1039-00002 · Torchlight Mining Corp · Legal Opinions

sc-opinion-ny-law.docx DOCUMENT Capital Markets

28 / 40 ← → ✕

Contract analysis Extract to table

CALDERWOOD & HARKNESS LLP Attorneys at Law

450 Park Avenue New York, New York 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

April 19, 2022

Kelvantis Capital Markets LLC 599 Lexington Avenue, 38th Floor New York, New York 10022

Prestige Barrington & Co., Inc. 1285 Avenue of the Americas, 22nd Floor New York, New York 10019

Halcyon Securities Inc. 200 Park Avenue, Suite 3100 New York, New York 10166

(collectively, the "Initial Purchasers")

Ladies and Gentlemen:

Re: $300,000,000 Aggregate Principal Amount of 8.750% Senior Secured Notes due 2029 (the "Notes") of Torchlight Mining Corp.

C&H Matter No. 1039-00002

We have acted as United States counsel to Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended (the "CBCA") (the "Issuer" or the "Company"), in connection with the issuance and sale by the Company of $300,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2029 (the "Notes"). The Notes are being issued pursuant to an Indenture dated as of April 19, 2022 (the "Indenture"), among the Company, Wolverine Lake Mining Ltd., a corporation organized under the laws of the Province of Ontario ("Wolverine Lake"), Torchlight Milling & Processing Inc., a corporation organized under the laws of the Province of Ontario ("Torchlight Milling"), and Torchlight U.S. Holdings, Inc., a corporation organized under the laws of the State of Delaware (the "Delaware Guarantor"), as guarantors (Wolverine Lake, Torchlight Milling, and the Delaware Guarantor are collectively referred to herein as the "Guarantors" and, together with the Company, the "Obligors"), and Northern Dominion Trust Company, as trustee (in such capacity, the "Trustee") and as collateral agent (in such capacity, the "Collateral Agent").

The Notes are being sold to the Initial Purchasers pursuant to a Purchase Agreement dated March 29, 2022 (the "Purchase Agreement"), among the Company, the Guarantors, and the Initial Purchasers. This opinion is delivered to you pursuant to Section 7(e) of the Purchase Agreement as a condition to the obligations of the Initial Purchasers to purchase the Notes on the date hereof.

1. DOCUMENTS EXAMINED; DEFINED TERMS

1.1 Transaction Documents Reviewed

In connection with the opinions expressed herein, we have examined executed originals or copies, certified or otherwise identified to our satisfaction, of each of the following documents:

1. The Indenture, dated as of April 19, 2022, among the Company, the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent (the "Indenture");

2. The Notes, including (a) the Global Note in respect of Notes sold in reliance on Rule 144A under the Securities Act (CUSIP: 891207 AA 3; ISIN: US891207AA38) (the "Rule 144A Global Note") and (b) the Global Note in respect of Notes sold in reliance on Regulation S under the Securities Act (CUSIP: C89120 AA 5; ISIN: USC89120AA58) (the "Regulation S Global Note"), each in the form attached as Exhibits A-1 and A-2, respectively, to the Indenture;

3. The Purchase Agreement, dated March 29, 2022, among the Company, the Guarantors, and the Initial Purchasers (the "Purchase Agreement");

4. The Registration Rights Agreement, dated as of April 19, 2022, among the Company, the Guarantors, and the Initial Purchasers (the "Registration Rights Agreement");

5. The Security Agreement (U.S.), dated as of April 19, 2022, between Torchlight U.S. Holdings, Inc. and Northern Dominion Trust Company, as Collateral Agent (the "U.S. Security Agreement");

6. The Collateral Agency Agreement, dated as of April 19, 2022, among the Company, the Guarantors, and Northern Dominion Trust Company, as Collateral Agent (the "Collateral Agency Agreement");

7. The Offering Memorandum, dated March 14, 2022, relating to the offering and sale of the Notes (the "Offering Memorandum").

Items 1 through 7 above are collectively referred to herein as the "Transaction Documents." Where the context requires, the subset of the Transaction Documents that are expressed to be governed by the laws of the State of New York are referred to as the "New York Law Documents."

1.2 Corporate and Other Documents Reviewed

In addition to the Transaction Documents, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following:

(a) the Certificate of Incorporation of Torchlight U.S. Holdings, Inc. (the "Delaware Guarantor"), as filed with the Secretary of State of the State of Delaware, together with all amendments thereto through the date hereof;

(b) the Bylaws of the Delaware Guarantor, as currently in effect;

(c) the Secretary's Certificate of the Delaware Guarantor, dated April 19, 2022, executed by Anika Petrov, Secretary, attaching thereto (i) certified copies of the resolutions of the Board of Directors of the Delaware Guarantor authorizing the execution, delivery, and performance of the Transaction Documents to which the Delaware Guarantor is a party, (ii) an incumbency certificate identifying the officers of the Delaware Guarantor authorized to execute the Transaction Documents, (iii) a certified copy of the Certificate of Incorporation of the Delaware Guarantor, and (iv) a certified copy of the Bylaws of the Delaware Guarantor;

(d) a certificate of good standing for the Delaware Guarantor issued by the Secretary of State of the State of Delaware, dated April 15, 2022;

(e) the Officer's Certificate of Torchlight Mining Corp., dated April 19, 2022, executed by Lianne Prokopchuk, Chief Financial Officer, and Deepak Rathore, General Counsel and Corporate Secretary;

(f) the Secretary's Certificate of Torchlight Mining Corp., dated April 19, 2022, executed by Deepak Rathore, General Counsel and Corporate Secretary;

(g) the Secretary's Certificate of Wolverine Lake Mining Ltd., dated April 19, 2022;

(h) the Secretary's Certificate of Torchlight Milling & Processing Inc., dated April 19, 2022; and

(i) such other documents, records, agreements, certificates, and instruments as we have deemed necessary or appropriate for purposes of rendering the opinions expressed herein.

1.3 Additional Defined Terms

As used in this opinion letter, the following terms have the meanings set forth below:

"Guarantee" means the guarantee of each Guarantor as set forth in Article X of the Indenture.

"Collateral Documents" means, collectively, the U.S. Security Agreement and the Collateral Agency Agreement.

"UCC" means the Uniform Commercial Code as in effect in the State of New York.

"Securities Act" means the Securities Act of 1933, as amended.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

"Investment Company Act" means the Investment Company Act of 1940, as amended.

Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Indenture or, where the context so requires, the Purchase Agreement.

2. ASSUMPTIONS

In rendering the opinions expressed herein, we have, with your consent and without independent investigation or verification, assumed the following:

2.1 General Assumptions

(a) All signatures on all documents examined by us are genuine, all documents submitted to us as originals are authentic, and all documents submitted to us as copies conform to the originals thereof.

(b) Each natural person who signed any document examined by us had, at the time of such signing, the legal capacity to do so.

