1039-00005 · Torchlight Mining Corp · Diligence/Corporate

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

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

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

DATE: April 10, 2025

RE: Review of Torchlight Ganara Holdings Ltd. Corporate Records — Coordinated with Hargrove Whitfield LLP

MATTER NO.: 1039-00005

I. Purpose and Scope of Review

This memorandum summarizes the results of a detailed review of the corporate records of Torchlight Ganara Holdings Ltd. ("TGH"), a British Virgin Islands business company and wholly owned subsidiary of Torchlight Mining Corp. ("Torchlight" or "TMC"). The review was conducted in coordination with Catherine Whitfield, Lead Partner of Hargrove Whitfield LLP ("HW"), BVI counsel retained in this matter, who provided access to TGH's corporate records maintained at its registered office in Road Town, Tortola, and who advised on questions of BVI corporate law arising from our review of those records.

This review was undertaken as part of the ongoing internal investigation of potential violations of the Foreign Corrupt Practices Act ("FCPA"), 15 U.S.C. §§ 78dd-1 et seq., by Torchlight and its subsidiaries, arising from payments made through TGH and Torchlight Ganara Mining S.A. ("TGM") in connection with the procurement and maintenance of mining permits and environmental approvals in the Republic of Ganara. As you are aware, the investigation was authorized by the Audit Committee of Torchlight's Board of Directors and is being conducted under the direction of the White Collar & Investigations practice group at Calderwood & Harkness LLP.

The specific purposes of this corporate records review were as follows:

(1) To examine TGH's corporate governance documents, including its Memorandum and Articles of Association, board resolutions, and minute book entries, with a particular focus on the resolutions authorizing the engagement of Crestfield Advisory Partners Ltd. ("Crestfield"), a Mauritius-incorporated entity retained as a purported government relations advisor in the Republic of Ganara;

(2) To review TGH's bank account opening documents at Meridian Commercial Bank, Road Town, Tortola, BVI, including the corporate resolution, beneficial ownership declarations, and know-your-customer documentation submitted to the bank;

(3) To identify authorized signatories and delegations of authority applicable to TGH's bank accounts, and to assess the alignment (or lack thereof) between TGH-level signatory authority and Torchlight's parent-level Delegation of Authority Policy; and

(4) To assess the corporate formalities observed — or not observed — in connection with the payments at issue, including whether proper board authorization was obtained for payments that exceeded the contractual limits of the Crestfield Advisory Agreement and whether required conflict of interest disclosures were made.

Catherine Whitfield of Hargrove Whitfield LLP, Trident Chambers, Wickhams Cay I, Road Town, Tortola, British Virgin Islands, provided the corporate records from TGH's registered office files and advised on BVI corporate law requirements relevant to each of the topics addressed herein. Ms. Whitfield's firm serves as TGH's BVI legal counsel and has represented TGH on corporate and regulatory matters since 2017. We have coordinated closely with Ms. Whitfield throughout this review and have incorporated her observations on BVI law where noted below.

II. Background — TGH Corporate Structure

A. Formation and Incorporation

TGH was incorporated in the British Virgin Islands on March 15, 2017, as a BVI Business Company under the BVI Business Companies Act, 2004 (as amended) (the "BVI Act"). The company was formed as part of Torchlight's strategic expansion into West African mining operations, serving as the intermediate holding company through which Torchlight would hold its Ganaran mining assets and channel capital into the Ganaran operating subsidiary.

TGH's registered office address is Wickhams Cay II, Suite 408, Road Town, Tortola, British Virgin Islands. The registered agent is BVI Corporate Services Ltd., which also maintains TGH's statutory registers and minute book at the registered office address.

TGH is a wholly owned subsidiary of Torchlight Mining Corp., a corporation organized under the Canada Business Corporations Act, headquartered at 200 King Street West, Suite 3400, Toronto, Ontario M5H 3T4, Canada. Torchlight is a publicly traded company, listed on both the Toronto Stock Exchange (TSX: TMC) and the New York Stock Exchange (NYSE: TRCH). As a dual-listed issuer with NYSE-traded American Depositary Shares, Torchlight is subject to the anti-bribery and books-and-records provisions of the FCPA, as well as the Corruption of Foreign Public Officials Act (Canada) ("CFPOA").

B. Purpose and Subsidiaries

TGH serves as the intermediate holding company for Torchlight's Ganaran mining operations. The use of a BVI holding company in this structure is consistent with the corporate architecture commonly employed by Canadian and international mining companies operating in sub-Saharan Africa, providing certain benefits relating to investment treaty protections, currency management, and intercompany financing flexibility.

TGH holds 100% of the equity interests in Torchlight Ganara Mining S.A. ("TGM"), the in-country operating entity organized under the laws of the Republic of Ganara. TGM's principal offices are located at Boulevard du Commerce 14, Quartier Plateau, Libreville, Republic of Ganara. TGM is the entity that directly holds the mining concessions, employs the local and expatriate workforce, and conducts the extractive operations that are the subject of this investigation.

TGM holds the following mining concessions granted by the Ganaran Ministry of Mines, Geology, and Natural Resources:

(a) Kousseri Copper-Cobalt Complex — Mining License No. KCC-2019-0047, originally covering an area of approximately 14,200 hectares. This license was subsequently expanded by 3,200 hectares under Amendment KCC-2019-0047-A1, bringing the total licensed area to approximately 17,400 hectares. The Kousseri Complex is TGM's primary producing asset and represents the largest single source of revenue within Torchlight's West African portfolio.

(b) Dembélé Rare Earths Project — Exploration License No. DRE-2021-0092, subsequently converted to Mining License No. DRE-M-2023-0018, covering an area of approximately 8,750 hectares. The Dembélé Project is in the development phase, with commercial production anticipated to commence in late 2026 or early 2027.

As of December 2024, TGM employed approximately 2,400 local workers and 85 expatriate staff across its Ganaran operations. The workforce is principally engaged at the Kousseri Complex mine site, the Libreville administrative offices, and the Dembélé Project site.

C. Fiscal and Revenue Context

Torchlight's West African operations, conducted through the TGH/TGM structure, generated approximately CAD $387 million in revenue during fiscal year 2024. This figure represents approximately 18.4% of Torchlight's consolidated revenues of approximately CAD $2.1 billion for the same period. The West African segment is thus a material component of Torchlight's overall business, and any enforcement actions or operational disruptions arising from the matters under investigation would have a significant impact on Torchlight's financial position and stock performance. This revenue context is relevant to the materiality analysis that will be required for purposes of the interim investigation report to the Audit Committee, as well as any potential securities disclosure obligations.

III. Directors and Officers of TGH

A. Current and Historical Directors

A review of the BVI Register of Directors maintained by TGH's registered agent, BVI Corporate Services Ltd., discloses the following individuals who have served as directors of TGH during the relevant period of April 2019 through the present:

(i) Marcus Delacroix — Director. Mr. Delacroix was appointed as a director of TGH in November 2018, coinciding with his appointment as Vice President, Africa Operations at Torchlight Mining Corp., which became effective November 3, 2018. Mr. Delacroix resigned as a director of TGH effective November 15, 2024, on the same date as his resignation from all positions with Torchlight Mining Corp. Mr. Delacroix is a French-Canadian dual citizen, age 47. He is currently residing at 47 Rue de la République, 69002 Lyon, France. As discussed in greater detail below, Mr. Delacroix was the individual who proposed the engagement of Crestfield Advisory Partners Ltd., personally introduced Jean-Philippe Renard (the sole owner of Crestfield) to other Torchlight personnel, held expanded single-signatory authority on TGH's Meridian bank account, and initiated the majority of the wire transfers to Crestfield during the relevant period.

(ii) Diane Fournier — Director. Ms. Fournier was appointed as a director of TGH at the time of incorporation in 2017 and continues to serve as a director to the present date. Ms. Fournier also serves as Vice President, Finance at Torchlight Mining Corp. She was the original authorized signatory on TGH's Meridian Commercial Bank account, with single-signatory authority up to $100,000.

(iii) Patricia Sung — Director. Ms. Sung was appointed as a director of TGH in 2020, coinciding with her appointment as General Counsel and Corporate Secretary at Torchlight Mining Corp. Ms. Sung continues to serve as a director to the present date. Following Delacroix's resignation, Ms. Sung was added as an authorized signatory on the Meridian bank account by resolution dated November 20, 2024.

Catherine Whitfield confirmed that under the BVI Business Companies Act, TGH's Memorandum and Articles of Association require a minimum of two directors at all times. During the entire relevant period, TGH maintained a board of either two or three directors, consistent with this minimum requirement. Ms. Whitfield noted that TGH has been in compliance with its minimum director requirements at all times.

B. Officers. TGH's Articles of Association provide for the appointment of officers by the board of directors. The Articles contemplate that the directors may appoint such officers as they determine necessary, including a president, secretary, treasurer, or such other positions as the board may create.

Based on a thorough review of the corporate records, however, Marcus Delacroix appears to have served as the sole officer with the title of "Managing Director" or an equivalent designation for the Africa operations. In practice, Delacroix was responsible for the day-to-day management of TGH and exercised oversight of TGM's operations in the Republic of Ganara, including the negotiation and management of relationships with government authorities, contractors, and service providers.

