holt's cooperation; his separation agreement (executed September 15, 2021) contains standard confidentiality and non-disparagement provisions but does not include a cooperation clause requiring participation in post-employment investigations. Accordingly, any participation by Holt in the internal investigation interview would be entirely voluntary.
C. Holt's Central Role in the Alleged Conduct
The DOJ investigation, as reflected in the grand jury subpoenas and the information gathered through Calderwood & Harkness's internal investigation, alleges that from approximately January 2017 through at least August 2021 — a period of approximately four and a half years — Gavin Holt engaged in an agreement with Carl Edgerton, Vice President of Sales at Ridgecrest Minerals Inc., and Kevin Tsang, former Senior Vice President of Commercial Operations at Pinnacle Earth Resources Ltd., to fix prices, allocate customers, and rig bids for the three specialty mineral products sold to U.S. industrial and chemical-manufacturing customers. The alleged conspiracy operated across all three product categories within the U.S. Specialty Minerals Division and is alleged to have resulted in artificially elevated prices paid by purchasers of high-purity feldspar, industrial talc, and rare-earth concentrates during the conspiracy period.
Calderwood & Harkness's document review, which has encompassed approximately 487,000 documents produced in response to the first grand jury subpoena, has identified at least 37 documented instances of direct communications between Holt and one or both of Edgerton and Tsang between March 2017 and July 2021. These communications were conducted primarily through two channels. The first and most significant channel was VaultChat, an end-to-end encrypted messaging platform that is not an enterprise-approved communication tool at TMC and whose use was not known to TMC's information-technology or compliance functions during the relevant period. The VaultChat messages were recovered from a TMC-issued mobile device that Holt failed to return upon his departure and that was subsequently obtained by TMC through its IT asset-recovery process in November 2021. The second communication channel consisted of in-person conversations at quarterly conferences hosted by the North American Specialty Minerals Council ("NASMC"), a trade association. NASMC conferences during the relevant period were held at rotating locations, primarily in Arlington, Virginia; Scottsdale, Arizona; and Orlando, Florida. Holt attended a total of 17 NASMC quarterly conferences during his tenure at TMC, and conference attendance records confirm that Edgerton and Tsang attended overlapping conferences on at least 14 of those occasions.
The first documented VaultChat exchange between Holt and Edgerton dates to March 14, 2017, and concerns pricing for high-purity feldspar sold to industrial coatings manufacturers. The content of this and subsequent messages is analyzed in detail in the VaultChat Message Analysis Memorandum dated September 15, 2022 (prepared by Monica Reyes, Working Associate). For purposes of this memorandum, it is sufficient to note that the messages, taken as a whole, reflect discussions of upcoming price increases, coordination of bid responses to named customers, and agreement on customer allocation — conduct that, if proven, would constitute per se violations of Section 1 of the Sherman Act, 15 U.S.C. § 1.
Separately, evidence gathered during the internal investigation indicates that Holt instructed Sandra Chu, Director of Pricing Analytics, to adjust TMC's published price lists on at least 12 occasions during the conspiracy period. Calderwood & Harkness's analysis has determined that these price-list adjustments correlated — in timing, direction, and approximate magnitude — with competitor price movements by Ridgecrest and Pinnacle. Chu has stated in her interview (July 18, 2022) that she received these instructions from Holt verbally or via internal instant message and that Holt did not provide written explanations for the adjustments beyond general references to "market conditions" or "competitive positioning." Chu denied having knowledge that the instructions were connected to any communications with competitors.
TMC's share of the DOJ's estimated total affected commerce during the conspiracy period is USD 478 million, representing approximately 35.7% of the total affected commerce of USD 1.34 billion across all identified participants (TMC, Ridgecrest, and Pinnacle). This figure is significant in that it will be a primary input to the calculation of any criminal fine under the Sentencing Guidelines and will also inform the magnitude of civil damages exposure in follow-on private litigation, including the multidistrict class action consolidated before Judge Patricia Yamamoto in the Northern District of California (In re Specialty Minerals Antitrust Litigation, MDL No. 3:22-md-03041-PY).
D. Retention of Personal Counsel and Fifth Amendment Assertion
On or about June 10, 2022, Holt retained personal counsel to represent him in connection with the DOJ investigation. Holt's personal counsel is Patrick Dunleavy of Briarcliff Law Group PLLC, 50 California Street, Suite 2800, San Francisco, California 94111. Dunleavy is a former federal prosecutor with the DOJ Antitrust Division (2005–2014) and a recognized specialist in criminal antitrust defense. His retention by Holt signals the seriousness with which Holt views his individual criminal exposure and his expectation that the DOJ may seek to bring charges against him personally.
