1039-00005 · Torchlight Mining Corp · Diligence/Contractual

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

Date: March 19, 2025

To: Steven Hollander, Lead Associate, White Collar & Investigations, Calderwood & Harkness LLP

From: Jasmine Thornton, Working Associate, White Collar & Investigations, Calderwood & Harkness LLP

Re: Analysis of Government Relations Advisory Agreement between Torchlight Ganara Holdings Ltd. and Crestfield Advisory Partners Ltd., dated April 12, 2019

Matter No.: 1039-00005

I. Purpose and Summary

The purpose of this memorandum is to provide a detailed analysis of the Government Relations Advisory Agreement dated April 12, 2019, executed between Torchlight Ganara Holdings Ltd. ("TGH") and Crestfield Advisory Partners Ltd. ("Crestfield") (the "Agreement" or the "Crestfield Agreement"). This analysis has been prepared in connection with Calderwood & Harkness LLP's internal investigation of potential violations of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1 et seq. ("FCPA") on behalf of Torchlight Mining Corp. ("Torchlight" or the "Company"). The investigation was authorized by the Audit Committee of the Torchlight Board of Directors on January 14, 2025.

The Agreement governs Crestfield's engagement as a government relations intermediary in the Republic of Ganara, a jurisdiction widely recognized as presenting elevated corruption risk. Crestfield, acting through its sole principal, Jean-Philippe Renard, was retained to provide advisory services related to the permitting and regulatory processes associated with Torchlight's mining operations in Ganara, including the Kousseri Copper-Cobalt Complex and the Dembélé Rare Earths Project.

This memorandum presents the following key findings:

1. Insufficient Anti-Corruption Protections. The Agreement's terms are materially deficient from an anti-corruption compliance standpoint. The Agreement lacks the substantive protections that would be expected — and that current DOJ and SEC enforcement guidance effectively mandates — for a third-party agent operating in a high-risk jurisdiction on behalf of a U.S.-listed issuer.

2. Payments Substantially Exceeding the Contractual Maximum. Total payments from TGH to Crestfield over the term of the engagement amounted to $3,210,000, exceeding the contractual maximum by $1,170,000 (approximately 57.4%), without any documented contract amendment, addendum, or other formal modification.

3. Absence of Standard FCPA-Compliance Provisions. The Agreement lacks explicit FCPA representations, audit rights, beneficial ownership disclosures, reporting obligations, compliance certifications, and immediate termination rights tied to anti-corruption breaches — all of which are standard components of best-practice agreements with government-facing third-party intermediaries.

4. No Evidence of Competitive Selection or Due Diligence. The investigation has uncovered no evidence that Torchlight or TGH conducted a competitive selection process, issued a request for proposals, or performed any due diligence on Crestfield prior to executing the Agreement. No due diligence file for Crestfield exists in any repository of Torchlight's compliance records that has been reviewed to date.

This memorandum was prepared at the direction of counsel and reflects the mental impressions, conclusions, and legal theories of the attorneys working on this matter. It is protected by the attorney-client privilege and the work product doctrine, and should not be disclosed to any person outside the investigation team without the prior written approval of Conrad Ashby, Partner, Calderwood & Harkness LLP.

II. Background

A. The Parties to the Agreement

Client — Torchlight Ganara Holdings Ltd. ("TGH"). TGH is a wholly owned subsidiary of Torchlight Mining Corp., a Delaware corporation whose common stock is listed on the New York Stock Exchange (NYSE: TRCH). TGH was incorporated in the British Virgin Islands on March 15, 2017, under BVI Business Companies Act registration number 1928764. TGH serves as the holding company for Torchlight's Ganaran mining operations and holds 100% of the equity interests in Torchlight Ganara Mining S.A. ("TGM"), the in-country operating entity organized under the mining and corporate laws of the Republic of Ganara. TGH's primary function within the Torchlight corporate structure is to serve as the intermediate holding and funding vehicle through which capital expenditures, operational expenses, and consulting payments associated with the Ganaran operations are channeled. During the relevant period, TGH maintained its principal operating bank account at Meridian Commercial Bank (BVI), Account No. 7740-2281-0056. This account was the source of all wire transfers to Crestfield during the term of the Agreement, as discussed more fully in Section IV below.

Advisor — Crestfield Advisory Partners Ltd. ("Crestfield"). Crestfield is a consulting firm incorporated in Mauritius in 2016 under the Mauritius Companies Act 2001. The sole beneficial owner and operator of Crestfield is Jean-Philippe Renard, a French citizen, age 54, currently residing in Dakar, Senegal. Renard is a former diplomat who served in various capacities within the French Ministry of Foreign Affairs from approximately 1998 to 2014, including postings in several West African nations. Through these diplomatic postings, Renard developed personal connections to current and former government officials in several West African states, including the Republic of Ganara. Crestfield's registered address is 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius — an address that matches the registered-agent office of Apex Corporate Services (Mauritius) Ltd., a provider of corporate domiciliation and nominee services. Crestfield maintained no website, employed no personnel other than Renard himself, and — based on publicly available records reviewed to date — has no known clients other than TGH. The combination of these characteristics is discussed in Section V.B below as a significant red flag.

B. Context of the Engagement

The Agreement was executed on April 12, 2019. This date is significant within the timeline of the investigation in several respects:

• The Agreement was signed approximately two months after Raymond Osei-Bonsu was hired as Country Manager of TGM. Osei-Bonsu commenced employment with TGM on February 7, 2019. Prior to joining TGM, Osei-Bonsu served as Deputy Director of Mining Operations for the Republic of Ganara's Ministry of Mines and Mineral Resources from 2012 to 2018. His hiring, while the subject of a separate memorandum, is relevant because he subsequently served as the primary approver of Crestfield invoices, as discussed in Section IV.C below.

• The Agreement was signed approximately five months after Marcus Delacroix was appointed Vice President, Africa Operations at Torchlight Mining Corp. on November 3, 2018. Delacroix, a Canadian citizen with approximately 20 years of experience in African mining operations, assumed direct oversight responsibility for all of Torchlight's African subsidiaries, including TGH and TGM. As set forth below, the investigation has determined that Delacroix personally introduced Renard to TGH and was the driving force behind Crestfield's engagement.

Crestfield was engaged to serve as a government relations intermediary in the Republic of Ganara. The stated purpose of the engagement was to facilitate the permitting process for Torchlight's mining operations, principally the Kousseri Copper-Cobalt Complex and the Dembélé Rare Earths Project — two large-scale extraction operations that required multiple licenses, environmental approvals, and regulatory clearances from Ganaran governmental authorities, including the Ministry of Mines and Mineral Resources, the National Environmental Protection Agency, and the Office of the President of the Republic.

The investigation has revealed that Jean-Philippe Renard was personally introduced to TGH by Marcus Delacroix. According to documents recovered from Torchlight's corporate email system, Delacroix emailed Osei-Bonsu on March 3, 2019, stating that he had "someone who can navigate the regulatory landscape" and that this contact would "get the permits moving." This email did not copy any member of Torchlight's legal or compliance team. No evidence of a competitive selection process, request for proposals, or comparison of alternative government relations consultants has been located in Torchlight's compliance records, procurement files, or the files of TGH or TGM. The absence of any competitive selection process is a direct deviation from Torchlight's Vendor Selection and Procurement Policy, which requires that engagements involving government-facing services exceeding $100,000 in annual value be subject to a competitive tender process with a minimum of three qualified bidders and review by the regional procurement committee.

Additionally, no due diligence file on Crestfield exists in Torchlight's compliance records. Torchlight's Anti-Corruption Compliance Manual (Version 3.2, effective January 2018) provides that all third-party agents, consultants, and intermediaries retained to interact with government officials on behalf of Torchlight or its subsidiaries must undergo a risk-based due diligence review prior to engagement, including background screening, verification of beneficial ownership, identification of any relationships with government officials, and assessment of the intermediary's anti-corruption compliance policies and procedures. The absence of any such due diligence file for Crestfield is a significant gap, particularly given the nature of the engagement (government relations and permit facilitation in a high-corruption-risk jurisdiction) and the profile of the intermediary (a single-person Mauritius-incorporated entity with no website, no employees, and a registered-agent office address).

C. Mining Permits at Issue

During the term of the Crestfield Agreement, five mining-related permits and approvals were obtained from Ganaran governmental authorities. These five permits form the core of the investigation's analysis of potential improper payments:

1. Kousseri Copper-Cobalt Complex Mining License (License No. KCC-2019-0047) — Issued by the Ministry of Mines and Mineral Resources on September 14, 2019. This license was issued approximately four months after the submission of TGM's application on May 20, 2019, and approximately five months after the execution of the Crestfield Agreement. Notably, the statutory average processing time for mining licenses in Ganara during the 2017–2022 period, as reported by the Ganaran Chamber of Mines, was approximately eight to ten months. The issuance of this license in approximately four months — roughly half the normal processing time — is a circumstance warranting further analysis.

2. Kousseri Environmental Impact Approval (Certificate No. ENV-KCC-2020-113) — Issued by the National Environmental Protection Agency on March 27, 2020. This certificate was a prerequisite for the commencement of full-scale extraction operations at the Kousseri site.

3. Dembélé Rare Earths Exploration License (License No. DRE-2021-0092) — Issued by the Ministry of Mines and Mineral Resources on July 8, 2021. This license authorized TGM to conduct geological surveys and exploratory drilling at the Dembélé concession area in the northern administrative region of Ganara.

4. Dembélé Mining License Upgrade (License No. DRE-M-2023-0018) — Issued by the Ministry of Mines and Mineral Resources on February 14, 2023. This license converted the exploration license to a full mining license, authorizing commercial extraction at the Dembélé site. This upgrade was a significant milestone for Torchlight's rare earths strategy and was highlighted in Torchlight's 2023 Annual Report on Form 10-K filed with the SEC.

5. Kousseri Expansion Permit (Amendment KCC-2019-0047-A1) — Issued by the Ministry of Mines and Mineral Resources on April 3, 2024. This amendment expanded the geographic scope and annual tonnage limits of the original Kousseri Mining License.

The issuance of each of these permits was preceded by a spike in invoicing by Crestfield, as discussed further in Section V.I below. The temporal correlation between Crestfield's billing activity and the issuance of government permits is one of the most significant red flags identified in the investigation to date.

III. Key Terms of the Agreement

This section analyzes the material terms of the Agreement and identifies deficiencies and omissions that are relevant to the FCPA liability analysis.

A. Scope of Services (Clause 2)

Clause 2 of the Agreement defines the scope of Crestfield's engagement as follows:

"The Advisor shall provide to the Client government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara."

This scope language is both broadly and vaguely drafted. Several observations are warranted:

First, the terms "permit facilitation" and "stakeholder engagement" are not defined anywhere in the Agreement, nor is there any schedule or exhibit that provides further specificity as to the nature of the activities encompassed within these terms. The phrase "permit facilitation," in particular, is a term that could encompass a wide range of activities — from the entirely legitimate (e.g., assembling application packages, tracking regulatory timelines, arranging meetings with officials in their official capacities) to the potentially unlawful (e.g., making payments to officials to expedite permit processing or to secure favorable outcomes). Without a clear definition, the scope language provides no basis for distinguishing between permissible and impermissible activities by Crestfield.

Second, there are no deliverable requirements specified in the Agreement. Crestfield was not contractually required to provide any reports, memoranda, meeting summaries, activity logs, or other documentation of the work it performed under the Agreement. This absence of deliverable requirements meant that TGH had no contractual mechanism for verifying what services Crestfield actually rendered in exchange for the substantial fees it received.

Third, there are no reporting obligations. Crestfield was not required to report to TGH on the nature, frequency, or substance of its interactions with Ganaran government officials, nor was it required to identify the specific officials with whom it engaged.