No formal officer appointments, beyond the directors themselves, appear in TGH's minute book. The absence of documented officer appointments is notable in that it suggests that TGH operated with minimal corporate formality with respect to the delegation of management responsibilities — a point that is consistent with the broader pattern of inadequate governance controls identified in this investigation.

IV. Board Resolutions Reviewed

The following board resolutions were identified in TGH's minute book and are relevant to the matters under investigation. Each resolution is summarized below, together with our observations regarding its significance.

A. Resolution Authorizing the Crestfield Advisory Agreement

A Written Resolution of the Directors of TGH, dated April 10, 2019, was located in the minute book. This resolution was executed two days before the execution of the Government Relations Advisory Agreement between TGH and Crestfield Advisory Partners Ltd., which bears an execution date of April 12, 2019. The resolution provides as follows:

The resolution authorized TGH to enter into a "Government Relations Advisory Agreement" with Crestfield Advisory Partners Ltd., described in the resolution as a company incorporated in the Republic of Mauritius, with a registered address at 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius. The stated scope of services was described as "government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara."

The resolution described the material engagement terms in summary form as follows:

(a) A monthly retainer of $15,000 (United States Dollars), payable in arrears;

(b) Success fees of $100,000 per mining permit, exploration license, or environmental approval obtained with Crestfield's assistance; and

The resolution was signed by Marcus Delacroix and Diane Fournier, constituting a majority of the directors then in office (Ms. Sung had not yet been appointed as a director at the time of this resolution).

Observation: The resolution does not reference any due diligence conducted on Crestfield Advisory Partners Ltd. or on Jean-Philippe Renard, its sole owner and beneficial owner. No supporting materials — such as a due diligence questionnaire, compliance review, background check results, reference checks, or any other form of third-party vetting documentation — were attached to or filed with the resolution in TGH's minute book. There is no indication in the resolution or in any contemporaneous document in TGH's files that a competitive selection process or request-for-proposal process was undertaken prior to the engagement of Crestfield. The resolution states simply that Crestfield was "recommended by management," which is consistent with the finding from the broader investigation that Jean-Philippe Renard was personally introduced to Torchlight by Marcus Delacroix. The nature and history of the personal relationship between Delacroix and Renard remain under investigation.

Observation: The resolution does not reference compliance with Torchlight's global anti-corruption policies, including the Torchlight Mining Corp. Global Anti-Corruption Policy (last revised March 2018), or any requirement to conduct anti-corruption due diligence on third-party intermediaries. The resolution makes no reference to the FCPA, the Canadian Corruption of Foreign Public Officials Act ("CFPOA"), the United Kingdom Bribery Act 2010, or any BVI anti-corruption statutes. This omission is particularly significant given that Crestfield was being engaged specifically to interact with Ganaran government officials on TGH's and TGM's behalf — precisely the type of engagement that should trigger heightened compliance scrutiny under both Torchlight's own policies and applicable DOJ/SEC enforcement guidance regarding the use of third-party intermediaries.

B. Resolution Authorizing Meridian Commercial Bank Account

A Written Resolution of the Directors of TGH, dated March 28, 2017, was located in the minute book. This resolution was adopted shortly after TGH's incorporation on March 15, 2017, and authorized the following:

(a) The opening of a United States Dollar-denominated operating account at Meridian Commercial Bank, Road Town, Tortola, British Virgin Islands. The account was subsequently assigned Account No. 7740-2281-0056.

(b) The designation of Diane Fournier as the initial authorized signatory on the account. Ms. Fournier was granted single-signatory authority for transactions up to $100,000. For transactions exceeding $100,000, the resolution required dual-signatory authorization.

The original resolution designated Fournier as the sole authorized signatory. As discussed immediately below, a supplemental resolution adopted in December 2018 added Marcus Delacroix as an authorized signatory with materially different authority thresholds.

Observation: The supplemental resolution of December 2018, discussed in Section IV.C below, expanded Delacroix's signatory authority to a $250,000 single-signatory threshold — significantly higher than Fournier's $100,000 single-signatory threshold. Catherine Whitfield noted that this disparity is unusual for a subsidiary holding company of TGH's nature. Ms. Whitfield further observed that the Torchlight parent-level Delegation of Authority Policy, which sets a $50,000 single-approval threshold for expenditures at the subsidiary level, was not referenced in either the original or supplemental banking resolutions. The failure to incorporate or even acknowledge the parent-level approval threshold in TGH's banking arrangements created a structural gap in financial controls that effectively allowed Delacroix to initiate payments to Crestfield without triggering the dual-approval requirements that Torchlight's corporate policies were designed to impose.

C. Supplemental Signatory Resolution — December 2018

A Written Resolution of the Directors of TGH, dated December 14, 2018, was located in the minute book. This supplemental resolution provided as follows:

(a) Marcus Delacroix was added as an authorized signatory on the Meridian Commercial Bank Account No. 7740-2281-0056.

(b) Mr. Delacroix's single-signatory authority was set at $250,000 — two-and-a-half times the $100,000 threshold previously established for Diane Fournier.

(c) For transactions exceeding $250,000, the resolution required dual-signatory authorization (both Delacroix and Fournier).

The resolution was signed by Diane Fournier and Marcus Delacroix.

By way of cross-reference, Delacroix was appointed as Vice President, Africa Operations at Torchlight Mining Corp. on November 3, 2018. He was subsequently added as a director of TGH in November 2018. The December 14, 2018 supplemental signatory resolution followed approximately six weeks after his appointment as a TGH director. The sequence of these events — appointment at the parent level, appointment as a TGH director, and then the grant of expanded banking authority — appears to have been orchestrated to consolidate financial control over TGH's operations in Delacroix's hands.

D. Annual Resolutions and Other Corporate Governance

Annual written resolutions for fiscal years 2019 through 2023 were located in TGH's minute book. These resolutions are largely pro forma in nature, containing standard provisions confirming the continuation of the existing directors in office, ratifying all acts of the directors during the prior fiscal year, and approving the annual financial statements of TGH. The annual resolutions do not contain any substantive discussion of TGH's operations, the Crestfield engagement, or the payments at issue in this investigation.

No resolution was identified in the minute book authorizing any amendment, modification, or supplement to the Crestfield Advisory Agreement, or any increase in the contractual payment limits beyond the original terms set forth in the April 2019 agreement (monthly retainer, success fees, and expense reimbursement cap). This absence is significant in light of the following analysis of the contractual maximum versus actual payments:

Contractual Maximum Calculation:

• Monthly retainers: $15,000 × 66 months (April 2019 through September 2024, the month prior to Delacroix's departure from Torchlight) = $990,000

• Success fees: $100,000 × 5 permits (the total number of permits/approvals obtained during the engagement period) = $500,000

• Expense reimbursement: $25,000 × 22 quarters (maximum possible over the engagement period) = $550,000

• Total contractual maximum: $2,040,000

Actual Payments:

• Total payments to Crestfield from TGH Meridian Account No. 7740-2281-0056 during the engagement period: $3,210,000

Excess over contractual maximum: $1,170,000

The excess of $1,170,000 — representing payments made beyond what the Crestfield Advisory Agreement authorized on its face — was made without any board-level authorization at TGH. No resolution amending the agreement, increasing payment caps, or otherwise ratifying the excess payments appears in TGH's corporate records. The source and justification for these excess payments is a central focus of the ongoing forensic accounting analysis being conducted by Pinnacle Forensic Advisory LLC.

Additionally, no resolution was located in TGH's minute book authorizing TGH or TGM to make cash disbursements for "community development" or "stakeholder gifts." These are the expense categories under which approximately $890,000 in TGM cash withdrawals were booked under general ledger account 7450 ("Community Relations Expenses") at Regency International Bank, Account No. GAN-4419-8837. The absence of board authorization for these significant cash disbursements is an additional corporate governance deficiency relevant to this investigation.

E. Resolution re: Removal of Delacroix Signatory Authority

A Written Resolution of the Directors of TGH, dated November 20, 2024, was located in the minute book. This resolution was adopted five days after Delacroix's resignation from all positions with Torchlight and TGH, which became effective on November 15, 2024. The resolution provided as follows:

(a) Marcus Delacroix was removed as an authorized signatory on Meridian Commercial Bank Account No. 7740-2281-0056, effective immediately.

(b) Patricia Sung was added as an authorized signatory on the account, with single-signatory authority up to $100,000. For transactions exceeding $100,000, dual-signatory authorization by both Sung and Fournier was required.

(c) The resolution directed the registered agent and Meridian Commercial Bank to update all signatory records and specimen signature cards accordingly.

The resolution was signed by Diane Fournier and Patricia Sung, the two remaining directors of TGH following Delacroix's departure. The five-day delay between Delacroix's resignation and the formal revocation of his signatory authority is noted, though no transactions on the Meridian account during this interval have been identified to date.

V. Meridian Commercial Bank — Account Opening Documentation

A. Account Details

The following summarizes the key details of TGH's primary bank account:

The account was opened shortly after TGH's incorporation on March 15, 2017, and has served as TGH's primary operating account for receiving intercompany capital contributions from Torchlight and disbursing funds to TGM and to third-party service providers, including Crestfield Advisory Partners Ltd.

