1039-00002 · Torchlight Mining Corp · Closing

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CLOSING CERTIFICATE

Bring-Down of Representations and Warranties

Delivered pursuant to Section 6.01(e) of the Purchase Agreement dated as of March 29, 2022

April 19, 2022

$300,000,000 Aggregate Principal Amount 8.750% Senior Secured Notes due 2029

PREAMBLE

This Closing Certificate (this "Certificate") is delivered by Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended (the "Issuer" or the "Company"), with its principal executive offices located at 2200 – 400 Burrard Street, Vancouver, British Columbia V6C 3A6, Canada, and its registered office at 1600 – 925 West Georgia Street, Vancouver, British Columbia V6C 3L2, Canada.

This Certificate is delivered to the following parties (collectively, the "Initial Purchasers"):

(a) Kelvantis Capital Markets LLC, as Lead Initial Purchaser and Book-Running Manager, with offices at 599 Lexington Avenue, 38th Floor, New York, New York 10022;

(b) Prestige Barrington & Co., Inc., as Co-Manager and Initial Purchaser, with offices at 1285 Avenue of the Americas, 22nd Floor, New York, New York 10019; and

(c) Halcyon Securities Inc., as Co-Manager and Initial Purchaser, with offices at 200 Park Avenue, Suite 3100, New York, New York 10166.

This Certificate is delivered pursuant to and in connection with that certain Purchase Agreement, dated as of March 29, 2022 (the "Purchase Agreement"), among:

(i) Torchlight Mining Corp., as issuer (the "Issuer");

(ii) Wolverine Lake Mining Ltd., a corporation organized under the laws of the Province of Ontario ("WLML");

(iii) Torchlight Milling & Processing Inc., a corporation organized under the laws of the Province of Ontario ("TMPI");

(iv) Torchlight U.S. Holdings, Inc., a corporation organized under the laws of the State of Delaware, Employer Identification Number 84-3921057 ("TUSHI" and, together with WLML and TMPI, each a "Guarantor" and collectively, the "Guarantors"); and

(v) Kelvantis Capital Markets LLC, Prestige Barrington & Co., Inc., and Halcyon Securities Inc. (the "Initial Purchasers").

The Purchase Agreement relates to the offering (the "Offering") by the Issuer of $300,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2029 (the "Notes"), to be offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act.

The Notes are to be issued pursuant to an Indenture, dated as of April 19, 2022 (the "Indenture"), among the Issuer, the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent, with its corporate trust office located at 101 Barclay Street, 7th Floor, New York, New York 10286.

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement, and all references to sections, articles, and exhibits shall be to sections, articles, and exhibits of the Purchase Agreement unless otherwise specified.

This Certificate is delivered on the date hereof in satisfaction of the conditions to closing set forth in Article VI of the Purchase Agreement, including Section 6.01(e) thereof, on the Closing Date, which is April 19, 2022 (the "Closing Date").

SECTION 1 — CERTIFYING OFFICERS

The undersigned, Lianne Prokopchuk (age 47), Chief Financial Officer of Torchlight Mining Corp., holder of the Chartered Professional Accountant (CPA) and Chartered Financial Analyst (CFA) designations, and Deepak Rathore (age 52), General Counsel and Corporate Secretary of Torchlight Mining Corp., called to the Bar of the Province of Ontario in 1998 and a member in good standing of the Law Society of Ontario, each hereby certify as follows:

Each of the undersigned is a duly authorized officer of the Company. Each of the undersigned is delivering this Certificate in such capacity, acting on behalf of the Issuer and on behalf of each of the Guarantors — namely, Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. — and is duly authorized to execute, deliver, and perform on behalf of each such entity in connection with the transactions contemplated by the Purchase Agreement.

Each of the undersigned has reviewed and is familiar with the terms and conditions of the Purchase Agreement, the Indenture, the Notes, and each of the other Transaction Documents (as defined in the Purchase Agreement), and has reviewed and is familiar with the transactions contemplated thereby. Each of the undersigned has made such investigations and inquiries as each has deemed necessary or appropriate in connection with the delivery of this Certificate, including consultation with other officers and directors of the Issuer and the Guarantors, review of the books, records, and corporate and organizational documents of the Issuer and each Guarantor, and discussions with external legal counsel, auditors, and technical advisors.

The certifications and statements made herein are made to the knowledge and belief of each of the undersigned, after due inquiry and investigation, and in each case in such officer's capacity as an officer of the Issuer and not in any personal capacity.

SECTION 2 — BRING-DOWN OF REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Issuer. Each of the undersigned hereby certifies that each of the representations and warranties of the Issuer set forth in the Purchase Agreement (including, without limitation, those set forth in Section 3.01 thereof) is true and correct in all material respects as of the date hereof, April 19, 2022, with the same force and effect as though each such representation and warranty had been expressly made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty was true and correct in all material respects as of such earlier date. For the avoidance of doubt, where any such representation or warranty is qualified by materiality, Material Adverse Change, or similar concepts, such representation or warranty is true and correct in all respects (giving effect to such materiality or similar qualification) as of the date hereof (or, in the case of a representation or warranty that expressly relates to an earlier date, as of such earlier date).

2.2 Representations and Warranties of the Guarantors. Each of the undersigned hereby certifies that each of the representations and warranties of each Guarantor — namely, Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. — set forth in the Purchase Agreement (including, without limitation, those set forth in Section 3.02 thereof) is true and correct in all material respects as of the date hereof, April 19, 2022, with the same force and effect as though each such representation and warranty had been expressly made on and as of the date hereof. In the case of any such representation or warranty that expressly relates to an earlier date, such representation or warranty was true and correct in all material respects as of such earlier date. The foregoing certification is given on behalf of each Guarantor severally, with respect to such Guarantor's own representations and warranties, as well as jointly, to the extent applicable under the Purchase Agreement.