(c) Each party to the Transaction Documents (other than the Company and the Delaware Guarantor, to the extent expressly opined on herein) is duly organized or formed, validly existing, and in good standing under the laws of its jurisdiction of organization or formation, and has all requisite power and authority (corporate, trust, or otherwise) to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party.

(d) The Indenture has been duly qualified under the Trust Indenture Act to the extent applicable, or is exempt from the qualification requirements thereof in connection with the offer and sale of the Notes in the manner contemplated by the Purchase Agreement and the Offering Memorandum.

(e) Each Transaction Document has been duly executed and delivered by each party thereto (other than, with respect to due authorization, execution, and delivery, those parties as to which we have expressly opined herein, and subject to the assumptions set forth in Section 2.3 below with respect to the Canadian Obligors).

2.2 Factual Assumptions

(a) The representations and warranties of each party contained in the Transaction Documents are true and correct as of the date of execution and delivery thereof and as of the date hereof.

(b) Each party to the Transaction Documents has complied with all covenants, conditions, and obligations required to be performed or satisfied by it on or prior to the date hereof under each of the Transaction Documents to which it is a party.

(c) The consideration received by each Obligor under the Transaction Documents constitutes reasonably equivalent value and fair consideration for the obligations undertaken by such Obligor thereunder. No Obligor is insolvent, and the consummation of the transactions contemplated by the Transaction Documents will not render any Obligor insolvent, and no Obligor has entered into the Transaction Documents with the intent to hinder, delay, or defraud any of its present or future creditors.

(d) The Notes have been issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, in accordance with the terms of the Indenture.

(e) Interest on the Notes is payable semi-annually on April 15 and October 15 of each year, commencing October 15, 2022. The Notes bear interest at a rate of 8.750% per annum and mature on April 15, 2029. The Notes were sold to the Initial Purchasers at an issue price of 98.50% of the aggregate principal amount thereof, resulting in gross proceeds to the Company of $295,500,000.

2.3 Assumptions Specific to Canadian Entities

With respect to the Company (a corporation incorporated under the CBCA), Wolverine Lake Mining Ltd. (a corporation incorporated under the laws of the Province of Ontario), and Torchlight Milling & Processing Inc. (a corporation incorporated under the laws of the Province of Ontario) (collectively, the "Canadian Obligors"), we have assumed, without independent investigation or verification, that:

(a) each Canadian Obligor is duly organized, validly existing, and in good standing (or the equivalent thereof) under the laws of its jurisdiction of incorporation;

(b) the execution, delivery, and performance by each Canadian Obligor of the Transaction Documents to which it is a party have been duly authorized by all necessary corporate action under the applicable laws of Canada and the Province of Ontario, as applicable;

(c) each Canadian Obligor has all requisite corporate power and authority under Canadian law to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party; and

(d) the execution, delivery, and performance by each Canadian Obligor of the Transaction Documents to which it is a party do not and will not violate any applicable Canadian federal or provincial law, rule, regulation, order, or decree, or any provision of the articles of incorporation, bylaws, or other organizational documents of such Canadian Obligor.

We express no opinion whatsoever on any matter of Canadian law, whether federal or provincial, and, as to all such matters, the Initial Purchasers are advised to rely solely on the opinion of Pendleton Ross LLP dated the date hereof, delivered simultaneously herewith.

3. OPINIONS

Based upon and subject to the foregoing, and subject to the qualifications, limitations, exceptions, and assumptions set forth herein, we are of the opinion that:

3.1 Due Authorization and Execution — Torchlight U.S. Holdings, Inc.

Torchlight U.S. Holdings, Inc. (EIN: 84-3921057) is a corporation duly incorporated, validly existing, and in good standing under the General Corporation Law of the State of Delaware. The Delaware Guarantor has all requisite corporate power and authority under the General Corporation Law of the State of Delaware and its Certificate of Incorporation and Bylaws to execute, deliver, and perform its obligations under each of the Transaction Documents to which it is a party, including, without limitation, the Indenture (including the Guarantee set forth therein), the U.S. Security Agreement, and the Collateral Agency Agreement. The execution, delivery, and performance by the Delaware Guarantor of each of the Indenture (including the Guarantee), the U.S. Security Agreement, and the Collateral Agency Agreement have been duly authorized by all necessary corporate action on the part of the Delaware Guarantor, including the adoption of resolutions by the Board of Directors of the Delaware Guarantor, and no further corporate approval or authorization is required.

3.2 Enforceability of the Indenture

The Indenture has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions (as defined in Section 4 below).

3.3 Valid Issuance of the Notes

The Notes have been duly authorized by the Company (subject, with respect to the Company, to the assumptions set forth in Section 2.3 hereof). The Notes, when executed by the Company in accordance with the terms of the Indenture and authenticated by the Trustee in accordance with the terms of the Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement at the issue price of 98.50% of the aggregate principal amount thereof, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions. The Notes are entitled to the benefits of the Indenture, including, without limitation, the security interests and guarantees provided for therein and in the Collateral Documents.

3.4 Enforceability of the Guarantees

The Guarantee of each Guarantor contained in Article X of the Indenture has been duly authorized, executed, and delivered by such Guarantor (subject, with respect to the Canadian Guarantors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to the Enforceability Exceptions.

3.5 Enforceability of the Purchase Agreement

The Purchase Agreement has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions.

3.6 Enforceability of the Registration Rights Agreement

The Registration Rights Agreement has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions. We note that, pursuant to the terms of the Registration Rights Agreement, the Company has undertaken to file a registration statement with respect to an exchange offer for the Notes, or, under certain circumstances, a shelf registration statement, no later than 365 days after the closing date (i.e., by April 19, 2023), subject to the conditions and exceptions set forth in the Registration Rights Agreement.

3.7 Enforceability of the U.S. Security Agreement and Collateral Agency Agreement

The U.S. Security Agreement has been duly authorized, executed, and delivered by Torchlight U.S. Holdings, Inc. and constitutes a valid and binding obligation of Torchlight U.S. Holdings, Inc., enforceable against Torchlight U.S. Holdings, Inc. in accordance with its terms, subject to the Enforceability Exceptions.

The Collateral Agency Agreement has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions.

3.8 Security Interest — U.S. Security Agreement (UCC Article 9)

The U.S. Security Agreement creates in favor of Northern Dominion Trust Company, as Collateral Agent, for the benefit of the holders of the Notes, a valid security interest (within the meaning of Articles 9-201 and 9-203 of the UCC) in all right, title, and interest of Torchlight U.S. Holdings, Inc. in and to the personal property described in the U.S. Security Agreement (the "U.S. Collateral"), to the extent that a security interest therein can be created under Article 9 of the UCC as in effect in the State of New York.

Upon the filing of appropriate UCC-1 financing statements in the form required by Article 9 of the UCC, naming Torchlight U.S. Holdings, Inc. as debtor (at its registered address of 1209 Orange Street, Wilmington, Delaware 19801) and Northern Dominion Trust Company, as Collateral Agent, as secured party, with the office of the Secretary of State of the State of Delaware (which is the jurisdiction of organization of Torchlight U.S. Holdings, Inc. for purposes of Section 9-301 of the UCC), the security interest in the U.S. Collateral, to the extent such security interest can be perfected by the filing of a UCC financing statement under Article 9 of the UCC, will be perfected.