On June 14, 2022, Holt appeared before the grand jury pursuant to a subpoena ad testificandum and asserted his Fifth Amendment privilege against self-incrimination, declining to testify on all substantive matters. We understand from communications with the DOJ's trial team (Senior Trial Counsel Margaret Whitmore and Trial Attorney David Enriquez, San Francisco Field Office) that Holt's assertion of the privilege was comprehensive and that Holt did not provide testimony on any topic beyond confirming his identity and the identity of his counsel.
The retention of separate counsel and the Fifth Amendment assertion were noted in our prior Memorandum re Gavin Holt — Individual Exposure and Joint Defense Considerations, dated June 12, 2022 (subsequently updated following the grand jury appearance on June 14, 2022). That memorandum analyzed Holt's individual criminal exposure under the Sherman Act (maximum individual penalty of USD 1,000,000 fine and 10 years imprisonment per count under 15 U.S.C. § 1, as amended) and recommended against entering into a joint defense agreement with Holt's counsel, a recommendation that remains in force.
III. Chronology of Interview Request and Refusal
A. Initial Outreach to Holt (Pre-Separate Counsel)
Calderwood & Harkness identified Holt as a Tier 1 priority witness in the Internal Investigation Plan dated March 5, 2022. The Investigation Plan recognized that, as a former employee, Holt could not be compelled to participate in the internal investigation, and it recommended that outreach be initiated promptly to maximize the likelihood of voluntary cooperation before Holt's posture hardened or he retained separate counsel.
The initial attempts to contact Holt were made in March 2022 through TMC's General Counsel, Priya Anand. Anand had maintained Holt's personal email address and mobile telephone number from his separation in September 2021 and made two attempts to reach Holt — an email sent on March 9, 2022, and a voicemail left on March 14, 2022. Both communications indicated that TMC was conducting an internal review related to the DOJ inquiry and requested that Holt contact Anand or Calderwood & Harkness at his earliest convenience. Holt did not respond to either communication.
A follow-up letter was sent by Calderwood & Harkness directly to Holt at his last known personal address (a residential address in Bend, Oregon, obtained from TMC's HR records) on April 27, 2022. The letter, sent via Sundial Data Systems and USPS certified mail, was signed by Aaron Liu on behalf of the Calderwood & Harkness matter team. It identified Calderwood & Harkness as counsel to TMC in connection with the DOJ investigation, explained that the firm was conducting an internal investigation on TMC's behalf, and requested Holt's voluntary participation in an interview. The letter noted that the interview would be conducted in a manner respectful of Holt's interests and that Calderwood & Harkness would provide appropriate admonitions at the outset of the interview clarifying the nature of the attorney-client relationship. The Sundial Data Systems delivery was confirmed on April 28, 2022; the USPS certified mail receipt was returned as signed on April 29, 2022. No response was received from Holt.
During this period — March through May 2022 — Holt had not yet retained personal counsel (at least, no counsel had entered an appearance or communicated with the DOJ or Calderwood & Harkness on Holt's behalf). It is possible that Holt was already consulting with an attorney informally, but we have no information to that effect.
B. Outreach Through Personal Counsel
Following Holt's retention of Patrick Dunleavy at Briarcliff Law Group PLLC on or about June 10, 2022, and his assertion of the Fifth Amendment privilege before the grand jury on June 14, 2022, all further communications were directed through Dunleavy. Calderwood & Harkness became aware of Dunleavy's representation through a communication from the DOJ's trial team (Senior Trial Counsel Margaret Whitmore) on approximately June 15, 2022, in which Whitmore identified Dunleavy as Holt's counsel of record and provided his contact information. Dunleavy confirmed his representation in a brief telephone call with Aaron Liu on June 17, 2022.
On July 28, 2022, Elaine Forsythe sent an email to Patrick Dunleavy formally requesting an interview of Gavin Holt in connection with TMC's internal investigation. A copy of this email is included as Attachment A to this memorandum. The email was drafted to address the considerations likely to be weighed by Holt and his counsel in evaluating the request. Specifically, the email:
(a) Identified Calderwood & Harkness as counsel to TMC (not to Holt individually) and stated that the interview was being requested in connection with TMC's internal investigation;
(b) Noted the potential for a joint defense interest between TMC and Holt while acknowledging and respecting Holt's separate representation and the independent judgment of his personal counsel;
(c) Emphasized that the interview would be conducted by Calderwood & Harkness as counsel to TMC and not on behalf of the DOJ or any government agency;
(d) Stated that the purpose of the interview was to gather facts for the internal investigation, including facts that would assist in TMC's assessment of the scope of the alleged conduct and the level of corporate knowledge, if any, of the alleged activity;
(e) Confirmed that TMC's counsel would provide appropriate Upjohn-style warnings at the outset of the interview, clarifying that Calderwood & Harkness represents TMC and not Holt individually, that the attorney-client privilege arising from the communication belongs to TMC, and that TMC may choose to disclose the contents of the interview to third parties, including the DOJ, at its sole discretion;
(f) Offered flexibility as to the timing, location, and format of the interview, including the option of conducting the interview at Dunleavy's offices in San Francisco or at a neutral location selected by Holt; and
(g) Invited Dunleavy to propose any conditions or limitations on the scope of the interview that Holt deemed appropriate, with an expression of Calderwood & Harkness's willingness to discuss such conditions in good faith.