Fourth, there is no specification of permitted and prohibited activities. The Agreement does not delineate any activities that Crestfield was prohibited from undertaking, nor does it impose any requirement that Crestfield seek prior approval from TGH before engaging in particular types of government-facing activities.

Fifth, there is no requirement that Crestfield document the nature or recipients of its engagement with government officials. This is a particularly critical omission given that the core purpose of the engagement was to interact with government officials on Torchlight's behalf.

Finally, the Agreement does not identify specific permits or projects. There is no reference to the Kousseri Copper-Cobalt Complex, the Dembélé Rare Earths Project, or any particular mining license or regulatory approval. This creates an open-ended mandate with minimal oversight mechanisms, providing Crestfield with broad latitude to act under a vaguely defined scope without meaningful accountability to its principal.

B. Compensation Structure

The Agreement establishes a three-part compensation structure consisting of a monthly retainer, success fees, and expense reimbursement.

1. Monthly Retainer (Clause 4.1)

Clause 4.1 provides for a monthly retainer of $15,000 payable to Crestfield, due on the first business day of each calendar month during the term of the Agreement. The retainer is described as compensation for "ongoing advisory availability and general government relations services." Over the 66-month term of the engagement (April 2019 through October 2024, inclusive), the total retainer component amounts to $15,000 × 66 = $990,000 in aggregate retainer fees.

2. Success Fees (Clause 4.2)

Clause 4.2 provides for a success fee of $100,000 payable to Crestfield upon the issuance of each "material government permit, license, or approval obtained in connection with the Client's mining operations in the Republic of Ganara." As set forth in Section II.C above, five permits were issued during the engagement period, yielding total success fees of $100,000 × 5 = $500,000. The success fee structure, while not inherently improper, is a feature that warrants scrutiny in the anti-corruption context. DOJ and SEC enforcement actions have consistently identified contingent-fee arrangements tied to the outcome of government decisions as a red flag for potential corruption. When a government-facing intermediary's compensation is directly contingent upon the issuance of government permits, the intermediary has a direct financial incentive to secure the desired government action by any means available, including through improper payments.

3. Expense Reimbursement (Clause 4.3)

Clause 4.3 provides for reimbursement of Crestfield's "reasonable out-of-pocket expenses incurred in connection with the performance of the Services," subject to a quarterly cap of $25,000. No further specification is provided as to the types of expenses that are reimbursable, and the Agreement contains no requirement that Crestfield provide receipts, invoices, or other supporting documentation for expense claims. Over the approximately 22 quarters spanned by the engagement (April 2019 through October 2024), the maximum permissible expense reimbursement amounts to $25,000 × 22 = $550,000.

4. Contractual Maximum Calculation

Based on the foregoing compensation provisions, the contractual maximum total payments to Crestfield over the 66-month term of the Agreement can be calculated as follows:

As discussed in Section IV below, actual payments to Crestfield substantially exceeded this contractual maximum.

C. Anti-Corruption Representations (Clause 9.2)

Clause 9.2 of the Agreement contains a general representation by Crestfield warranting compliance with "all applicable anti-corruption laws." The full text of the clause reads as follows:

"The Advisor represents and warrants that it has not and shall not, in connection with the performance of its obligations under this Agreement, make, offer, promise, or authorize any payment or transfer of anything of value, directly or indirectly, to any person in violation of any applicable anti-corruption laws."

While this representation provides a baseline acknowledgment that Crestfield is obligated to comply with anti-corruption laws, it is critically deficient in several respects:

• No specific reference to the FCPA. The clause does not reference the FCPA by name, nor does it reference the Canadian Corruption of Foreign Public Officials Act ("CFPOA"), the UK Bribery Act 2010, or any other specific anti-corruption statute. Given that Torchlight is a U.S.-listed issuer subject to the FCPA, and given that Crestfield's activities on behalf of TGH (a subsidiary of a U.S. issuer) implicate the FCPA's jurisdictional reach, the absence of an explicit FCPA reference is a significant omission.

• No affirmative compliance obligations. The clause imposes no affirmative obligation on Crestfield to implement anti-corruption compliance procedures, to train its personnel (such as they are) on anti-corruption requirements, or to maintain books and records reflecting its interactions with government officials.

• No periodic certification requirement. The clause does not require Crestfield to certify its compliance with anti-corruption laws on a periodic basis (e.g., annually or at the time of each invoice submission). Periodic certifications are a widely recognized best practice for agreements with government-facing intermediaries.

• No notification obligation. There is no requirement that Crestfield notify TGH in the event that Crestfield, Renard, or any person acting on Crestfield's behalf becomes the subject of any government investigation, enforcement action, or inquiry related to corruption, bribery, or similar offenses.

• No representation regarding government official status. Clause 9.2 does not include any representation that Renard is not, and has not been, a government official, a politically exposed person ("PEP"), or a close associate or family member of a government official. Given Renard's background as a former diplomat and his stated connections to Ganaran government officials, the absence of such a representation is a particularly glaring omission.

• No beneficial ownership disclosure requirement. The clause does not require Crestfield to disclose its beneficial ownership structure or to notify TGH of any changes to its ownership. Nor does it require disclosure of any ownership interest held by, or any business relationship between Crestfield (or Renard) and any government official.

This stands in stark contrast to best-practice anti-corruption contractual provisions, which typically include detailed FCPA-specific representations, comprehensive certifications, ongoing compliance obligations, and robust remediation and termination mechanisms tied to anti-corruption breaches. The comparison to best-practice provisions is set forth in greater detail in Section VI below.

D. Audit Rights

The Agreement contains no audit rights clause. TGH did not reserve the right to audit, inspect, or examine Crestfield's books, records, accounts, or supporting documentation for invoiced amounts. There is no provision permitting TGH (or any representative of Torchlight or its affiliates) to access Crestfield's records for purposes of verifying the nature and appropriateness of expenses or the use of funds paid under the Agreement.

This is a significant omission. Industry best practice, as well as guidance from the DOJ and SEC — including the DOJ Criminal Division's Evaluation of Corporate Compliance Programs (updated March 2023), the DOJ/SEC Resource Guide to the U.S. Foreign Corrupt Practices Act (Second Edition, 2020), and the Ten Hallmarks of an Effective Compliance Program — strongly recommend that agreements with third-party intermediaries in high-risk jurisdictions include robust audit rights permitting the principal to examine the agent's financial records, verify the use and disposition of funds, and confirm compliance with anti-corruption obligations. The absence of such rights in the Crestfield Agreement effectively meant that TGH ceded all ability to verify how Crestfield used the substantial sums it received under the Agreement — sums that, as the investigation has revealed, were in large part diverted to Ganaran government officials.

E. Termination (Clause 12)

Clause 12 of the Agreement addresses termination. The clause permits either party to terminate the Agreement upon 90 days' prior written notice without cause. The clause also provides for termination "for cause" in the event of a material breach by the other party, subject to a 30-day cure period following written notice of the breach.

Critically, Clause 12 does not include an immediate termination right triggered by any breach of anti-corruption representations or obligations. Under best-practice standards, agreements with government-facing intermediaries should permit the principal to terminate the agreement immediately, without notice or cure period, upon any breach or suspected breach of the intermediary's anti-corruption obligations, or upon the principal's becoming aware of any investigation, enforcement action, or allegation of corruption involving the intermediary. The Crestfield Agreement lacks any such provision. The 30-day cure period applicable to material breaches is facially inappropriate in the context of an anti-corruption violation, as it would theoretically afford Crestfield an opportunity to "cure" a payment to a government official — an outcome that is both legally and practically nonsensical.

F. Governing Law and Dispute Resolution

Clause 14 of the Agreement provides that the Agreement is governed by the laws of Mauritius. Clause 15 provides that any dispute arising out of or in connection with the Agreement shall be referred to and finally resolved by arbitration administered by the Mauritius Chamber of Commerce and Industry Arbitration and Mediation Centre ("MARC"), with the seat of arbitration in Port Louis, Mauritius, and proceedings to be conducted in English.

The selection of Mauritian law and Mauritian arbitration is notable. Neither TGH (a BVI entity) nor Crestfield's operational activities (conducted in Ganara by a principal residing in Senegal) have any obvious nexus to Mauritius, beyond Crestfield's formal incorporation there. The choice of a relatively obscure arbitration forum, combined with the geographic and jurisdictional distance from both the parties' operations and Torchlight's U.S. headquarters, raises concerns that the governing law and dispute resolution provisions were selected to minimize the practical enforceability of the Agreement's terms — including any anti-corruption protections that the Agreement might have contained. In practice, the selection of Mauritian law and arbitration would make it considerably more difficult for TGH or Torchlight to pursue audit rights (had they been included), enforce anti-corruption obligations, or exercise termination rights, as compared to a governing law and forum selection with a closer nexus to the parties or their operations.

G. Signatory Authority

The Agreement was executed by Marcus Delacroix on behalf of TGH, signing in his capacity as "Authorized Representative." The Agreement was executed by Jean-Philippe Renard on behalf of Crestfield, signing in his capacity as "Director."

A review of TGH's corporate records, coordinated with Hargrove Whitfield LLP (Catherine Whitfield), who is advising on BVI corporate governance matters, has not located any board resolution of TGH expressly authorizing the execution of the Crestfield Agreement or delegating signatory authority to Delacroix for this purpose. While Delacroix held the title of Vice President, Africa Operations at Torchlight Mining Corp. (the ultimate parent), his authority to execute contracts on behalf of TGH — a separate legal entity incorporated in the BVI — would ordinarily require express authorization from TGH's board of directors. As of the date of this memorandum, Hargrove Whitfield LLP is continuing its review of TGH's board minutes and resolutions for the period March–April 2019 to determine whether such authorization was granted. The preliminary indication, however, is that no such resolution was passed, which would raise questions about the validity of the Agreement under BVI law and the propriety of the signatory process.

IV. Analysis of Actual Payments versus Contractual Terms

A. Total Payments to Crestfield

A review of TGH's banking records at Meridian Commercial Bank (BVI) and the Crestfield invoice files maintained in TGM's accounts payable records reveals that, over the period from April 2019 through October 2024, TGH made total payments to Crestfield of $3,210,000, disbursed across 24 separate invoices. The year-by-year breakdown of payments is as follows:

The escalating trajectory of payments — from $420,000 in the initial partial year (2019) to a peak of $680,000 in 2021 — is notable and warrants further examination in the context of the forensic analysis being conducted by Pinnacle Forensic Advisory LLC.

B. Excess Over Contractual Maximum

The comparison between actual payments and the contractual maximum established under the Agreement is as follows:

The overpayment of $1,170,000 represents an excess of approximately 57.4% above the contractual maximum. This overpayment was made without any documented contract amendment, addendum, side letter, or other formal modification to the original Agreement. A thorough review of TGH's contract files, TGM's procurement records, and the corporate records maintained at Torchlight's Houston headquarters has not identified any written instrument purporting to modify the compensation terms of the Agreement or to authorize payments in excess of the contractual maximum.

Similarly, no evidence has been located of any written authorization — whether from TGH's board of directors, from Torchlight's executive management, or from any individual with delegated authority — approving payments in excess of the contractual maximum. The absence of any such authorization is a critical red flag: the fact that payments consistently and substantially exceeded contractual limits without any formal amendment or authorization suggests, at minimum, that the invoicing and approval process was not subject to meaningful oversight. At worst, it suggests deliberate circumvention of the Agreement's stated compensation limits.

C. Invoice Approval Process Deficiencies

Under Torchlight Mining Corp.'s Delegation of Authority Policy (Version 4.1, effective March 2018) (the "DOA Policy"), all expenditures exceeding $50,000 require dual approval — that is, the approval of two authorized signatories, at least one of whom must hold a position at the level of Regional Vice President or above. The DOA Policy applies to all Torchlight subsidiaries, including TGH and TGM.