2.3 Final Offering Memorandum. Each of the undersigned hereby specifically certifies that the representations and warranties of the Issuer and each Guarantor regarding the Final Offering Memorandum, dated March 14, 2022 (the "Final Offering Memorandum"), as distributed to (a) qualified institutional buyers in reliance on Rule 144A under the Securities Act and (b) non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act, remain true and correct in all material respects as of the date hereof. Without limiting the generality of the foregoing, the Final Offering Memorandum, as of its date and as of the date hereof, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Since the date of the Final Offering Memorandum, no event or development has occurred that would cause the Final Offering Memorandum, taken as a whole, to contain an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

SECTION 3 — COMPLIANCE WITH COVENANTS AND AGREEMENTS

3.1 General Compliance. Each of the undersigned hereby certifies that the Issuer and each Guarantor have performed and complied in all material respects with all of their respective covenants, agreements, and obligations contained in the Purchase Agreement that are required to be performed or complied with on or before the Closing Date, April 19, 2022. Neither the Issuer nor any Guarantor is in breach of, or default under, any provision of the Purchase Agreement, and no event has occurred that, with the giving of notice, the passage of time, or both, would constitute such a breach or default.

3.2 Delivery and Execution of Transaction Documents. Each of the undersigned hereby confirms that, on or before the Closing Date, the Issuer and the Guarantors have duly authorized, executed, and delivered each of the following Transaction Documents, and that each such document is in full force and effect as of the date hereof:

(a) The Indenture, dated as of April 19, 2022, among the Issuer, the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent, governing the terms and conditions of the Notes;

(b) The Global Notes, consisting of:

(i) the Rule 144A Global Note (CUSIP: 891207 AA 3; ISIN: US891207AA38), representing Notes sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act; and

(ii) the Regulation S Global Note (CUSIP: C89120 AA 5; ISIN: USC89120AA58), representing Notes sold to non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act,

in each case in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, registered in the name of Cede & Co., as nominee for The Depository Trust Company;

(c) The Registration Rights Agreement, dated as of April 19, 2022, among the Issuer, the Guarantors, and the Initial Purchasers, providing for, among other things, the filing of an exchange offer registration statement or, under certain circumstances, a shelf registration statement, on or before April 19, 2023;

(d) The Security Agreement (U.S.), between Torchlight U.S. Holdings, Inc. and Northern Dominion Trust Company, as Collateral Agent, granting a first-priority security interest in substantially all of the assets of TUSHI;

(e) The General Security Agreement (Canada), among Torchlight Mining Corp., Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Northern Dominion Trust Company, as Collateral Agent, granting a first-priority lien on substantially all of the assets of each of the Canadian grantors, including, without limitation:

(i) all mining rights and mineral claims held by the Canadian grantors, including Ontario Mining Claim Nos. WL-4492-01 through WL-4492-47, inclusive, comprising nickel-copper mineral rights at the Wolverine Lake property;

(ii) all surface rights at the Wolverine Lake property, comprising approximately 12,400 hectares in the District of Sudbury, Province of Ontario; and

(iii) all personal property, equipment, inventory, accounts receivable, intellectual property, permits, and other assets of each Canadian grantor as more particularly described in the General Security Agreement (Canada);

(f) The Collateral Agency Agreement, dated as of April 19, 2022, among the Issuer, the Guarantors, Northern Dominion Trust Company, as Collateral Agent, and the other parties thereto, governing the rights, duties, and obligations of the Collateral Agent with respect to the Collateral;

(g) The Guarantees of each of the Guarantors — Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. — as contemplated by Article XI of the Indenture, guaranteeing on a senior secured basis the due and punctual payment and performance of all of the Issuer's obligations under the Indenture and the Notes.

SECTION 4 — NO DEFAULT OR EVENT OF DEFAULT

Each of the undersigned hereby certifies that, as of the Closing Date, no Default or Event of Default (as each such term is defined in Article VII of the Indenture) has occurred and is continuing. Each of the undersigned further certifies that neither the issuance and sale of the Notes, the execution and delivery of the Indenture, the granting of the security interests contemplated by the Security Agreement (U.S.) and the General Security Agreement (Canada), nor the consummation of any of the other transactions contemplated by the Purchase Agreement or the other Transaction Documents will result in, or give rise to, any Default or Event of Default under the Indenture. No event has occurred that, with the giving of notice, the lapse of time, or both, would constitute a Default or Event of Default under the Indenture or any other material agreement or instrument to which the Issuer or any Guarantor is a party or by which any of their respective properties or assets are bound.

SECTION 5 — NO MATERIAL ADVERSE CHANGE

5.1 Each of the undersigned hereby certifies that since the date of the most recent financial statements included in the Final Offering Memorandum — being the audited consolidated financial statements of Torchlight Mining Corp. and its subsidiaries for the fiscal year ended December 31, 2021 (reporting consolidated revenue of CAD $612.4 million and Adjusted EBITDA of CAD $189.7 million) — there has been no Material Adverse Change (as defined in Section 1.01 of the Purchase Agreement) in the financial condition, results of operations, business, assets, properties, or prospects of the Issuer and its subsidiaries, taken as a whole.

5.2 Without limiting the generality of Section 5.1 above, each of the undersigned hereby confirms that:

(a) The Wolverine Lake Nickel-Copper Mine located in the District of Sudbury, Province of Ontario, continues to operate in the ordinary course of business without material disruption, and production levels remain consistent with the projections and expectations set forth in the Final Offering Memorandum;

(b) Phase II expansion planning for the Wolverine Lake Mine, as described in the Final Offering Memorandum, proceeds in the ordinary course of business in accordance with the timeline and budget parameters previously disclosed, and no event or development has occurred that would reasonably be expected to result in a material delay or material cost overrun with respect to such expansion; and

(c) There has been no material adverse change in the commodity prices for nickel or copper that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Change on the Issuer and its subsidiaries, taken as a whole.