The email was deliberate in its tone, seeking to convey respect for Holt's position while underscoring the importance of his potential contribution to the internal investigation.
C. Holt's Refusal
On August 2, 2022, Patrick Dunleavy responded to Forsythe's request by email. A copy of Dunleavy's email is included as Attachment B to this memorandum. The email was concise and unequivocal. Its substantive content is summarized as follows:
(a) Dunleavy advised that Gavin Holt, on the advice of counsel, declines to participate in TMC's internal investigation interview at this time.
(b) The refusal was grounded in Holt's ongoing individual criminal exposure in the DOJ Antitrust Division investigation and his prior assertion of the Fifth Amendment privilege against self-incrimination before the grand jury on June 14, 2022.
(c) Dunleavy stated that Holt would "continue to assert his Fifth Amendment privilege" and that participation in any interview — even one conducted by TMC's counsel rather than by the government — could jeopardize Holt's individual defense by creating a record of statements that might be discovered by the government, used to impeach Holt, or otherwise undermine his ability to protect his constitutional rights.
(d) Dunleavy did not foreclose the possibility of future cooperation. He stated that Holt's refusal was limited to "this time" and that any change in Holt's posture would be communicated proactively to Calderwood & Harkness. However, Dunleavy provided no indication of the circumstances under which a change in posture might occur or the timeline on which such a change might be expected.
(e) Dunleavy did not offer any counter-proposal, such as a submission of written questions to which Holt might respond, a limited-scope interview confined to specified subject matters, or a proffer-type arrangement with use restrictions or other protective conditions.
The refusal was absolute with respect to the present time frame, and the absence of any counter-proposal suggests that Dunleavy's assessment of the risk to Holt is sufficiently serious that no form of engagement with TMC's internal investigation is considered acceptable at this stage.
D. Assessment of Further Outreach
Following receipt of Dunleavy's response, Calderwood & Harkness considered whether to make additional requests or propose alternative interview formats. The alternatives considered included:
(a) Submission of written questions to Holt through Dunleavy, with an agreement that Holt's written responses would be treated as confidential and would not be disclosed to the DOJ without prior notice to Dunleavy;
(b) A limited subject-matter interview confined to topics that would not directly implicate Holt's Fifth Amendment concerns (e.g., general questions about TMC's pricing processes, organizational structure, and compliance culture, rather than questions about specific communications with competitors);
(c) An interview conducted under a proffer-type agreement between TMC and Holt, pursuant to which TMC would agree that statements made by Holt during the interview would not be used against Holt in any proceeding and would not be disclosed to the DOJ; and
(d) A renewed general request, with additional emphasis on the potential for mutual benefit and the possibility that Holt's cooperation with TMC's internal investigation could be positioned favorably in any future individual resolution with the DOJ.
After careful consideration, we determined that further outreach at this time is unlikely to succeed and could carry risks that outweigh any potential benefits. Dunleavy's refusal was unequivocal and constitutionally grounded, and his email did not signal any openness to alternative formats. Pressing the issue risks antagonizing Holt and his counsel, which could complicate TMC's relationship with Holt should his cooperation become necessary or desirable at a later stage — for example, if TMC enters into a non-prosecution agreement that includes cooperation obligations requiring TMC to facilitate the DOJ's access to relevant witnesses, or if Holt's individual posture changes in ways that create opportunities for constructive engagement. Additionally, aggressive outreach could be perceived by Dunleavy as an effort by TMC to circumvent Holt's Fifth Amendment assertion, which could generate adversarial dynamics that would serve no productive purpose.
Accordingly, Calderwood & Harkness will not make additional interview requests at this time. We will, however, continue to monitor Holt's posture through periodic contact with Dunleavy. This contact will be maintained at quarterly intervals, or sooner in the event of a material change in circumstances (such as a development in the DOJ's investigation that may alter Holt's calculus regarding cooperation), and will be conducted in a manner that preserves a constructive professional relationship with Dunleavy.