Of the 24 Crestfield invoices, 14 invoices exceeded $50,000, with individual invoice amounts ranging from $55,000 to $185,000. A detailed review of the approval records associated with these invoices — including email approvals, signed invoice cover sheets, and entries in TGM's accounts payable system (Northgate Solutions) — reveals the following deficiencies:

• Of the 14 invoices exceeding $50,000, at least nine were approved solely by Raymond Osei-Bonsu, the Country Manager of TGM, without any secondary authorization. Osei-Bonsu's single approval on these invoices constitutes a direct violation of the DOA Policy's dual-approval requirement.

• The remaining five invoices exceeding $50,000 bear the approvals of Osei-Bonsu and one additional signatory, but in at least two cases, the second signatory was Thomas Achebe, the Finance Director of TGM, who did not hold a position at the level of Regional Vice President or above as required by the DOA Policy.

• No Crestfield invoice of any amount appears to have been reviewed or approved by any member of Torchlight's legal or compliance department, by any Regional Vice President, or by any individual at Torchlight's corporate headquarters in Houston.

The failure to enforce dual-approval requirements on payments of this magnitude to a government-facing intermediary operating in a high-corruption-risk jurisdiction represents a fundamental internal controls breakdown. The concentration of approval authority in a single individual — particularly an individual who, as a former Deputy Director of the Ministry of Mines and Mineral Resources in Ganara, had his own pre-existing relationships with the government officials to whom, as the investigation has revealed, substantial portions of the Crestfield payments were ultimately diverted — is a fact pattern that warrants the most serious scrutiny.

D. Payment Routing

All payments to Crestfield were wire-transferred from TGH's account at Meridian Commercial Bank (BVI), Account No. 7740-2281-0056, to accounts held in Crestfield's name. Based on wire transfer records reviewed to date, 19 of the 24 payments were directed to Crestfield's account at Harborline Commerce Bank (Mauritius), Account No. 0041-8823-9967, while five payments were directed to an account in the name of "Crestfield Advisory Partners — Operations Account" at Sundial Financial, Account No. SN-0088-4429-1150. The use of the Senegalese account for five of the 24 payments is notable, as it indicates that funds were routed not to the country of Crestfield's incorporation (Mauritius) but to the country of Renard's personal residence (Senegal), a circumstance that is consistent with payment structures designed to facilitate the onward diversion of funds.

Pinnacle Forensic Advisory LLC, led by Dr. Leonard Strauss, is conducting further analysis of the downstream movement of these funds and any ultimate diversion to Ganaran government officials or their associates. The forensic analysis is ongoing and is expected to be completed by mid-May 2025. However, preliminary findings from Pinnacle's work — based on a review of bank statements, wire transfer records, and other financial data obtained to date — indicate that approximately $2,410,000 (approximately 75% of the $3,210,000 total) was diverted, through a series of intermediate transfers, to accounts held by or for the benefit of Ganaran government officials. The specific allocations of diverted funds, as preliminary identified, are discussed further in Section VII.C below.

V. Identification and Analysis of Red Flags

The following red flags have been identified in connection with the Crestfield Agreement and the associated payment activity. Each of these red flags is individually significant; considered collectively, they present a pattern that is strongly indicative of an intermediary arrangement designed to facilitate improper payments to foreign government officials.

A. Absence of Competitive Selection Process

As set forth in Section II.B above, Jean-Philippe Renard was personally introduced to TGH by Marcus Delacroix. No request for proposals was issued, no comparison of alternative government relations consultants was undertaken, and no procurement committee review was conducted prior to Crestfield's engagement. This departure from Torchlight's Vendor Selection and Procurement Policy is itself a significant red flag. The personal introduction of the intermediary by a senior executive, coupled with the absence of any competitive tender process, is a fact pattern that DOJ and SEC enforcement personnel have repeatedly identified as indicative of a corrupt arrangement in which the selection of the intermediary is driven not by its qualifications or competitive pricing, but by its willingness and ability to serve as a conduit for improper payments.

B. Shell-Company Characteristics of Crestfield

Crestfield exhibits several characteristics commonly associated with shell companies or special-purpose vehicles used to obscure payment flows:

• No website. Crestfield maintained no internet presence during the period of its engagement by TGH.

• No employees. Crestfield had no employees other than Renard himself.

• Registered-agent office address. Crestfield's registered address (7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius) is the address of Apex Corporate Services (Mauritius) Ltd., a registered-agent and corporate domiciliation provider. There is no indication that Crestfield maintained any physical office at this location.

• Jurisdictional mismatch. Crestfield was incorporated in Mauritius but provided services exclusively in the Republic of Ganara, a West African nation with no geographic, legal, or commercial connection to Mauritius. The sole owner and operator of Crestfield resided in Senegal, not Mauritius. The Mauritius incorporation appears to serve no legitimate business purpose and is consistent with the use of an offshore jurisdiction to take advantage of favorable corporate secrecy provisions and to distance the intermediary's legal identity from the jurisdiction in which it operates.

These characteristics, individually and collectively, are classic indicators of an intermediary entity established for the purpose of receiving and redirecting payments. The DOJ/SEC Resource Guide to the U.S. Foreign Corrupt Practices Act specifically identifies the use of "shell companies" and "entities with no apparent operational infrastructure" as hallmarks of corruption-related intermediary arrangements.

C. Absence of Due Diligence File

As noted in Section II.B, no due diligence file on Crestfield exists in Torchlight's compliance records. This represents a direct violation of Torchlight's Anti-Corruption Compliance Manual, which requires risk-based due diligence on all third-party intermediaries retained to interact with government officials. The DOJ Criminal Division's Evaluation of Corporate Compliance Programs identifies the design and implementation of third-party management processes — including "risk-based due diligence" — as a key metric in evaluating the effectiveness of a company's compliance program. The complete absence of any due diligence on Crestfield undermines any claim by Torchlight that its compliance program was effectively implemented with respect to the Ganaran operations.

Best-practice due diligence for a government-facing intermediary of this nature would have included, at minimum:

• Background checks on Crestfield and Renard through commercial databases and open-source research

• Verification of Crestfield's beneficial ownership structure

• Assessment of Renard's current and former relationships with government officials, including specific identification of the officials with whom he claimed to have relationships

• Review of Crestfield's financial statements and bank references

• Assessment of whether Crestfield maintained any anti-corruption compliance policies or procedures

• Identification and evaluation of any adverse media or litigation history involving Crestfield or Renard

• Verification of Crestfield's incorporation documents and business licenses

None of these steps were performed. Had they been, several of the red flags identified in this memorandum — including the shell-company characteristics of Crestfield, Renard's former diplomatic career, and the jurisdictional mismatch between Crestfield's incorporation and its operations — would likely have been identified before the engagement commenced.

D. Vague Scope Language Without Deliverable Requirements

As analyzed in detail in Section III.A above, the Agreement's scope language — "regulatory liaison, permit facilitation, and stakeholder engagement" — is vague and open-ended. The absence of any deliverable requirements, reporting obligations, or activity documentation requirements meant that TGH had no contractual mechanism for verifying what services Crestfield actually performed. In effect, TGH paid $3,210,000 over a five-and-a-half-year period without ever requiring — or receiving — any tangible work product or documented evidence of the advisory services purportedly rendered. This lack of accountability is a significant red flag for an intermediary arrangement that may have been designed primarily as a conduit for payments to government officials rather than as a genuine advisory engagement.

E. Absence of FCPA-Specific Representations

The generic anti-corruption warranty contained in Clause 9.2 of the Agreement (compliance with "all applicable anti-corruption laws") is insufficient under current enforcement expectations. As detailed in Section III.C above, the clause lacks any explicit reference to the FCPA, any certification mechanism, any notification obligation, any representation regarding government official status or PEP status, and any beneficial ownership disclosure requirement. The generic nature of the anti-corruption clause is a red flag because it suggests either a deliberate effort to minimize the contractual framework around anti-corruption compliance or, at best, a reckless disregard for the anti-corruption risks inherent in the engagement.

F. No Audit Rights Clause

As detailed in Section III.D, the absence of audit rights in the Agreement prevented TGH from verifying how Crestfield used the funds it received. This omission is particularly significant in light of the investigation's preliminary finding that approximately 75% of the funds paid to Crestfield were diverted to government officials. Had audit rights been included in the Agreement and exercised, TGH would have had the ability to examine Crestfield's bank records, identify the downstream recipients of funds, and potentially detect the diversion before it reached the magnitude that has now been identified.

G. Invoicing Exceeding Contractual Maximum Without Amendment

The overpayment of $1,170,000 — 57.4% in excess of the contractual maximum — absent any contract amendment, addendum, or formal authorization, is one of the most significant red flags associated with the Crestfield engagement. The systematic and sustained nature of the excess payments (the cumulative excess grew steadily over the 66-month engagement) indicates that the contractual compensation limits were effectively disregarded from an early point in the relationship. This pattern is consistent with an arrangement in which the Agreement's stated compensation terms served as a veneer of legitimacy, while the actual payment amounts were driven by the sums required to fund improper payments to government officials.

H. Single-Approval Violations on Invoices Exceeding $50,000

As set forth in Section IV.C, 14 of the 24 Crestfield invoices exceeded the $50,000 threshold that triggers the DOA Policy's dual-approval requirement, and at least nine of these invoices were approved by Osei-Bonsu alone. The concentration of approval authority in a single individual — and the systematic failure to obtain the required second approval — represents a breakdown in internal controls that is relevant to both the FCPA internal controls analysis and the assessment of individual culpability. The fact that the individual who served as the sole approver (Osei-Bonsu) was himself a former senior official of the Ganaran Ministry of Mines and Mineral Resources — the very ministry from which several of the permits at issue were obtained — adds an additional dimension of concern to this red flag.

I. Timing Correlation Between Invoices and Permit Issuances

Preliminary forensic analysis, coordinated with Pinnacle Forensic Advisory LLC, has identified a statistically significant correlation between the timing of Crestfield invoices and the issuance of mining permits by Ganaran governmental authorities. Specifically, Crestfield invoices spiked — both in frequency and in amount — in the 30 to 60-day period preceding each of the five permit issuances identified in Section II.C. For example:

• In the 60 days preceding the issuance of the Kousseri Mining License (September 14, 2019), Crestfield submitted two invoices totaling $185,000, compared to an average of approximately $80,000 per 60-day period during months not immediately preceding a permit issuance.

• In the 45 days preceding the issuance of the Dembélé Mining License Upgrade (February 14, 2023), Crestfield submitted an invoice for $175,000.

This temporal correlation is consistent with a pattern in which payments to Crestfield were timed to coincide with — and potentially to fund — improper payments made to government officials to expedite or secure the issuance of regulatory approvals. Pinnacle Forensic Advisory is conducting further statistical analysis to quantify the strength of this correlation and to map the timing of Crestfield invoices against the timing of downstream transfers from Crestfield's accounts to accounts associated with government officials.

J. Use of Personal Email by Delacroix

A review of electronic communications, conducted in coordination with Marlowe Asset Management Digital Forensics Inc., has identified 37 communications between Marcus Delacroix and Jean-Philippe Renard that were conducted via Delacroix's personal email account (an account hosted on a commercial email provider), rather than through Torchlight's corporate email system. These communications span the period from November 2018 (prior to the execution of the Agreement) through March 2024. The content of several of these communications — to the extent they have been recovered and reviewed to date — includes discussions regarding the status of specific permit applications, references to meetings with unnamed government officials, and, in at least three instances, references to "arrangements" and "commitments" that require further investigation.