B. Account Opening Documents Reviewed

The following documents were reviewed as part of the account opening file maintained at TGH's registered office:

(a) Corporate Resolution authorizing the opening of the account (see Section IV.B above);

(b) Certificate of Incorporation of TGH, issued by the BVI Registrar of Corporate Affairs, dated March 15, 2017;

(d) Register of Directors, reflecting the directors of TGH as of the date of account opening;

(e) Certificate of Good Standing, dated March 2017, issued by the BVI Registrar confirming that TGH was in good standing at the time of the account opening;

(f) Specimen signature cards for Diane Fournier (original signatory, filed at account opening) and Marcus Delacroix (added as signatory in December 2018, with updated signature card filed at that time);

(g) Know-Your-Customer ("KYC") documentation, consisting of the following:

• Certified passport copies for Diane Fournier and Marcus Delacroix;

• Beneficial ownership declaration identifying Torchlight Mining Corp. as the 100% ultimate beneficial owner of TGH;

• Source-of-funds declaration referencing intercompany capital contributions from Torchlight Mining Corp. as the anticipated source of funds for the account; and

• Utility bills and address verification documentation for both signatories.

The KYC documentation appears facially complete and consistent with standard BVI banking requirements. No anomalies were noted in the account opening file itself.

C. Wire Transfer Authorization Protocols

Per Meridian Commercial Bank's account terms and conditions, which were included in the account opening file, wire transfers below the applicable single-signatory threshold could be initiated by a single authorized signatory via authenticated electronic banking instructions submitted through Meridian's secure online platform. Wire transfers above the applicable threshold required dual signatures, which could be provided either through dual electronic authorization or through a co-signed wire transfer instruction form submitted to the bank.

Catherine Whitfield noted a significant control gap arising from the interaction between TGH's signatory structure and Torchlight's parent-level policies. Specifically, 14 of the 24 invoices submitted by Crestfield Advisory Partners Ltd. during the engagement period exceeded $50,000, with individual invoice amounts ranging from $55,000 to $185,000. Under the Torchlight parent-level Delegation of Authority Policy, expenditures exceeding $50,000 at the subsidiary level require dual approval. However, under TGH's own signatory resolution, as amended in December 2018, Delacroix's $250,000 single-signatory authority meant he could execute payments up to $250,000 on the Meridian account without Fournier's co-signature. This structural misalignment between the parent-level policy and the subsidiary-level banking arrangements effectively bypassed the parent company's $50,000 dual-approval requirement for all 24 Crestfield invoices — none of which exceeded Delacroix's $250,000 single-signatory threshold.

Preliminary review of Meridian wire transfer records, which is being coordinated with Pinnacle Forensic Advisory LLC (Dr. Leonard Strauss, engagement partner), indicates that the substantial majority of payments to Crestfield were initiated by Delacroix as the sole signatory, without Fournier's co-authorization. A detailed wire-by-wire analysis, including dates, amounts, initiating signatory, and corresponding Crestfield invoices, is set forth in the separate Payment Flow Analysis Workbook prepared by the Pinnacle engagement team and will be incorporated into the interim investigation report.

VI. Crestfield Advisory Partners Ltd. — Corporate Due Diligence Records at TGH

A. Due Diligence File

No due diligence file on Crestfield Advisory Partners Ltd. was located in TGH's corporate records at its BVI registered office. A thorough search of TGH's minute book, correspondence files, and supplemental corporate records maintained by the registered agent revealed no compliance questionnaire, background check report, anti-corruption certification, conflict of interest disclosure, reference check, or any other form of due diligence documentation relating to Crestfield or to Jean-Philippe Renard, its sole owner and beneficial owner.

Catherine Whitfield confirmed that her firm, as TGH's BVI legal counsel, was not consulted in connection with the Crestfield engagement and was not asked to conduct or review any due diligence on Crestfield or Renard. Ms. Whitfield further confirmed that the registered agent's files contain no compliance questionnaire, background check, anti-corruption certification, or other due diligence materials relating to Crestfield or Renard.

This finding is consistent with the red flag previously identified in the broader investigation: no due diligence file on Crestfield exists in Torchlight's compliance records maintained by Nadia Berenson, Vice President, Compliance and Ethics at Torchlight Mining Corp. The absence of any due diligence documentation at both the parent level and the subsidiary level strongly suggests that no meaningful due diligence was conducted on Crestfield at any point prior to or during the engagement — a significant departure from Torchlight's stated anti-corruption policies and from the expectations set forth in DOJ and SEC guidance on the vetting of third-party intermediaries used to interact with foreign government officials.

B. Observations on Crestfield's Corporate Profile

Based on the information gathered during the course of this investigation, the following characteristics of Crestfield Advisory Partners Ltd. are noted:

(a) Crestfield Advisory Partners Ltd. was incorporated in the Republic of Mauritius in 2016. Its registered address is 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius, which corresponds to a registered-agent office and corporate services provider, rather than a physical operational office.

(b) Crestfield has no publicly accessible website, no known employees other than Renard himself, and a minimal corporate presence. The company does not appear to maintain a physical office in the Republic of Ganara, the jurisdiction in which its services were purportedly rendered.

(c) Jean-Philippe Renard, a French citizen, age 54, currently based in Dakar, Senegal, is the sole beneficial owner and the sole director of Crestfield. Mr. Renard is a former French diplomat who served in various West African postings and is understood to have developed personal relationships with senior Ganaran government officials during his diplomatic career, including individuals in the Ministry of Mines, Geology, and Natural Resources and the National Environmental Protection Agency.

These characteristics — incorporation in an offshore jurisdiction, use of a registered-agent address, lack of employees or operational presence, single-person ownership by an individual with government connections — are consistent with a "shell company" profile and constitute significant red flags under the DOJ's A Resource Guide to the U.S. Foreign Corrupt Practices Act (2020, 2d ed.) and SEC enforcement guidance on the evaluation of third-party intermediaries. Specifically, these characteristics are among the hallmarks that the DOJ and SEC have identified as warning signs suggesting that a purported "agent" or "consultant" may be acting as a conduit for corrupt payments to foreign officials.

VII. TGH Memorandum and Articles of Association — Key Provisions

A review of TGH's Memorandum and Articles of Association, as filed with the BVI Registrar of Corporate Affairs at the time of incorporation and as maintained in the registered office files, reveals the following provisions of particular relevance to this investigation:

A. Objects Clause

TGH's Memorandum of Association contains a general-purpose objects clause permitting TGH to engage in any lawful business, trade, or activity. This is the standard form objects clause for BVI Business Companies and does not impose any restriction on the types of contracts or engagements that TGH may enter into. The breadth of this objects clause means that the Crestfield Advisory Agreement was within TGH's corporate powers, and no ultra vires argument would be available with respect to the engagement itself. The legality of the purpose for which the engagement was used, however, is a separate question.

B. Directors' Powers

The Articles of Association grant the directors broad authority to manage the business and affairs of the company, including the power to enter into contracts, appoint agents, and open bank accounts on behalf of TGH. These powers may be exercised without shareholder approval, which is consistent with the BVI Business Companies Act default provisions for single-member companies. Given that Torchlight Mining Corp. is TGH's sole shareholder, the directors' exercise of these powers was not subject to any additional shareholder consent requirements beyond those imposed by Torchlight's own internal governance policies — policies that, as noted above, appear not to have been effectively implemented at the TGH level.

C. Conflict of Interest Provisions

The Articles contain a standard BVI conflict of interest provision requiring directors to disclose any material interest they may have in a transaction or arrangement entered into by the company. This provision is consistent with Section 125 of the BVI Business Companies Act, which requires a director who has an interest in a transaction entered into or to be entered into by the company to disclose that interest to the board.

No disclosure by Marcus Delacroix of any personal relationship with Jean-Philippe Renard was located in the minute book in connection with the Crestfield engagement authorization or at any subsequent time. The April 10, 2019 resolution authorizing the Crestfield engagement contains no record of any conflict disclosure, and no separate conflict disclosure memorandum or declaration was filed with the resolution or elsewhere in TGH's records.

Catherine Whitfield noted that the absence of a conflict disclosure does not necessarily indicate a violation of BVI law if Delacroix had no direct personal financial interest in the Crestfield transaction — for example, if Delacroix did not hold an ownership stake in Crestfield and did not personally benefit from the payments. However, Ms. Whitfield acknowledged that the personal relationship between Delacroix and Renard, as well as the circumstances surrounding Delacroix's introduction of Renard and advocacy for the Crestfield engagement, warrant further inquiry as part of the internal investigation to determine whether Delacroix had an undisclosed interest that should have been disclosed under the Articles or under BVI law.

D. Indemnification Provisions

The Articles contain a standard director indemnification clause providing that TGH shall indemnify its directors and former directors against all liabilities, losses, damages, costs, and expenses (including legal fees) incurred in their capacity as directors, except in cases of willful misconduct, fraud, or dishonesty. This provision is consistent with Section 132 of the BVI Business Companies Act, which permits BVI companies to indemnify directors subject to the statutory exceptions.

This provision may be implicated in the near term if Marcus Delacroix seeks indemnification from TGH for defense costs incurred in connection with the FCPA investigation or any subsequent enforcement proceedings. Depending on the ultimate findings of the investigation regarding Delacroix's knowledge of and involvement in the alleged improper payment scheme, the fraud and dishonesty exception to the indemnification clause may apply, potentially relieving TGH of any obligation to indemnify him. This issue should be flagged for the Audit Committee and for Torchlight's outside D&O insurance counsel as the investigation progresses.

VIII. Regency International Bank — TGM Local Account

A. Overview. While the primary focus of this memorandum is TGH's BVI corporate records, reference must be made to TGM's local banking arrangements in the Republic of Ganara, as those arrangements are directly relevant to the payments under investigation.

TGM maintains its principal operating account at Regency International Bank, Libreville, Republic of Ganara (Account No. GAN-4419-8837). This account is denominated in CFA Francs and is used for TGM's local payroll, vendor payments, tax payments to the Ganaran government, and other in-country operating expenditures. Significantly, this account was also used for the cash withdrawals and in-kind benefits that are among the categories of potentially improper payments under investigation.

Corporate records relating to the TGM Regency International Bank account were not maintained in TGH's BVI files. Catherine Whitfield confirmed that TGH's registered office in the British Virgin Islands would not ordinarily hold records for a Ganaran operating subsidiary's local bank accounts, as those records would typically be maintained at TGM's offices in Libreville or at TGM's Ganaran registered office.

TGM account documentation, including corporate resolutions, signatory authority designations, account opening documents, and transaction records, is being reviewed separately in coordination with Maître Salif Ndong of Ndong & Keïta Cabinet Juridique, Ganaran local counsel retained in this matter. Maître Ndong's engagement is being managed under the overall direction of Calderwood & Harkness's investigation team.

Noted for cross-reference and coordination with the forensic accounting workstream: approximately $890,000 in cash withdrawals from the Regency International Bank account were coded under general ledger account 7450 ("Community Relations Expenses"), and an additional $630,000 in in-kind benefits — including the purchase and transfer of vehicles and the payment of travel expenses for third parties — were booked across GL 7200 ("Equipment and Vehicles — Non-Mining") and GL 7310 ("Travel and Entertainment — Third Party") at TGM. The signatory and authorization protocols for TGM's Regency account, including the identity of the individuals who authorized these cash withdrawals and in-kind benefit payments, are under separate review by Maître Ndong's team and will be addressed in a forthcoming memorandum.

IX. Summary of Key Findings and Observations

Based on the review of TGH's corporate records described in this memorandum, the following key findings and observations are presented for purposes of the ongoing investigation:

1. Authorization of Crestfield Engagement. The TGH board resolution of April 10, 2019 authorized TGH to enter into the Crestfield Advisory Agreement, but the resolution did not reference any due diligence conducted on Crestfield or Renard, did not reference any anti-corruption compliance review, and did not reflect any competitive selection or request-for-proposal process. The resolution was proposed by Marcus Delacroix, who personally introduced Jean-Philippe Renard to Torchlight and who advocated for the Crestfield engagement. The resolution was signed by Delacroix and Fournier only.

2. Absence of Due Diligence Documentation. No due diligence file on Crestfield Advisory Partners Ltd. or Jean-Philippe Renard exists in TGH's registered office records. This finding is consistent with the absence of any due diligence file in Torchlight's parent-level compliance records, as confirmed by VP Compliance and Ethics Nadia Berenson. The complete absence of due diligence documentation at both the parent and subsidiary levels represents a fundamental failure of Torchlight's anti-corruption compliance program as applied to the Crestfield engagement.

3. Signatory Authority Gap. Marcus Delacroix's $250,000 single-signatory authority on the Meridian Commercial Bank account, established by the December 2018 supplemental resolution, exceeded the Torchlight parent-level Delegation of Authority Policy threshold of $50,000 for single approvals at the subsidiary level. This disparity enabled Delacroix to initiate payments to Crestfield — including 14 invoices exceeding $50,000, with individual amounts ranging from $55,000 to $185,000 — without requiring dual authorization from Fournier or any other individual. The structural gap between the parent-level policy and the subsidiary-level banking arrangements effectively negated the dual-approval controls that Torchlight's corporate policies were designed to impose.

4. Excess Payments Without Board Authorization. Total payments to Crestfield from TGH's Meridian account amounted to $3,210,000, exceeding the contractual maximum under the Crestfield Advisory Agreement of $2,040,000 by $1,170,000. No TGH board resolution was identified authorizing the excess payments, amending the Crestfield Advisory Agreement to increase payment caps, or otherwise ratifying payments in excess of the original contractual terms. The excess payments were made without any documented corporate authorization at the TGH board level.

5. No Conflict Disclosure by Delacroix. Despite the conflict of interest provisions in TGH's Articles of Association requiring directors to disclose material interests in transactions, no disclosure by Marcus Delacroix of his personal relationship with Jean-Philippe Renard appears in TGH's corporate records in connection with the Crestfield engagement or at any subsequent time. Whether this omission constitutes a violation of BVI law depends on the nature and extent of Delacroix's interest in the Crestfield transaction, which remains under investigation.

6. Post-Resignation Steps. Following Delacroix's resignation from TGH and Torchlight on November 15, 2024, his signatory authority on the Meridian account was revoked by board resolution dated November 20, 2024, and Patricia Sung was added as a signatory with $100,000 single-signatory authority. The revocation was completed within five days of the resignation date.

7. TGM Records Gap. TGH's BVI registered office files do not contain records relating to TGM's local Regency International Bank account (Account No. GAN-4419-8837) or the $890,000 in cash withdrawals and $630,000 in in-kind benefits under review. These records are being separately obtained through Ganaran local counsel, Maître Salif Ndong of Ndong & Keïta Cabinet Juridique.

X. Recommended Next Steps

Based on the findings and observations summarized above, the following next steps are recommended:

1. Complete Meridian Wire Transfer Records. Obtain from Meridian Commercial Bank the complete wire transfer records for Account No. 7740-2281-0056 covering the full period from April 2019 through the present date. These records should include initiating signatory identification, timestamps, beneficiary bank details, and any accompanying payment instructions or reference information. Once obtained, these records should be cross-referenced with the Crestfield invoice register compiled during the document review phase and with the forensic accounting analysis being conducted by Pinnacle Forensic Advisory LLC under the direction of Dr. Leonard Strauss.

2. Confirm Completeness of TGH Corporate Records. Request that Catherine Whitfield of Hargrove Whitfield LLP confirm in writing whether any additional TGH corporate records exist at the registered agent's office (BVI Corporate Services Ltd.) or in any secondary storage location, including any informal correspondence files, email archives, or supplemental records maintained by the registered agent outside of the formal minute book.

3. Coordinate with Ganaran Local Counsel. Continue coordination with Maître Salif Ndong of Ndong & Keïta Cabinet Juridique regarding TGM corporate records, including TGM's articles of association, board resolutions, Regency International Bank account opening documentation, signatory authority designations, and transaction records. Particular attention should be given to the authorization protocols for the $890,000 in cash withdrawals coded under GL 7450 and the $630,000 in in-kind benefits booked under GL 7200 and GL 7310.

4. BVI Director Liability Analysis. Request that Catherine Whitfield provide a formal legal opinion addressing whether the absence of a board resolution authorizing the excess payments to Crestfield (the $1,170,000 in excess of the contractual maximum) constitutes a breach of TGH's Articles of Association or the BVI Business Companies Act, and the potential implications for personal liability of the TGH directors who were in office during the period in which the excess payments were made.

5. Delacroix Indemnification Analysis. Evaluate the scope and applicability of the indemnification provision in TGH's Articles of Association in light of the evolving investigation findings regarding Delacroix's role in the alleged payment scheme. Specifically, assess whether the fraud and dishonesty exception to indemnification would likely apply based on the evidence developed to date, and coordinate with Torchlight's D&O insurance counsel regarding coverage implications.

6. Incorporate Findings into Interim Investigation Report. Incorporate the findings from this corporate records review, together with the results of the Pinnacle forensic accounting analysis and the Ganaran counsel review, into the interim investigation report to be presented to the Audit Committee of Torchlight's Board of Directors. The Audit Committee, currently composed of Dr. Eleanor Fiske (Chair), Warren Ogilvy, and Marguerite Chen, has requested that the interim report be delivered by the targeted date of May 15, 2025.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

This memorandum has been prepared by Calderwood & Harkness LLP at the direction of the Audit Committee of Torchlight Mining Corp. in connection with the internal investigation referenced herein. It constitutes attorney work product and is protected by the attorney-client privilege. This memorandum is not intended for distribution beyond the investigation team and should not be disclosed to any third party without prior authorization from the undersigned or from the supervising partner.

Calderwood & Harkness LLP 825 Eighth Avenue, 42nd Floor New York, New York 10019

Matter No. 1039-00005 — Torchlight Mining Corp. FCPA Investigation

Field	Detail
Account Holder	Torchlight Ganara Holdings Ltd.
Account Number	7740-2281-0056
Currency	United States Dollars (USD)
Bank	Meridian Commercial Bank
Branch	Road Town, Tortola, British Virgin Islands
Date Opened	Approximately April 2017

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Steven Hollander, Lead Associate, White Collar & Investigations, Calderwood & Harkness LLP
FROM: Jasmine Thornton, Working Associate, White Collar & Investigations, Calderwood & Harkness LLP
DATE: April 10, 2025
RE: Review of Torchlight Ganara Holdings Ltd. Corporate Records — Coordinated with Hargrove Whitfield LLP
MATTER NO.: 1039-00005
I. Purpose and Scope of Review
This memorandum summarizes the results of a detailed review of the corporate records of Torchlight Ganara Holdings Ltd. ("TGH"), a British Virgin Islands business company and wholly owned subsidiary of Torchlight Mining Corp. ("Torchlight" or "TMC"). The review was conducted in coordination with Catherine Whitfield, Lead Partner of Hargrove Whitfield LLP ("HW"), BVI counsel retained in this matter, who provided access to TGH's corporate records maintained at its registered office in Road Town, Tortola, and who advised on questions of BVI corporate law arising from our review of those records.
This review was undertaken as part of the ongoing internal investigation of potential violations of the Foreign Corrupt Practices Act ("FCPA"), 15 U.S.C. §§ 78dd-1 et seq., by Torchlight and its subsidiaries, arising from payments made through TGH and Torchlight Ganara Mining S.A. ("TGM") in connection with the procurement and maintenance of mining permits and environmental approvals in the Republic of Ganara. As you are aware, the investigation was authorized by the Audit Committee of Torchlight's Board of Directors and is being conducted under the direction of the White Collar & Investigations practice group at Calderwood & Harkness LLP.
The specific purposes of this corporate records review were as follows:
(1) To examine TGH's corporate governance documents, including its Memorandum and Articles of Association, board resolutions, and minute book entries, with a particular focus on the resolutions authorizing the engagement of Crestfield Advisory Partners Ltd. ("Crestfield"), a Mauritius-incorporated entity retained as a purported government relations advisor in the Republic of Ganara;
(2) To review TGH's bank account opening documents at Meridian Commercial Bank, Road Town, Tortola, BVI, including the corporate resolution, beneficial ownership declarations, and know-your-customer documentation submitted to the bank;
(3) To identify authorized signatories and delegations of authority applicable to TGH's bank accounts, and to assess the alignment (or lack thereof) between TGH-level signatory authority and Torchlight's parent-level Delegation of Authority Policy; and
(4) To assess the corporate formalities observed — or not observed — in connection with the payments at issue, including whether proper board authorization was obtained for payments that exceeded the contractual limits of the Crestfield Advisory Agreement and whether required conflict of interest disclosures were made.
Catherine Whitfield of Hargrove Whitfield LLP, Trident Chambers, Wickhams Cay I, Road Town, Tortola, British Virgin Islands, provided the corporate records from TGH's registered office files and advised on BVI corporate law requirements relevant to each of the topics addressed herein. Ms. Whitfield's firm serves as TGH's BVI legal counsel and has represented TGH on corporate and regulatory matters since 2017. We have coordinated closely with Ms. Whitfield throughout this review and have incorporated her observations on BVI law where noted below.
II. Background — TGH Corporate Structure
A. Formation and Incorporation
TGH was incorporated in the British Virgin Islands on March 15, 2017, as a BVI Business Company under the BVI Business Companies Act, 2004 (as amended) (the "BVI Act"). The company was formed as part of Torchlight's strategic expansion into West African mining operations, serving as the intermediate holding company through which Torchlight would hold its Ganaran mining assets and channel capital into the Ganaran operating subsidiary.
TGH's registered office address is Wickhams Cay II, Suite 408, Road Town, Tortola, British Virgin Islands. The registered agent is BVI Corporate Services Ltd., which also maintains TGH's statutory registers and minute book at the registered office address.
TGH is a wholly owned subsidiary of Torchlight Mining Corp., a corporation organized under the Canada Business Corporations Act, headquartered at 200 King Street West, Suite 3400, Toronto, Ontario M5H 3T4, Canada. Torchlight is a publicly traded company, listed on both the Toronto Stock Exchange (TSX: TMC) and the New York Stock Exchange (NYSE: TRCH). As a dual-listed issuer with NYSE-traded American Depositary Shares, Torchlight is subject to the anti-bribery and books-and-records provisions of the FCPA, as well as the Corruption of Foreign Public Officials Act (Canada) ("CFPOA").
B. Purpose and Subsidiaries
TGH serves as the intermediate holding company for Torchlight's Ganaran mining operations. The use of a BVI holding company in this structure is consistent with the corporate architecture commonly employed by Canadian and international mining companies operating in sub-Saharan Africa, providing certain benefits relating to investment treaty protections, currency management, and intercompany financing flexibility.
TGH holds 100% of the equity interests in Torchlight Ganara Mining S.A. ("TGM"), the in-country operating entity organized under the laws of the Republic of Ganara. TGM's principal offices are located at Boulevard du Commerce 14, Quartier Plateau, Libreville, Republic of Ganara. TGM is the entity that directly holds the mining concessions, employs the local and expatriate workforce, and conducts the extractive operations that are the subject of this investigation.
TGM holds the following mining concessions granted by the Ganaran Ministry of Mines, Geology, and Natural Resources:
(a) Kousseri Copper-Cobalt Complex — Mining License No. KCC-2019-0047, originally covering an area of approximately 14,200 hectares. This license was subsequently expanded by 3,200 hectares under Amendment KCC-2019-0047-A1, bringing the total licensed area to approximately 17,400 hectares. The Kousseri Complex is TGM's primary producing asset and represents the largest single source of revenue within Torchlight's West African portfolio.
(b) Dembélé Rare Earths Project — Exploration License No. DRE-2021-0092, subsequently converted to Mining License No. DRE-M-2023-0018, covering an area of approximately 8,750 hectares. The Dembélé Project is in the development phase, with commercial production anticipated to commence in late 2026 or early 2027.
As of December 2024, TGM employed approximately 2,400 local workers and 85 expatriate staff across its Ganaran operations. The workforce is principally engaged at the Kousseri Complex mine site, the Libreville administrative offices, and the Dembélé Project site.
C. Fiscal and Revenue Context
Torchlight's West African operations, conducted through the TGH/TGM structure, generated approximately CAD $387 million in revenue during fiscal year 2024. This figure represents approximately 18.4% of Torchlight's consolidated revenues of approximately CAD $2.1 billion for the same period. The West African segment is thus a material component of Torchlight's overall business, and any enforcement actions or operational disruptions arising from the matters under investigation would have a significant impact on Torchlight's financial position and stock performance. This revenue context is relevant to the materiality analysis that will be required for purposes of the interim investigation report to the Audit Committee, as well as any potential securities disclosure obligations.
III. Directors and Officers of TGH
A. Current and Historical Directors
A review of the BVI Register of Directors maintained by TGH's registered agent, BVI Corporate Services Ltd., discloses the following individuals who have served as directors of TGH during the relevant period of April 2019 through the present:
(i) Marcus Delacroix — Director. Mr. Delacroix was appointed as a director of TGH in November 2018, coinciding with his appointment as Vice President, Africa Operations at Torchlight Mining Corp., which became effective November 3, 2018. Mr. Delacroix resigned as a director of TGH effective November 15, 2024, on the same date as his resignation from all positions with Torchlight Mining Corp. Mr. Delacroix is a French-Canadian dual citizen, age 47. He is currently residing at 47 Rue de la République, 69002 Lyon, France. As discussed in greater detail below, Mr. Delacroix was the individual who proposed the engagement of Crestfield Advisory Partners Ltd., personally introduced Jean-Philippe Renard (the sole owner of Crestfield) to other Torchlight personnel, held expanded single-signatory authority on TGH's Meridian bank account, and initiated the majority of the wire transfers to Crestfield during the relevant period.
(ii) Diane Fournier — Director. Ms. Fournier was appointed as a director of TGH at the time of incorporation in 2017 and continues to serve as a director to the present date. Ms. Fournier also serves as Vice President, Finance at Torchlight Mining Corp. She was the original authorized signatory on TGH's Meridian Commercial Bank account, with single-signatory authority up to $100,000.
(iii) Patricia Sung — Director. Ms. Sung was appointed as a director of TGH in 2020, coinciding with her appointment as General Counsel and Corporate Secretary at Torchlight Mining Corp. Ms. Sung continues to serve as a director to the present date. Following Delacroix's resignation, Ms. Sung was added as an authorized signatory on the Meridian bank account by resolution dated November 20, 2024.
Catherine Whitfield confirmed that under the BVI Business Companies Act, TGH's Memorandum and Articles of Association require a minimum of two directors at all times. During the entire relevant period, TGH maintained a board of either two or three directors, consistent with this minimum requirement. Ms. Whitfield noted that TGH has been in compliance with its minimum director requirements at all times.
B. Officers. TGH's Articles of Association provide for the appointment of officers by the board of directors. The Articles contemplate that the directors may appoint such officers as they determine necessary, including a president, secretary, treasurer, or such other positions as the board may create.
Based on a thorough review of the corporate records, however, Marcus Delacroix appears to have served as the sole officer with the title of "Managing Director" or an equivalent designation for the Africa operations. In practice, Delacroix was responsible for the day-to-day management of TGH and exercised oversight of TGM's operations in the Republic of Ganara, including the negotiation and management of relationships with government authorities, contractors, and service providers.
No formal officer appointments, beyond the directors themselves, appear in TGH's minute book. The absence of documented officer appointments is notable in that it suggests that TGH operated with minimal corporate formality with respect to the delegation of management responsibilities — a point that is consistent with the broader pattern of inadequate governance controls identified in this investigation.
IV. Board Resolutions Reviewed
The following board resolutions were identified in TGH's minute book and are relevant to the matters under investigation. Each resolution is summarized below, together with our observations regarding its significance.
A. Resolution Authorizing the Crestfield Advisory Agreement
A Written Resolution of the Directors of TGH, dated April 10, 2019, was located in the minute book. This resolution was executed two days before the execution of the Government Relations Advisory Agreement between TGH and Crestfield Advisory Partners Ltd., which bears an execution date of April 12, 2019. The resolution provides as follows:
The resolution authorized TGH to enter into a "Government Relations Advisory Agreement" with Crestfield Advisory Partners Ltd., described in the resolution as a company incorporated in the Republic of Mauritius, with a registered address at 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius. The stated scope of services was described as "government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara."
The resolution described the material engagement terms in summary form as follows:
(a) A monthly retainer of $15,000 (United States Dollars), payable in arrears;
(b) Success fees of $100,000 per mining permit, exploration license, or environmental approval obtained with Crestfield's assistance; and
(c) Quarterly expense reimbursement, capped at $25,000 per quarter, upon submission of supporting documentation.
The resolution was signed by Marcus Delacroix and Diane Fournier, constituting a majority of the directors then in office (Ms. Sung had not yet been appointed as a director at the time of this resolution).
Observation: The resolution does not reference any due diligence conducted on Crestfield Advisory Partners Ltd. or on Jean-Philippe Renard, its sole owner and beneficial owner. No supporting materials — such as a due diligence questionnaire, compliance review, background check results, reference checks, or any other form of third-party vetting documentation — were attached to or filed with the resolution in TGH's minute book. There is no indication in the resolution or in any contemporaneous document in TGH's files that a competitive selection process or request-for-proposal process was undertaken prior to the engagement of Crestfield. The resolution states simply that Crestfield was "recommended by management," which is consistent with the finding from the broader investigation that Jean-Philippe Renard was personally introduced to Torchlight by Marcus Delacroix. The nature and history of the personal relationship between Delacroix and Renard remain under investigation.
Observation: The resolution does not reference compliance with Torchlight's global anti-corruption policies, including the Torchlight Mining Corp. Global Anti-Corruption Policy (last revised March 2018), or any requirement to conduct anti-corruption due diligence on third-party intermediaries. The resolution makes no reference to the FCPA, the Canadian Corruption of Foreign Public Officials Act ("CFPOA"), the United Kingdom Bribery Act 2010, or any BVI anti-corruption statutes. This omission is particularly significant given that Crestfield was being engaged specifically to interact with Ganaran government officials on TGH's and TGM's behalf — precisely the type of engagement that should trigger heightened compliance scrutiny under both Torchlight's own policies and applicable DOJ/SEC enforcement guidance regarding the use of third-party intermediaries.
B. Resolution Authorizing Meridian Commercial Bank Account
A Written Resolution of the Directors of TGH, dated March 28, 2017, was located in the minute book. This resolution was adopted shortly after TGH's incorporation on March 15, 2017, and authorized the following:
(a) The opening of a United States Dollar-denominated operating account at Meridian Commercial Bank, Road Town, Tortola, British Virgin Islands. The account was subsequently assigned Account No. 7740-2281-0056.
(b) The designation of Diane Fournier as the initial authorized signatory on the account. Ms. Fournier was granted single-signatory authority for transactions up to $100,000. For transactions exceeding $100,000, the resolution required dual-signatory authorization.
The original resolution designated Fournier as the sole authorized signatory. As discussed immediately below, a supplemental resolution adopted in December 2018 added Marcus Delacroix as an authorized signatory with materially different authority thresholds.
Observation: The supplemental resolution of December 2018, discussed in Section IV.C below, expanded Delacroix's signatory authority to a $250,000 single-signatory threshold — significantly higher than Fournier's $100,000 single-signatory threshold. Catherine Whitfield noted that this disparity is unusual for a subsidiary holding company of TGH's nature. Ms. Whitfield further observed that the Torchlight parent-level Delegation of Authority Policy, which sets a $50,000 single-approval threshold for expenditures at the subsidiary level, was not referenced in either the original or supplemental banking resolutions. The failure to incorporate or even acknowledge the parent-level approval threshold in TGH's banking arrangements created a structural gap in financial controls that effectively allowed Delacroix to initiate payments to Crestfield without triggering the dual-approval requirements that Torchlight's corporate policies were designed to impose.
C. Supplemental Signatory Resolution — December 2018
A Written Resolution of the Directors of TGH, dated December 14, 2018, was located in the minute book. This supplemental resolution provided as follows:
(a) Marcus Delacroix was added as an authorized signatory on the Meridian Commercial Bank Account No. 7740-2281-0056.
(b) Mr. Delacroix's single-signatory authority was set at $250,000 — two-and-a-half times the $100,000 threshold previously established for Diane Fournier.
(c) For transactions exceeding $250,000, the resolution required dual-signatory authorization (both Delacroix and Fournier).
The resolution was signed by Diane Fournier and Marcus Delacroix.
By way of cross-reference, Delacroix was appointed as Vice President, Africa Operations at Torchlight Mining Corp. on November 3, 2018. He was subsequently added as a director of TGH in November 2018. The December 14, 2018 supplemental signatory resolution followed approximately six weeks after his appointment as a TGH director. The sequence of these events — appointment at the parent level, appointment as a TGH director, and then the grant of expanded banking authority — appears to have been orchestrated to consolidate financial control over TGH's operations in Delacroix's hands.
D. Annual Resolutions and Other Corporate Governance
Annual written resolutions for fiscal years 2019 through 2023 were located in TGH's minute book. These resolutions are largely pro forma in nature, containing standard provisions confirming the continuation of the existing directors in office, ratifying all acts of the directors during the prior fiscal year, and approving the annual financial statements of TGH. The annual resolutions do not contain any substantive discussion of TGH's operations, the Crestfield engagement, or the payments at issue in this investigation.
No resolution was identified in the minute book authorizing any amendment, modification, or supplement to the Crestfield Advisory Agreement, or any increase in the contractual payment limits beyond the original terms set forth in the April 2019 agreement (monthly retainer, success fees, and expense reimbursement cap). This absence is significant in light of the following analysis of the contractual maximum versus actual payments:
Contractual Maximum Calculation:
• Monthly retainers: $15,000 × 66 months (April 2019 through September 2024, the month prior to Delacroix's departure from Torchlight) = $990,000
• Success fees: $100,000 × 5 permits (the total number of permits/approvals obtained during the engagement period) = $500,000
• Expense reimbursement: $25,000 × 22 quarters (maximum possible over the engagement period) = $550,000
• Total contractual maximum: $2,040,000
Actual Payments:
• Total payments to Crestfield from TGH Meridian Account No. 7740-2281-0056 during the engagement period: $3,210,000
Excess over contractual maximum: $1,170,000
The excess of $1,170,000 — representing payments made beyond what the Crestfield Advisory Agreement authorized on its face — was made without any board-level authorization at TGH. No resolution amending the agreement, increasing payment caps, or otherwise ratifying the excess payments appears in TGH's corporate records. The source and justification for these excess payments is a central focus of the ongoing forensic accounting analysis being conducted by Pinnacle Forensic Advisory LLC.
Additionally, no resolution was located in TGH's minute book authorizing TGH or TGM to make cash disbursements for "community development" or "stakeholder gifts." These are the expense categories under which approximately $890,000 in TGM cash withdrawals were booked under general ledger account 7450 ("Community Relations Expenses") at Regency International Bank, Account No. GAN-4419-8837. The absence of board authorization for these significant cash disbursements is an additional corporate governance deficiency relevant to this investigation.
E. Resolution re: Removal of Delacroix Signatory Authority
A Written Resolution of the Directors of TGH, dated November 20, 2024, was located in the minute book. This resolution was adopted five days after Delacroix's resignation from all positions with Torchlight and TGH, which became effective on November 15, 2024. The resolution provided as follows:
(a) Marcus Delacroix was removed as an authorized signatory on Meridian Commercial Bank Account No. 7740-2281-0056, effective immediately.
(b) Patricia Sung was added as an authorized signatory on the account, with single-signatory authority up to $100,000. For transactions exceeding $100,000, dual-signatory authorization by both Sung and Fournier was required.
(c) The resolution directed the registered agent and Meridian Commercial Bank to update all signatory records and specimen signature cards accordingly.
The resolution was signed by Diane Fournier and Patricia Sung, the two remaining directors of TGH following Delacroix's departure. The five-day delay between Delacroix's resignation and the formal revocation of his signatory authority is noted, though no transactions on the Meridian account during this interval have been identified to date.
V. Meridian Commercial Bank — Account Opening Documentation
A. Account Details
The following summarizes the key details of TGH's primary bank account:
The account was opened shortly after TGH's incorporation on March 15, 2017, and has served as TGH's primary operating account for receiving intercompany capital contributions from Torchlight and disbursing funds to TGM and to third-party service providers, including Crestfield Advisory Partners Ltd.
B. Account Opening Documents Reviewed
The following documents were reviewed as part of the account opening file maintained at TGH's registered office:
(a) Corporate Resolution authorizing the opening of the account (see Section IV.B above);
(b) Certificate of Incorporation of TGH, issued by the BVI Registrar of Corporate Affairs, dated March 15, 2017;
(c) Memorandum and Articles of Association of TGH, as filed with the BVI Registrar at the time of incorporation;
(d) Register of Directors, reflecting the directors of TGH as of the date of account opening;
(e) Certificate of Good Standing, dated March 2017, issued by the BVI Registrar confirming that TGH was in good standing at the time of the account opening;
(f) Specimen signature cards for Diane Fournier (original signatory, filed at account opening) and Marcus Delacroix (added as signatory in December 2018, with updated signature card filed at that time);
(g) Know-Your-Customer ("KYC") documentation, consisting of the following:
• Certified passport copies for Diane Fournier and Marcus Delacroix;
• Beneficial ownership declaration identifying Torchlight Mining Corp. as the 100% ultimate beneficial owner of TGH;
• Source-of-funds declaration referencing intercompany capital contributions from Torchlight Mining Corp. as the anticipated source of funds for the account; and
• Utility bills and address verification documentation for both signatories.
The KYC documentation appears facially complete and consistent with standard BVI banking requirements. No anomalies were noted in the account opening file itself.
C. Wire Transfer Authorization Protocols
Per Meridian Commercial Bank's account terms and conditions, which were included in the account opening file, wire transfers below the applicable single-signatory threshold could be initiated by a single authorized signatory via authenticated electronic banking instructions submitted through Meridian's secure online platform. Wire transfers above the applicable threshold required dual signatures, which could be provided either through dual electronic authorization or through a co-signed wire transfer instruction form submitted to the bank.
Catherine Whitfield noted a significant control gap arising from the interaction between TGH's signatory structure and Torchlight's parent-level policies. Specifically, 14 of the 24 invoices submitted by Crestfield Advisory Partners Ltd. during the engagement period exceeded $50,000, with individual invoice amounts ranging from $55,000 to $185,000. Under the Torchlight parent-level Delegation of Authority Policy, expenditures exceeding $50,000 at the subsidiary level require dual approval. However, under TGH's own signatory resolution, as amended in December 2018, Delacroix's $250,000 single-signatory authority meant he could execute payments up to $250,000 on the Meridian account without Fournier's co-signature. This structural misalignment between the parent-level policy and the subsidiary-level banking arrangements effectively bypassed the parent company's $50,000 dual-approval requirement for all 24 Crestfield invoices — none of which exceeded Delacroix's $250,000 single-signatory threshold.
Preliminary review of Meridian wire transfer records, which is being coordinated with Pinnacle Forensic Advisory LLC (Dr. Leonard Strauss, engagement partner), indicates that the substantial majority of payments to Crestfield were initiated by Delacroix as the sole signatory, without Fournier's co-authorization. A detailed wire-by-wire analysis, including dates, amounts, initiating signatory, and corresponding Crestfield invoices, is set forth in the separate Payment Flow Analysis Workbook prepared by the Pinnacle engagement team and will be incorporated into the interim investigation report.
VI. Crestfield Advisory Partners Ltd. — Corporate Due Diligence Records at TGH
A. Due Diligence File
No due diligence file on Crestfield Advisory Partners Ltd. was located in TGH's corporate records at its BVI registered office. A thorough search of TGH's minute book, correspondence files, and supplemental corporate records maintained by the registered agent revealed no compliance questionnaire, background check report, anti-corruption certification, conflict of interest disclosure, reference check, or any other form of due diligence documentation relating to Crestfield or to Jean-Philippe Renard, its sole owner and beneficial owner.
Catherine Whitfield confirmed that her firm, as TGH's BVI legal counsel, was not consulted in connection with the Crestfield engagement and was not asked to conduct or review any due diligence on Crestfield or Renard. Ms. Whitfield further confirmed that the registered agent's files contain no compliance questionnaire, background check, anti-corruption certification, or other due diligence materials relating to Crestfield or Renard.
This finding is consistent with the red flag previously identified in the broader investigation: no due diligence file on Crestfield exists in Torchlight's compliance records maintained by Nadia Berenson, Vice President, Compliance and Ethics at Torchlight Mining Corp. The absence of any due diligence documentation at both the parent level and the subsidiary level strongly suggests that no meaningful due diligence was conducted on Crestfield at any point prior to or during the engagement — a significant departure from Torchlight's stated anti-corruption policies and from the expectations set forth in DOJ and SEC guidance on the vetting of third-party intermediaries used to interact with foreign government officials.
B. Observations on Crestfield's Corporate Profile
Based on the information gathered during the course of this investigation, the following characteristics of Crestfield Advisory Partners Ltd. are noted:
(a) Crestfield Advisory Partners Ltd. was incorporated in the Republic of Mauritius in 2016. Its registered address is 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius, which corresponds to a registered-agent office and corporate services provider, rather than a physical operational office.
(b) Crestfield has no publicly accessible website, no known employees other than Renard himself, and a minimal corporate presence. The company does not appear to maintain a physical office in the Republic of Ganara, the jurisdiction in which its services were purportedly rendered.
(c) Jean-Philippe Renard, a French citizen, age 54, currently based in Dakar, Senegal, is the sole beneficial owner and the sole director of Crestfield. Mr. Renard is a former French diplomat who served in various West African postings and is understood to have developed personal relationships with senior Ganaran government officials during his diplomatic career, including individuals in the Ministry of Mines, Geology, and Natural Resources and the National Environmental Protection Agency.
These characteristics — incorporation in an offshore jurisdiction, use of a registered-agent address, lack of employees or operational presence, single-person ownership by an individual with government connections — are consistent with a "shell company" profile and constitute significant red flags under the DOJ's A Resource Guide to the U.S. Foreign Corrupt Practices Act (2020, 2d ed.) and SEC enforcement guidance on the evaluation of third-party intermediaries. Specifically, these characteristics are among the hallmarks that the DOJ and SEC have identified as warning signs suggesting that a purported "agent" or "consultant" may be acting as a conduit for corrupt payments to foreign officials.
VII. TGH Memorandum and Articles of Association — Key Provisions
A review of TGH's Memorandum and Articles of Association, as filed with the BVI Registrar of Corporate Affairs at the time of incorporation and as maintained in the registered office files, reveals the following provisions of particular relevance to this investigation:
A. Objects Clause
TGH's Memorandum of Association contains a general-purpose objects clause permitting TGH to engage in any lawful business, trade, or activity. This is the standard form objects clause for BVI Business Companies and does not impose any restriction on the types of contracts or engagements that TGH may enter into. The breadth of this objects clause means that the Crestfield Advisory Agreement was within TGH's corporate powers, and no ultra vires argument would be available with respect to the engagement itself. The legality of the purpose for which the engagement was used, however, is a separate question.
B. Directors' Powers
The Articles of Association grant the directors broad authority to manage the business and affairs of the company, including the power to enter into contracts, appoint agents, and open bank accounts on behalf of TGH. These powers may be exercised without shareholder approval, which is consistent with the BVI Business Companies Act default provisions for single-member companies. Given that Torchlight Mining Corp. is TGH's sole shareholder, the directors' exercise of these powers was not subject to any additional shareholder consent requirements beyond those imposed by Torchlight's own internal governance policies — policies that, as noted above, appear not to have been effectively implemented at the TGH level.
C. Conflict of Interest Provisions
The Articles contain a standard BVI conflict of interest provision requiring directors to disclose any material interest they may have in a transaction or arrangement entered into by the company. This provision is consistent with Section 125 of the BVI Business Companies Act, which requires a director who has an interest in a transaction entered into or to be entered into by the company to disclose that interest to the board.
No disclosure by Marcus Delacroix of any personal relationship with Jean-Philippe Renard was located in the minute book in connection with the Crestfield engagement authorization or at any subsequent time. The April 10, 2019 resolution authorizing the Crestfield engagement contains no record of any conflict disclosure, and no separate conflict disclosure memorandum or declaration was filed with the resolution or elsewhere in TGH's records.
Catherine Whitfield noted that the absence of a conflict disclosure does not necessarily indicate a violation of BVI law if Delacroix had no direct personal financial interest in the Crestfield transaction — for example, if Delacroix did not hold an ownership stake in Crestfield and did not personally benefit from the payments. However, Ms. Whitfield acknowledged that the personal relationship between Delacroix and Renard, as well as the circumstances surrounding Delacroix's introduction of Renard and advocacy for the Crestfield engagement, warrant further inquiry as part of the internal investigation to determine whether Delacroix had an undisclosed interest that should have been disclosed under the Articles or under BVI law.
D. Indemnification Provisions
The Articles contain a standard director indemnification clause providing that TGH shall indemnify its directors and former directors against all liabilities, losses, damages, costs, and expenses (including legal fees) incurred in their capacity as directors, except in cases of willful misconduct, fraud, or dishonesty. This provision is consistent with Section 132 of the BVI Business Companies Act, which permits BVI companies to indemnify directors subject to the statutory exceptions.