We note that the foregoing opinion does not address assets or types of collateral requiring perfection by means other than the filing of a UCC financing statement, including, without limitation, deposit accounts (which require perfection by control under Section 9-312(b)(1) of the UCC), letter-of-credit rights (which require perfection by control under Section 9-312(b)(2) of the UCC), certificated securities (which require perfection by delivery or control under Section 9-313 or 9-314 of the UCC), money, and tangible chattel paper.

3.9 No Conflict with New York Law

The execution, delivery, and performance by each Obligor of the Transaction Documents to which it is a party, and the compliance by each Obligor with the terms and provisions thereof, do not and will not (a) violate any New York statute, rule, or regulation applicable to the Obligors of a type that, in our experience, is normally applicable to transactions of the nature contemplated by the Transaction Documents or (b) violate any United States federal statute, rule, or regulation applicable to the Obligors of a type that, in our experience, is normally applicable to transactions of the nature contemplated by the Transaction Documents. We express no opinion pursuant to this Section 3.9 as to (i) federal or state securities laws (which are addressed in Section 3.10 below), (ii) federal or state tax laws, (iii) federal or state antitrust laws, (iv) the laws of the Province of Ontario, the Province of British Columbia, or the Province of Alberta, (v) the laws of Canada, or (vi) the laws of any jurisdiction other than the State of New York and the United States of America.

3.10 Securities Act Exemption — Rule 144A / Regulation S

Assuming the accuracy of the representations and warranties of the Company and the Guarantors contained in the Purchase Agreement and the accuracy of the representations and warranties of the Initial Purchasers contained therein, and assuming compliance by the Company, the Guarantors, and the Initial Purchasers with the offering and transfer restrictions described in the Offering Memorandum dated March 14, 2022, and further assuming that the Initial Purchasers offered and sold the Notes only:

(a) within the United States to persons whom the Initial Purchasers reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act, in transactions meeting the requirements of Rule 144A; and

(b) outside the United States in offshore transactions in compliance with Rule 903 of Regulation S under the Securities Act,

it is not necessary, in connection with the offer, sale, and delivery of the Notes by the Initial Purchasers in the manner contemplated by the Purchase Agreement and the Offering Memorandum, to register the Notes or the Guarantees under the Securities Act, and the Indenture is not required to be qualified under the Trust Indenture Act in connection with such offer and sale of the Notes.

3.11 No Investment Company Act Registration

Neither the Company nor any Guarantor is, or upon consummation of the transactions contemplated by the Transaction Documents will be, required to register as an "investment company" as such term is defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

4. ENFORCEABILITY EXCEPTIONS

The opinions expressed in Sections 3.2 through 3.7 above as to the enforceability of the Transaction Documents are, in each case, subject to the following qualifications:

4.1 Bankruptcy and Insolvency Exceptions

The enforceability of the obligations of the Obligors under the Transaction Documents may be limited by or subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, liquidation, fraudulent conveyance, fraudulent transfer, preference, and other similar laws of general applicability now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, including, without limitation, the United States Bankruptcy Code, applicable state fraudulent transfer and fraudulent conveyance statutes, and, with respect to the Canadian Obligors, the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act (Canada), and any similar Canadian federal or provincial legislation now or hereafter in effect.

4.2 Equitable Principles

The enforceability of the obligations of the Obligors under the Transaction Documents may be limited by (ii) general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith, and fair dealing (regardless of whether enforcement is considered in a proceeding in equity or at law), and by the discretion of any court before which a proceeding may be brought.

The qualifications described in Sections 4.1 and 4.2 are collectively referred to herein as the "Enforceability Exceptions."

4.3 Additional Enforceability Qualifications

In addition to the Enforceability Exceptions, we note the following:

(a) While certain specific provisions of the Transaction Documents may be rendered unenforceable by operation of law, we are of the opinion that the inclusion of such provisions does not render the Transaction Documents invalid as a whole, and that each Transaction Document contains legally adequate remedies for the practical realization of the principal benefits intended to be afforded thereby.

(b) The enforceability of provisions in the Transaction Documents relating to indemnification, contribution, or exculpation may be limited by applicable law and by considerations of public policy, including, without limitation, federal and state securities laws.

(c) Waivers of rights or defenses that are broadly or generally stated in the Transaction Documents may not be enforceable to the extent that a specific right or defense cannot, as a matter of law or public policy, be effectively waived.

(d) Provisions of the Transaction Documents purporting to establish evidentiary standards (including, without limitation, provisions stating that certificates, determinations, or calculations by a party or the Trustee shall be conclusive or prima facie evidence) may not be enforceable in all circumstances.

(e) Severability provisions contained in the Transaction Documents may not be enforceable in all circumstances, particularly where the invalidation of a provision would alter the essential character of the obligations of the parties thereunder.

(f) Currency indemnity provisions contained in the Transaction Documents (including provisions requiring payment of additional amounts in the event of a currency conversion) may not be enforceable in all circumstances under New York law, and a court of competent jurisdiction may award judgment in a currency other than that specified in the Transaction Documents.

5. LIMITATIONS AND QUALIFICATIONS

5.1 Scope of Law Covered

The opinions expressed herein are limited solely to (i) the laws of the State of New York, (ii) the federal laws of the United States of America, and (iii) solely for purposes of the opinion set forth in Section 3.1 above (due incorporation, valid existence, and good standing of the Delaware Guarantor), the General Corporation Law of the State of Delaware. We express no opinion as to the laws of any other jurisdiction, including, without limitation, the laws of Canada (federal), the Province of Ontario, the Province of British Columbia, the Province of Alberta, or any other Canadian province or territory.

With respect to all matters of Canadian law, including, without limitation, (a) the due organization, valid existence, and corporate authority of the Company, Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc., (b) the creation, validity, perfection, and priority of security interests in assets located in Canada, including mining rights under Ontario Mining Claim Nos. WL-4492-01 through WL-4492-47, mineral claims, surface rights, equipment, inventory, accounts receivable, and other assets of the Canadian Obligors located at or in connection with the Wolverine Lake property in the Province of Ontario, and (c) the enforceability under Canadian law of the Transaction Documents against the Canadian Obligors, the Initial Purchasers should rely solely on the opinion of Pendleton Ross LLP, dated the date hereof, delivered simultaneously herewith.