SECTION 6 — USE OF PROCEEDS CONFIRMATION

Each of the undersigned hereby confirms that the net proceeds from the Offering will be applied substantially as described in the Final Offering Memorandum under the section entitled "Use of Proceeds." Specifically, the Issuer intends to apply the net proceeds of the Offering as follows:

The foregoing allocation of net proceeds is consistent with the use of proceeds described in the Final Offering Memorandum and with the representations and warranties of the Issuer contained in the Purchase Agreement. The Issuer does not intend to use any portion of the net proceeds from the Offering in a manner that is inconsistent with the description set forth in the Final Offering Memorandum.

SECTION 7 — CONFIRMATION OF PAYOFF AND LIEN RELEASE

Each of the undersigned hereby confirms that, on the Closing Date, Ridgeline Bank of Canada, in its capacity as administrative agent under that certain committed revolving credit facility in the aggregate amount of CAD $225,000,000 (the "Existing Credit Facility"), of which CAD $140,000,000 was drawn and outstanding as of the date immediately preceding the Closing Date, will receive payment in full of all amounts outstanding under such Existing Credit Facility, including all accrued and unpaid interest, fees, and other amounts due and payable thereunder.

Each of the undersigned further confirms that, upon receipt of such payment in full, the Existing Credit Facility will be terminated in accordance with its terms, and all liens, security interests, mortgages, charges, and encumbrances granted by the Issuer and the Guarantors in connection with the Existing Credit Facility will be released and discharged. Ridgeline Bank of Canada has agreed to deliver, on the Closing Date, all such lien releases, discharges, and other instruments as are necessary to evidence and effectuate such release and termination, including any required PPSA discharge statements and UCC-3 termination statements.

SECTION 8 — RATINGS CONFIRMATION

Each of the undersigned hereby confirms that the credit ratings assigned to the Notes by each of the following nationally recognized rating agencies remain in full force and effect as of the Closing Date and have not been downgraded, withdrawn, suspended, or placed on negative watch or negative outlook since the date of their initial assignment:

(a) Northmark Ratings Group, Inc.: Rating of B1, with a stable outlook, initially assigned on March 7, 2022; and

(b) Creston Analytics, Inc.: Rating of B+, with a stable outlook, initially assigned on March 7, 2022.

To the knowledge of each of the undersigned, no rating agency has publicly announced that it is reviewing or has placed under review the rating assigned to the Notes for possible downgrade, suspension, or withdrawal, and neither the Issuer nor any Guarantor has received any notification from either rating agency indicating that any such action is being contemplated.

SECTION 9 — DELIVERY OF OTHER CLOSING CONDITIONS

Each of the undersigned hereby certifies that all other conditions precedent to the obligations of the Initial Purchasers to purchase the Notes as set forth in Article VI of the Purchase Agreement have been satisfied or, to the extent permitted under the Purchase Agreement, waived in writing by the Initial Purchasers as of the Closing Date. Without limiting the generality of the foregoing, each of the undersigned confirms the delivery of, or satisfaction of, the following:

(a) Legal Opinions. Delivery of legal opinions from:

(i) Calderwood & Harkness LLP, counsel to the Issuer, providing (A) a New York law opinion as to the enforceability of the Notes, the Indenture, and the other Transaction Documents governed by New York law, and (B) a Delaware law opinion as to the due incorporation and good standing of Torchlight U.S. Holdings, Inc. and related matters;

(ii) Pendleton Ross LLP, Canadian counsel to the Issuer and the Canadian Guarantors, providing a Canadian law opinion as to the due incorporation, good standing, and corporate authority of Torchlight Mining Corp., Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc., the enforceability under the laws of the Province of Ontario and the federal laws of Canada applicable therein of the Transaction Documents to which such entities are parties, and the creation, attachment, and perfection of the security interests granted under the General Security Agreement (Canada); and

(iii) such other opinions of counsel as are required pursuant to the Purchase Agreement;

(b) Comfort Letter. Delivery of the comfort letter (including "negative assurance" and "change period" procedures) from Aldgate Thornton LLP, independent auditors to the Issuer (engagement partner: Francesca Hui, CPA, CA), addressed to the Initial Purchasers, dated the Closing Date, in form and substance satisfactory to the Initial Purchasers;

(c) Independent Engineer's Report. Delivery of the independent engineer's report prepared by Cascade Technical Advisors Inc. (lead: Dr. Elaine Whitaker, P.Eng.), dated February 28, 2022, regarding the mineral reserves, mineral resources, mining operations, and capital expenditure estimates at the Wolverine Lake Nickel-Copper Mine, in form and substance satisfactory to the Initial Purchasers;

(d) Officer's Certificate under the Indenture. Delivery of the Officer's Certificate of Torchlight Mining Corp. pursuant to Section 4.02 of the Indenture, in the form required thereunder;

(e) Secretary's Certificates. Delivery of the Secretary's Certificates of each of the following entities, certifying as to (i) the articles of incorporation and by-laws (or equivalent organizational documents) of such entity, (ii) the resolutions of the board of directors (or equivalent governing body) of such entity authorizing the execution, delivery, and performance of the Transaction Documents to which it is a party, and (iii) the incumbency and specimen signatures of the officers of such entity executing the Transaction Documents:

(i) Torchlight Mining Corp.; (ii) Wolverine Lake Mining Ltd.; (iii) Torchlight Milling & Processing Inc.; and (iv) Torchlight U.S. Holdings, Inc.;