The use of a personal email account to conduct business communications related to a government-facing intermediary engagement is a significant red flag. It circumvented Torchlight's corporate communications systems and any monitoring, archiving, or compliance review processes applicable to those systems. The deliberate use of personal email channels for communications of this nature is consistent with an intent to conceal the substance of the interactions between Delacroix and Renard from Torchlight's compliance function and from any future review or investigation.

VI. Comparison to Best-Practice Anti-Corruption Contractual Provisions

The deficiencies of the Crestfield Agreement are placed in sharper relief when measured against the anti-corruption contractual provisions that a properly drafted government relations advisory agreement should contain. The following provisions are recommended by DOJ and SEC guidance — including the Resource Guide to the U.S. Foreign Corrupt Practices Act (Second Edition, 2020), the DOJ Criminal Division's Evaluation of Corporate Compliance Programs (updated March 2023), and the consensus standards reflected in publications by the International Bar Association, Transparency International, and the OECD — for agreements with third-party intermediaries operating in high-risk jurisdictions:

1. Explicit FCPA, CFPOA, and UK Bribery Act Compliance Representations. The agreement should contain express representations by the intermediary that it will comply with the FCPA (including both the anti-bribery provisions and the books-and-records and internal controls provisions), the CFPOA, the UK Bribery Act 2010, and any other applicable anti-corruption statutes, identified by name.

2. Prohibition on Payments to Government Officials Without Prior Written Approval. The agreement should expressly prohibit the intermediary from making, offering, or promising any payment or transfer of anything of value, directly or indirectly, to any government official, political party, party official, or candidate for political office, without the prior written approval of the principal's legal or compliance department.

3. Detailed Scope of Work with Specified Deliverables and Reporting Requirements. The agreement should define the scope of the intermediary's engagement with specificity, identify the particular projects, permits, or regulatory matters within the scope, and require the intermediary to provide regular written reports (e.g., monthly or quarterly) detailing the activities undertaken, meetings held, officials contacted, and the status of pending regulatory matters.

4. Robust Audit and Inspection Rights. The agreement should grant the principal the right to audit and inspect the intermediary's books, records, accounts, and supporting documentation, including bank statements, at any time during the term and for a specified period following termination. The audit right should extend to the principal's external auditors, outside counsel, and forensic accountants.

5. Immediate Termination Rights Upon Breach of Anti-Corruption Provisions. The agreement should permit the principal to terminate the agreement immediately, without notice or cure period, upon any breach or suspected breach of the intermediary's anti-corruption obligations, or upon the principal's becoming aware of any investigation or allegation of corruption involving the intermediary.

6. Periodic Compliance Certifications. The agreement should require the intermediary to certify its compliance with anti-corruption obligations on a periodic basis (e.g., annually, or at the time of each invoice submission), with the certification executed by an authorized officer of the intermediary.

7. Disclosure of All Government Relationships and Politically Exposed Person Status. The agreement should require the intermediary to disclose all current and former relationships with government officials, all current and former government employment of the intermediary's principals and employees, and the PEP status of any person associated with the intermediary. The intermediary should be required to promptly update these disclosures upon any change in circumstances.

8. Beneficial Ownership Disclosure. The agreement should require the intermediary to disclose its complete beneficial ownership structure, including the identity of all direct and indirect owners holding more than a specified threshold (e.g., 10%) of the intermediary's equity, and to notify the principal of any changes in ownership.

9. Training Requirements. The agreement should require the intermediary to ensure that its principals and any employees who will be performing services under the agreement receive anti-corruption training, either provided by the principal or by a qualified third-party provider.

10. Record-Keeping and Document Retention Obligations. The agreement should require the intermediary to maintain accurate and complete books and records reflecting all activities undertaken and all expenditures incurred in connection with the engagement, and to retain such records for a specified period (e.g., seven years) following the termination of the agreement.

11. Requirement for Competitive Selection and Documented Due Diligence. While not a contractual provision per se, best practice requires that the selection of any government-facing intermediary be preceded by a documented competitive selection process and a thorough due diligence review, the results of which should be documented and maintained in the principal's compliance files.

Assessment of the Crestfield Agreement Against These Standards:

Of the eleven best-practice provisions identified above, the Crestfield Agreement contains only a single, generic anti-corruption representation (item 1, in a heavily diluted form — with no specific statutory references). The remaining ten provisions are entirely absent from the Agreement. The Agreement's anti-corruption protections are, by any reasonable measure, grossly insufficient for an engagement of this nature, and the gap between the Agreement's terms and best-practice standards is among the most significant findings of this analysis.

The following table summarizes the comparison:

VII. Implications for FCPA Liability Analysis

A. Books and Records Concerns

The FCPA's books-and-records provision, Section 13(b)(2)(A) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m(b)(2)(A), requires issuers to "make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer." This obligation extends to the books and records of the issuer's subsidiaries, including consolidated subsidiaries such as TGH.

The payment of $3,210,000 to Crestfield — including $1,170,000 in excess of the contractual maximum — raises significant concerns under this provision. The Crestfield payments were booked in TGH's and TGM's financial records under general ledger codes for "consulting fees" and "government relations advisory services," without any supporting documentation reflecting the specific services actually rendered by Crestfield. No work product, activity reports, meeting summaries, or other deliverables from Crestfield were retained in TGH's or TGM's files. The invoices submitted by Crestfield were, in most cases, bare-bones documents containing only a one-line description (e.g., "Government Relations Advisory Services — Q3 2021") and an aggregate amount, with no itemization of activities, hours, or expenses. The vague GL coding, combined with the absence of any supporting documentation for Crestfield's actual activities, meant that TGH's books and records did not, "in reasonable detail, accurately and fairly reflect" the nature and purpose of payments totaling $3,210,000 to a government-facing intermediary operating in a high-corruption-risk jurisdiction.

Furthermore, to the extent that the Crestfield payments were, in fact, conduits for bribes to Ganaran government officials — as the preliminary forensic evidence suggests — the characterization of these payments as "consulting fees" and "government relations advisory services" in TGH's books and records would constitute affirmatively false and misleading entries, representing a clear violation of Section 13(b)(2)(A).

B. Internal Controls Concerns

The FCPA's internal controls provision, Section 13(b)(2)(B) of the Securities Exchange Act, 15 U.S.C. § 78m(b)(2)(B), requires issuers to "devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances" that, among other things, "transactions are executed in accordance with management's general or specific authorization" and "access to assets is permitted only in accordance with management's general or specific authorization."

The following internal controls deficiencies have been identified in connection with the Crestfield engagement:

• Failure to conduct due diligence. Torchlight's compliance policies required risk-based due diligence on third-party intermediaries prior to engagement. No due diligence was conducted on Crestfield.

• Absence of competitive selection. Torchlight's procurement policies required a competitive tender process for government-facing engagements exceeding $100,000. No competitive process was conducted.

• Absence of audit rights. The Agreement contained no audit rights, depriving TGH of the ability to verify the use of funds paid to Crestfield.

• Failure to enforce dual-approval requirements. At least nine invoices exceeding $50,000 were approved by Osei-Bonsu alone, in violation of the DOA Policy's dual-approval requirement.

• Payment of amounts exceeding the contractual maximum without amendment. $1,170,000 was paid in excess of the contractual maximum without any contract amendment or formal authorization.

• Absence of legal or compliance review. No Crestfield invoice or payment was reviewed or approved by any member of Torchlight's legal or compliance department.

These deficiencies, individually and collectively, reflect a system of internal accounting controls that was insufficient to provide reasonable assurances that transactions involving the Crestfield engagement were executed in accordance with management's authorization and that assets were not disposed of without appropriate oversight. The Agreement itself, and Torchlight's administration of it, constitute potential violations of Section 13(b)(2)(B).

C. Anti-Bribery Provisions

The FCPA's anti-bribery provision, Section 30A of the Securities Exchange Act, 15 U.S.C. § 78dd-1, prohibits issuers and their officers, directors, employees, agents, and stockholders from making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any foreign official for purposes of influencing any act or decision of such foreign official in his official capacity, inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or securing any improper advantage.

The investigation's preliminary finding — based on the ongoing forensic analysis by Pinnacle Forensic Advisory — is that approximately $2,410,000 (approximately 75%) of the $3,210,000 paid to Crestfield was diverted, through a series of intermediate transfers, to accounts held by or for the benefit of Ganaran government officials. The preliminary allocation of these diverted funds is as follows:

• Hon. Boubacar Diallo — Minister of Mines and Mineral Resources, Republic of Ganara — approximately $1,850,000 traced to accounts associated with Diallo and members of his immediate family.

• Amadou Traoré — Director General, National Environmental Protection Agency, Republic of Ganara — approximately $620,000 traced to accounts associated with Traoré.

• Col. Ibrahim Konaté — Director, Presidential Security Service, Republic of Ganara, and advisor to the Office of the President on natural resources matters — approximately $340,000 traced to accounts associated with Konaté.

These preliminary findings, if confirmed, raise direct anti-bribery concerns under FCPA Section 30A. The payments to Crestfield, to the extent they were made with the knowledge or conscious awareness that all or a portion of those payments would be passed through to government officials for the purpose of securing mining permits and regulatory approvals, would constitute violations of the anti-bribery provision.

The deficiencies in the Crestfield Agreement are directly relevant to the analysis of mens rea under the anti-bribery provision. The "corruptly" element of Section 30A can be satisfied not only by proof of actual knowledge but also by evidence of willful blindness or conscious avoidance. The Agreement was structured in a way that, at minimum, failed to prevent — and arguably facilitated — the diversion of funds to government officials: the vague scope language, the absence of deliverable and reporting requirements, the absence of audit rights, the absence of FCPA-specific representations, and the failure to conduct due diligence collectively created an environment in which funds could be funneled to government officials with minimal risk of detection. To the extent that Delacroix and/or Osei-Bonsu were aware of these deficiencies and chose not to remedy them — or, worse, deliberately structured the arrangement to exploit them — the evidence may support a finding of willful blindness or conscious avoidance, satisfying the knowledge element of the anti-bribery provision.

D. Relevance to Voluntary Self-Disclosure Analysis

The deficiencies in the Crestfield Agreement and the associated red flags identified in this memorandum will be material to Calderwood & Harkness's analysis and recommendation regarding voluntary self-disclosure to the DOJ under the Criminal Division's Corporate Enforcement Policy (formerly known as the FCPA Corporate Enforcement Policy). Under the Corporate Enforcement Policy, the DOJ will consider, among other factors, the "nature and seriousness of the offense," the company's "existing compliance program," and the company's "remedial actions" in determining the appropriate resolution for self-disclosing companies. The systemic deficiencies in the Crestfield Agreement — and Torchlight's failure to detect and address them over a five-and-a-half-year period — will be relevant to the DOJ's assessment of the effectiveness of Torchlight's compliance program, as well as to the scope and credibility of the remediation efforts that Calderwood & Harkness will recommend.

A decision on voluntary self-disclosure is targeted for June 30, 2025, and this memorandum should be incorporated into the broader analysis being prepared for the Audit Committee in advance of that deadline.