5.2 Matters Not Opined Upon

Without limiting the generality of Section 5.1, we express no opinion with respect to any of the following:

(a) the federal, state, provincial, local, or foreign tax consequences (including income tax, transfer tax, stamp duty, or similar tax consequences) of the transactions contemplated by the Transaction Documents;

(b) compliance with or the effect of any securities or "blue sky" laws of any state of the United States (other than as expressly set forth in Section 3.10 above with respect to the Securities Act and the Trust Indenture Act);

(c) any environmental, mining, natural resources, health and safety, or land use laws or regulations applicable to the business or operations of the Company or any Guarantor;

(d) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any similar laws relating to employee benefit plans, including Section 4975 of the Internal Revenue Code of 1986, as amended;

(e) the creation, validity, perfection, or priority of any security interest in any collateral located in Canada, including, without limitation, the mining rights, mineral claims, surface rights, equipment, inventory, accounts receivable, and other assets of the Company, Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc. at or in connection with the Wolverine Lake property in the Province of Ontario, which matters are addressed in the opinion of Pendleton Ross LLP and in the Canadian General Security Agreement delivered on the date hereof;

(f) the priority of any security interest created under the U.S. Security Agreement relative to the interests of any other person or entity; our opinion set forth in Section 3.8 above addresses solely the creation and perfection of the security interest in the U.S. Collateral and does not address priority (we note, for reference only, that the Ridgeline Bank of Canada revolving credit facility has been repaid in full and terminated as of the date hereof, and that, to our knowledge, no intercreditor agreement is in effect as of the date hereof); and

(g) the enforceability of any provisions of the Transaction Documents relating to forum selection, consent to personal jurisdiction, service of process by mail, or waiver of the right to trial by jury, to the extent that the enforceability of any such provision may be limited by applicable law.

5.3 Reliance on Certificates and Factual Matters

In rendering the opinions expressed herein, we have, with your consent, relied as to certain factual matters upon certificates of officers and representatives of the Company and its subsidiaries, including, without limitation, the Officer's Certificate of Torchlight Mining Corp. dated April 19, 2022, executed by Lianne Prokopchuk, Chief Financial Officer, and Deepak Rathore, General Counsel and Corporate Secretary, and the Secretary's Certificates described in Section 1.2 above. We have not independently verified or investigated any of the factual matters stated in such certificates and have assumed the accuracy and completeness of all such factual matters. Our opinions are subject to, and may be affected by, facts and circumstances not known to us.

We have also relied upon the certificate of good standing for Torchlight U.S. Holdings, Inc. issued by the Secretary of State of the State of Delaware, dated April 15, 2022. Such certificate speaks only as of its date, and we have made no independent investigation of the continued good standing of the Delaware Guarantor subsequent to such date.

5.4 UCC / Security Interest Limitations

Our opinion set forth in Section 3.8 above regarding the security interest created by the U.S. Security Agreement is limited to personal property of Torchlight U.S. Holdings, Inc. in which a security interest may be created and perfected under Article 9 of the UCC as in effect in the State of New York. Without limiting the foregoing, we express no opinion as to:

(i) security interests in real property, fixtures (to the extent a fixture filing under Section 9-502(b) of the UCC is required for perfection), or goods covered by a certificate of title statute;

(ii) security interests in deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or other categories of collateral that may be perfected only by possession, control, or other means other than the filing of a UCC financing statement;

(iii) any assets of Torchlight U.S. Holdings, Inc. that are located outside the United States or that are subject to the laws of a jurisdiction other than the State of New York and the State of Delaware; or

(iv) the effect of after-acquired property provisions to the extent limited by applicable law, including Section 552 of the United States Bankruptcy Code.

We further note that, under Section 9-515 of the UCC, a filed financing statement is effective for a period of five years from the date of filing. Continuation statements must be filed within the six-month period preceding the expiration of the initial five-year period (and each successive five-year period) in order to maintain the effectiveness of the financing statement and the perfection of the security interest.

6. 10b-5 NEGATIVE ASSURANCE

Without having undertaken to determine independently the completeness or accuracy of the statements contained in the Offering Memorandum dated March 14, 2022, and on the basis of our participation in the preparation of the Offering Memorandum (including, without limitation, our participation in due diligence sessions held on February 14, 15, and 16, 2022, with officers and representatives of the Company and its subsidiaries, and our review of certain documents and materials, including the independent engineer's report prepared by Cascade Technical Advisors Inc. dated February 28, 2022, and the comfort letter of Aldgate Thornton LLP dated March 29, 2022), nothing has come to our attention that causes us to believe that the Offering Memorandum (other than the financial statements, financial data, statistical data, and other financial information included therein or incorporated by reference therein, or the independent engineer's report included therein or delivered in connection therewith, as to which we express no view), as of its date and as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits 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.

The statement in the preceding paragraph is provided for the benefit of the Initial Purchasers solely in connection with the offering of the Notes contemplated by the Purchase Agreement and the Offering Memorandum, and should not be construed as a guarantee, warranty, or insurance against loss, nor as a representation that we have independently verified the accuracy or completeness of any information contained in the Offering Memorandum.

7. GENERAL PROVISIONS

7.1 Date Limitation

This opinion letter is rendered as of the date hereof, and we express no opinion as to the effect of any event, fact, circumstance, or change in law occurring or coming to our attention after the date hereof. We assume no obligation to update or supplement this opinion letter to reflect any facts or circumstances that may hereafter come to our attention, any changes in law (including changes in interpretation or application of existing law) that may hereafter occur, or any other matter whatsoever.

7.2 Benefit and Reliance

This opinion letter is furnished to you, the Initial Purchasers, solely for your benefit and solely in connection with the transactions contemplated by the Purchase Agreement. This opinion letter may not be relied upon by any other person, or for any other purpose, without our prior written consent, provided, however, that Clairmont & Voss LLP, in its capacity as counsel to the Initial Purchasers, may rely on this opinion letter in connection with any opinion or advice delivered by Clairmont & Voss LLP to the Initial Purchasers in connection with the transactions contemplated by the Purchase Agreement.

This opinion letter may not be quoted, referred to, or furnished to any other person, firm, or entity, nor may any portion hereof be filed with any governmental agency, regulatory body, or other third party, without our prior written consent, except as may be required by applicable law or regulation, by order of a court of competent jurisdiction, or in connection with any legal or regulatory proceeding to which any Initial Purchaser is a party.

7.3 Governing Law of the Opinion

This opinion letter shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any conflicts-of-law principles that would require the application of the laws of any other jurisdiction.

[Remainder of this page intentionally left blank. Signature page follows.]

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Vivienne St. Claire

Title: Partner

cc (by email and overnight courier):

Torchlight Mining Corp.