(f) DTC Letter of Representations. Delivery of the Letter of Representations, dated as of the Closing Date, among the Issuer, Northern Dominion Trust Company (as Trustee), and The Depository Trust Company, in the form required by DTC;

(g) Payoff Letter. Execution and delivery of the Payoff Letter by Ridgeline Bank of Canada (attention: Gavin Forde, Relationship Manager), setting forth the aggregate amounts required to discharge in full all indebtedness and other obligations outstanding under the Existing Credit Facility and providing wire transfer instructions for the payment thereof, together with authorization for the filing of all necessary lien releases upon receipt of payment;

(h) Good Standing Certificates. Delivery of good standing certificates (or equivalent certificates of compliance or certificates of status, as applicable) for each of the following entities in its jurisdiction of organization:

(i) Torchlight Mining Corp. — Canada Business Corporations Act (Corporations Canada); (ii) Wolverine Lake Mining Ltd. — Province of Ontario (Ontario Business Corporations Act); (iii) Torchlight Milling & Processing Inc. — Province of Ontario (Ontario Business Corporations Act); and (iv) Torchlight U.S. Holdings, Inc. — State of Delaware (Delaware Secretary of State);

(i) Perfection Filings. Completion of all UCC financing statement filings under the Uniform Commercial Code of the State of Delaware (and such other states as are required) to perfect the security interests granted by Torchlight U.S. Holdings, Inc. under the Security Agreement (U.S.), and completion of all PPSA registrations under the Personal Property Security Act (Ontario) and such other applicable provincial legislation to perfect the security interests granted by Torchlight Mining Corp., Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc. under the General Security Agreement (Canada), in each case with first-priority status (subject to Permitted Liens as defined in the Indenture).

SECTION 10 — NO LEGAL IMPEDIMENT

10.1 Each of the undersigned hereby certifies that no order, injunction, judgment, decree, stay, ruling, or other similar action of any court, tribunal, arbitral panel, governmental authority, or regulatory body of competent jurisdiction has been issued, entered, or threatened that would prevent, prohibit, restrain, or materially delay the consummation of any of the transactions contemplated by the Purchase Agreement, the Indenture, or any of the other Transaction Documents.

10.2 Each of the undersigned further confirms that all necessary regulatory clearances and governmental approvals, including all Canadian regulatory clearances required in connection with the Offering and the transactions contemplated by the Purchase Agreement, have been obtained and remain in full force and effect as of the Closing Date. Without limiting the generality of the foregoing, the Canadian regulatory clearances that had necessitated the extension of the originally expected closing date from April 5, 2022 to the Closing Date of April 19, 2022 have been duly obtained, and all conditions to the effectiveness of such clearances have been satisfied.

10.3 No litigation, proceeding, or investigation has been commenced, or, to the knowledge of each of the undersigned, threatened, against the Issuer, any Guarantor, or any of their respective officers or directors, that seeks to prevent, prohibit, or restrain the issuance and sale of the Notes or the consummation of any of the other transactions contemplated by the Purchase Agreement.

SECTION 11 — GOVERNING LAW

This Certificate shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law). The Purchase Agreement and the other Transaction Documents are likewise governed by and construed in accordance with the laws of the State of New York, except as otherwise expressly provided therein.

[SIGNATURE PAGE FOLLOWS]

SIGNATURE PAGE TO CLOSING CERTIFICATE Bring-Down of Representations and Warranties

IN WITNESS WHEREOF, the undersigned have executed and delivered this Closing Certificate as of the 19th day of April, 2022, in their respective capacities as officers of Torchlight Mining Corp. (as Issuer) and on behalf of each of the Guarantors: Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc.

TORCHLIGHT MINING CORP. (as Issuer and on behalf of each of the Guarantors)

By: ________

Name: Lianne Prokopchuk

Title: Chief Financial Officer

Date: April 19, 2022

TORCHLIGHT MINING CORP. (as Issuer and on behalf of each of the Guarantors)

By: ________

Name: Deepak Rathore

Title: General Counsel & Corporate Secretary

Date: April 19, 2022

APPENDIX — INCORPORATED DOCUMENTS

The following documents are incorporated by reference into this Certificate and are available in the closing binder maintained by Calderwood & Harkness LLP (Matter No. 1039-00002) at the offices of Calderwood & Harkness LLP, 1585 Broadway, New York, New York 10036:

1. Purchase Agreement, dated as of March 29, 2022, among Torchlight Mining Corp., the Guarantors, and the Initial Purchasers.

2. Indenture, dated as of April 19, 2022, among Torchlight Mining Corp., the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent.

3. Final Offering Memorandum, dated March 14, 2022, relating to the offering of $300,000,000 aggregate principal amount of 8.750% Senior Secured Notes due 2029.

Copies of the foregoing documents, together with all other closing deliverables referenced in Section 9 of this Certificate and all other documents comprising the closing binder, will be made available to the Initial Purchasers and their counsel upon request.

This Closing Certificate, together with the documents incorporated herein by reference, constitutes confidential information and is subject to the confidentiality provisions of the Purchase Agreement. Distribution of this Certificate is limited to the parties thereto and their respective counsel, auditors, and advisors, in each case on a need-to-know basis.