IV. Implications for the Internal Investigation
A. Evidentiary Gap
Holt's refusal to participate in the internal investigation interview creates a significant evidentiary gap. As the individual who led TMC's commercial pricing function during the entirety of the alleged conspiracy period and who is the primary identified TMC participant in the alleged competitor communications, Holt is uniquely positioned to provide information and context that cannot be fully obtained from any other source. Specifically, Holt's cooperation would have enabled Calderwood & Harkness to explore the following critical topics:
(a) Nature, purpose, and scope of competitor communications. Holt is the only identified TMC participant in the alleged communications with Carl Edgerton of Ridgecrest and Kevin Tsang of Pinnacle. While the VaultChat messages and other documentary evidence provide substantial evidence of the content of these communications, only Holt can provide first-person testimony regarding the context in which these communications occurred, the understanding among the participants as to the purpose and binding nature of their discussions, and the full scope of the alleged agreements (including any oral agreements or understandings that may not be reflected in the documentary record).
(b) Knowledge and participation of other TMC personnel. A critical objective of the internal investigation is to determine whether any other TMC employees — including Sandra Chu, Thomas Eriksen, Marcus Fairchild, or other members of the U.S. Specialty Minerals Division — had knowledge of or participated in the alleged coordination. Holt's account would be essential to resolving this question with confidence. While Chu and Eriksen have been interviewed and have denied knowledge of inter-competitor communications, only Holt can confirm or deny whether he disclosed his activities to any colleagues.
(c) C-suite and Board awareness. Relatedly, the investigation must determine the extent to which TMC's senior management — including CEO Søren Dalmqvist and General Counsel Priya Anand — or the Board of Directors — including Board Chair Margaret Caldwell and Audit Committee Chair Janet Moreau-Shaw — had any awareness of the alleged conduct. Holt's testimony on this point would be highly probative, particularly with respect to whether Holt reported his pricing activities or competitor contacts to Marcus Fairchild or any other member of senior management.
(d) Instructions to Sandra Chu regarding price-list adjustments. The investigation has identified at least 12 instances in which Holt instructed Chu to adjust published price lists in a manner that correlated with competitor price movements. Only Holt can explain the basis for these instructions and whether they were connected to information obtained through communications with Edgerton and Tsang.
(e) Genesis and operation of the VaultChat messaging channel. The use of VaultChat — an encrypted messaging platform not approved for business use at TMC — as the primary communication channel for the alleged conspiracy raises questions about who initiated the use of this platform, when and why it was adopted, and whether its use was intended to conceal the communications from TMC's IT and compliance functions. Only Holt can provide a first-person account of these matters.
The absence of Holt's testimony on these topics means that the internal investigation must rely on inferences drawn from the documentary record and on the accounts of witnesses who, by their own statements, lacked direct knowledge of the alleged competitor communications.
B. Mitigating Sources of Information
Despite Holt's non-cooperation, the internal investigation has assembled a substantial evidentiary record from other sources that partially fills the gap created by Holt's refusal. These mitigating sources include the following:
VaultChat Messages. The VaultChat messages recovered from Holt's TMC-issued mobile device have been analyzed in the VaultChat Message Analysis Memorandum, prepared by Monica Reyes and dated September 15, 2022 (forthcoming; in advanced draft as of the date of this memorandum). The analysis documents at least 37 distinct exchanges between Holt and Edgerton, Holt and Tsang, or Holt in a group chat with both Edgerton and Tsang, spanning the period from March 14, 2017, through July 9, 2021. These messages provide direct documentary evidence of the substance of the alleged communications and include discussions of specific price points, customer names, bid amounts, and allocation agreements. While the messages do not capture the entirety of the alleged communications (in-person conversations at NASMC conferences, for example, are not documented), they constitute the single most important body of evidence in the internal investigation.
Sandra Chu Interview (July 18, 2022). Sandra Chu, Director of Pricing Analytics, was interviewed by Calderwood & Harkness on July 18, 2022. Chu provided detailed information regarding the 12 identified instances in which Holt instructed her to adjust published price lists. Chu stated that Holt provided these instructions verbally or by internal instant message and that he did not offer written explanations beyond general references to "market conditions," "competitive positioning," or "customer feedback." Chu stated that she did not question the instructions because Holt was her direct supervisor and she believed the adjustments were within the scope of his authority. Chu denied having any direct knowledge of communications between Holt and representatives of Ridgecrest or Pinnacle and stated that she was not aware that Holt was using VaultChat or any other encrypted messaging platform for business communications.