This provision may be implicated in the near term if Marcus Delacroix seeks indemnification from TGH for defense costs incurred in connection with the FCPA investigation or any subsequent enforcement proceedings. Depending on the ultimate findings of the investigation regarding Delacroix's knowledge of and involvement in the alleged improper payment scheme, the fraud and dishonesty exception to the indemnification clause may apply, potentially relieving TGH of any obligation to indemnify him. This issue should be flagged for the Audit Committee and for Torchlight's outside D&O insurance counsel as the investigation progresses.
VIII. Regency International Bank — TGM Local Account
A. Overview. While the primary focus of this memorandum is TGH's BVI corporate records, reference must be made to TGM's local banking arrangements in the Republic of Ganara, as those arrangements are directly relevant to the payments under investigation.
TGM maintains its principal operating account at Regency International Bank, Libreville, Republic of Ganara (Account No. GAN-4419-8837). This account is denominated in CFA Francs and is used for TGM's local payroll, vendor payments, tax payments to the Ganaran government, and other in-country operating expenditures. Significantly, this account was also used for the cash withdrawals and in-kind benefits that are among the categories of potentially improper payments under investigation.
Corporate records relating to the TGM Regency International Bank account were not maintained in TGH's BVI files. Catherine Whitfield confirmed that TGH's registered office in the British Virgin Islands would not ordinarily hold records for a Ganaran operating subsidiary's local bank accounts, as those records would typically be maintained at TGM's offices in Libreville or at TGM's Ganaran registered office.
TGM account documentation, including corporate resolutions, signatory authority designations, account opening documents, and transaction records, is being reviewed separately in coordination with Maître Salif Ndong of Ndong & Keïta Cabinet Juridique, Ganaran local counsel retained in this matter. Maître Ndong's engagement is being managed under the overall direction of Calderwood & Harkness's investigation team.
Noted for cross-reference and coordination with the forensic accounting workstream: approximately $890,000 in cash withdrawals from the Regency International Bank account were coded under general ledger account 7450 ("Community Relations Expenses"), and an additional $630,000 in in-kind benefits — including the purchase and transfer of vehicles and the payment of travel expenses for third parties — were booked across GL 7200 ("Equipment and Vehicles — Non-Mining") and GL 7310 ("Travel and Entertainment — Third Party") at TGM. The signatory and authorization protocols for TGM's Regency account, including the identity of the individuals who authorized these cash withdrawals and in-kind benefit payments, are under separate review by Maître Ndong's team and will be addressed in a forthcoming memorandum.
IX. Summary of Key Findings and Observations
Based on the review of TGH's corporate records described in this memorandum, the following key findings and observations are presented for purposes of the ongoing investigation:
1. Authorization of Crestfield Engagement. The TGH board resolution of April 10, 2019 authorized TGH to enter into the Crestfield Advisory Agreement, but the resolution did not reference any due diligence conducted on Crestfield or Renard, did not reference any anti-corruption compliance review, and did not reflect any competitive selection or request-for-proposal process. The resolution was proposed by Marcus Delacroix, who personally introduced Jean-Philippe Renard to Torchlight and who advocated for the Crestfield engagement. The resolution was signed by Delacroix and Fournier only.
2. Absence of Due Diligence Documentation. No due diligence file on Crestfield Advisory Partners Ltd. or Jean-Philippe Renard exists in TGH's registered office records. This finding is consistent with the absence of any due diligence file in Torchlight's parent-level compliance records, as confirmed by VP Compliance and Ethics Nadia Berenson. The complete absence of due diligence documentation at both the parent and subsidiary levels represents a fundamental failure of Torchlight's anti-corruption compliance program as applied to the Crestfield engagement.
3. Signatory Authority Gap. Marcus Delacroix's $250,000 single-signatory authority on the Meridian Commercial Bank account, established by the December 2018 supplemental resolution, exceeded the Torchlight parent-level Delegation of Authority Policy threshold of $50,000 for single approvals at the subsidiary level. This disparity enabled Delacroix to initiate payments to Crestfield — including 14 invoices exceeding $50,000, with individual amounts ranging from $55,000 to $185,000 — without requiring dual authorization from Fournier or any other individual. The structural gap between the parent-level policy and the subsidiary-level banking arrangements effectively negated the dual-approval controls that Torchlight's corporate policies were designed to impose.
4. Excess Payments Without Board Authorization. Total payments to Crestfield from TGH's Meridian account amounted to $3,210,000, exceeding the contractual maximum under the Crestfield Advisory Agreement of $2,040,000 by $1,170,000. No TGH board resolution was identified authorizing the excess payments, amending the Crestfield Advisory Agreement to increase payment caps, or otherwise ratifying payments in excess of the original contractual terms. The excess payments were made without any documented corporate authorization at the TGH board level.
5. No Conflict Disclosure by Delacroix. Despite the conflict of interest provisions in TGH's Articles of Association requiring directors to disclose material interests in transactions, no disclosure by Marcus Delacroix of his personal relationship with Jean-Philippe Renard appears in TGH's corporate records in connection with the Crestfield engagement or at any subsequent time. Whether this omission constitutes a violation of BVI law depends on the nature and extent of Delacroix's interest in the Crestfield transaction, which remains under investigation.
6. Post-Resignation Steps. Following Delacroix's resignation from TGH and Torchlight on November 15, 2024, his signatory authority on the Meridian account was revoked by board resolution dated November 20, 2024, and Patricia Sung was added as a signatory with $100,000 single-signatory authority. The revocation was completed within five days of the resignation date.
7. TGM Records Gap. TGH's BVI registered office files do not contain records relating to TGM's local Regency International Bank account (Account No. GAN-4419-8837) or the $890,000 in cash withdrawals and $630,000 in in-kind benefits under review. These records are being separately obtained through Ganaran local counsel, Maître Salif Ndong of Ndong & Keïta Cabinet Juridique.
X. Recommended Next Steps
Based on the findings and observations summarized above, the following next steps are recommended:
1. Complete Meridian Wire Transfer Records. Obtain from Meridian Commercial Bank the complete wire transfer records for Account No. 7740-2281-0056 covering the full period from April 2019 through the present date. These records should include initiating signatory identification, timestamps, beneficiary bank details, and any accompanying payment instructions or reference information. Once obtained, these records should be cross-referenced with the Crestfield invoice register compiled during the document review phase and with the forensic accounting analysis being conducted by Pinnacle Forensic Advisory LLC under the direction of Dr. Leonard Strauss.
2. Confirm Completeness of TGH Corporate Records. Request that Catherine Whitfield of Hargrove Whitfield LLP confirm in writing whether any additional TGH corporate records exist at the registered agent's office (BVI Corporate Services Ltd.) or in any secondary storage location, including any informal correspondence files, email archives, or supplemental records maintained by the registered agent outside of the formal minute book.
3. Coordinate with Ganaran Local Counsel. Continue coordination with Maître Salif Ndong of Ndong & Keïta Cabinet Juridique regarding TGM corporate records, including TGM's articles of association, board resolutions, Regency International Bank account opening documentation, signatory authority designations, and transaction records. Particular attention should be given to the authorization protocols for the $890,000 in cash withdrawals coded under GL 7450 and the $630,000 in in-kind benefits booked under GL 7200 and GL 7310.
4. BVI Director Liability Analysis. Request that Catherine Whitfield provide a formal legal opinion addressing whether the absence of a board resolution authorizing the excess payments to Crestfield (the $1,170,000 in excess of the contractual maximum) constitutes a breach of TGH's Articles of Association or the BVI Business Companies Act, and the potential implications for personal liability of the TGH directors who were in office during the period in which the excess payments were made.
5. Delacroix Indemnification Analysis. Evaluate the scope and applicability of the indemnification provision in TGH's Articles of Association in light of the evolving investigation findings regarding Delacroix's role in the alleged payment scheme. Specifically, assess whether the fraud and dishonesty exception to indemnification would likely apply based on the evidence developed to date, and coordinate with Torchlight's D&O insurance counsel regarding coverage implications.
6. Incorporate Findings into Interim Investigation Report. Incorporate the findings from this corporate records review, together with the results of the Pinnacle forensic accounting analysis and the Ganaran counsel review, into the interim investigation report to be presented to the Audit Committee of Torchlight's Board of Directors. The Audit Committee, currently composed of Dr. Eleanor Fiske (Chair), Warren Ogilvy, and Marguerite Chen, has requested that the interim report be delivered by the targeted date of May 15, 2025.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
This memorandum has been prepared by Calderwood & Harkness LLP at the direction of the Audit Committee of Torchlight Mining Corp. in connection with the internal investigation referenced herein. It constitutes attorney work product and is protected by the attorney-client privilege. This memorandum is not intended for distribution beyond the investigation team and should not be disclosed to any third party without prior authorization from the undersigned or from the supervising partner.
Calderwood & Harkness LLP 825 Eighth Avenue, 42nd Floor New York, New York 10019
Matter No. 1039-00005 — Torchlight Mining Corp. FCPA Investigation
Field | Detail
Account Holder | Torchlight Ganara Holdings Ltd.
Account Number | 7740-2281-0056
Currency | United States Dollars (USD)
Bank | Meridian Commercial Bank
Branch | Road Town, Tortola, British Virgin Islands
Date Opened | Approximately April 2017

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

MATTER NO.: 1039-00005

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