VIII. Recommendations

Based on the analysis set forth in this memorandum, the following next steps are recommended:

1. Complete Forensic Reconstruction of Crestfield Invoices. In coordination with Pinnacle Forensic Advisory LLC (Dr. Leonard Strauss), complete the forensic reconstruction and analysis of all 24 Crestfield invoices, including detailed tracing of downstream fund flows from Crestfield's accounts at Harborline Commerce Bank (Mauritius) and Sundial Financial to any ultimate recipients, with particular focus on accounts associated with Ganaran government officials or their associates. This analysis should include a mapping of the timing of downstream transfers against the timing of permit issuances and an assessment of any additional intermediary entities or accounts throug

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
Date: March 19, 2025
To: Steven Hollander, Lead Associate, White Collar & Investigations, Calderwood & Harkness LLP
From: Jasmine Thornton, Working Associate, White Collar & Investigations, Calderwood & Harkness LLP
Re: Analysis of Government Relations Advisory Agreement between Torchlight Ganara Holdings Ltd. and Crestfield Advisory Partners Ltd., dated April 12, 2019
Matter No.: 1039-00005
I. Purpose and Summary
The purpose of this memorandum is to provide a detailed analysis of the Government Relations Advisory Agreement dated April 12, 2019, executed between Torchlight Ganara Holdings Ltd. ("TGH") and Crestfield Advisory Partners Ltd. ("Crestfield") (the "Agreement" or the "Crestfield Agreement"). This analysis has been prepared in connection with Calderwood & Harkness LLP's internal investigation of potential violations of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1 et seq. ("FCPA") on behalf of Torchlight Mining Corp. ("Torchlight" or the "Company"). The investigation was authorized by the Audit Committee of the Torchlight Board of Directors on January 14, 2025.
The Agreement governs Crestfield's engagement as a government relations intermediary in the Republic of Ganara, a jurisdiction widely recognized as presenting elevated corruption risk. Crestfield, acting through its sole principal, Jean-Philippe Renard, was retained to provide advisory services related to the permitting and regulatory processes associated with Torchlight's mining operations in Ganara, including the Kousseri Copper-Cobalt Complex and the Dembélé Rare Earths Project.
This memorandum presents the following key findings:
1.  Insufficient Anti-Corruption Protections. The Agreement's terms are materially deficient from an anti-corruption compliance standpoint. The Agreement lacks the substantive protections that would be expected — and that current DOJ and SEC enforcement guidance effectively mandates — for a third-party agent operating in a high-risk jurisdiction on behalf of a U.S.-listed issuer.
2.  Payments Substantially Exceeding the Contractual Maximum. Total payments from TGH to Crestfield over the term of the engagement amounted to $3,210,000, exceeding the contractual maximum by $1,170,000 (approximately 57.4%), without any documented contract amendment, addendum, or other formal modification.
3.  Absence of Standard FCPA-Compliance Provisions. The Agreement lacks explicit FCPA representations, audit rights, beneficial ownership disclosures, reporting obligations, compliance certifications, and immediate termination rights tied to anti-corruption breaches — all of which are standard components of best-practice agreements with government-facing third-party intermediaries.
4.  No Evidence of Competitive Selection or Due Diligence. The investigation has uncovered no evidence that Torchlight or TGH conducted a competitive selection process, issued a request for proposals, or performed any due diligence on Crestfield prior to executing the Agreement. No due diligence file for Crestfield exists in any repository of Torchlight's compliance records that has been reviewed to date.
This memorandum was prepared at the direction of counsel and reflects the mental impressions, conclusions, and legal theories of the attorneys working on this matter. It is protected by the attorney-client privilege and the work product doctrine, and should not be disclosed to any person outside the investigation team without the prior written approval of Conrad Ashby, Partner, Calderwood & Harkness LLP.
II. Background
A. The Parties to the Agreement
Client — Torchlight Ganara Holdings Ltd. ("TGH"). TGH is a wholly owned subsidiary of Torchlight Mining Corp., a Delaware corporation whose common stock is listed on the New York Stock Exchange (NYSE: TRCH). TGH was incorporated in the British Virgin Islands on March 15, 2017, under BVI Business Companies Act registration number 1928764. TGH serves as the holding company for Torchlight's Ganaran mining operations and holds 100% of the equity interests in Torchlight Ganara Mining S.A. ("TGM"), the in-country operating entity organized under the mining and corporate laws of the Republic of Ganara. TGH's primary function within the Torchlight corporate structure is to serve as the intermediate holding and funding vehicle through which capital expenditures, operational expenses, and consulting payments associated with the Ganaran operations are channeled. During the relevant period, TGH maintained its principal operating bank account at Meridian Commercial Bank (BVI), Account No. 7740-2281-0056. This account was the source of all wire transfers to Crestfield during the term of the Agreement, as discussed more fully in Section IV below.
Advisor — Crestfield Advisory Partners Ltd. ("Crestfield"). Crestfield is a consulting firm incorporated in Mauritius in 2016 under the Mauritius Companies Act 2001. The sole beneficial owner and operator of Crestfield is Jean-Philippe Renard, a French citizen, age 54, currently residing in Dakar, Senegal. Renard is a former diplomat who served in various capacities within the French Ministry of Foreign Affairs from approximately 1998 to 2014, including postings in several West African nations. Through these diplomatic postings, Renard developed personal connections to current and former government officials in several West African states, including the Republic of Ganara. Crestfield's registered address is 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius — an address that matches the registered-agent office of Apex Corporate Services (Mauritius) Ltd., a provider of corporate domiciliation and nominee services. Crestfield maintained no website, employed no personnel other than Renard himself, and — based on publicly available records reviewed to date — has no known clients other than TGH. The combination of these characteristics is discussed in Section V.B below as a significant red flag.
B. Context of the Engagement
The Agreement was executed on April 12, 2019. This date is significant within the timeline of the investigation in several respects:
•  The Agreement was signed approximately two months after Raymond Osei-Bonsu was hired as Country Manager of TGM. Osei-Bonsu commenced employment with TGM on February 7, 2019. Prior to joining TGM, Osei-Bonsu served as Deputy Director of Mining Operations for the Republic of Ganara's Ministry of Mines and Mineral Resources from 2012 to 2018. His hiring, while the subject of a separate memorandum, is relevant because he subsequently served as the primary approver of Crestfield invoices, as discussed in Section IV.C below.
•  The Agreement was signed approximately five months after Marcus Delacroix was appointed Vice President, Africa Operations at Torchlight Mining Corp. on November 3, 2018. Delacroix, a Canadian citizen with approximately 20 years of experience in African mining operations, assumed direct oversight responsibility for all of Torchlight's African subsidiaries, including TGH and TGM. As set forth below, the investigation has determined that Delacroix personally introduced Renard to TGH and was the driving force behind Crestfield's engagement.
Crestfield was engaged to serve as a government relations intermediary in the Republic of Ganara. The stated purpose of the engagement was to facilitate the permitting process for Torchlight's mining operations, principally the Kousseri Copper-Cobalt Complex and the Dembélé Rare Earths Project — two large-scale extraction operations that required multiple licenses, environmental approvals, and regulatory clearances from Ganaran governmental authorities, including the Ministry of Mines and Mineral Resources, the National Environmental Protection Agency, and the Office of the President of the Republic.
The investigation has revealed that Jean-Philippe Renard was personally introduced to TGH by Marcus Delacroix. According to documents recovered from Torchlight's corporate email system, Delacroix emailed Osei-Bonsu on March 3, 2019, stating that he had "someone who can navigate the regulatory landscape" and that this contact would "get the permits moving." This email did not copy any member of Torchlight's legal or compliance team. No evidence of a competitive selection process, request for proposals, or comparison of alternative government relations consultants has been located in Torchlight's compliance records, procurement files, or the files of TGH or TGM. The absence of any competitive selection process is a direct deviation from Torchlight's Vendor Selection and Procurement Policy, which requires that engagements involving government-facing services exceeding $100,000 in annual value be subject to a competitive tender process with a minimum of three qualified bidders and review by the regional procurement committee.
Additionally, no due diligence file on Crestfield exists in Torchlight's compliance records. Torchlight's Anti-Corruption Compliance Manual (Version 3.2, effective January 2018) provides that all third-party agents, consultants, and intermediaries retained to interact with government officials on behalf of Torchlight or its subsidiaries must undergo a risk-based due diligence review prior to engagement, including background screening, verification of beneficial ownership, identification of any relationships with government officials, and assessment of the intermediary's anti-corruption compliance policies and procedures. The absence of any such due diligence file for Crestfield is a significant gap, particularly given the nature of the engagement (government relations and permit facilitation in a high-corruption-risk jurisdiction) and the profile of the intermediary (a single-person Mauritius-incorporated entity with no website, no employees, and a registered-agent office address).
C. Mining Permits at Issue
During the term of the Crestfield Agreement, five mining-related permits and approvals were obtained from Ganaran governmental authorities. These five permits form the core of the investigation's analysis of potential improper payments:
1.  Kousseri Copper-Cobalt Complex Mining License (License No. KCC-2019-0047) — Issued by the Ministry of Mines and Mineral Resources on September 14, 2019. This license was issued approximately four months after the submission of TGM's application on May 20, 2019, and approximately five months after the execution of the Crestfield Agreement. Notably, the statutory average processing time for mining licenses in Ganara during the 2017–2022 period, as reported by the Ganaran Chamber of Mines, was approximately eight to ten months. The issuance of this license in approximately four months — roughly half the normal processing time — is a circumstance warranting further analysis.
2.  Kousseri Environmental Impact Approval (Certificate No. ENV-KCC-2020-113) — Issued by the National Environmental Protection Agency on March 27, 2020. This certificate was a prerequisite for the commencement of full-scale extraction operations at the Kousseri site.
3.  Dembélé Rare Earths Exploration License (License No. DRE-2021-0092) — Issued by the Ministry of Mines and Mineral Resources on July 8, 2021. This license authorized TGM to conduct geological surveys and exploratory drilling at the Dembélé concession area in the northern administrative region of Ganara.
4.  Dembélé Mining License Upgrade (License No. DRE-M-2023-0018) — Issued by the Ministry of Mines and Mineral Resources on February 14, 2023. This license converted the exploration license to a full mining license, authorizing commercial extraction at the Dembélé site. This upgrade was a significant milestone for Torchlight's rare earths strategy and was highlighted in Torchlight's 2023 Annual Report on Form 10-K filed with the SEC.
5.  Kousseri Expansion Permit (Amendment KCC-2019-0047-A1) — Issued by the Ministry of Mines and Mineral Resources on April 3, 2024. This amendment expanded the geographic scope and annual tonnage limits of the original Kousseri Mining License.
The issuance of each of these permits was preceded by a spike in invoicing by Crestfield, as discussed further in Section V.I below. The temporal correlation between Crestfield's billing activity and the issuance of government permits is one of the most significant red flags identified in the investigation to date.
III. Key Terms of the Agreement
This section analyzes the material terms of the Agreement and identifies deficiencies and omissions that are relevant to the FCPA liability analysis.
A. Scope of Services (Clause 2)
Clause 2 of the Agreement defines the scope of Crestfield's engagement as follows:
"The Advisor shall provide to the Client government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara."
This scope language is both broadly and vaguely drafted. Several observations are warranted:
First, the terms "permit facilitation" and "stakeholder engagement" are not defined anywhere in the Agreement, nor is there any schedule or exhibit that provides further specificity as to the nature of the activities encompassed within these terms. The phrase "permit facilitation," in particular, is a term that could encompass a wide range of activities — from the entirely legitimate (e.g., assembling application packages, tracking regulatory timelines, arranging meetings with officials in their official capacities) to the potentially unlawful (e.g., making payments to officials to expedite permit processing or to secure favorable outcomes). Without a clear definition, the scope language provides no basis for distinguishing between permissible and impermissible activities by Crestfield.
Second, there are no deliverable requirements specified in the Agreement. Crestfield was not contractually required to provide any reports, memoranda, meeting summaries, activity logs, or other documentation of the work it performed under the Agreement. This absence of deliverable requirements meant that TGH had no contractual mechanism for verifying what services Crestfield actually rendered in exchange for the substantial fees it received.
Third, there are no reporting obligations. Crestfield was not required to report to TGH on the nature, frequency, or substance of its interactions with Ganaran government officials, nor was it required to identify the specific officials with whom it engaged.