Use of Proceeds	Amount (USD)
Phase II Wolverine Lake mine expansion capital expenditure	$167,000,000
Repayment of the Ridgeline Bank of Canada revolving credit facility (CAD $140,000,000 at a USD/CAD exchange rate of approximately 0.7875)	$110,250,000
Transaction fees and expenses, comprising:	$14,250,000
— Original issue discount (OID)	$4,500,000
— Initial purchaser discount	$6,750,000
— Estimated other expenses (legal, trustee, rating agency, and printing costs)	~$3,000,000
General corporate purposes and working capital	$8,500,000
Total	$300,000,000

CLOSING CERTIFICATE
Bring-Down of Representations and Warranties
Delivered pursuant to Section 6.01(e) of the Purchase Agreement dated as of March 29, 2022
April 19, 2022
$300,000,000 Aggregate Principal Amount 8.750% Senior Secured Notes due 2029
PREAMBLE
This Closing Certificate (this "Certificate") is delivered by Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended (the "Issuer" or the "Company"), with its principal executive offices located at 2200 – 400 Burrard Street, Vancouver, British Columbia V6C 3A6, Canada, and its registered office at 1600 – 925 West Georgia Street, Vancouver, British Columbia V6C 3L2, Canada.
This Certificate is delivered to the following parties (collectively, the "Initial Purchasers"):
(a) Kelvantis Capital Markets LLC, as Lead Initial Purchaser and Book-Running Manager, with offices at 599 Lexington Avenue, 38th Floor, New York, New York 10022;
(b) Prestige Barrington & Co., Inc., as Co-Manager and Initial Purchaser, with offices at 1285 Avenue of the Americas, 22nd Floor, New York, New York 10019; and
(c) Halcyon Securities Inc., as Co-Manager and Initial Purchaser, with offices at 200 Park Avenue, Suite 3100, New York, New York 10166.
This Certificate is delivered pursuant to and in connection with that certain Purchase Agreement, dated as of March 29, 2022 (the "Purchase Agreement"), among:
(i) Torchlight Mining Corp., as issuer (the "Issuer");
(ii) Wolverine Lake Mining Ltd., a corporation organized under the laws of the Province of Ontario ("WLML");
(iii) Torchlight Milling & Processing Inc., a corporation organized under the laws of the Province of Ontario ("TMPI");
(iv) Torchlight U.S. Holdings, Inc., a corporation organized under the laws of the State of Delaware, Employer Identification Number 84-3921057 ("TUSHI" and, together with WLML and TMPI, each a "Guarantor" and collectively, the "Guarantors"); and
(v) Kelvantis Capital Markets LLC, Prestige Barrington & Co., Inc., and Halcyon Securities Inc. (the "Initial Purchasers").
The Purchase Agreement relates to the offering (the "Offering") by the Issuer of $300,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2029 (the "Notes"), to be offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act.
The Notes are to be issued pursuant to an Indenture, dated as of April 19, 2022 (the "Indenture"), among the Issuer, the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent, with its corporate trust office located at 101 Barclay Street, 7th Floor, New York, New York 10286.
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement, and all references to sections, articles, and exhibits shall be to sections, articles, and exhibits of the Purchase Agreement unless otherwise specified.
This Certificate is delivered on the date hereof in satisfaction of the conditions to closing set forth in Article VI of the Purchase Agreement, including Section 6.01(e) thereof, on the Closing Date, which is April 19, 2022 (the "Closing Date").
SECTION 1 — CERTIFYING OFFICERS
The undersigned, Lianne Prokopchuk (age 47), Chief Financial Officer of Torchlight Mining Corp., holder of the Chartered Professional Accountant (CPA) and Chartered Financial Analyst (CFA) designations, and Deepak Rathore (age 52), General Counsel and Corporate Secretary of Torchlight Mining Corp., called to the Bar of the Province of Ontario in 1998 and a member in good standing of the Law Society of Ontario, each hereby certify as follows:
Each of the undersigned is a duly authorized officer of the Company. Each of the undersigned is delivering this Certificate in such capacity, acting on behalf of the Issuer and on behalf of each of the Guarantors — namely, Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. — and is duly authorized to execute, deliver, and perform on behalf of each such entity in connection with the transactions contemplated by the Purchase Agreement.
Each of the undersigned has reviewed and is familiar with the terms and conditions of the Purchase Agreement, the Indenture, the Notes, and each of the other Transaction Documents (as defined in the Purchase Agreement), and has reviewed and is familiar with the transactions contemplated thereby. Each of the undersigned has made such investigations and inquiries as each has deemed necessary or appropriate in connection with the delivery of this Certificate, including consultation with other officers and directors of the Issuer and the Guarantors, review of the books, records, and corporate and organizational documents of the Issuer and each Guarantor, and discussions with external legal counsel, auditors, and technical advisors.
The certifications and statements made herein are made to the knowledge and belief of each of the undersigned, after due inquiry and investigation, and in each case in such officer's capacity as an officer of the Issuer and not in any personal capacity.
SECTION 2 — BRING-DOWN OF REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Issuer. Each of the undersigned hereby certifies that each of the representations and warranties of the Issuer set forth in the Purchase Agreement (including, without limitation, those set forth in Section 3.01 thereof) is true and correct in all material respects as of the date hereof, April 19, 2022, with the same force and effect as though each such representation and warranty had been expressly made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty was true and correct in all material respects as of such earlier date. For the avoidance of doubt, where any such representation or warranty is qualified by materiality, Material Adverse Change, or similar concepts, such representation or warranty is true and correct in all respects (giving effect to such materiality or similar qualification) as of the date hereof (or, in the case of a representation or warranty that expressly relates to an earlier date, as of such earlier date).