Thomas Eriksen Interview (July 22, 2022). Thomas Eriksen, Regional Sales Manager for the Western Region, was interviewed by Calderwood & Harkness on July 22, 2022. Eriksen confirmed that he attended four NASMC quarterly conferences during the alleged conspiracy period (Q2 2018, Q4 2018, Q2 2019, and Q4 2019). Eriksen stated that he observed Holt interacting with individuals from competitor companies at these conferences, including individuals he later identified as Carl Edgerton and Kevin Tsang, but that these interactions appeared to be social in nature and occurred in common areas such as conference receptions and dinners. Eriksen denied having knowledge of any pricing agreements or bid-rigging arrangements and stated that Holt did not discuss competitor pricing or customer allocation with him. Eriksen's account leaves some ambiguity regarding the extent of his awareness; his characterization of Holt's competitor interactions as "social" cannot be independently verified, and his attendance at four conferences creates at least a possibility that he observed more than he has disclosed.
Priya Anand Interview (August 12, 2022). Priya Anand, TMC's General Counsel, was interviewed by Calderwood & Harkness on August 12, 2022. Anand confirmed that neither she nor, to her knowledge, any other member of TMC's C-suite was aware of the alleged pricing coordination prior to receipt of the grand jury subpoena on February 14, 2022. Anand provided background on TMC's antitrust compliance program, which was adopted in 2014 following a prior regulatory inquiry (unrelated to the current matter) and which includes a written antitrust compliance policy and employee training materials. However, Anand acknowledged that the compliance program had significant deficiencies: annual antitrust training had not been conducted since 2018, there was no monitoring of trade-association interactions or attendance at industry conferences, and there was no systematic audit of competitor contacts or communications. Anand expressed the view that these deficiencies, while regrettable, were attributable to resource constraints and competing compliance priorities rather than any deliberate effort to facilitate or ignore anticompetitive conduct.
Richard Fong Interview (August 19, 2022). Richard Fong, TMC's Vice President of Finance and Controller for the Minerals Group, was interviewed by Calderwood & Harkness on August 19, 2022. Fong confirmed the absence of financial irregularities — such as off-books payments, unexplained consulting fees, or irregular expense-account activity — that might suggest management awareness of or complicity in the alleged conduct. Fong's testimony supports the conclusion that the alleged conspiracy was confined to Holt's commercial activities and did not involve financial mechanisms that would have been visible to the finance function.
Document Review. Calderwood & Harkness, in conjunction with the document-review team managed by Bellamy and Reyes, has conducted a cumulative review of approximately 487,000 documents produced in response to the first grand jury subpoena (GJ-22-0194-SD-003). This document population includes internal emails, calendar entries, expense reports, pricing records, RFP responses, customer correspondence, and the VaultChat messages described above. The document review provides substantial evidence of the relevant communications and pricing conduct and supports the timeline and factual narrative being developed for the internal investigation report.
Cascade Chemical Supply Co. Cooperation Materials. Cascade Chemical Supply Co. entered into a cooperation agreement with the DOJ on or about September 15, 2021, under the direction of its president, Leonard Massey. Cascade is represented by Rebecca Ostrander of Whitfield, Strauss & Tully LLP, San Francisco. While Calderwood & Harkness does not have direct access to Cascade's cooperating testimony or materials (no joint defense agreement is in place with Cascade's counsel), we anticipate that the DOJ's reliance on Cascade's cooperation may surface additional information regarding Holt's conduct in due course. Specifically, if the DOJ provides discovery or disclosure of cooperating-witness testimony in connection with plea negotiations or other proceedings, such disclosures may include information bearing on Holt's role and the extent of the alleged conspiracy that would supplement our current evidentiary record.
C. Impact on Key Investigation Findings
The inability to interview Holt means that the internal investigation's conclusions regarding the scope and intent of the alleged anticompetitive conduct will necessarily rely on documentary evidence and the accounts of other witnesses rather than Holt's own narrative. This limitation is significant but does not, in our assessment, undermine the core findings that have emerged from the investigation to date. The principal impacts are as follows:
Finding: No evidence implicates TMC's C-suite or Board. The internal investigation has found no evidence that TMC's senior management (CEO Søren Dalmqvist, General Counsel Priya Anand) or the Board of Directors (Board Chair Margaret Caldwell, Audit Committee Chair Janet Moreau-Shaw) had any knowledge of or involvement in the alleged pricing coordination. This finding is based on the absence of any documentary evidence of upward reporting by Holt, the corroborating accounts provided by Anand, Fong, Chu, and Eriksen, and the absence of financial irregularities that might suggest management-level complicity. Holt's refusal to be interviewed means that we cannot obtain his confirmation or denial of this finding. It is theoretically possible that Holt, if interviewed, would assert that he reported his activities to one or more members of senior management — an assertion that, if credible, would fundamentally alter the investigation's conclusions. However, the absence of any corroborating documentary or testimonial evidence supporting such a claim provides a reasonable basis for confidence in the current finding. We note this limitation explicitly so that it may be addressed in the investigation report and in any cooperation proffer submitted to the DOJ.