Attention: Deepak Rathore, General Counsel & Corporate Secretary

2200 – 400 Burrard Street Vancouver, BC V6C 3A6, Canada

Clairmont & Voss LLP

Attention: Harrison Voss

51 West 52nd Street New York, New York 10019

Pendleton Ross LLP

Attention: Marie-Claire Bouchard

3400 – 1 First Canadian Place Toronto, ON M5X 1A4, Canada

Northern Dominion Trust Company

Attention: Sandra Leung, VP, Corporate Trust

101 Barclay Street, 7th Floor New York, New York 10286

CALDERWOOD & HARKNESS LLP Attorneys at Law
450 Park Avenue New York, New York 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
April 19, 2022
Kelvantis Capital Markets LLC 599 Lexington Avenue, 38th Floor New York, New York 10022
Prestige Barrington & Co., Inc. 1285 Avenue of the Americas, 22nd Floor New York, New York 10019
Halcyon Securities Inc. 200 Park Avenue, Suite 3100 New York, New York 10166
(collectively, the "Initial Purchasers")
Ladies and Gentlemen:
Re: $300,000,000 Aggregate Principal Amount of 8.750% Senior Secured Notes due 2029 (the "Notes") of Torchlight Mining Corp.
C&H Matter No. 1039-00002
We have acted as United States counsel to Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended (the "CBCA") (the "Issuer" or the "Company"), in connection with the issuance and sale by the Company of $300,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2029 (the "Notes"). The Notes are being issued pursuant to an Indenture dated as of April 19, 2022 (the "Indenture"), among the Company, Wolverine Lake Mining Ltd., a corporation organized under the laws of the Province of Ontario ("Wolverine Lake"), Torchlight Milling & Processing Inc., a corporation organized under the laws of the Province of Ontario ("Torchlight Milling"), and Torchlight U.S. Holdings, Inc., a corporation organized under the laws of the State of Delaware (the "Delaware Guarantor"), as guarantors (Wolverine Lake, Torchlight Milling, and the Delaware Guarantor are collectively referred to herein as the "Guarantors" and, together with the Company, the "Obligors"), and Northern Dominion Trust Company, as trustee (in such capacity, the "Trustee") and as collateral agent (in such capacity, the "Collateral Agent").
The Notes are being sold to the Initial Purchasers pursuant to a Purchase Agreement dated March 29, 2022 (the "Purchase Agreement"), among the Company, the Guarantors, and the Initial Purchasers. This opinion is delivered to you pursuant to Section 7(e) of the Purchase Agreement as a condition to the obligations of the Initial Purchasers to purchase the Notes on the date hereof.
1. DOCUMENTS EXAMINED; DEFINED TERMS
1.1 Transaction Documents Reviewed
In connection with the opinions expressed herein, we have examined executed originals or copies, certified or otherwise identified to our satisfaction, of each of the following documents:
1.  The Indenture, dated as of April 19, 2022, among the Company, the Guarantors, and Northern Dominion Trust Company, as Trustee and Collateral Agent (the "Indenture");
2.  The Notes, including (a) the Global Note in respect of Notes sold in reliance on Rule 144A under the Securities Act (CUSIP: 891207 AA 3; ISIN: US891207AA38) (the "Rule 144A Global Note") and (b) the Global Note in respect of Notes sold in reliance on Regulation S under the Securities Act (CUSIP: C89120 AA 5; ISIN: USC89120AA58) (the "Regulation S Global Note"), each in the form attached as Exhibits A-1 and A-2, respectively, to the Indenture;
3.  The Purchase Agreement, dated March 29, 2022, among the Company, the Guarantors, and the Initial Purchasers (the "Purchase Agreement");
4.  The Registration Rights Agreement, dated as of April 19, 2022, among the Company, the Guarantors, and the Initial Purchasers (the "Registration Rights Agreement");
5.  The Security Agreement (U.S.), dated as of April 19, 2022, between Torchlight U.S. Holdings, Inc. and Northern Dominion Trust Company, as Collateral Agent (the "U.S. Security Agreement");
6.  The Collateral Agency Agreement, dated as of April 19, 2022, among the Company, the Guarantors, and Northern Dominion Trust Company, as Collateral Agent (the "Collateral Agency Agreement");
7.  The Offering Memorandum, dated March 14, 2022, relating to the offering and sale of the Notes (the "Offering Memorandum").
Items 1 through 7 above are collectively referred to herein as the "Transaction Documents." Where the context requires, the subset of the Transaction Documents that are expressed to be governed by the laws of the State of New York are referred to as the "New York Law Documents."
1.2 Corporate and Other Documents Reviewed
In addition to the Transaction Documents, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following:
(a) the Certificate of Incorporation of Torchlight U.S. Holdings, Inc. (the "Delaware Guarantor"), as filed with the Secretary of State of the State of Delaware, together with all amendments thereto through the date hereof;
(b) the Bylaws of the Delaware Guarantor, as currently in effect;
(c) the Secretary's Certificate of the Delaware Guarantor, dated April 19, 2022, executed by Anika Petrov, Secretary, attaching thereto (i) certified copies of the resolutions of the Board of Directors of the Delaware Guarantor authorizing the execution, delivery, and performance of the Transaction Documents to which the Delaware Guarantor is a party, (ii) an incumbency certificate identifying the officers of the Delaware Guarantor authorized to execute the Transaction Documents, (iii) a certified copy of the Certificate of Incorporation of the Delaware Guarantor, and (iv) a certified copy of the Bylaws of the Delaware Guarantor;
(d) a certificate of good standing for the Delaware Guarantor issued by the Secretary of State of the State of Delaware, dated April 15, 2022;
(e) the Officer's Certificate of Torchlight Mining Corp., dated April 19, 2022, executed by Lianne Prokopchuk, Chief Financial Officer, and Deepak Rathore, General Counsel and Corporate Secretary;
(f) the Secretary's Certificate of Torchlight Mining Corp., dated April 19, 2022, executed by Deepak Rathore, General Counsel and Corporate Secretary;
(g) the Secretary's Certificate of Wolverine Lake Mining Ltd., dated April 19, 2022;
(h) the Secretary's Certificate of Torchlight Milling & Processing Inc., dated April 19, 2022; and
(i) such other documents, records, agreements, certificates, and instruments as we have deemed necessary or appropriate for purposes of rendering the opinions expressed herein.
1.3 Additional Defined Terms
As used in this opinion letter, the following terms have the meanings set forth below:
"Guarantee" means the guarantee of each Guarantor as set forth in Article X of the Indenture.
"Collateral Documents" means, collectively, the U.S. Security Agreement and the Collateral Agency Agreement.
"UCC" means the Uniform Commercial Code as in effect in the State of New York.
"Securities Act" means the Securities Act of 1933, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Investment Company Act" means the Investment Company Act of 1940, as amended.
Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Indenture or, where the context so requires, the Purchase Agreement.
2. ASSUMPTIONS
In rendering the opinions expressed herein, we have, with your consent and without independent investigation or verification, assumed the following:
2.1 General Assumptions
(a) All signatures on all documents examined by us are genuine, all documents submitted to us as originals are authentic, and all documents submitted to us as copies conform to the originals thereof.
(b) Each natural person who signed any document examined by us had, at the time of such signing, the legal capacity to do so.
(c) Each party to the Transaction Documents (other than the Company and the Delaware Guarantor, to the extent expressly opined on herein) is duly organized or formed, validly existing, and in good standing under the laws of its jurisdiction of organization or formation, and has all requisite power and authority (corporate, trust, or otherwise) to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party.
(d) The Indenture has been duly qualified under the Trust Indenture Act to the extent applicable, or is exempt from the qualification requirements thereof in connection with the offer and sale of the Notes in the manner contemplated by the Purchase Agreement and the Offering Memorandum.
(e) Each Transaction Document has been duly executed and delivered by each party thereto (other than, with respect to due authorization, execution, and delivery, those parties as to which we have expressly opined herein, and subject to the assumptions set forth in Section 2.3 below with respect to the Canadian Obligors).