Fourth, there is no specification of permitted and prohibited activities. The Agreement does not delineate any activities that Crestfield was prohibited from undertaking, nor does it impose any requirement that Crestfield seek prior approval from TGH before engaging in particular types of government-facing activities.
Fifth, there is no requirement that Crestfield document the nature or recipients of its engagement with government officials. This is a particularly critical omission given that the core purpose of the engagement was to interact with government officials on Torchlight's behalf.
Finally, the Agreement does not identify specific permits or projects. There is no reference to the Kousseri Copper-Cobalt Complex, the Dembélé Rare Earths Project, or any particular mining license or regulatory approval. This creates an open-ended mandate with minimal oversight mechanisms, providing Crestfield with broad latitude to act under a vaguely defined scope without meaningful accountability to its principal.
B. Compensation Structure
The Agreement establishes a three-part compensation structure consisting of a monthly retainer, success fees, and expense reimbursement.
1. Monthly Retainer (Clause 4.1)
Clause 4.1 provides for a monthly retainer of $15,000 payable to Crestfield, due on the first business day of each calendar month during the term of the Agreement. The retainer is described as compensation for "ongoing advisory availability and general government relations services." Over the 66-month term of the engagement (April 2019 through October 2024, inclusive), the total retainer component amounts to $15,000 × 66 = $990,000 in aggregate retainer fees.
2. Success Fees (Clause 4.2)
Clause 4.2 provides for a success fee of $100,000 payable to Crestfield upon the issuance of each "material government permit, license, or approval obtained in connection with the Client's mining operations in the Republic of Ganara." As set forth in Section II.C above, five permits were issued during the engagement period, yielding total success fees of $100,000 × 5 = $500,000. The success fee structure, while not inherently improper, is a feature that warrants scrutiny in the anti-corruption context. DOJ and SEC enforcement actions have consistently identified contingent-fee arrangements tied to the outcome of government decisions as a red flag for potential corruption. When a government-facing intermediary's compensation is directly contingent upon the issuance of government permits, the intermediary has a direct financial incentive to secure the desired government action by any means available, including through improper payments.
3. Expense Reimbursement (Clause 4.3)
Clause 4.3 provides for reimbursement of Crestfield's "reasonable out-of-pocket expenses incurred in connection with the performance of the Services," subject to a quarterly cap of $25,000. No further specification is provided as to the types of expenses that are reimbursable, and the Agreement contains no requirement that Crestfield provide receipts, invoices, or other supporting documentation for expense claims. Over the approximately 22 quarters spanned by the engagement (April 2019 through October 2024), the maximum permissible expense reimbursement amounts to $25,000 × 22 = $550,000.
4. Contractual Maximum Calculation
Based on the foregoing compensation provisions, the contractual maximum total payments to Crestfield over the 66-month term of the Agreement can be calculated as follows:
As discussed in Section IV below, actual payments to Crestfield substantially exceeded this contractual maximum.
C. Anti-Corruption Representations (Clause 9.2)
Clause 9.2 of the Agreement contains a general representation by Crestfield warranting compliance with "all applicable anti-corruption laws." The full text of the clause reads as follows:
"The Advisor represents and warrants that it has not and shall not, in connection with the performance of its obligations under this Agreement, make, offer, promise, or authorize any payment or transfer of anything of value, directly or indirectly, to any person in violation of any applicable anti-corruption laws."
While this representation provides a baseline acknowledgment that Crestfield is obligated to comply with anti-corruption laws, it is critically deficient in several respects:
•  No specific reference to the FCPA. The clause does not reference the FCPA by name, nor does it reference the Canadian Corruption of Foreign Public Officials Act ("CFPOA"), the UK Bribery Act 2010, or any other specific anti-corruption statute. Given that Torchlight is a U.S.-listed issuer subject to the FCPA, and given that Crestfield's activities on behalf of TGH (a subsidiary of a U.S. issuer) implicate the FCPA's jurisdictional reach, the absence of an explicit FCPA reference is a significant omission.
•  No affirmative compliance obligations. The clause imposes no affirmative obligation on Crestfield to implement anti-corruption compliance procedures, to train its personnel (such as they are) on anti-corruption requirements, or to maintain books and records reflecting its interactions with government officials.
•  No periodic certification requirement. The clause does not require Crestfield to certify its compliance with anti-corruption laws on a periodic basis (e.g., annually or at the time of each invoice submission). Periodic certifications are a widely recognized best practice for agreements with government-facing intermediaries.
•  No notification obligation. There is no requirement that Crestfield notify TGH in the event that Crestfield, Renard, or any person acting on Crestfield's behalf becomes the subject of any government investigation, enforcement action, or inquiry related to corruption, bribery, or similar offenses.
•  No representation regarding government official status. Clause 9.2 does not include any representation that Renard is not, and has not been, a government official, a politically exposed person ("PEP"), or a close associate or family member of a government official. Given Renard's background as a former diplomat and his stated connections to Ganaran government officials, the absence of such a representation is a particularly glaring omission.
•  No beneficial ownership disclosure requirement. The clause does not require Crestfield to disclose its beneficial ownership structure or to notify TGH of any changes to its ownership. Nor does it require disclosure of any ownership interest held by, or any business relationship between Crestfield (or Renard) and any government official.
This stands in stark contrast to best-practice anti-corruption contractual provisions, which typically include detailed FCPA-specific representations, comprehensive certifications, ongoing compliance obligations, and robust remediation and termination mechanisms tied to anti-corruption breaches. The comparison to best-practice provisions is set forth in greater detail in Section VI below.
D. Audit Rights
The Agreement contains no audit rights clause. TGH did not reserve the right to audit, inspect, or examine Crestfield's books, records, accounts, or supporting documentation for invoiced amounts. There is no provision permitting TGH (or any representative of Torchlight or its affiliates) to access Crestfield's records for purposes of verifying the nature and appropriateness of expenses or the use of funds paid under the Agreement.
This is a significant omission. Industry best practice, as well as guidance from the DOJ and SEC — including the DOJ Criminal Division's Evaluation of Corporate Compliance Programs (updated March 2023), the DOJ/SEC Resource Guide to the U.S. Foreign Corrupt Practices Act (Second Edition, 2020), and the Ten Hallmarks of an Effective Compliance Program — strongly recommend that agreements with third-party intermediaries in high-risk jurisdictions include robust audit rights permitting the principal to examine the agent's financial records, verify the use and disposition of funds, and confirm compliance with anti-corruption obligations. The absence of such rights in the Crestfield Agreement effectively meant that TGH ceded all ability to verify how Crestfield used the substantial sums it received under the Agreement — sums that, as the investigation has revealed, were in large part diverted to Ganaran government officials.
E. Termination (Clause 12)
Clause 12 of the Agreement addresses termination. The clause permits either party to terminate the Agreement upon 90 days' prior written notice without cause. The clause also provides for termination "for cause" in the event of a material breach by the other party, subject to a 30-day cure period following written notice of the breach.
Critically, Clause 12 does not include an immediate termination right triggered by any breach of anti-corruption representations or obligations. Under best-practice standards, agreements with government-facing intermediaries should permit the principal to terminate the agreement immediately, without notice or cure period, upon any breach or suspected breach of the intermediary's anti-corruption obligations, or upon the principal's becoming aware of any investigation, enforcement action, or allegation of corruption involving the intermediary. The Crestfield Agreement lacks any such provision. The 30-day cure period applicable to material breaches is facially inappropriate in the context of an anti-corruption violation, as it would theoretically afford Crestfield an opportunity to "cure" a payment to a government official — an outcome that is both legally and practically nonsensical.
F. Governing Law and Dispute Resolution
Clause 14 of the Agreement provides that the Agreement is governed by the laws of Mauritius. Clause 15 provides that any dispute arising out of or in connection with the Agreement shall be referred to and finally resolved by arbitration administered by the Mauritius Chamber of Commerce and Industry Arbitration and Mediation Centre ("MARC"), with the seat of arbitration in Port Louis, Mauritius, and proceedings to be conducted in English.
The selection of Mauritian law and Mauritian arbitration is notable. Neither TGH (a BVI entity) nor Crestfield's operational activities (conducted in Ganara by a principal residing in Senegal) have any obvious nexus to Mauritius, beyond Crestfield's formal incorporation there. The choice of a relatively obscure arbitration forum, combined with the geographic and jurisdictional distance from both the parties' operations and Torchlight's U.S. headquarters, raises concerns that the governing law and dispute resolution provisions were selected to minimize the practical enforceability of the Agreement's terms — including any anti-corruption protections that the Agreement might have contained. In practice, the selection of Mauritian law and arbitration would make it considerably more difficult for TGH or Torchlight to pursue audit rights (had they been included), enforce anti-corruption obligations, or exercise termination rights, as compared to a governing law and forum selection with a closer nexus to the parties or their operations.
G. Signatory Authority
The Agreement was executed by Marcus Delacroix on behalf of TGH, signing in his capacity as "Authorized Representative." The Agreement was executed by Jean-Philippe Renard on behalf of Crestfield, signing in his capacity as "Director."
A review of TGH's corporate records, coordinated with Hargrove Whitfield LLP (Catherine Whitfield), who is advising on BVI corporate governance matters, has not located any board resolution of TGH expressly authorizing the execution of the Crestfield Agreement or delegating signatory authority to Delacroix for this purpose. While Delacroix held the title of Vice President, Africa Operations at Torchlight Mining Corp. (the ultimate parent), his authority to execute contracts on behalf of TGH — a separate legal entity incorporated in the BVI — would ordinarily require express authorization from TGH's board of directors. As of the date of this memorandum, Hargrove Whitfield LLP is continuing its review of TGH's board minutes and resolutions for the period March–April 2019 to determine whether such authorization was granted. The preliminary indication, however, is that no such resolution was passed, which would raise questions about the validity of the Agreement under BVI law and the propriety of the signatory process.
IV. Analysis of Actual Payments versus Contractual Terms
A. Total Payments to Crestfield
A review of TGH's banking records at Meridian Commercial Bank (BVI) and the Crestfield invoice files maintained in TGM's accounts payable records reveals that, over the period from April 2019 through October 2024, TGH made total payments to Crestfield of $3,210,000, disbursed across 24 separate invoices. The year-by-year breakdown of payments is as follows:
The escalating trajectory of payments — from $420,000 in the initial partial year (2019) to a peak of $680,000 in 2021 — is notable and warrants further examination in the context of the forensic analysis being conducted by Pinnacle Forensic Advisory LLC.
B. Excess Over Contractual Maximum
The comparison between actual payments and the contractual maximum established under the Agreement is as follows:
The overpayment of $1,170,000 represents an excess of approximately 57.4% above the contractual maximum. This overpayment was made without any documented contract amendment, addendum, side letter, or other formal modification to the original Agreement. A thorough review of TGH's contract files, TGM's procurement records, and the corporate records maintained at Torchlight's Houston headquarters has not identified any written instrument purporting to modify the compensation terms of the Agreement or to authorize payments in excess of the contractual maximum.
Similarly, no evidence has been located of any written authorization — whether from TGH's board of directors, from Torchlight's executive management, or from any individual with delegated authority — approving payments in excess of the contractual maximum. The absence of any such authorization is a critical red flag: the fact that payments consistently and substantially exceeded contractual limits without any formal amendment or authorization suggests, at minimum, that the invoicing and approval process was not subject to meaningful oversight. At worst, it suggests deliberate circumvention of the Agreement's stated compensation limits.
C. Invoice Approval Process Deficiencies
Under Torchlight Mining Corp.'s Delegation of Authority Policy (Version 4.1, effective March 2018) (the "DOA Policy"), all expenditures exceeding $50,000 require dual approval — that is, the approval of two authorized signatories, at least one of whom must hold a position at the level of Regional Vice President or above. The DOA Policy applies to all Torchlight subsidiaries, including TGH and TGM.