Finding: The alleged conduct was confined to Holt and his direct interactions with competitors. The available evidence indicates that the alleged pricing coordination was conducted by Holt personally, through communications with Edgerton and Tsang, and that no other TMC employee directly participated in the competitor communications. Sandra Chu received pricing instructions from Holt that appear connected to the alleged coordination, but the evidence does not establish that Chu was aware of the connection. Thomas Eriksen attended NASMC conferences at which Holt interacted with competitors but denies knowledge of any substantive agreements. Holt's refusal to be interviewed means that this finding rests on inference and the testimony of witnesses with limited direct knowledge. Again, this limitation should be disclosed.
Finding: TMC's antitrust compliance program was inadequate. The investigation has determined that TMC's antitrust compliance program, while formally adopted in 2014, suffered from significant deficiencies during the conspiracy period, including the cessation of annual training after 2018, the absence of monitoring of trade-association interactions, and the absence of any audit of competitor contacts or communications. This finding stands independent of Holt's cooperation, as it is based on TMC's corporate records, the compliance policy itself, training records, and the interviews with Anand and other compliance-related personnel. The compliance-program deficiency finding is likely to be a significant factor in the DOJ's assessment of TMC's culpability and in any negotiation of a corporate resolution.
V. Implications for TMC's Defense Strategy and DOJ Cooperation
A. Cooperation Posture
TMC's cooperation with the DOJ Antitrust Division does not require TMC to compel testimony from former employees over whom TMC has no legal authority or contractual control. The DOJ's Evaluation of Corporate Compliance Programs guidance and the Antitrust Division's policies on corporate cooperation recognize that a corporation's cooperation obligation extends to making current employees available for interviews and testimony, producing documents within its possession, custody, or control, and making good-faith efforts to facilitate access to relevant witnesses. TMC cannot compel Holt — a former employee who has retained separate counsel and asserted his constitutional rights — to participate in an interview, and TMC's cooperation credit should not be diminished by Holt's independent decision to invoke the Fifth Amendment.
However, Holt's refusal to cooperate with TMC's internal investigation may limit the depth and completeness of the cooperation proffer that Calderwood & Harkness intends to submit to the DOJ. The cooperation proffer, currently targeted for submission in Q1 2023, will present the findings of the internal investigation and offer TMC's cooperation in the DOJ's ongoing investigation and prosecution of individual participants. To the extent that the cooperation proffer is based on an internal investigation that lacks Holt's first-person account, the DOJ may view the proffer as incomplete, particularly with respect to the scope of the alleged conduct and the level of corporate knowledge. Calderwood & Harkness will address this limitation by (a) documenting the good-faith efforts made to secure Holt's cooperation, (b) presenting the substantial documentary and testimonial evidence gathered from other sources, and (c) emphasizing that the evidentiary gap attributable to Holt's refusal does not undermine the reliability of the investigation's core findings.
The DOJ is aware that Holt has separately asserted his Fifth Amendment privilege, having done so before the grand jury on June 14, 2022. Senior Trial Counsel Margaret Whitmore acknowledged Holt's assertion during a telephonic status conference with Calderwood & Harkness on July 8, 2022. TMC should not be penalized for Holt's independent decision to invoke constitutionally protected rights, and we will make this point affirmatively in any cooperation discussions with the DOJ.
B. Holt Carve-Out in Any Future NPA
Holt's non-cooperation with the internal investigation reinforces the anticipated need for any non-prosecution agreement ("NPA") between TMC and the DOJ to include a carve-out preserving the DOJ's right to pursue criminal charges against Holt individually. Such carve-outs are standard in corporate resolutions involving Antitrust Division investigations and serve to ensure that the corporate resolution does not preclude or impede the government's ability to hold culpable individuals accountable.
The divergence between TMC's interests and Holt's interests is now clearly established. TMC is pursuing a cooperation-based resolution strategy, the goal of which is to minimize the severity of the corporate outcome — ideally an NPA with a negotiated fine, compliance undertakings, and a cooperation term — while demonstrating TMC's commitment to remediation and compliance. Holt, by contrast, is asserting his Fifth Amendment rights, refusing engagement with both the DOJ and TMC, and pursuing an individual defense strategy that appears oriented toward preserving his ability to contest charges at trial or negotiate an individual resolution on terms that protect his personal interests. These interests are not merely distinct; they are potentially adverse, insofar as Holt may ultimately seek to shift responsibility to TMC (by asserting, for example, that his conduct was authorized or known at higher levels of the organization) and TMC may benefit from demonstrating that the alleged conduct was the product of a single rogue actor operating without corporate knowledge or sanction.
This divergence further supports the recommendation made in the June 12, 2022 memorandum against entering into a joint defense agreement with Holt's counsel. A joint defense agreement would create obligations of information-sharing and non-disclosure that could constrain TMC's ability to cooperate fully with the DOJ and could expose TMC to the risk that Holt's defense strategy — including any adverse factual assertions — would be developed with the benefit of information shared under the joint defense umbrella. The risks of a joint defense agreement clearly outweigh any potential benefits, and we reaffirm our recommendation that no such agreement be entered into.
C. Potential Future Developments
Several developments could alter Holt's posture and the landscape of this investigation:
DOJ individual plea or immunity offer. If the DOJ ultimately offers Holt a plea agreement or individual immunity in exchange for his testimony, Holt's posture may change significantly. In that scenario, Holt's testimony would become available to the DOJ and could be used in the government's case — either as part of the grand jury proceedings, in support of an indictment, or as cooperating-witness testimony at trial. The content of any such testimony could affect the scope and terms of TMC's NPA negotiation, particularly if Holt provides testimony that implicates individuals above him in the corporate hierarchy or expands the scope of the alleged corporate involvement. Calderwood & Harkness should be prepared to address such testimony, which may require supplemental investigation and analysis.
Adverse Holt testimony. TMC should be prepared for the possibility that Holt, if he ultimately cooperates with the DOJ individually, may provide testimony adverse to TMC's interests. This could take several forms: (a) Holt may assert that his pricing activities were known to or authorized by Marcus Fairchild or other members of senior management; (b) Holt may assert that TMC's corporate culture encouraged aggressive pricing tactics that facilitated the alleged coordination; or (c) Holt may provide information regarding the scope of the alleged conduct that expands the conspiracy period, the range of affected products, or the number of implicated TMC personnel. While the internal investigation to date has not uncovered evidence supporting any of these assertions, the absence of Holt's cooperation means that our findings have not been tested against his account. Contingency planning for adverse Holt testimony is addressed in the recommendations below.
Changes in the DOJ's investigative posture. The DOJ's investigation is ongoing, and developments such as additional cooperating witnesses, supplemental subpoenas, or the return of indictments against individual defendants could alter the factual landscape and create new opportunities or challenges for TMC. Calderwood & Harkness will continue to monitor these developments through periodic communications with the DOJ trial team and through information obtained from our document review and witness interviews.
Calderwood & Harkness will continue to monitor developments regarding Holt's individual exposure and posture through periodic contact with Patrick Dunleavy at Briarcliff Law Group PLLC and through information surfaced in the DOJ's communications with our team. Any material change in Holt's posture will be reported to the Responsible Partner and to TMC General Counsel promptly.
VI. Recommendations
Based on the foregoing analysis, Calderwood & Harkness recommends the following:
1.  No further interview attempts at this time. Additional requests to interview Gavin Holt are unlikely to succeed given Dunleavy's unequivocal refusal and the constitutional grounding of Holt's position. Further outreach at this stage risks complicating the relationship with Holt and his counsel and could be perceived as overreaching. Calderwood & Harkness will revisit the question of renewed outreach on a quarterly basis, or sooner upon a material change in circumstances (e.g., a resolution of Holt's individual exposure, a change in the DOJ's investigative posture, or an affirmative communication from Dunleavy indicating a shift in Holt's willingness to engage).
2.  Proceed with internal investigation based on available evidence. The documentary record — including the VaultChat messages, pricing data, email correspondence, RFP records, and expense reports — together with the interviews of 23 current and former TMC employees (including Chu, Eriksen, Anand, and Fong) provide a sufficient evidentiary basis for the internal investigation's findings, notwithstanding the gap created by Holt's non-cooperation. The investigation report should disclose the Holt gap and explain the efforts made to secure his cooperation, while presenting the evidence-based conclusions that the available record supports.
3.  Document the refusal for cooperation-credit purposes. TMC should be able to demonstrate to the DOJ that it made good-faith, diligent efforts to interview Holt and was rebuffed by his independent assertion of constitutional rights. The chronology documented in this memorandum, together with the email correspondence between Forsythe and Dunleavy (July 28 and August 2, 2022), the prior outreach through Priya Anand (March 2022), and the direct letter from Calderwood & Harkness to Holt (April 27, 2022), establishes a clear and well-documented record of TMC's efforts. This record should be preserved and made available for inclusion in the cooperation proffer.
4.  Maintain separation from Holt's defense. We reaffirm the recommendation, first made in the June 12, 2022 memorandum, against entering into a joint defense agreement with Holt's counsel, Patrick Dunleavy. TMC's cooperation strategy requires clear separation from Holt's individual posture, and the divergence of interests between TMC and Holt is now firmly established. Information-sharing with Holt's counsel should be limited to that which is necessary for professional courtesy and maintenance of the relationship, and no substantive work-product or privileged information should be shared without the express authorization of the Responsible Partner.
5.  Prepare for adverse Holt testimony. Calderwood & Harkness should develop a contingency analysis addressing scenarios in which Holt cooperates with the DOJ and provides testimony that may attempt to shift responsibility upward within TMC or expand the scope of alleged corporate involvement. This analysis should include: (a) identification of the specific adverse assertions Holt could make; (b) assessment of the documentary and testimonial evidence that would support or refute each such assertion; (c) preparation of a responsive factual narrative demonstrating C-suite and Board non-involvement, supported by the investigation findings and the testimony of corroborating witnesses; and (d) development of any additional investigative steps that may be warranted to strengthen the record on these points. This contingency work should be undertaken as a priority in Q4 2022 and should be completed prior to the submission of the cooperation proffer to the DOJ in Q1 2023.
VII. Document Retention and Privilege Designation
This memorandum has been prepared by Calderwood & Harkness LLP in its capacity as counsel to Torchlight Mining Corp. It constitutes attorney work product and is protected by the attorney-client privilege and the work-product doctrine under Federal Rule of Civil Procedure 26(b)(3) and applicable California law. The memorandum reflects the mental impressions, conclusions, opinions, and legal theories of counsel and was prepared in anticipation of litigation and for the purpose of providing legal advice to TMC in connection with the DOJ grand jury investigation.
This memorandum should be maintained in the privileged work-product files for Matter No. 1039-00001 in accordance with Calderwood & Harkness's document-management protocols for privileged materials. Electronic copies should be stored in the restricted-access matter workspace on the firm's document-management system and should not be uploaded to any shared or externally accessible platform.
Distribution of this memorandum is restricted. Do not distribute outside of the Calderwood & Harkness matter team — Elaine Forsythe (Responsible Partner), Caroline Bellamy (Senior Associate), Aaron Liu (Lead Associate), and Monica Reyes (Working Associate) — without the express authorization of the Responsible Partner. Copies provided to TMC General Counsel Priya Anand are protected by the attorney-client privilege and should be maintained by Anand in TMC's privileged legal files with appropriate access restrictions.
In the event that any portion of this memorandum is sought by the DOJ or any other party through subpoena, discovery request, or other legal process, Calderwood & Harkness should be notified immediately so that appropriate privilege assertions and protective measures can be implemented.
VIII. Attachments (Referenced)
The following materials are referenced in this memorandum and are maintained in the privileged work-product files for Matter No. 1039-00001:
•  Attachment A: Email from Elaine Forsythe to Patrick Dunleavy, dated July 28, 2022, requesting interview of Gavin Holt in connection with TMC's internal investigation.
•  Attachment B: Email from Patrick Dunleavy to Elaine Forsythe, dated August 2, 2022, declining interview on behalf of Gavin Holt.
•  Cross-Reference: Memorandum re Gavin Holt — Individual Exposure and Joint Defense Considerations, dated June 12, 2022 (updated June 15, 2022).
•  Cross-Reference: Internal Investigation Plan, dated March 5, 2022.
•  Cross-Reference: VaultChat Message Analysis Memorandum, dated September 15, 2022 (forthcoming; in advanced draft as of the date of this memorandum).
Prepared by:
________________________________________
Aaron Liu Lead Associate Antitrust & Competition Practice Group Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104 Telephone: (415) 555-7200
Email: aliu@calderwoodharkness.com
Date: August 5, 2022
Reviewed and Approved by:
________________________________________
Elaine Forsythe Responsible Partner Antitrust & Competition Practice Group Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, CA 94104 Telephone: (415) 555-7100
Email: eforsythe@calderwoodharkness.com
Date: ________
cc: Monica Reyes, Working Associate (Matter No. 1039-00001 file)
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT. This memorandum was prepared by Calderwood & Harkness LLP in anticipation of litigation and for the purpose of providing legal advice. It is not to be distributed, copied, or disclosed without the express written authorization of the Responsible Partner. Unauthorized disclosure may result in waiver of applicable privileges and protections.

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