2.2 Factual Assumptions
(a) The representations and warranties of each party contained in the Transaction Documents are true and correct as of the date of execution and delivery thereof and as of the date hereof.
(b) Each party to the Transaction Documents has complied with all covenants, conditions, and obligations required to be performed or satisfied by it on or prior to the date hereof under each of the Transaction Documents to which it is a party.
(c) The consideration received by each Obligor under the Transaction Documents constitutes reasonably equivalent value and fair consideration for the obligations undertaken by such Obligor thereunder. No Obligor is insolvent, and the consummation of the transactions contemplated by the Transaction Documents will not render any Obligor insolvent, and no Obligor has entered into the Transaction Documents with the intent to hinder, delay, or defraud any of its present or future creditors.
(d) The Notes have been issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof, in accordance with the terms of the Indenture.
(e) Interest on the Notes is payable semi-annually on April 15 and October 15 of each year, commencing October 15, 2022. The Notes bear interest at a rate of 8.750% per annum and mature on April 15, 2029. The Notes were sold to the Initial Purchasers at an issue price of 98.50% of the aggregate principal amount thereof, resulting in gross proceeds to the Company of $295,500,000.
2.3 Assumptions Specific to Canadian Entities
With respect to the Company (a corporation incorporated under the CBCA), Wolverine Lake Mining Ltd. (a corporation incorporated under the laws of the Province of Ontario), and Torchlight Milling & Processing Inc. (a corporation incorporated under the laws of the Province of Ontario) (collectively, the "Canadian Obligors"), we have assumed, without independent investigation or verification, that:
(a) each Canadian Obligor is duly organized, validly existing, and in good standing (or the equivalent thereof) under the laws of its jurisdiction of incorporation;
(b) the execution, delivery, and performance by each Canadian Obligor of the Transaction Documents to which it is a party have been duly authorized by all necessary corporate action under the applicable laws of Canada and the Province of Ontario, as applicable;
(c) each Canadian Obligor has all requisite corporate power and authority under Canadian law to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party; and
(d) the execution, delivery, and performance by each Canadian Obligor of the Transaction Documents to which it is a party do not and will not violate any applicable Canadian federal or provincial law, rule, regulation, order, or decree, or any provision of the articles of incorporation, bylaws, or other organizational documents of such Canadian Obligor.
We express no opinion whatsoever on any matter of Canadian law, whether federal or provincial, and, as to all such matters, the Initial Purchasers are advised to rely solely on the opinion of Pendleton Ross LLP dated the date hereof, delivered simultaneously herewith.
3. OPINIONS
Based upon and subject to the foregoing, and subject to the qualifications, limitations, exceptions, and assumptions set forth herein, we are of the opinion that:
3.1 Due Authorization and Execution — Torchlight U.S. Holdings, Inc.
Torchlight U.S. Holdings, Inc. (EIN: 84-3921057) is a corporation duly incorporated, validly existing, and in good standing under the General Corporation Law of the State of Delaware. The Delaware Guarantor has all requisite corporate power and authority under the General Corporation Law of the State of Delaware and its Certificate of Incorporation and Bylaws to execute, deliver, and perform its obligations under each of the Transaction Documents to which it is a party, including, without limitation, the Indenture (including the Guarantee set forth therein), the U.S. Security Agreement, and the Collateral Agency Agreement. The execution, delivery, and performance by the Delaware Guarantor of each of the Indenture (including the Guarantee), the U.S. Security Agreement, and the Collateral Agency Agreement have been duly authorized by all necessary corporate action on the part of the Delaware Guarantor, including the adoption of resolutions by the Board of Directors of the Delaware Guarantor, and no further corporate approval or authorization is required.
3.2 Enforceability of the Indenture
The Indenture has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions (as defined in Section 4 below).
3.3 Valid Issuance of the Notes
The Notes have been duly authorized by the Company (subject, with respect to the Company, to the assumptions set forth in Section 2.3 hereof). The Notes, when executed by the Company in accordance with the terms of the Indenture and authenticated by the Trustee in accordance with the terms of the Indenture, and delivered to and paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement at the issue price of 98.50% of the aggregate principal amount thereof, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions. The Notes are entitled to the benefits of the Indenture, including, without limitation, the security interests and guarantees provided for therein and in the Collateral Documents.
3.4 Enforceability of the Guarantees
The Guarantee of each Guarantor contained in Article X of the Indenture has been duly authorized, executed, and delivered by such Guarantor (subject, with respect to the Canadian Guarantors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to the Enforceability Exceptions.
3.5 Enforceability of the Purchase Agreement
The Purchase Agreement has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions.
3.6 Enforceability of the Registration Rights Agreement
The Registration Rights Agreement has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions. We note that, pursuant to the terms of the Registration Rights Agreement, the Company has undertaken to file a registration statement with respect to an exchange offer for the Notes, or, under certain circumstances, a shelf registration statement, no later than 365 days after the closing date (i.e., by April 19, 2023), subject to the conditions and exceptions set forth in the Registration Rights Agreement.
3.7 Enforceability of the U.S. Security Agreement and Collateral Agency Agreement
The U.S. Security Agreement has been duly authorized, executed, and delivered by Torchlight U.S. Holdings, Inc. and constitutes a valid and binding obligation of Torchlight U.S. Holdings, Inc., enforceable against Torchlight U.S. Holdings, Inc. in accordance with its terms, subject to the Enforceability Exceptions.
The Collateral Agency Agreement has been duly authorized, executed, and delivered by each of the Obligors that is a party thereto (subject, with respect to the Canadian Obligors, to the assumptions set forth in Section 2.3 hereof) and constitutes a valid and binding obligation of each such Obligor, enforceable against each such Obligor in accordance with its terms, subject to the Enforceability Exceptions.
3.8 Security Interest — U.S. Security Agreement (UCC Article 9)
The U.S. Security Agreement creates in favor of Northern Dominion Trust Company, as Collateral Agent, for the benefit of the holders of the Notes, a valid security interest (within the meaning of Articles 9-201 and 9-203 of the UCC) in all right, title, and interest of Torchlight U.S. Holdings, Inc. in and to the personal property described in the U.S. Security Agreement (the "U.S. Collateral"), to the extent that a security interest therein can be created under Article 9 of the UCC as in effect in the State of New York.
Upon the filing of appropriate UCC-1 financing statements in the form required by Article 9 of the UCC, naming Torchlight U.S. Holdings, Inc. as debtor (at its registered address of 1209 Orange Street, Wilmington, Delaware 19801) and Northern Dominion Trust Company, as Collateral Agent, as secured party, with the office of the Secretary of State of the State of Delaware (which is the jurisdiction of organization of Torchlight U.S. Holdings, Inc. for purposes of Section 9-301 of the UCC), the security interest in the U.S. Collateral, to the extent such security interest can be perfected by the filing of a UCC financing statement under Article 9 of the UCC, will be perfected.