Of the 24 Crestfield invoices, 14 invoices exceeded $50,000, with individual invoice amounts ranging from $55,000 to $185,000. A detailed review of the approval records associated with these invoices — including email approvals, signed invoice cover sheets, and entries in TGM's accounts payable system (Northgate Solutions) — reveals the following deficiencies:
•  Of the 14 invoices exceeding $50,000, at least nine were approved solely by Raymond Osei-Bonsu, the Country Manager of TGM, without any secondary authorization. Osei-Bonsu's single approval on these invoices constitutes a direct violation of the DOA Policy's dual-approval requirement.
•  The remaining five invoices exceeding $50,000 bear the approvals of Osei-Bonsu and one additional signatory, but in at least two cases, the second signatory was Thomas Achebe, the Finance Director of TGM, who did not hold a position at the level of Regional Vice President or above as required by the DOA Policy.
•  No Crestfield invoice of any amount appears to have been reviewed or approved by any member of Torchlight's legal or compliance department, by any Regional Vice President, or by any individual at Torchlight's corporate headquarters in Houston.
The failure to enforce dual-approval requirements on payments of this magnitude to a government-facing intermediary operating in a high-corruption-risk jurisdiction represents a fundamental internal controls breakdown. The concentration of approval authority in a single individual — particularly an individual who, as a former Deputy Director of the Ministry of Mines and Mineral Resources in Ganara, had his own pre-existing relationships with the government officials to whom, as the investigation has revealed, substantial portions of the Crestfield payments were ultimately diverted — is a fact pattern that warrants the most serious scrutiny.
D. Payment Routing
All payments to Crestfield were wire-transferred from TGH's account at Meridian Commercial Bank (BVI), Account No. 7740-2281-0056, to accounts held in Crestfield's name. Based on wire transfer records reviewed to date, 19 of the 24 payments were directed to Crestfield's account at Harborline Commerce Bank (Mauritius), Account No. 0041-8823-9967, while five payments were directed to an account in the name of "Crestfield Advisory Partners — Operations Account" at Sundial Financial, Account No. SN-0088-4429-1150. The use of the Senegalese account for five of the 24 payments is notable, as it indicates that funds were routed not to the country of Crestfield's incorporation (Mauritius) but to the country of Renard's personal residence (Senegal), a circumstance that is consistent with payment structures designed to facilitate the onward diversion of funds.
Pinnacle Forensic Advisory LLC, led by Dr. Leonard Strauss, is conducting further analysis of the downstream movement of these funds and any ultimate diversion to Ganaran government officials or their associates. The forensic analysis is ongoing and is expected to be completed by mid-May 2025. However, preliminary findings from Pinnacle's work — based on a review of bank statements, wire transfer records, and other financial data obtained to date — indicate that approximately $2,410,000 (approximately 75% of the $3,210,000 total) was diverted, through a series of intermediate transfers, to accounts held by or for the benefit of Ganaran government officials. The specific allocations of diverted funds, as preliminary identified, are discussed further in Section VII.C below.
V. Identification and Analysis of Red Flags
The following red flags have been identified in connection with the Crestfield Agreement and the associated payment activity. Each of these red flags is individually significant; considered collectively, they present a pattern that is strongly indicative of an intermediary arrangement designed to facilitate improper payments to foreign government officials.
A. Absence of Competitive Selection Process
As set forth in Section II.B above, Jean-Philippe Renard was personally introduced to TGH by Marcus Delacroix. No request for proposals was issued, no comparison of alternative government relations consultants was undertaken, and no procurement committee review was conducted prior to Crestfield's engagement. This departure from Torchlight's Vendor Selection and Procurement Policy is itself a significant red flag. The personal introduction of the intermediary by a senior executive, coupled with the absence of any competitive tender process, is a fact pattern that DOJ and SEC enforcement personnel have repeatedly identified as indicative of a corrupt arrangement in which the selection of the intermediary is driven not by its qualifications or competitive pricing, but by its willingness and ability to serve as a conduit for improper payments.
B. Shell-Company Characteristics of Crestfield
Crestfield exhibits several characteristics commonly associated with shell companies or special-purpose vehicles used to obscure payment flows:
•  No website. Crestfield maintained no internet presence during the period of its engagement by TGH.
•  No employees. Crestfield had no employees other than Renard himself.
•  Registered-agent office address. Crestfield's registered address (7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius) is the address of Apex Corporate Services (Mauritius) Ltd., a registered-agent and corporate domiciliation provider. There is no indication that Crestfield maintained any physical office at this location.
•  Jurisdictional mismatch. Crestfield was incorporated in Mauritius but provided services exclusively in the Republic of Ganara, a West African nation with no geographic, legal, or commercial connection to Mauritius. The sole owner and operator of Crestfield resided in Senegal, not Mauritius. The Mauritius incorporation appears to serve no legitimate business purpose and is consistent with the use of an offshore jurisdiction to take advantage of favorable corporate secrecy provisions and to distance the intermediary's legal identity from the jurisdiction in which it operates.
These characteristics, individually and collectively, are classic indicators of an intermediary entity established for the purpose of receiving and redirecting payments. The DOJ/SEC Resource Guide to the U.S. Foreign Corrupt Practices Act specifically identifies the use of "shell companies" and "entities with no apparent operational infrastructure" as hallmarks of corruption-related intermediary arrangements.
C. Absence of Due Diligence File
As noted in Section II.B, no due diligence file on Crestfield exists in Torchlight's compliance records. This represents a direct violation of Torchlight's Anti-Corruption Compliance Manual, which requires risk-based due diligence on all third-party intermediaries retained to interact with government officials. The DOJ Criminal Division's Evaluation of Corporate Compliance Programs identifies the design and implementation of third-party management processes — including "risk-based due diligence" — as a key metric in evaluating the effectiveness of a company's compliance program. The complete absence of any due diligence on Crestfield undermines any claim by Torchlight that its compliance program was effectively implemented with respect to the Ganaran operations.
Best-practice due diligence for a government-facing intermediary of this nature would have included, at minimum:
•  Background checks on Crestfield and Renard through commercial databases and open-source research
•  Verification of Crestfield's beneficial ownership structure
•  Assessment of Renard's current and former relationships with government officials, including specific identification of the officials with whom he claimed to have relationships
•  Review of Crestfield's financial statements and bank references
•  Assessment of whether Crestfield maintained any anti-corruption compliance policies or procedures
•  Identification and evaluation of any adverse media or litigation history involving Crestfield or Renard
•  Verification of Crestfield's incorporation documents and business licenses
None of these steps were performed. Had they been, several of the red flags identified in this memorandum — including the shell-company characteristics of Crestfield, Renard's former diplomatic career, and the jurisdictional mismatch between Crestfield's incorporation and its operations — would likely have been identified before the engagement commenced.
D. Vague Scope Language Without Deliverable Requirements
As analyzed in detail in Section III.A above, the Agreement's scope language — "regulatory liaison, permit facilitation, and stakeholder engagement" — is vague and open-ended. The absence of any deliverable requirements, reporting obligations, or activity documentation requirements meant that TGH had no contractual mechanism for verifying what services Crestfield actually performed. In effect, TGH paid $3,210,000 over a five-and-a-half-year period without ever requiring — or receiving — any tangible work product or documented evidence of the advisory services purportedly rendered. This lack of accountability is a significant red flag for an intermediary arrangement that may have been designed primarily as a conduit for payments to government officials rather than as a genuine advisory engagement.
E. Absence of FCPA-Specific Representations
The generic anti-corruption warranty contained in Clause 9.2 of the Agreement (compliance with "all applicable anti-corruption laws") is insufficient under current enforcement expectations. As detailed in Section III.C above, the clause lacks any explicit reference to the FCPA, any certification mechanism, any notification obligation, any representation regarding government official status or PEP status, and any beneficial ownership disclosure requirement. The generic nature of the anti-corruption clause is a red flag because it suggests either a deliberate effort to minimize the contractual framework around anti-corruption compliance or, at best, a reckless disregard for the anti-corruption risks inherent in the engagement.
F. No Audit Rights Clause
As detailed in Section III.D, the absence of audit rights in the Agreement prevented TGH from verifying how Crestfield used the funds it received. This omission is particularly significant in light of the investigation's preliminary finding that approximately 75% of the funds paid to Crestfield were diverted to government officials. Had audit rights been included in the Agreement and exercised, TGH would have had the ability to examine Crestfield's bank records, identify the downstream recipients of funds, and potentially detect the diversion before it reached the magnitude that has now been identified.
G. Invoicing Exceeding Contractual Maximum Without Amendment
The overpayment of $1,170,000 — 57.4% in excess of the contractual maximum — absent any contract amendment, addendum, or formal authorization, is one of the most significant red flags associated with the Crestfield engagement. The systematic and sustained nature of the excess payments (the cumulative excess grew steadily over the 66-month engagement) indicates that the contractual compensation limits were effectively disregarded from an early point in the relationship. This pattern is consistent with an arrangement in which the Agreement's stated compensation terms served as a veneer of legitimacy, while the actual payment amounts were driven by the sums required to fund improper payments to government officials.
H. Single-Approval Violations on Invoices Exceeding $50,000
As set forth in Section IV.C, 14 of the 24 Crestfield invoices exceeded the $50,000 threshold that triggers the DOA Policy's dual-approval requirement, and at least nine of these invoices were approved by Osei-Bonsu alone. The concentration of approval authority in a single individual — and the systematic failure to obtain the required second approval — represents a breakdown in internal controls that is relevant to both the FCPA internal controls analysis and the assessment of individual culpability. The fact that the individual who served as the sole approver (Osei-Bonsu) was himself a former senior official of the Ganaran Ministry of Mines and Mineral Resources — the very ministry from which several of the permits at issue were obtained — adds an additional dimension of concern to this red flag.
I. Timing Correlation Between Invoices and Permit Issuances
Preliminary forensic analysis, coordinated with Pinnacle Forensic Advisory LLC, has identified a statistically significant correlation between the timing of Crestfield invoices and the issuance of mining permits by Ganaran governmental authorities. Specifically, Crestfield invoices spiked — both in frequency and in amount — in the 30 to 60-day period preceding each of the five permit issuances identified in Section II.C. For example:
•  In the 60 days preceding the issuance of the Kousseri Mining License (September 14, 2019), Crestfield submitted two invoices totaling $185,000, compared to an average of approximately $80,000 per 60-day period during months not immediately preceding a permit issuance.
•  In the 45 days preceding the issuance of the Dembélé Mining License Upgrade (February 14, 2023), Crestfield submitted an invoice for $175,000.
This temporal correlation is consistent with a pattern in which payments to Crestfield were timed to coincide with — and potentially to fund — improper payments made to government officials to expedite or secure the issuance of regulatory approvals. Pinnacle Forensic Advisory is conducting further statistical analysis to quantify the strength of this correlation and to map the timing of Crestfield invoices against the timing of downstream transfers from Crestfield's accounts to accounts associated with government officials.
J. Use of Personal Email by Delacroix
A review of electronic communications, conducted in coordination with Marlowe Asset Management Digital Forensics Inc., has identified 37 communications between Marcus Delacroix and Jean-Philippe Renard that were conducted via Delacroix's personal email account (an account hosted on a commercial email provider), rather than through Torchlight's corporate email system. These communications span the period from November 2018 (prior to the execution of the Agreement) through March 2024. The content of several of these communications — to the extent they have been recovered and reviewed to date — includes discussions regarding the status of specific permit applications, references to meetings with unnamed government officials, and, in at least three instances, references to "arrangements" and "commitments" that require further investigation.
The use of a personal email account to conduct business communications related to a government-facing intermediary engagement is a significant red flag. It circumvented Torchlight's corporate communications systems and any monitoring, archiving, or compliance review processes applicable to those systems. The deliberate use of personal email channels for communications of this nature is consistent with an intent to conceal the substance of the interactions between Delacroix and Renard from Torchlight's compliance function and from any future review or investigation.