2.2 Representations and Warranties of the Guarantors. Each of the undersigned hereby certifies that each of the representations and warranties of each Guarantor — namely, Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. — set forth in the Purchase Agreement (including, without limitation, those set forth in Section 3.02 thereof) is true and correct in all material respects as of the date hereof, April 19, 2022, with the same force and effect as though each such representation and warranty had been expressly made on and as of the date hereof. In the case of any such representation or warranty that expressly relates to an earlier date, such representation or warranty was true and correct in all material respects as of such earlier date. The foregoing certification is given on behalf of each Guarantor severally, with respect to such Guarantor's own representations and warranties, as well as jointly, to the extent applicable under the Purchase Agreement.
2.3 Final Offering Memorandum. Each of the undersigned hereby specifically certifies that the representations and warranties of the Issuer and each Guarantor regarding the Final Offering Memorandum, dated March 14, 2022 (the "Final Offering Memorandum"), as distributed to (a) qualified institutional buyers in reliance on Rule 144A under the Securities Act and (b) non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act, remain true and correct in all material respects as of the date hereof. Without limiting the generality of the foregoing, the Final Offering Memorandum, as of its date and as of the date hereof, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Since the date of the Final Offering Memorandum, no event or development has occurred that would cause the Final Offering Memorandum, taken as a whole, to contain an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
SECTION 3 — COMPLIANCE WITH COVENANTS AND AGREEMENTS
3.1 General Compliance. Each of the undersigned hereby certifies that the Issuer and each Guarantor have performed and complied in all material respects with all of their respective covenants, agreements, and obligations contained in the Purchase Agreement that are required to be performed or complied with on or before the Closing Date, April 19, 2022. Neither the Issuer nor any Guarantor is in breach of, or default under, any provision of the Purchase Agreement, and no event has occurred that, with the giving of notice, the passage of time, or both, would constitute such a breach or default.
3.2 Delivery and Execution of Transaction Documents. Each of the undersigned hereby confirms that, on or before the Closing Date, the Issuer and the Guarantors have duly authorized, executed, and delivered each of the following Transaction Documents, and that each such document is in full force and effect as of the date hereof:
(a) The Indenture, dated as of April 19, 2022, among the Issuer, the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent, governing the terms and conditions of the Notes;
(b) The Global Notes, consisting of:
(i) the Rule 144A Global Note (CUSIP: 891207 AA 3; ISIN: US891207AA38), representing Notes sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act; and
(ii) the Regulation S Global Note (CUSIP: C89120 AA 5; ISIN: USC89120AA58), representing Notes sold to non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act,
in each case in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, registered in the name of Cede & Co., as nominee for The Depository Trust Company;
(c) The Registration Rights Agreement, dated as of April 19, 2022, among the Issuer, the Guarantors, and the Initial Purchasers, providing for, among other things, the filing of an exchange offer registration statement or, under certain circumstances, a shelf registration statement, on or before April 19, 2023;
(d) The Security Agreement (U.S.), between Torchlight U.S. Holdings, Inc. and Northern Dominion Trust Company, as Collateral Agent, granting a first-priority security interest in substantially all of the assets of TUSHI;
(e) The General Security Agreement (Canada), among Torchlight Mining Corp., Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Northern Dominion Trust Company, as Collateral Agent, granting a first-priority lien on substantially all of the assets of each of the Canadian grantors, including, without limitation:
(i) all mining rights and mineral claims held by the Canadian grantors, including Ontario Mining Claim Nos. WL-4492-01 through WL-4492-47, inclusive, comprising nickel-copper mineral rights at the Wolverine Lake property;
(ii) all surface rights at the Wolverine Lake property, comprising approximately 12,400 hectares in the District of Sudbury, Province of Ontario; and
(iii) all personal property, equipment, inventory, accounts receivable, intellectual property, permits, and other assets of each Canadian grantor as more particularly described in the General Security Agreement (Canada);
(f) The Collateral Agency Agreement, dated as of April 19, 2022, among the Issuer, the Guarantors, Northern Dominion Trust Company, as Collateral Agent, and the other parties thereto, governing the rights, duties, and obligations of the Collateral Agent with respect to the Collateral;
(g) The Guarantees of each of the Guarantors — Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. — as contemplated by Article XI of the Indenture, guaranteeing on a senior secured basis the due and punctual payment and performance of all of the Issuer's obligations under the Indenture and the Notes.
SECTION 4 — NO DEFAULT OR EVENT OF DEFAULT
Each of the undersigned hereby certifies that, as of the Closing Date, no Default or Event of Default (as each such term is defined in Article VII of the Indenture) has occurred and is continuing. Each of the undersigned further certifies that neither the issuance and sale of the Notes, the execution and delivery of the Indenture, the granting of the security interests contemplated by the Security Agreement (U.S.) and the General Security Agreement (Canada), nor the consummation of any of the other transactions contemplated by the Purchase Agreement or the other Transaction Documents will result in, or give rise to, any Default or Event of Default under the Indenture. No event has occurred that, with the giving of notice, the lapse of time, or both, would constitute a Default or Event of Default under the Indenture or any other material agreement or instrument to which the Issuer or any Guarantor is a party or by which any of their respective properties or assets are bound.
SECTION 5 — NO MATERIAL ADVERSE CHANGE
5.1 Each of the undersigned hereby certifies that since the date of the most recent financial statements included in the Final Offering Memorandum — being the audited consolidated financial statements of Torchlight Mining Corp. and its subsidiaries for the fiscal year ended December 31, 2021 (reporting consolidated revenue of CAD $612.4 million and Adjusted EBITDA of CAD $189.7 million) — there has been no Material Adverse Change (as defined in Section 1.01 of the Purchase Agreement) in the financial condition, results of operations, business, assets, properties, or prospects of the Issuer and its subsidiaries, taken as a whole.
5.2 Without limiting the generality of Section 5.1 above, each of the undersigned hereby confirms that:
(a) The Wolverine Lake Nickel-Copper Mine located in the District of Sudbury, Province of Ontario, continues to operate in the ordinary course of business without material disruption, and production levels remain consistent with the projections and expectations set forth in the Final Offering Memorandum;
(b) Phase II expansion planning for the Wolverine Lake Mine, as described in the Final Offering Memorandum, proceeds in the ordinary course of business in accordance with the timeline and budget parameters previously disclosed, and no event or development has occurred that would reasonably be expected to result in a material delay or material cost overrun with respect to such expansion; and
(c) There has been no material adverse change in the commodity prices for nickel or copper that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Change on the Issuer and its subsidiaries, taken as a whole.
SECTION 6 — USE OF PROCEEDS CONFIRMATION
Each of the undersigned hereby confirms that the net proceeds from the Offering will be applied substantially as described in the Final Offering Memorandum under the section entitled "Use of Proceeds." Specifically, the Issuer intends to apply the net proceeds of the Offering as follows:
The foregoing allocation of net proceeds is consistent with the use of proceeds described in the Final Offering Memorandum and with the representations and warranties of the Issuer contained in the Purchase Agreement. The Issuer does not intend to use any portion of the net proceeds from the Offering in a manner that is inconsistent with the description set forth in the Final Offering Memorandum.
SECTION 7 — CONFIRMATION OF PAYOFF AND LIEN RELEASE
Each of the undersigned hereby confirms that, on the Closing Date, Ridgeline Bank of Canada, in its capacity as administrative agent under that certain committed revolving credit facility in the aggregate amount of CAD $225,000,000 (the "Existing Credit Facility"), of which CAD $140,000,000 was drawn and outstanding as of the date immediately preceding the Closing Date, will receive payment in full of all amounts outstanding under such Existing Credit Facility, including all accrued and unpaid interest, fees, and other amounts due and payable thereunder.
Each of the undersigned further confirms that, upon receipt of such payment in full, the Existing Credit Facility will be terminated in accordance with its terms, and all liens, security interests, mortgages, charges, and encumbrances granted by the Issuer and the Guarantors in connection with the Existing Credit Facility will be released and discharged. Ridgeline Bank of Canada has agreed to deliver, on the Closing Date, all such lien releases, discharges, and other instruments as are necessary to evidence and effectuate such release and termination, including any required PPSA discharge statements and UCC-3 termination statements.
SECTION 8 — RATINGS CONFIRMATION
Each of the undersigned hereby confirms that the credit ratings assigned to the Notes by each of the following nationally recognized rating agencies remain in full force and effect as of the Closing Date and have not been downgraded, withdrawn, suspended, or placed on negative watch or negative outlook since the date of their initial assignment:
(a) Northmark Ratings Group, Inc.: Rating of B1, with a stable outlook, initially assigned on March 7, 2022; and
(b) Creston Analytics, Inc.: Rating of B+, with a stable outlook, initially assigned on March 7, 2022.
To the knowledge of each of the undersigned, no rating agency has publicly announced that it is reviewing or has placed under review the rating assigned to the Notes for possible downgrade, suspension, or withdrawal, and neither the Issuer nor any Guarantor has received any notification from either rating agency indicating that any such action is being contemplated.
SECTION 9 — DELIVERY OF OTHER CLOSING CONDITIONS
Each of the undersigned hereby certifies that all other conditions precedent to the obligations of the Initial Purchasers to purchase the Notes as set forth in Article VI of the Purchase Agreement have been satisfied or, to the extent permitted under the Purchase Agreement, waived in writing by the Initial Purchasers as of the Closing Date. Without limiting the generality of the foregoing, each of the undersigned confirms the delivery of, or satisfaction of, the following:
(a) Legal Opinions. Delivery of legal opinions from:
(i) Calderwood & Harkness LLP, counsel to the Issuer, providing (A) a New York law opinion as to the enforceability of the Notes, the Indenture, and the other Transaction Documents governed by New York law, and (B) a Delaware law opinion as to the due incorporation and good standing of Torchlight U.S. Holdings, Inc. and related matters;
(ii) Pendleton Ross LLP, Canadian counsel to the Issuer and the Canadian Guarantors, providing a Canadian law opinion as to the due incorporation, good standing, and corporate authority of Torchlight Mining Corp., Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc., the enforceability under the laws of the Province of Ontario and the federal laws of Canada applicable therein of the Transaction Documents to which such entities are parties, and the creation, attachment, and perfection of the security interests granted under the General Security Agreement (Canada); and
(iii) such other opinions of counsel as are required pursuant to the Purchase Agreement;
(b) Comfort Letter. Delivery of the comfort letter (including "negative assurance" and "change period" procedures) from Aldgate Thornton LLP, independent auditors to the Issuer (engagement partner: Francesca Hui, CPA, CA), addressed to the Initial Purchasers, dated the Closing Date, in form and substance satisfactory to the Initial Purchasers;
(c) Independent Engineer's Report. Delivery of the independent engineer's report prepared by Cascade Technical Advisors Inc. (lead: Dr. Elaine Whitaker, P.Eng.), dated February 28, 2022, regarding the mineral reserves, mineral resources, mining operations, and capital expenditure estimates at the Wolverine Lake Nickel-Copper Mine, in form and substance satisfactory to the Initial Purchasers;
(d) Officer's Certificate under the Indenture. Delivery of the Officer's Certificate of Torchlight Mining Corp. pursuant to Section 4.02 of the Indenture, in the form required thereunder;
(e) Secretary's Certificates. Delivery of the Secretary's Certificates of each of the following entities, certifying as to (i) the articles of incorporation and by-laws (or equivalent organizational documents) of such entity, (ii) the resolutions of the board of directors (or equivalent governing body) of such entity authorizing the execution, delivery, and performance of the Transaction Documents to which it is a party, and (iii) the incumbency and specimen signatures of the officers of such entity executing the Transaction Documents:
(i) Torchlight Mining Corp.; (ii) Wolverine Lake Mining Ltd.; (iii) Torchlight Milling & Processing Inc.; and (iv) Torchlight U.S. Holdings, Inc.;
(f) DTC Letter of Representations. Delivery of the Letter of Representations, dated as of the Closing Date, among the Issuer, Northern Dominion Trust Company (as Trustee), and The Depository Trust Company, in the form required by DTC;
(g) Payoff Letter. Execution and delivery of the Payoff Letter by Ridgeline Bank of Canada (attention: Gavin Forde, Relationship Manager), setting forth the aggregate amounts required to discharge in full all indebtedness and other obligations outstanding under the Existing Credit Facility and providing wire transfer instructions for the payment thereof, together with authorization for the filing of all necessary lien releases upon receipt of payment;
(h) Good Standing Certificates. Delivery of good standing certificates (or equivalent certificates of compliance or certificates of status, as applicable) for each of the following entities in its jurisdiction of organization:
(i) Torchlight Mining Corp. — Canada Business Corporations Act (Corporations Canada); (ii) Wolverine Lake Mining Ltd. — Province of Ontario (Ontario Business Corporations Act); (iii) Torchlight Milling & Processing Inc. — Province of Ontario (Ontario Business Corporations Act); and (iv) Torchlight U.S. Holdings, Inc. — State of Delaware (Delaware Secretary of State);
(i) Perfection Filings. Completion of all UCC financing statement filings under the Uniform Commercial Code of the State of Delaware (and such other states as are required) to perfect the security interests granted by Torchlight U.S. Holdings, Inc. under the Security Agreement (U.S.), and completion of all PPSA registrations under the Personal Property Security Act (Ontario) and such other applicable provincial legislation to perfect the security interests granted by Torchlight Mining Corp., Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc. under the General Security Agreement (Canada), in each case with first-priority status (subject to Permitted Liens as defined in the Indenture).
SECTION 10 — NO LEGAL IMPEDIMENT
10.1 Each of the undersigned hereby certifies that no order, injunction, judgment, decree, stay, ruling, or other similar action of any court, tribunal, arbitral panel, governmental authority, or regulatory body of competent jurisdiction has been issued, entered, or threatened that would prevent, prohibit, restrain, or materially delay the consummation of any of the transactions contemplated by the Purchase Agreement, the Indenture, or any of the other Transaction Documents.
10.2 Each of the undersigned further confirms that all necessary regulatory clearances and governmental approvals, including all Canadian regulatory clearances required in connection with the Offering and the transactions contemplated by the Purchase Agreement, have been obtained and remain in full force and effect as of the Closing Date. Without limiting the generality of the foregoing, the Canadian regulatory clearances that had necessitated the extension of the originally expected closing date from April 5, 2022 to the Closing Date of April 19, 2022 have been duly obtained, and all conditions to the effectiveness of such clearances have been satisfied.
10.3 No litigation, proceeding, or investigation has been commenced, or, to the knowledge of each of the undersigned, threatened, against the Issuer, any Guarantor, or any of their respective officers or directors, that seeks to prevent, prohibit, or restrain the issuance and sale of the Notes or the consummation of any of the other transactions contemplated by the Purchase Agreement.
SECTION 11 — GOVERNING LAW
This Certificate shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law principles thereof (other than Section 5-1401 of the New York General Obligations Law). The Purchase Agreement and the other Transaction Documents are likewise governed by and construed in accordance with the laws of the State of New York, except as otherwise expressly provided therein.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO CLOSING CERTIFICATE Bring-Down of Representations and Warranties
IN WITNESS WHEREOF, the undersigned have executed and delivered this Closing Certificate as of the 19th day of April, 2022, in their respective capacities as officers of Torchlight Mining Corp. (as Issuer) and on behalf of each of the Guarantors: Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc.
TORCHLIGHT MINING CORP. (as Issuer and on behalf of each of the Guarantors)
By: ________
Name: Lianne Prokopchuk
Title: Chief Financial Officer
Date: April 19, 2022
TORCHLIGHT MINING CORP. (as Issuer and on behalf of each of the Guarantors)
By: ________
Name: Deepak Rathore
Title: General Counsel & Corporate Secretary
Date: April 19, 2022
APPENDIX — INCORPORATED DOCUMENTS
The following documents are incorporated by reference into this Certificate and are available in the closing binder maintained by Calderwood & Harkness LLP (Matter No. 1039-00002) at the offices of Calderwood & Harkness LLP, 1585 Broadway, New York, New York 10036:
1.  Purchase Agreement, dated as of March 29, 2022, among Torchlight Mining Corp., the Guarantors, and the Initial Purchasers.
2.  Indenture, dated as of April 19, 2022, among Torchlight Mining Corp., the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent.
3.  Final Offering Memorandum, dated March 14, 2022, relating to the offering of $300,000,000 aggregate principal amount of 8.750% Senior Secured Notes due 2029.
Copies of the foregoing documents, together with all other closing deliverables referenced in Section 9 of this Certificate and all other documents comprising the closing binder, will be made available to the Initial Purchasers and their counsel upon request.
This Closing Certificate, together with the documents incorporated herein by reference, constitutes confidential information and is subject to the confidentiality provisions of the Purchase Agreement. Distribution of this Certificate is limited to the parties thereto and their respective counsel, auditors, and advisors, in each case on a need-to-know basis.
Use of Proceeds | Amount (USD)
Phase II Wolverine Lake mine expansion capital expenditure | $167,000,000
Repayment of the Ridgeline Bank of Canada revolving credit facility (CAD $140,000,000 at a USD/CAD exchange rate of approximately 0.7875) | $110,250,000
Transaction fees and expenses, comprising: | $14,250,000
— Original issue discount (OID) | $4,500,000
— Initial purchaser discount | $6,750,000
— Estimated other expenses (legal, trustee, rating agency, and printing costs) | ~$3,000,000
General corporate purposes and working capital | $8,500,000
Total | $300,000,000

CLOSING CERTIFICATE

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