We note that the foregoing opinion does not address assets or types of collateral requiring perfection by means other than the filing of a UCC financing statement, including, without limitation, deposit accounts (which require perfection by control under Section 9-312(b)(1) of the UCC), letter-of-credit rights (which require perfection by control under Section 9-312(b)(2) of the UCC), certificated securities (which require perfection by delivery or control under Section 9-313 or 9-314 of the UCC), money, and tangible chattel paper.
3.9 No Conflict with New York Law
The execution, delivery, and performance by each Obligor of the Transaction Documents to which it is a party, and the compliance by each Obligor with the terms and provisions thereof, do not and will not (a) violate any New York statute, rule, or regulation applicable to the Obligors of a type that, in our experience, is normally applicable to transactions of the nature contemplated by the Transaction Documents or (b) violate any United States federal statute, rule, or regulation applicable to the Obligors of a type that, in our experience, is normally applicable to transactions of the nature contemplated by the Transaction Documents. We express no opinion pursuant to this Section 3.9 as to (i) federal or state securities laws (which are addressed in Section 3.10 below), (ii) federal or state tax laws, (iii) federal or state antitrust laws, (iv) the laws of the Province of Ontario, the Province of British Columbia, or the Province of Alberta, (v) the laws of Canada, or (vi) the laws of any jurisdiction other than the State of New York and the United States of America.
3.10 Securities Act Exemption — Rule 144A / Regulation S
Assuming the accuracy of the representations and warranties of the Company and the Guarantors contained in the Purchase Agreement and the accuracy of the representations and warranties of the Initial Purchasers contained therein, and assuming compliance by the Company, the Guarantors, and the Initial Purchasers with the offering and transfer restrictions described in the Offering Memorandum dated March 14, 2022, and further assuming that the Initial Purchasers offered and sold the Notes only:
(a) within the United States to persons whom the Initial Purchasers reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act, in transactions meeting the requirements of Rule 144A; and
(b) outside the United States in offshore transactions in compliance with Rule 903 of Regulation S under the Securities Act,
it is not necessary, in connection with the offer, sale, and delivery of the Notes by the Initial Purchasers in the manner contemplated by the Purchase Agreement and the Offering Memorandum, to register the Notes or the Guarantees under the Securities Act, and the Indenture is not required to be qualified under the Trust Indenture Act in connection with such offer and sale of the Notes.
3.11 No Investment Company Act Registration
Neither the Company nor any Guarantor is, or upon consummation of the transactions contemplated by the Transaction Documents will be, required to register as an "investment company" as such term is defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.
4. ENFORCEABILITY EXCEPTIONS
The opinions expressed in Sections 3.2 through 3.7 above as to the enforceability of the Transaction Documents are, in each case, subject to the following qualifications:
4.1 Bankruptcy and Insolvency Exceptions
The enforceability of the obligations of the Obligors under the Transaction Documents may be limited by or subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, liquidation, fraudulent conveyance, fraudulent transfer, preference, and other similar laws of general applicability now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, including, without limitation, the United States Bankruptcy Code, applicable state fraudulent transfer and fraudulent conveyance statutes, and, with respect to the Canadian Obligors, the Bankruptcy and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act (Canada), and any similar Canadian federal or provincial legislation now or hereafter in effect.
4.2 Equitable Principles
The enforceability of the obligations of the Obligors under the Transaction Documents may be limited by (ii) general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith, and fair dealing (regardless of whether enforcement is considered in a proceeding in equity or at law), and by the discretion of any court before which a proceeding may be brought.
The qualifications described in Sections 4.1 and 4.2 are collectively referred to herein as the "Enforceability Exceptions."
4.3 Additional Enforceability Qualifications
In addition to the Enforceability Exceptions, we note the following:
(a) While certain specific provisions of the Transaction Documents may be rendered unenforceable by operation of law, we are of the opinion that the inclusion of such provisions does not render the Transaction Documents invalid as a whole, and that each Transaction Document contains legally adequate remedies for the practical realization of the principal benefits intended to be afforded thereby.
(b) The enforceability of provisions in the Transaction Documents relating to indemnification, contribution, or exculpation may be limited by applicable law and by considerations of public policy, including, without limitation, federal and state securities laws.
(c) Waivers of rights or defenses that are broadly or generally stated in the Transaction Documents may not be enforceable to the extent that a specific right or defense cannot, as a matter of law or public policy, be effectively waived.
(d) Provisions of the Transaction Documents purporting to establish evidentiary standards (including, without limitation, provisions stating that certificates, determinations, or calculations by a party or the Trustee shall be conclusive or prima facie evidence) may not be enforceable in all circumstances.
(e) Severability provisions contained in the Transaction Documents may not be enforceable in all circumstances, particularly where the invalidation of a provision would alter the essential character of the obligations of the parties thereunder.
(f) Currency indemnity provisions contained in the Transaction Documents (including provisions requiring payment of additional amounts in the event of a currency conversion) may not be enforceable in all circumstances under New York law, and a court of competent jurisdiction may award judgment in a currency other than that specified in the Transaction Documents.
5. LIMITATIONS AND QUALIFICATIONS
5.1 Scope of Law Covered
The opinions expressed herein are limited solely to (i) the laws of the State of New York, (ii) the federal laws of the United States of America, and (iii) solely for purposes of the opinion set forth in Section 3.1 above (due incorporation, valid existence, and good standing of the Delaware Guarantor), the General Corporation Law of the State of Delaware. We express no opinion as to the laws of any other jurisdiction, including, without limitation, the laws of Canada (federal), the Province of Ontario, the Province of British Columbia, the Province of Alberta, or any other Canadian province or territory.
With respect to all matters of Canadian law, including, without limitation, (a) the due organization, valid existence, and corporate authority of the Company, Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc., (b) the creation, validity, perfection, and priority of security interests in assets located in Canada, including mining rights under Ontario Mining Claim Nos. WL-4492-01 through WL-4492-47, mineral claims, surface rights, equipment, inventory, accounts receivable, and other assets of the Canadian Obligors located at or in connection with the Wolverine Lake property in the Province of Ontario, and (c) the enforceability under Canadian law of the Transaction Documents against the Canadian Obligors, the Initial Purchasers should rely solely on the opinion of Pendleton Ross LLP, dated the date hereof, delivered simultaneously herewith.
5.2 Matters Not Opined Upon
Without limiting the generality of Section 5.1, we express no opinion with respect to any of the following:
(a) the federal, state, provincial, local, or foreign tax consequences (including income tax, transfer tax, stamp duty, or similar tax consequences) of the transactions contemplated by the Transaction Documents;
(b) compliance with or the effect of any securities or "blue sky" laws of any state of the United States (other than as expressly set forth in Section 3.10 above with respect to the Securities Act and the Trust Indenture Act);
(c) any environmental, mining, natural resources, health and safety, or land use laws or regulations applicable to the business or operations of the Company or any Guarantor;