VI. Comparison to Best-Practice Anti-Corruption Contractual Provisions
The deficiencies of the Crestfield Agreement are placed in sharper relief when measured against the anti-corruption contractual provisions that a properly drafted government relations advisory agreement should contain. The following provisions are recommended by DOJ and SEC guidance — including the Resource Guide to the U.S. Foreign Corrupt Practices Act (Second Edition, 2020), the DOJ Criminal Division's Evaluation of Corporate Compliance Programs (updated March 2023), and the consensus standards reflected in publications by the International Bar Association, Transparency International, and the OECD — for agreements with third-party intermediaries operating in high-risk jurisdictions:
1.  Explicit FCPA, CFPOA, and UK Bribery Act Compliance Representations. The agreement should contain express representations by the intermediary that it will comply with the FCPA (including both the anti-bribery provisions and the books-and-records and internal controls provisions), the CFPOA, the UK Bribery Act 2010, and any other applicable anti-corruption statutes, identified by name.
2.  Prohibition on Payments to Government Officials Without Prior Written Approval. The agreement should expressly prohibit the intermediary from making, offering, or promising any payment or transfer of anything of value, directly or indirectly, to any government official, political party, party official, or candidate for political office, without the prior written approval of the principal's legal or compliance department.
3.  Detailed Scope of Work with Specified Deliverables and Reporting Requirements. The agreement should define the scope of the intermediary's engagement with specificity, identify the particular projects, permits, or regulatory matters within the scope, and require the intermediary to provide regular written reports (e.g., monthly or quarterly) detailing the activities undertaken, meetings held, officials contacted, and the status of pending regulatory matters.
4.  Robust Audit and Inspection Rights. The agreement should grant the principal the right to audit and inspect the intermediary's books, records, accounts, and supporting documentation, including bank statements, at any time during the term and for a specified period following termination. The audit right should extend to the principal's external auditors, outside counsel, and forensic accountants.
5.  Immediate Termination Rights Upon Breach of Anti-Corruption Provisions. The agreement should permit the principal to terminate the agreement immediately, without notice or cure period, upon any breach or suspected breach of the intermediary's anti-corruption obligations, or upon the principal's becoming aware of any investigation or allegation of corruption involving the intermediary.
6.  Periodic Compliance Certifications. The agreement should require the intermediary to certify its compliance with anti-corruption obligations on a periodic basis (e.g., annually, or at the time of each invoice submission), with the certification executed by an authorized officer of the intermediary.
7.  Disclosure of All Government Relationships and Politically Exposed Person Status. The agreement should require the intermediary to disclose all current and former relationships with government officials, all current and former government employment of the intermediary's principals and employees, and the PEP status of any person associated with the intermediary. The intermediary should be required to promptly update these disclosures upon any change in circumstances.
8.  Beneficial Ownership Disclosure. The agreement should require the intermediary to disclose its complete beneficial ownership structure, including the identity of all direct and indirect owners holding more than a specified threshold (e.g., 10%) of the intermediary's equity, and to notify the principal of any changes in ownership.
9.  Training Requirements. The agreement should require the intermediary to ensure that its principals and any employees who will be performing services under the agreement receive anti-corruption training, either provided by the principal or by a qualified third-party provider.
10.  Record-Keeping and Document Retention Obligations. The agreement should require the intermediary to maintain accurate and complete books and records reflecting all activities undertaken and all expenditures incurred in connection with the engagement, and to retain such records for a specified period (e.g., seven years) following the termination of the agreement.
11.  Requirement for Competitive Selection and Documented Due Diligence. While not a contractual provision per se, best practice requires that the selection of any government-facing intermediary be preceded by a documented competitive selection process and a thorough due diligence review, the results of which should be documented and maintained in the principal's compliance files.
Assessment of the Crestfield Agreement Against These Standards:
Of the eleven best-practice provisions identified above, the Crestfield Agreement contains only a single, generic anti-corruption representation (item 1, in a heavily diluted form — with no specific statutory references). The remaining ten provisions are entirely absent from the Agreement. The Agreement's anti-corruption protections are, by any reasonable measure, grossly insufficient for an engagement of this nature, and the gap between the Agreement's terms and best-practice standards is among the most significant findings of this analysis.
The following table summarizes the comparison:
VII. Implications for FCPA Liability Analysis
A. Books and Records Concerns
The FCPA's books-and-records provision, Section 13(b)(2)(A) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m(b)(2)(A), requires issuers to "make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer." This obligation extends to the books and records of the issuer's subsidiaries, including consolidated subsidiaries such as TGH.
The payment of $3,210,000 to Crestfield — including $1,170,000 in excess of the contractual maximum — raises significant concerns under this provision. The Crestfield payments were booked in TGH's and TGM's financial records under general ledger codes for "consulting fees" and "government relations advisory services," without any supporting documentation reflecting the specific services actually rendered by Crestfield. No work product, activity reports, meeting summaries, or other deliverables from Crestfield were retained in TGH's or TGM's files. The invoices submitted by Crestfield were, in most cases, bare-bones documents containing only a one-line description (e.g., "Government Relations Advisory Services — Q3 2021") and an aggregate amount, with no itemization of activities, hours, or expenses. The vague GL coding, combined with the absence of any supporting documentation for Crestfield's actual activities, meant that TGH's books and records did not, "in reasonable detail, accurately and fairly reflect" the nature and purpose of payments totaling $3,210,000 to a government-facing intermediary operating in a high-corruption-risk jurisdiction.
Furthermore, to the extent that the Crestfield payments were, in fact, conduits for bribes to Ganaran government officials — as the preliminary forensic evidence suggests — the characterization of these payments as "consulting fees" and "government relations advisory services" in TGH's books and records would constitute affirmatively false and misleading entries, representing a clear violation of Section 13(b)(2)(A).
B. Internal Controls Concerns
The FCPA's internal controls provision, Section 13(b)(2)(B) of the Securities Exchange Act, 15 U.S.C. § 78m(b)(2)(B), requires issuers to "devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances" that, among other things, "transactions are executed in accordance with management's general or specific authorization" and "access to assets is permitted only in accordance with management's general or specific authorization."
The following internal controls deficiencies have been identified in connection with the Crestfield engagement:
•  Failure to conduct due diligence. Torchlight's compliance policies required risk-based due diligence on third-party intermediaries prior to engagement. No due diligence was conducted on Crestfield.
•  Absence of competitive selection. Torchlight's procurement policies required a competitive tender process for government-facing engagements exceeding $100,000. No competitive process was conducted.
•  Absence of audit rights. The Agreement contained no audit rights, depriving TGH of the ability to verify the use of funds paid to Crestfield.
•  Failure to enforce dual-approval requirements. At least nine invoices exceeding $50,000 were approved by Osei-Bonsu alone, in violation of the DOA Policy's dual-approval requirement.
•  Payment of amounts exceeding the contractual maximum without amendment. $1,170,000 was paid in excess of the contractual maximum without any contract amendment or formal authorization.
•  Absence of legal or compliance review. No Crestfield invoice or payment was reviewed or approved by any member of Torchlight's legal or compliance department.
These deficiencies, individually and collectively, reflect a system of internal accounting controls that was insufficient to provide reasonable assurances that transactions involving the Crestfield engagement were executed in accordance with management's authorization and that assets were not disposed of without appropriate oversight. The Agreement itself, and Torchlight's administration of it, constitute potential violations of Section 13(b)(2)(B).
C. Anti-Bribery Provisions
The FCPA's anti-bribery provision, Section 30A of the Securities Exchange Act, 15 U.S.C. § 78dd-1, prohibits issuers and their officers, directors, employees, agents, and stockholders from making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any foreign official for purposes of influencing any act or decision of such foreign official in his official capacity, inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or securing any improper advantage.
The investigation's preliminary finding — based on the ongoing forensic analysis by Pinnacle Forensic Advisory — is that approximately $2,410,000 (approximately 75%) of the $3,210,000 paid to Crestfield was diverted, through a series of intermediate transfers, to accounts held by or for the benefit of Ganaran government officials. The preliminary allocation of these diverted funds is as follows:
•  Hon. Boubacar Diallo — Minister of Mines and Mineral Resources, Republic of Ganara — approximately $1,850,000 traced to accounts associated with Diallo and members of his immediate family.
•  Amadou Traoré — Director General, National Environmental Protection Agency, Republic of Ganara — approximately $620,000 traced to accounts associated with Traoré.
•  Col. Ibrahim Konaté — Director, Presidential Security Service, Republic of Ganara, and advisor to the Office of the President on natural resources matters — approximately $340,000 traced to accounts associated with Konaté.
These preliminary findings, if confirmed, raise direct anti-bribery concerns under FCPA Section 30A. The payments to Crestfield, to the extent they were made with the knowledge or conscious awareness that all or a portion of those payments would be passed through to government officials for the purpose of securing mining permits and regulatory approvals, would constitute violations of the anti-bribery provision.
The deficiencies in the Crestfield Agreement are directly relevant to the analysis of mens rea under the anti-bribery provision. The "corruptly" element of Section 30A can be satisfied not only by proof of actual knowledge but also by evidence of willful blindness or conscious avoidance. The Agreement was structured in a way that, at minimum, failed to prevent — and arguably facilitated — the diversion of funds to government officials: the vague scope language, the absence of deliverable and reporting requirements, the absence of audit rights, the absence of FCPA-specific representations, and the failure to conduct due diligence collectively created an environment in which funds could be funneled to government officials with minimal risk of detection. To the extent that Delacroix and/or Osei-Bonsu were aware of these deficiencies and chose not to remedy them — or, worse, deliberately structured the arrangement to exploit them — the evidence may support a finding of willful blindness or conscious avoidance, satisfying the knowledge element of the anti-bribery provision.
D. Relevance to Voluntary Self-Disclosure Analysis
The deficiencies in the Crestfield Agreement and the associated red flags identified in this memorandum will be material to Calderwood & Harkness's analysis and recommendation regarding voluntary self-disclosure to the DOJ under the Criminal Division's Corporate Enforcement Policy (formerly known as the FCPA Corporate Enforcement Policy). Under the Corporate Enforcement Policy, the DOJ will consider, among other factors, the "nature and seriousness of the offense," the company's "existing compliance program," and the company's "remedial actions" in determining the appropriate resolution for self-disclosing companies. The systemic deficiencies in the Crestfield Agreement — and Torchlight's failure to detect and address them over a five-and-a-half-year period — will be relevant to the DOJ's assessment of the effectiveness of Torchlight's compliance program, as well as to the scope and credibility of the remediation efforts that Calderwood & Harkness will recommend.
A decision on voluntary self-disclosure is targeted for June 30, 2025, and this memorandum should be incorporated into the broader analysis being prepared for the Audit Committee in advance of that deadline.
VIII. Recommendations
Based on the analysis set forth in this memorandum, the following next steps are recommended:
1.  Complete Forensic Reconstruction of Crestfield Invoices. In coordination with Pinnacle Forensic Advisory LLC (Dr. Leonard Strauss), complete the forensic reconstruction and analysis of all 24 Crestfield invoices, including detailed tracing of downstream fund flows from Crestfield's accounts at Harborline Commerce Bank (Mauritius) and Sundial Financial to any ultimate recipients, with particular focus on accounts associated with Ganaran government officials or their associates. This analysis should include a mapping of the timing of downstream transfers against the timing of permit issuances and an assessment of any additional intermediary entities or accounts throug

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