(d) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any similar laws relating to employee benefit plans, including Section 4975 of the Internal Revenue Code of 1986, as amended;
(e) the creation, validity, perfection, or priority of any security interest in any collateral located in Canada, including, without limitation, the mining rights, mineral claims, surface rights, equipment, inventory, accounts receivable, and other assets of the Company, Wolverine Lake Mining Ltd., and Torchlight Milling & Processing Inc. at or in connection with the Wolverine Lake property in the Province of Ontario, which matters are addressed in the opinion of Pendleton Ross LLP and in the Canadian General Security Agreement delivered on the date hereof;
(f) the priority of any security interest created under the U.S. Security Agreement relative to the interests of any other person or entity; our opinion set forth in Section 3.8 above addresses solely the creation and perfection of the security interest in the U.S. Collateral and does not address priority (we note, for reference only, that the Ridgeline Bank of Canada revolving credit facility has been repaid in full and terminated as of the date hereof, and that, to our knowledge, no intercreditor agreement is in effect as of the date hereof); and
(g) the enforceability of any provisions of the Transaction Documents relating to forum selection, consent to personal jurisdiction, service of process by mail, or waiver of the right to trial by jury, to the extent that the enforceability of any such provision may be limited by applicable law.
5.3 Reliance on Certificates and Factual Matters
In rendering the opinions expressed herein, we have, with your consent, relied as to certain factual matters upon certificates of officers and representatives of the Company and its subsidiaries, including, without limitation, the Officer's Certificate of Torchlight Mining Corp. dated April 19, 2022, executed by Lianne Prokopchuk, Chief Financial Officer, and Deepak Rathore, General Counsel and Corporate Secretary, and the Secretary's Certificates described in Section 1.2 above. We have not independently verified or investigated any of the factual matters stated in such certificates and have assumed the accuracy and completeness of all such factual matters. Our opinions are subject to, and may be affected by, facts and circumstances not known to us.
We have also relied upon the certificate of good standing for Torchlight U.S. Holdings, Inc. issued by the Secretary of State of the State of Delaware, dated April 15, 2022. Such certificate speaks only as of its date, and we have made no independent investigation of the continued good standing of the Delaware Guarantor subsequent to such date.
5.4 UCC / Security Interest Limitations
Our opinion set forth in Section 3.8 above regarding the security interest created by the U.S. Security Agreement is limited to personal property of Torchlight U.S. Holdings, Inc. in which a security interest may be created and perfected under Article 9 of the UCC as in effect in the State of New York. Without limiting the foregoing, we express no opinion as to:
(i) security interests in real property, fixtures (to the extent a fixture filing under Section 9-502(b) of the UCC is required for perfection), or goods covered by a certificate of title statute;
(ii) security interests in deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or other categories of collateral that may be perfected only by possession, control, or other means other than the filing of a UCC financing statement;
(iii) any assets of Torchlight U.S. Holdings, Inc. that are located outside the United States or that are subject to the laws of a jurisdiction other than the State of New York and the State of Delaware; or
(iv) the effect of after-acquired property provisions to the extent limited by applicable law, including Section 552 of the United States Bankruptcy Code.
We further note that, under Section 9-515 of the UCC, a filed financing statement is effective for a period of five years from the date of filing. Continuation statements must be filed within the six-month period preceding the expiration of the initial five-year period (and each successive five-year period) in order to maintain the effectiveness of the financing statement and the perfection of the security interest.
6. 10b-5 NEGATIVE ASSURANCE
Without having undertaken to determine independently the completeness or accuracy of the statements contained in the Offering Memorandum dated March 14, 2022, and on the basis of our participation in the preparation of the Offering Memorandum (including, without limitation, our participation in due diligence sessions held on February 14, 15, and 16, 2022, with officers and representatives of the Company and its subsidiaries, and our review of certain documents and materials, including the independent engineer's report prepared by Cascade Technical Advisors Inc. dated February 28, 2022, and the comfort letter of Aldgate Thornton LLP dated March 29, 2022), nothing has come to our attention that causes us to believe that the Offering Memorandum (other than the financial statements, financial data, statistical data, and other financial information included therein or incorporated by reference therein, or the independent engineer's report included therein or delivered in connection therewith, as to which we express no view), as of its date and as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits 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.
The statement in the preceding paragraph is provided for the benefit of the Initial Purchasers solely in connection with the offering of the Notes contemplated by the Purchase Agreement and the Offering Memorandum, and should not be construed as a guarantee, warranty, or insurance against loss, nor as a representation that we have independently verified the accuracy or completeness of any information contained in the Offering Memorandum.
7. GENERAL PROVISIONS
7.1 Date Limitation
This opinion letter is rendered as of the date hereof, and we express no opinion as to the effect of any event, fact, circumstance, or change in law occurring or coming to our attention after the date hereof. We assume no obligation to update or supplement this opinion letter to reflect any facts or circumstances that may hereafter come to our attention, any changes in law (including changes in interpretation or application of existing law) that may hereafter occur, or any other matter whatsoever.
7.2 Benefit and Reliance
This opinion letter is furnished to you, the Initial Purchasers, solely for your benefit and solely in connection with the transactions contemplated by the Purchase Agreement. This opinion letter may not be relied upon by any other person, or for any other purpose, without our prior written consent, provided, however, that Clairmont & Voss LLP, in its capacity as counsel to the Initial Purchasers, may rely on this opinion letter in connection with any opinion or advice delivered by Clairmont & Voss LLP to the Initial Purchasers in connection with the transactions contemplated by the Purchase Agreement.
This opinion letter may not be quoted, referred to, or furnished to any other person, firm, or entity, nor may any portion hereof be filed with any governmental agency, regulatory body, or other third party, without our prior written consent, except as may be required by applicable law or regulation, by order of a court of competent jurisdiction, or in connection with any legal or regulatory proceeding to which any Initial Purchaser is a party.
7.3 Governing Law of the Opinion
This opinion letter shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any conflicts-of-law principles that would require the application of the laws of any other jurisdiction.
[Remainder of this page intentionally left blank. Signature page follows.]
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Vivienne St. Claire
Title: Partner
cc (by email and overnight courier):
Torchlight Mining Corp.
Attention: Deepak Rathore, General Counsel & Corporate Secretary
2200 – 400 Burrard Street Vancouver, BC V6C 3A6, Canada
Clairmont & Voss LLP
Attention: Harrison Voss
51 West 52nd Street New York, New York 10019
Pendleton Ross LLP
Attention: Marie-Claire Bouchard
3400 – 1 First Canadian Place Toronto, ON M5X 1A4, Canada
Northern Dominion Trust Company
Attention: Sandra Leung, VP, Corporate Trust
101 Barclay Street, 7th Floor New York, New York 10286

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts