1039-00005 · Torchlight Mining Corp · Diligence/Financial

payment-flow-analysis-memo.docx DOCUMENT Litigation

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

MEMORANDUM

TO: Conrad Ashby, Responsible Partner, White Collar & Investigations, Calderwood & Harkness LLP

FROM: Steven Hollander, Lead Associate, and Jasmine Thornton, Working Associate, White Collar & Investigations, Calderwood & Harkness LLP

DATE: April 3, 2025

RE: Analysis of Payment Flows — TGH to Crestfield Advisory Partners Ltd. and TGM Local Disbursements (2019–2024)

MATTER: Torchlight Mining Corp. — FCPA Investigation (C&H Matter No. 1039-00005)

I. Executive Summary

The purpose of this memorandum is to summarize the forensic accounting findings to date regarding payment flows from Torchlight Ganara Holdings Ltd. ("TGH") to Crestfield Advisory Partners Ltd. ("Crestfield") and direct disbursements from Torchlight Ganara Mining S.A. ("TGM") local accounts between 2019 and 2024. This memorandum is prepared at counsel's direction to inform the ongoing internal investigation of potential violations of the Foreign Corrupt Practices Act ("FCPA"), 15 U.S.C. §§ 78dd-1 et seq., and related anti-corruption laws, and to support the Firm's anticipated presentation to the Audit Committee of Torchlight Mining Corp. ("Torchlight" or the "Company").

The investigation has been conducted in coordination with Pinnacle Forensic Advisory LLC ("Pinnacle"), whose engagement partner, Dr. Leonard Strauss, CPA, CFF, was retained on March 12, 2025, under the direction and at the request of counsel. Pinnacle's forensic work has been performed at all times under the supervision of Calderwood & Harkness LLP and is protected by the attorney-client privilege and the work-product doctrine.

Based on the forensic analysis completed to date, we have identified three principal payment channels through which funds were directed to, or for the benefit of, foreign government officials in the Republic of Ganara:

(1) Crestfield Advisory invoiced payments totaling $3,210,000 across 24 invoices submitted between April 2019 and October 2024. These payments were wired from TGH's account at Meridian Commercial Bank in the British Virgin Islands ("BVI") to Crestfield's accounts in Mauritius. Preliminary tracing indicates that approximately 75% of these funds were subsequently diverted to Ganaran government officials and their associates.

(2) TGM cash withdrawals from Regency International Bank in Ganara, coded to General Ledger account 7450 ("Community Relations Expenses"), totaling $890,000. These withdrawals were made in local currency at irregular intervals, with a marked increase in frequency preceding permit application deadlines and government site inspections. Supporting documentation for the vast majority of these withdrawals is either absent or inadequate.

(3) In-kind benefits, including vehicle purchases and travel expenses, totaling approximately $630,000. These benefits were booked across GL 7200 (Equipment and Vehicles) and GL 7310 (Travel and Hospitality) and were provided to Ganaran government officials or their associates. Procurement records were deliberately characterized to obscure the true nature and intended beneficiaries of the expenditures.

The total suspected improper payments across all three channels amount to $4,730,000.

With respect to the Crestfield channel specifically, Pinnacle's preliminary tracing analysis estimates that approximately $2,410,000 — representing roughly 75% of the $3,210,000 in total Crestfield payments — was diverted from Crestfield's accounts to individuals and entities associated with Ganaran government officials. The remaining approximately $800,000 appears to be attributable to Crestfield's own operating costs and such legitimate advisory services as it may have rendered, although further analysis is required to confirm this allocation.

A significant and troubling pattern has emerged from the timing analysis: Crestfield invoice submissions and corresponding payments are strongly correlated with the issuance of five mining permits and regulatory approvals obtained by TGM during the period under review. In each instance, Crestfield submitted one or more invoices — typically at amounts substantially exceeding its monthly retainer — within the 30–60 day window preceding the issuance of a permit or approval. This pattern strongly suggests that the payments were tied to the procurement of specific regulatory outcomes rather than to any legitimate advisory services.

The foregoing analysis is based on a comprehensive review of wire transfer records from Meridian Commercial Bank (BVI) (Account No. 7740-2281-0056) and Regency International Bank (Ganara) (Account No. GAN-4419-8837), the complete Crestfield invoice register, TGM general ledger entries, procurement records, and supporting documentation collected by Marlowe Asset Management Digital Forensics Inc. ("Marlowe Asset Management") from the custodial files of 23 individuals. Our findings remain preliminary and are subject to supplementation as Pinnacle completes its downstream tracing analysis and as additional witness interviews and document productions are completed.

II. Scope and Methodology

A. Scope of Forensic Review

The forensic review covers the period from January 1, 2019 through October 31, 2024. This period was selected because it encompasses the entirety of Crestfield's engagement with TGH, beginning with the execution of the Government Relations Advisory Agreement on April 12, 2019, and extending through the last identified Crestfield invoice payment on October 31, 2024. The start date of January 1, 2019 was chosen to capture any pre-engagement payments or communications that may have preceded the formal execution of the Crestfield agreement.

The review encompasses two Torchlight entities:

• Torchlight Ganara Holdings Ltd. ("TGH") — a British Virgin Islands holding company through which Torchlight holds its equity interest in TGM. TGH served as the contracting party for the Crestfield engagement and as the entity from which all Crestfield payments were funded.

• Torchlight Ganara Mining S.A. ("TGM") — the Ganaran operating entity that holds mining licenses and conducts day-to-day mining operations in the Republic of Ganara. TGM maintained local currency accounts from which cash withdrawals and procurement expenditures were made.

The focus of the forensic review encompasses three categories of transactions:

(a) All payments made by TGH to Crestfield Advisory Partners Ltd., including wire transfers, the underlying invoices, and any contractual documentation governing the engagement;

(b) All cash withdrawals and disbursements from TGM local accounts that were categorized under vague or generic general ledger codes, with particular emphasis on GL 7450 ("Community Relations Expenses"); and

(c) All procurement transactions related to in-kind benefits provided to government officials or their associates, including vehicle purchases booked to GL 7200 (Equipment and Vehicles) and travel expenses booked to GL 7310 (Travel and Hospitality).

The relevant bank accounts under review are as follows:

• TGH primary operating account at Meridian Commercial Bank, Road Town, Tortola, British Virgin Islands — Account No. 7740-2281-0056. This account was used for all outbound wire transfers to Crestfield.

• TGM local currency operating account at Regency International Bank, Ganara City, Republic of Ganara — Account No. GAN-4419-8837. This account was used for local operational expenditures, including the cash withdrawals at issue and procurement-related disbursements.

B. Data Sources

The forensic review has drawn upon the following categories of source materials, each of which was produced, collected, or obtained under the direction of counsel:

1. Crestfield Invoice Register. The complete register of 24 invoices submitted by Crestfield to TGH between April 2019 and October 2024, obtained from TGH's financial records. Each invoice has been digitized and indexed by Pinnacle and is catalogued in Tab 1 of the Payment Flow Analysis Workbook.

2. Wire Transfer Confirmations and Bank Statements. Complete wire transfer confirmations and monthly bank statements from Meridian Commercial Bank for Account No. 7740-2281-0056, covering the full period under review. These records were produced by TGH under the document collection protocol established at the commencement of the investigation.

3. TGM General Ledger Extracts. Detailed general ledger extracts for GL 7450 (Community Relations Expenses), GL 7200 (Equipment and Vehicles), and GL 7310 (Travel and Hospitality) for the period January 2019 through October 2024, extracted from TGM's accounting system by Pinnacle with the cooperation of TGM's finance department.

4. Regency International Bank Statements and Cash Withdrawal Records. Monthly bank statements and cash withdrawal slips for Account No. GAN-4419-8837, produced by TGM.

5. Procurement Files and Purchase Orders. TGM procurement files, including purchase orders, vendor invoices, delivery confirmations, and related documentation for vehicle purchases and travel expenditures identified as relevant to the investigation.

6. Email Communications. Electronically stored information collected from the custodial files of 23 individuals by Marlowe Asset Management Digital Forensics Inc. The total data volume across all custodians is approximately 1.625 terabytes. Marlowe Asset Management has processed and loaded the data to a hosted review platform for attorney review and continues to support keyword searching, de-duplication, and threading analysis.

7. Government Relations Advisory Agreement. The executed agreement between TGH (as "Client") and Crestfield Advisory Partners Ltd. (as "Advisor"), dated April 12, 2019, which sets forth the scope of Crestfield's engagement and the contractual fee structure. This document was produced from TGH's corporate files.

C. Analytical Methodology

Pinnacle Forensic Advisory has employed the following analytical methodologies in conducting the forensic review:

Invoice-by-Invoice Analysis. Pinnacle performed a line-by-line review of each of the 24 Crestfield invoices, comparing the invoiced amounts against contractual entitlements under the Government Relations Advisory Agreement. This analysis identified the total invoiced amount, calculated the contractual maximum that should have been payable over the engagement period, and quantified the excess payments that lacked any contractual authorization.

Timeline Correlation Analysis. Pinnacle mapped the submission dates and payment dates of each Crestfield invoice against the issuance dates of mining permits, environmental approvals, and license upgrades obtained by TGM during the period under review. This analysis was designed to identify temporal patterns suggesting a nexus between payments and regulatory outcomes.

Cash Withdrawal Pattern Analysis. For GL 7450 entries, Pinnacle analyzed the frequency, amounts, and timing of cash withdrawals from the TGM local account, identifying patterns of increased withdrawal activity preceding key regulatory milestones. The analysis also assessed the adequacy of supporting documentation for each withdrawal.

In-Kind Benefit Cross-Referencing. Pinnacle cross-referenced procurement records for vehicle purchases and travel expenditures against the identities of known Ganaran government officials and their family members, associates, and controlled entities. This analysis was supported by public records research and open-source intelligence compiled by Pinnacle's investigative team.

It is important to note that the forensic work remains ongoing. The findings presented in this memorandum are preliminary and subject to supplementation as additional data becomes available — particularly with respect to downstream tracing of Crestfield account flows and the completion of second-wave witness interviews scheduled for late April and early May 2025.

III. Payment Channel 1: TGH Payments to Crestfield Advisory Partners Ltd.

A. Background on the Crestfield Engagement

The Government Relations Advisory Agreement (the "Agreement") between TGH and Crestfield Advisory Partners Ltd. was executed on April 12, 2019. Under the Agreement, TGH is designated as the "Client" and Crestfield as the "Advisor." The Agreement was signed on behalf of TGH by Marcus Delacroix, then Vice President, Africa Operations, and on behalf of Crestfield by Jean-Philippe Renard, its sole principal.

Crestfield Advisory Partners Ltd. was incorporated in Mauritius in 2016. Its registered address is 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius. Our investigation has confirmed that this address is a registered-agent office providing corporate domiciliation services; Crestfield has no physical office space, employees, or operational presence at this location. The sole beneficial owner and operator of Crestfield is Jean-Philippe Renard, a French citizen, age 54, who resides and is based primarily in Dakar, Senegal. No other directors, officers, or employees of Crestfield have been identified.

The stated scope of the engagement, as set forth in Section 2 of the Agreement, is "government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara." The Agreement does not contain any detailed description of the specific services to be rendered, nor does it include deliverable requirements, reporting obligations, or performance metrics.

Notably, Crestfield was personally introduced to TGH by Marcus Delacroix. Our review of the available documentation indicates that no competitive selection process was conducted, and no alternative government relations advisors were evaluated prior to the engagement of Crestfield. No due diligence file on Crestfield exists in Torchlight's compliance records — a fact that is particularly significant given Torchlight's own Third-Party Due Diligence Policy, which requires enhanced due diligence for all intermediaries engaged to interact with government officials on the Company's behalf.

B. Contractual Fee Structure

The Agreement establishes the following fee structure for Crestfield's services:

• Monthly Retainer: $15,000 per month, payable within 30 days of invoice submission, for ongoing government relations advisory services.

• Success Fees: $100,000 per permit obtained, payable upon the issuance of each mining permit, environmental approval, or license upgrade that Crestfield assisted in procuring.

• Expense Reimbursement: Reimbursement of reasonable out-of-pocket expenses incurred in connection with the engagement, at cost, capped at $25,000 per calendar quarter. The Agreement requires Crestfield to submit expense reports with supporting receipts, although no specific format or level of detail is prescribed.

Section 9.2 of the Agreement contains an anti-corruption representation pursuant to which Crestfield warranted its compliance with "all applicable anti-corruption laws" in the performance of its services. However, this representation is notably deficient in several respects: it does not specifically reference the FCPA or any other named statute; it does not require Crestfield to maintain books and records or internal controls; and it does not include a right of termination in the event of a breach of the anti-corruption warranty. Additionally, the Agreement does not contain an audit rights clause that would have permitted TGH or Torchlight to inspect Crestfield's books, records, or accounts.

Based on the contractual fee structure and the duration of the engagement (April 2019 through October 2024, a period of approximately 66 months), Pinnacle has calculated the contractual maximum that should have been payable to Crestfield as follows:

• Retainers: $15,000 per month × 66 months = $990,000

• Success fees: $100,000 × 5 permits obtained = $500,000

• Expenses: up to $25,000 per quarter × 22 quarters = $550,000 (maximum)

• Total contractual maximum: $2,040,000

As detailed in Section III.C below, the actual amounts invoiced by Crestfield and paid by TGH exceeded this contractual maximum by $1,170,000.

C. Actual Invoiced and Paid Amounts — Year-by-Year Breakdown

Pinnacle's invoice-by-invoice analysis of the 24 Crestfield invoices yields the following year-by-year summary:

The total amount invoiced and paid — $3,210,000 — exceeds the contractual maximum of $2,040,000 by $1,170,000. This excess represents approximately 57% above the contractual ceiling.

No contract amendment, addendum, side letter, or written justification for payments exceeding the contractual maximum has been identified in TGH's corporate files, Torchlight's corporate records, or the custodial files of any of the 23 individuals whose electronic data has been collected and reviewed. The absence of any documented authorization for the excess payments is a significant red flag, as it suggests that the overpayments were either deliberately concealed or approved through informal channels outside the normal governance process.

The last Crestfield invoice was paid on October 31, 2024, in the amount of $115,000. Payments ceased after that date following the initiation of the Company's internal compliance review in November 2024, which preceded the formal engagement of Calderwood & Harkness LLP in January 2025.

A complete register of all 24 invoices, including dates, amounts, descriptions, and approval chain information, is set forth in Tab 1 of the Payment Flow Analysis Workbook.

D. Invoice Approval Irregularities

Torchlight's Delegation of Authority Policy (the "DOA Policy"), as adopted by the Board of Directors and most recently updated in March 2018, requires dual approval for all expenditures exceeding $50,000. Specifically, the DOA Policy provides that any payment in excess of $50,000 must be approved by both the requesting business unit manager and a designated financial officer at the corporate level — in this case, Diane Fournier, Vice President, Finance, based at Torchlight's Toronto headquarters.

Of the 24 Crestfield invoices, 14 exceeded $50,000, with individual invoice amounts ranging from $55,000 to $185,000. Each of these 14 invoices was approved solely by Raymond Osei-Bonsu, then Country Manager for TGM, without any secondary authorization from Fournier or any other Toronto-based financial officer. This constitutes a direct and systematic violation of the DOA Policy.

The remaining 10 invoices, each of which was under $50,000, were also approved solely by Osei-Bonsu. While these invoices did not technically require dual approval under the DOA Policy, the fact that all 24 invoices — without exception — were approved by a single individual is a significant internal controls deficiency. It reflects a complete absence of independent oversight over the Crestfield payment stream.

Our review has identified no evidence that Diane Fournier, or any other member of Torchlight's Toronto-based finance organization, reviewed, approved, or was even made aware of any Crestfield invoice prior to payment. The invoices were processed through TGH's BVI accounts and did not flow through Torchlight's centralized accounts payable function in Toronto.

E. Wire Transfer Analysis

All 24 Crestfield payments were wired from the TGH primary operating account at Meridian Commercial Bank, Road Town, Tortola, BVI (Account No. 7740-2281-0056). The wire beneficiary on each transfer was Crestfield Advisory Partners Ltd. The receiving account details reference a Mauritian bank account, the full details of which are currently being traced by Pinnacle through international banking records.

Pinnacle's preliminary downstream tracing — conducted through analysis of available Crestfield bank records and corroborating wire transfer documentation — has identified that Crestfield maintained at least two additional accounts beyond its primary Mauritian receiving account: one at a commercial bank in Dakar, Senegal, and one at a bank in the Republic of Ganara. Portions of the payments received from TGH were subsequently transferred from the Mauritian account to these downstream accounts, and further disbursements were made from those accounts to individuals and entities associated with Ganaran government officials.

Based on the tracing analysis completed to date, Pinnacle estimates that approximately $2,410,000 — representing roughly 75% of the $3,210,000 in total Crestfield payments — was ultimately disbursed from Crestfield's accounts to individuals and entities associated with Ganaran government officials. The remaining approximately $800,000 appears to be attributable to Crestfield's own operating costs, including Renard's personal compensation, travel expenses, and such legitimate advisory services as may have been rendered. Further analysis is ongoing to confirm the precise allocation and to identify the specific recipients of the diverted amounts.

F. Estimated Distribution to Government Officials via Crestfield Channel

Based on Pinnacle's preliminary tracing analysis, the estimated distribution of diverted Crestfield funds to identified Ganaran government officials is as follows:

Hon. Boubacar Diallo — Former Minister of Mines and Natural Resources of the Republic of Ganara, serving from 2018 to 2023. Diallo held the ministerial portfolio responsible for the issuance of mining licenses and the oversight of the mining regulatory framework in Ganara during the critical period of Torchlight's permit applications. Pinnacle estimates that approximately $1,850,000 was channeled through Crestfield and intermediary accounts to Diallo and/or entities controlled by or associated with Diallo. The specific accounts and entities through which these payments were routed are detailed in Pinnacle's working papers, which are being updated as additional tracing is completed.

Amadou Traoré — Director of Environmental Permitting at the Ministry of Environment of the Republic of Ganara. Traoré was responsible for the review and approval of environmental impact assessments submitted in connection with mining permit applications. Pinnacle estimates that approximately $620,000 was directed to Traoré through a combination of Crestfield payments routed through intermediary accounts and direct wire transfers from Crestfield's Ganaran account.

Tracing of the remaining diverted amounts is ongoing. The outstanding balance includes payments to entities and individuals who have not yet been fully identified, and Pinnacle is pursuing additional banking records and corporate registry information to complete this analysis.

G. Timing Correlation: Crestfield Invoices and Permit Issuance

Pinnacle's timeline correlation analysis has revealed a striking and consistent pattern: in each of the five instances in which TGM obtained a mining permit, environmental approval, or license upgrade during the period under review, Crestfield submitted one or more invoices at elevated amounts within the 30–60 day window preceding the issuance of that permit or approval. The following table details this correlation:

Several observations emerge from this analysis:

First, the pattern is remarkably consistent. In all five instances, Crestfield invoiced amounts substantially in excess of the monthly retainer of $15,000 during the period immediately preceding permit issuance. The invoice amounts in these pre-permit windows range from approximately $120,000 to $185,000 — amounts that cannot be explained by the retainer or reasonable expense reimbursement and that far exceed the $100,000 success fee that would have been payable only after permit issuance.

Second, the Kousseri Copper-Cobalt Mining License (KCC-2019-0047), which was the first permit obtained after Crestfield's engagement, was issued on September 14, 2019 — approximately four months after TGM submitted its application. According to publicly available data from Ganara's Ministry of Mines and Natural Resources, the statutory average processing time for a copper-cobalt mining license during this period was approximately eight months. The fact that this license was obtained in roughly half the average processing time, contemporaneously with the largest single Crestfield invoice ($185,000), is a significant indicator of improper influence.

Third, the temporal correlation between elevated invoice amounts and permit issuance dates is statistically improbable as a coincidence. While this memorandum does not present a formal statistical analysis, the consistent 30–60 day lead time between invoice spikes and permit issuance across all five regulatory milestones strongly suggests that the payments were tied to the procurement of specific regulatory approvals rather than to any routine advisory function.

A detailed timeline chart mapping all 24 Crestfield invoice dates and amounts against the five permit issuance dates is included in Tab 5 of the Payment Flow Analysis Workbook.

IV. Payment Channel 2: TGM Cash Withdrawals — GL 7450 ("Community Relations Expenses")

A. Overview

TGM maintained local currency operating accounts at Regency International Bank in Ganara City, Republic of Ganara (Account No. GAN-4419-8837). Between 2019 and 2024, a total of $890,000 (or the local currency equivalent) in cash withdrawals were made from this account and booked to General Ledger account 7450, described in TGM's chart of accounts as "Community Relations Expenses."

GL 7450 is a vague, catch-all general ledger code that was created in TGM's chart of accounts without detailed sub-categories, without mandatory supporting documentation requirements, and without any defined approval workflow beyond a single signatory authorization. The existence of such a broadly defined account code — particularly one from which nearly $900,000 in cash was withdrawn over a five-year period — represents a fundamental internal controls deficiency that created an environment conducive to the misuse of corporate funds.

B. Nature and Pattern of Withdrawals

Cash withdrawals from the TGM local account coded to GL 7450 occurred at irregular intervals throughout the period under review. However, Pinnacle's pattern analysis has identified a pronounced increase in both the frequency and size of withdrawals during periods immediately preceding key regulatory milestones, including permit application deadlines and scheduled government site inspections of TGM's mining operations in Kousseri Province.

Individual withdrawal amounts varied across a wide range, the details of which are compiled in the accompanying Payment Flow Analysis Workbook (Tab 2). The withdrawals were made in local currency, and the U.S. dollar equivalent amounts referenced in this memorandum have been calculated by Pinnacle using the applicable exchange rates as of the date of each withdrawal.

Supporting documentation for the GL 7450 withdrawals is sparse and, where it exists, inadequate. The majority of GL 7450 entries are backed only by brief internal memoranda prepared by Raymond Osei-Bonsu, the TGM Country Manager. These memoranda contain generic descriptions such as "community engagement activities," "stakeholder gifts," "local community support," and "customary contributions," without identifying specific recipients, communities, activities, or purposes. No third-party receipts, beneficiary acknowledgments, signed gift registers, or community development project reports have been located for the majority of these disbursements. The absence of such documentation is inconsistent with the nature and scale of the expenditures and is a significant red flag.

C. Suspected Recipients

Based on the investigation to date, including the analysis of available documentation and preliminary witness interviews, the following suspected recipients have been identified:

Col. Ibrahim Konaté — Former Regional Prefect of Kousseri Province, serving from 2019 to 2023. Col. Konaté served as the senior administrative official in the province where TGM's mining operations are located and exercised significant discretionary authority over local regulatory matters, including land use approvals, security arrangements, and community relations oversight. Pinnacle estimates that approximately $340,000 in cash and in-kind benefits was directed to Col. Konaté, with a significant portion of the GL 7450 cash withdrawals believed to have been provided to him under the guise of "community development" contributions that were, in fact, personal in nature. Witness interview evidence (discussed below) and procurement records corroborate the direction of benefits to Col. Konaté.

The remaining cash disbursements under GL 7450 are attributed to other government officials and unidentified recipients whose identities have not yet been confirmed. Pinnacle is continuing its analysis of withdrawal records, cross-referencing the timing and amounts of withdrawals against known interactions with specific officials. Across all three payment channels, the total payments directed to officials and recipients other than Hon. Diallo, Traoré, and Col. Konaté amount to approximately $1,920,000 ($4,730,000 − $1,850,000 − $620,000 − $340,000), the specific allocation of which remains under investigation.

D. Internal Controls Observations

The internal controls environment surrounding the GL 7450 cash withdrawals was severely deficient in multiple respects:

Single signatory authorization. Cash withdrawal authorizations at TGM required only a single signatory — Raymond Osei-Bonsu. There was no requirement for a counter-signature from a finance officer, a compliance officer, or any other independent individual. This single-signatory arrangement eliminated any check on Osei-Bonsu's discretion to withdraw cash from the TGM operating account.

Lack of segregation of duties. There was no segregation of duties between the individual authorizing withdrawals (Osei-Bonsu) and the individual recording the corresponding general ledger entries. While Thomas Achebe, Finance Director of TGM, was responsible for processing the GL 7450 entries, he did so at the direction of Osei-Bonsu and without independent verification of the purpose or recipients of the withdrawn funds. In his witness interview conducted on April 28, 2025, Achebe stated that he was told by Osei-Bonsu that the funds were designated for legitimate community relations activities, and that he did not have reason to question this characterization at the time. The credibility and completeness of Achebe's account remain subject to further assessment as the investigation proceeds.

External audit oversight. Clarendon Group LLP, the external auditor of Torchlight Mining Corp. (engagement partner: Alain Beaumont), issued unqualified (clean) audit opinions on Torchlight's consolidated financial statements for fiscal years 2019 through 2023 without identifying or raising any concerns regarding the GL 7450 irregularities. The $890,000 in cash withdrawals booked to this account over the five-year period apparently did not trigger any heightened scrutiny from Clarendon during the audit process. The FY2024 audit is currently delayed and has been placed on hold pending the outcome of the internal investigation.

V. Payment Channel 3: In-Kind Benefits — Vehicle Purchases and Travel

A. Overview

In addition to the Crestfield invoiced payments and the GL 7450 cash withdrawals, Pinnacle has identified approximately $630,000 in in-kind benefits provided to Ganaran government officials or their associates between 2019 and 2024. These benefits consist principally of vehicle purchases and travel-related expenses, and were booked across two general ledger accounts: GL 7200 (Equipment and Vehicles) and GL 7310 (Travel and Hospitality). The characterization of these expenditures in TGM's accounting records was designed to obscure their true nature and intended beneficiaries.

B. Specific In-Kind Benefits Identified

Pinnacle's review of TGM procurement files and purchase orders has identified the following categories of in-kind benefits:

Vehicle Purchases. Multiple vehicles were procured by TGM through its standard procurement channels and subsequently delivered to government officials rather than deployed for operational use by TGM. The beneficiaries of these vehicle deliveries include Col. Ibrahim Konaté and other provincial officials in Kousseri Province. The vehicles were purchased from authorized dealers, with TGM invoices and payment records reflecting the purchases as "operational equipment" for the Kousseri mining site. However, delivery records and witness testimony indicate that certain vehicles were delivered directly to government officials' personal residences rather than to TGM's operational facilities.

Travel Expenses. Airfare, hotel accommodations, and per diem payments were provided to government officials who attended purported "technical site visits" and "training seminars" at locations outside the Republic of Ganara. The legitimate business justification for these trips is questionable in several instances, and the associated costs — which in some cases included business-class international airfare and multi-night stays at luxury hotels — were disproportionate to the stated purposes of the travel. These expenses were booked to GL 7310 (Travel and Hospitality) and characterized in TGM's records as "site visit logistics" and "training program expenses."

Kwame Mensah, Procurement Manager for TGM, processed the vehicle purchase orders at the direction of Raymond Osei-Bonsu. In his witness interview conducted on April 29, 2025, Mensah confirmed that he was aware that certain vehicles were delivered directly to Col. Konaté's personal residence. Mensah stated that he raised concerns with Osei-Bonsu regarding the propriety of these deliveries but was told that the vehicles were "gifts authorized by management" and that the arrangements had been approved at senior levels within the Company. Mensah did not escalate his concerns beyond Osei-Bonsu, nor did he report them through Torchlight's ethics hotline or any other compliance reporting channel.

C. Procurement Process Deficiencies

The procurement process surrounding the in-kind benefits exhibited several material deficiencies:

First, vehicle purchases intended for government officials were not flagged by TGM's procurement system as gifts to foreign officials. TGM's procurement system does not include a field or check-box requiring the purchaser to identify whether the end-user or recipient of a procured item is a government official or a government-affiliated entity. This deficiency allowed vehicles to be procured and delivered to government officials without triggering any automated compliance review or alert.

Second, no Gift and Hospitality Policy review or compliance pre-clearance was conducted for any of the identified in-kind benefits. Torchlight's Gift and Hospitality Policy requires pre-clearance from the Chief Compliance Officer for any gift or hospitality to a government official exceeding $250 in value. None of the vehicle purchases or travel arrangements identified in this review were submitted for pre-clearance, notwithstanding that their individual values far exceeded the $250 threshold.

Third, invoices for vehicles and travel were deliberately characterized in procurement records using terminology designed to obscure the true nature and intended beneficiary of the expenditures. Vehicle purchases were described as "operational equipment" for the mining site, and travel expenses were characterized as "site visit logistics" — descriptions that would not alert a reviewer to the involvement of government officials as beneficiaries.

VI. Consolidated Payment Flow Summary

A. Total Suspected Improper Payments

The following table consolidates the suspected improper payments identified across all three payment channels:

B. Estimated Allocation to Identified Government Officials

Based on Pinnacle's preliminary tracing analysis and the evidence gathered to date, the estimated allocation of suspected improper payments to identified Ganaran government officials is as follows:

C. Cross-Check and Reconciliation

To ensure the integrity of the foregoing analysis, Pinnacle has performed the following cross-check and reconciliation of total outflows associated with the investigation scope:

• Estimated Crestfield funds diverted to government officials: $2,410,000

• Direct and in-kind payments from TGM accounts: $1,520,000 ($890,000 in cash withdrawals + $630,000 in in-kind benefits)

• Legitimate Crestfield services and operating costs: approximately $800,000 ($3,210,000 total Crestfield payments − $2,410,000 estimated diversion)

• Total outflows associated with investigation scope: $5,530,000 ($4,730,000 suspected improper payments + $800,000 in legitimate Crestfield costs)

The $800,000 attributed to legitimate Crestfield services and operating costs remains subject to further verification. Pinnacle is continuing to analyze the Crestfield account flows to determine whether any portion of this amount was also diverted, and the allocation between legitimate and improper use may be revised as additional tracing is completed.

VII. Preliminary Observations and Red Flags

Based on the forensic analysis completed to date, the following preliminary observations and red flags have been identified. These observations are presented in summary form for the Responsible Partner's review and will be incorporated into the forthcoming interim investigation report to the Audit Committee:

1. Excess payments without contractual authorization. Crestfield invoiced and was paid a total of $3,210,000 — exceeding the contractual maximum of $2,040,000 by $1,170,000. No contract amendment, addendum, or written justification for the excess payments has been identified in any corporate records. The magnitude of the overpayment and the absence of any documented authorization strongly suggest that the excess funds were intended for improper purposes.

2. Systematic circumvention of dual-approval requirements. Fourteen of the 24 Crestfield invoices exceeded $50,000 and were approved solely by Raymond Osei-Bonsu, in direct and repeated violation of Torchlight's Delegation of Authority Policy. All 24 invoices were processed without any review or oversight by Toronto-based financial officers. This pattern reflects a deliberate circumvention of internal controls designed to prevent unauthorized or improper expenditures.

3. Shell-company indicia. Crestfield Advisory Partners Ltd. exhibited classic characteristics of a shell company: it had no website, no employees other than its sole principal (Renard), and its registered address is a registered-agent office in Port Louis, Mauritius. Crestfield maintained no physical office, no identifiable operational infrastructure, and no publicly available credentials or track record in government relations advisory services.

4. Absence of third-party due diligence. No due diligence file on Crestfield exists in Torchlight's compliance records. Torchlight's own Third-Party Due Diligence Policy, which requires enhanced due diligence for all intermediaries engaged to interact with government officials, was not followed in connection with the Crestfield engagement. The absence of any due diligence is particularly troubling given the nature of Crestfield's mandate and its sole principal's profile.

5. Use of personal email. Marcus Delacroix, who introduced Crestfield to TGH and who signed the Government Relations Advisory Agreement on behalf of TGH, used personal (non-company) email in 37 identified communications with Renard regarding Crestfield matters. The use of personal email for business communications involving a third-party intermediary engaged for government relations activities is a significant red flag, as it suggests an intent to keep these communications outside of Torchlight's corporate email system and beyond the reach of routine monitoring and compliance oversight.

6. Temporal correlation between payments and permits. As detailed in Section III.G above, there is a strong and consistent temporal correlation between elevated Crestfield invoice submissions and the issuance of each of the five mining permits or regulatory approvals obtained by TGM during the period under review. This correlation, combined with the above-market invoice amounts and the evidence of fund diversion, strongly supports an inference that the payments were made to secure regulatory approvals through the corrupt influence of Ganaran government officials.

7. Inadequate documentation for cash withdrawals. The $890,000 in cash withdrawals booked to GL 7450 ("Community Relations Expenses") lacked adequate supporting documentation. The generic descriptions used to characterize these withdrawals — "community engagement activities," "stakeholder gifts," and the like — are inconsistent with legitimate community development expenditures, which would ordinarily be supported by project plans, beneficiary lists, receipts, and reporting to community affairs departments.

8. Mischaracterization of in-kind benefits. Approximately $630,000 in vehicle purchases and travel expenses were characterized in TGM's procurement records as "operational equipment" and "site visit logistics," descriptions designed to obscure the fact that these benefits were provided to Ganaran government officials and their associates rather than used for legitimate operational purposes.

VIII. Outstanding Forensic Work and Next Steps

The forensic investigation remains ongoing. The following workstreams are in progress or planned for the near term:

1. Downstream Crestfield Tracing. Pinnacle continues to trace the downstream flows from Crestfield's Mauritian, Senegalese, and Ganaran accounts to identify the final beneficiaries of the estimated $2,410,000 in diverted funds. This analysis depends in part on the receipt of additional banking records through international production requests, as discussed below.

2. Identification of Other/Unidentified Recipients. Further analysis is required to determine the specific officials, intermediaries, and entities that received the approximately $1,920,000 currently attributed to "other/unidentified" recipients. Pinnacle is conducting additional cross-referencing of transaction data against public records, beneficial ownership registries, and open-source intelligence.

3. International Production Requests. The Firm is coordinating with Hargrove Whitfield LLP (BVI counsel; partner: Catherine Whitfield) and Ndong & Keïta Cabinet Juridique (Ganaran counsel; partner: Maître Salif Ndong) to obtain Crestfield bank records from institutions in Mauritius, Senegal, and the Republic of Ganara through formal international production requests. The timing and success of these requests will significantly impact the completeness of Pinnacle's tracing analysis.

4. Second-Wave Witness Interviews. A second wave of witness interviews is scheduled to take place in Ganara from April 28 through May 2, 2025. Key witnesses include Thomas Achebe (Finance Director, TGM) and Kwame Mensah (Procurement Manager, TGM), both of whom participated in preliminary interviews on April 28 and April 29, 2025, respectively. Follow-up interviews with these witnesses and additional TGM personnel are planned to explore topics arising from the forensic analysis in greater depth.

5. Interim Investigation Report to the Audit Committee. An interim investigation report is targeted for presentation to the Audit Committee of the Board of Directors on May 15, 2025. The Audit Committee members — Dr. Eleanor Fiske (Chair), Warren Ogilvy, and Marguerite Chen — have been briefed at a high level on the scope and status of the investigation and are expecting a substantive update, including preliminary findings and recommendations regarding remedial measures and disclosure obligations.

6. Voluntary Self-Disclosure Analysis. The findings of this investigation will directly inform the Firm's analysis of whether Torchlight should make a voluntary self-disclosure ("VSD") to the U.S. Department of Justice ("DOJ") and the U.S. Securities and Exchange Commission ("SEC"). The Firm has established a target decision deadline of June 30, 2025 for the VSD determination, in order to preserve the Company's ability to receive credit under the DOJ's revised Corporate Enforcement and Voluntary Self-Disclosure Policy and the SEC's cooperation framework.

7. Financial Impact Assessment. Pinnacle and the Firm are conducting a preliminary financial impact assessment to estimate the Company's potential government exposure in the event of an enforcement action. Based on the current findings, the estimated exposure ranges from approximately $14.19 million to $19.63 million, calculated as follows:

• DOJ criminal fine (based on applicable U.S. Sentencing Guidelines and alternative fine provisions): up to $9,460,000

• SEC disgorgement of profits derived from the improper payments: $4,730,000 (equal to the total suspected improper payments)

• Prejudgment interest on disgorgement (estimated at applicable Treasury rates): approximately $709,500

• SEC civil penalty (equal to the amount of the disgorgement, at the upper end of the penalty tiers): up to $4,730,000

These estimates are preliminary and are subject to significant revision based on additional facts, the extent of the Company's cooperation and remediation, and the applicable enforcement framework in effect at the time of any resolution.

8. Continued Coordination with Advisors. The Firm will continue to coordinate closely with Pinnacle Forensic Advisory LLC (estimated total engagement fees: $1.8 million to $2.4 million) and Marlowe Asset Management Digital Forensics Inc. (engagement contact: Rachel Hartley) on the processing, review, and production of electronically stored information and the completion of the forensic accounting analysis.

IX. Attachments and Enclosures

The following workbook is enclosed with this memorandum and is incorporated by reference herein:

Payment Flow Analysis Workbook (payment-flow-analysis-workbook.xlsx)

• Tab 1: Crestfield Invoice Register — Complete register of all 24 Crestfield invoices, including invoice dates, invoice numbers, descriptions, amounts, approval chain detail (approving officer, date of approval), and payment dates.

• Tab 2: TGM GL 7450 Cash Withdrawal Detail — Detailed listing of all cash withdrawals from TGM Account No. GAN-4419-8837 booked to GL 7450 ("Community Relations Expenses"), including withdrawal dates, amounts (local currency and USD equivalent), supporting documentation references, and Pinnacle's preliminary assessment of each entry.

• Tab 3: In-Kind Benefit Log — Log of all identified in-kind benefits provided to government officials and their associates, including vehicle purchases (make, model, purchase price, delivery address, and identified recipient) and travel expenses (traveler name, destination, travel dates, cost breakdown, and stated purpose).

• Tab 4: Wire Transfer Detail — Complete wire transfer records for all outbound transfers from Meridian Commercial Bank (BVI), Account No. 7740-2281-0056, and relevant inbound/outbound transfers from Regency International Bank (Ganara), Account No. GAN-4419-8837, for the period under review.

• Tab 5: Timeline Correlation — Payment Dates to Permit Issuance Dates — Graphical timeline and supporting data table mapping all 24 Crestfield invoice submission and payment dates, GL 7450 cash withdrawal dates, and in-kind benefit procurement dates against the issuance dates of the five mining permits and regulatory approvals.

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

This memorandum was prepared by Calderwood & Harkness LLP at the direction of counsel in connection with the provision of legal advice and in anticipation of litigation. It is protected by the attorney-client privilege and the attorney work-product doctrine. This memorandum and its attachments are strictly confidential and are not to be disclosed to any person or entity outside of Calderwood & Harkness LLP and authorized representatives of Torchlight Mining Corp. without the prior written consent of the undersigned.

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

C&H Matter No. 1039-00005

Year	Number of Invoices	Total Amount
2019 (April–December)	3	$420,000
2020	4	$575,000
2021	5	$680,000
2022	4	$610,000
2023	5	$590,000
2024 (January–October)	3	$335,000
Total	24	$3,210,000
Permit / Approval	License No.	Issuance Date	Crestfield Invoice(s) in 30–60 Day Window	Invoice Amount(s)
Kousseri Copper-Cobalt Mining License	KCC-2019-0047	September 14, 2019	Invoice(s) submitted July–August 2019	$185,000 (largest single invoice in the dataset)
Kousseri Environmental Impact Approval	ENV-KCC-2020-113	March 27, 2020	Invoice(s) submitted January–February 2020	~$150,000
Dembélé Rare Earths Exploration License	DRE-2021-0092	July 8, 2021	Invoice(s) submitted May–June 2021	~$160,000
Dembélé Mining License Upgrade	DRE-M-2023-0018	February 14, 2023	Invoice(s) submitted December 2022–January 2023	~$140,000
Kousseri Expansion Permit	KCC-2019-0047-A1	April 3, 2024	Invoice(s) submitted February–March 2024	~$120,000
Payment Channel	Amount	Source Account / Code
Crestfield Advisory invoices (TGH)	$3,210,000	Meridian Commercial Bank (BVI), Acct. 7740-2281-0056
TGM cash withdrawals (GL 7450)	$890,000	Regency International Bank (Ganara), Acct. GAN-4419-8837
In-kind benefits (GL 7200, GL 7310)	$630,000	TGM procurement / Regency International Bank
Total	$4,730,000
Official	Position	Estimated Amount	Primary Channel
Hon. Boubacar Diallo	Former Minister of Mines & Natural Resources	$1,850,000	Crestfield / intermediary accounts
Amadou Traoré	Director, Environmental Permitting, Ministry of Environment	$620,000	Crestfield / direct wire transfers
Col. Ibrahim Konaté	Former Regional Prefect, Kousseri Province	$340,000	Cash (GL 7450) and in-kind benefits
Other / unidentified	Various officials and intermediaries	$1,920,000	Multiple channels
Total	$4,730,000

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Conrad Ashby, Responsible Partner, White Collar & Investigations, Calderwood & Harkness LLP
FROM: Steven Hollander, Lead Associate, and Jasmine Thornton, Working Associate, White Collar & Investigations, Calderwood & Harkness LLP
DATE: April 3, 2025
RE: Analysis of Payment Flows — TGH to Crestfield Advisory Partners Ltd. and TGM Local Disbursements (2019–2024)
MATTER: Torchlight Mining Corp. — FCPA Investigation (C&H Matter No. 1039-00005)
I. Executive Summary
The purpose of this memorandum is to summarize the forensic accounting findings to date regarding payment flows from Torchlight Ganara Holdings Ltd. ("TGH") to Crestfield Advisory Partners Ltd. ("Crestfield") and direct disbursements from Torchlight Ganara Mining S.A. ("TGM") local accounts between 2019 and 2024. This memorandum is prepared at counsel's direction to inform the ongoing internal investigation of potential violations of the Foreign Corrupt Practices Act ("FCPA"), 15 U.S.C. §§ 78dd-1 et seq., and related anti-corruption laws, and to support the Firm's anticipated presentation to the Audit Committee of Torchlight Mining Corp. ("Torchlight" or the "Company").
The investigation has been conducted in coordination with Pinnacle Forensic Advisory LLC ("Pinnacle"), whose engagement partner, Dr. Leonard Strauss, CPA, CFF, was retained on March 12, 2025, under the direction and at the request of counsel. Pinnacle's forensic work has been performed at all times under the supervision of Calderwood & Harkness LLP and is protected by the attorney-client privilege and the work-product doctrine.
Based on the forensic analysis completed to date, we have identified three principal payment channels through which funds were directed to, or for the benefit of, foreign government officials in the Republic of Ganara:
(1) Crestfield Advisory invoiced payments totaling $3,210,000 across 24 invoices submitted between April 2019 and October 2024. These payments were wired from TGH's account at Meridian Commercial Bank in the British Virgin Islands ("BVI") to Crestfield's accounts in Mauritius. Preliminary tracing indicates that approximately 75% of these funds were subsequently diverted to Ganaran government officials and their associates.
(2) TGM cash withdrawals from Regency International Bank in Ganara, coded to General Ledger account 7450 ("Community Relations Expenses"), totaling $890,000. These withdrawals were made in local currency at irregular intervals, with a marked increase in frequency preceding permit application deadlines and government site inspections. Supporting documentation for the vast majority of these withdrawals is either absent or inadequate.
(3) In-kind benefits, including vehicle purchases and travel expenses, totaling approximately $630,000. These benefits were booked across GL 7200 (Equipment and Vehicles) and GL 7310 (Travel and Hospitality) and were provided to Ganaran government officials or their associates. Procurement records were deliberately characterized to obscure the true nature and intended beneficiaries of the expenditures.
The total suspected improper payments across all three channels amount to $4,730,000.
With respect to the Crestfield channel specifically, Pinnacle's preliminary tracing analysis estimates that approximately $2,410,000 — representing roughly 75% of the $3,210,000 in total Crestfield payments — was diverted from Crestfield's accounts to individuals and entities associated with Ganaran government officials. The remaining approximately $800,000 appears to be attributable to Crestfield's own operating costs and such legitimate advisory services as it may have rendered, although further analysis is required to confirm this allocation.
A significant and troubling pattern has emerged from the timing analysis: Crestfield invoice submissions and corresponding payments are strongly correlated with the issuance of five mining permits and regulatory approvals obtained by TGM during the period under review. In each instance, Crestfield submitted one or more invoices — typically at amounts substantially exceeding its monthly retainer — within the 30–60 day window preceding the issuance of a permit or approval. This pattern strongly suggests that the payments were tied to the procurement of specific regulatory outcomes rather than to any legitimate advisory services.
The foregoing analysis is based on a comprehensive review of wire transfer records from Meridian Commercial Bank (BVI) (Account No. 7740-2281-0056) and Regency International Bank (Ganara) (Account No. GAN-4419-8837), the complete Crestfield invoice register, TGM general ledger entries, procurement records, and supporting documentation collected by Marlowe Asset Management Digital Forensics Inc. ("Marlowe Asset Management") from the custodial files of 23 individuals. Our findings remain preliminary and are subject to supplementation as Pinnacle completes its downstream tracing analysis and as additional witness interviews and document productions are completed.
II. Scope and Methodology
A. Scope of Forensic Review
The forensic review covers the period from January 1, 2019 through October 31, 2024. This period was selected because it encompasses the entirety of Crestfield's engagement with TGH, beginning with the execution of the Government Relations Advisory Agreement on April 12, 2019, and extending through the last identified Crestfield invoice payment on October 31, 2024. The start date of January 1, 2019 was chosen to capture any pre-engagement payments or communications that may have preceded the formal execution of the Crestfield agreement.
The review encompasses two Torchlight entities:
• Torchlight Ganara Holdings Ltd. ("TGH") — a British Virgin Islands holding company through which Torchlight holds its equity interest in TGM. TGH served as the contracting party for the Crestfield engagement and as the entity from which all Crestfield payments were funded.
• Torchlight Ganara Mining S.A. ("TGM") — the Ganaran operating entity that holds mining licenses and conducts day-to-day mining operations in the Republic of Ganara. TGM maintained local currency accounts from which cash withdrawals and procurement expenditures were made.
The focus of the forensic review encompasses three categories of transactions:
(a) All payments made by TGH to Crestfield Advisory Partners Ltd., including wire transfers, the underlying invoices, and any contractual documentation governing the engagement;
(b) All cash withdrawals and disbursements from TGM local accounts that were categorized under vague or generic general ledger codes, with particular emphasis on GL 7450 ("Community Relations Expenses"); and
(c) All procurement transactions related to in-kind benefits provided to government officials or their associates, including vehicle purchases booked to GL 7200 (Equipment and Vehicles) and travel expenses booked to GL 7310 (Travel and Hospitality).
The relevant bank accounts under review are as follows:
• TGH primary operating account at Meridian Commercial Bank, Road Town, Tortola, British Virgin Islands — Account No. 7740-2281-0056. This account was used for all outbound wire transfers to Crestfield.
• TGM local currency operating account at Regency International Bank, Ganara City, Republic of Ganara — Account No. GAN-4419-8837. This account was used for local operational expenditures, including the cash withdrawals at issue and procurement-related disbursements.
B. Data Sources
The forensic review has drawn upon the following categories of source materials, each of which was produced, collected, or obtained under the direction of counsel:
1. Crestfield Invoice Register. The complete register of 24 invoices submitted by Crestfield to TGH between April 2019 and October 2024, obtained from TGH's financial records. Each invoice has been digitized and indexed by Pinnacle and is catalogued in Tab 1 of the Payment Flow Analysis Workbook.
2. Wire Transfer Confirmations and Bank Statements. Complete wire transfer confirmations and monthly bank statements from Meridian Commercial Bank for Account No. 7740-2281-0056, covering the full period under review. These records were produced by TGH under the document collection protocol established at the commencement of the investigation.
3. TGM General Ledger Extracts. Detailed general ledger extracts for GL 7450 (Community Relations Expenses), GL 7200 (Equipment and Vehicles), and GL 7310 (Travel and Hospitality) for the period January 2019 through October 2024, extracted from TGM's accounting system by Pinnacle with the cooperation of TGM's finance department.
4. Regency International Bank Statements and Cash Withdrawal Records. Monthly bank statements and cash withdrawal slips for Account No. GAN-4419-8837, produced by TGM.
5. Procurement Files and Purchase Orders. TGM procurement files, including purchase orders, vendor invoices, delivery confirmations, and related documentation for vehicle purchases and travel expenditures identified as relevant to the investigation.
6. Email Communications. Electronically stored information collected from the custodial files of 23 individuals by Marlowe Asset Management Digital Forensics Inc. The total data volume across all custodians is approximately 1.625 terabytes. Marlowe Asset Management has processed and loaded the data to a hosted review platform for attorney review and continues to support keyword searching, de-duplication, and threading analysis.
7. Government Relations Advisory Agreement. The executed agreement between TGH (as "Client") and Crestfield Advisory Partners Ltd. (as "Advisor"), dated April 12, 2019, which sets forth the scope of Crestfield's engagement and the contractual fee structure. This document was produced from TGH's corporate files.
C. Analytical Methodology
Pinnacle Forensic Advisory has employed the following analytical methodologies in conducting the forensic review:
Invoice-by-Invoice Analysis. Pinnacle performed a line-by-line review of each of the 24 Crestfield invoices, comparing the invoiced amounts against contractual entitlements under the Government Relations Advisory Agreement. This analysis identified the total invoiced amount, calculated the contractual maximum that should have been payable over the engagement period, and quantified the excess payments that lacked any contractual authorization.
Timeline Correlation Analysis. Pinnacle mapped the submission dates and payment dates of each Crestfield invoice against the issuance dates of mining permits, environmental approvals, and license upgrades obtained by TGM during the period under review. This analysis was designed to identify temporal patterns suggesting a nexus between payments and regulatory outcomes.
Cash Withdrawal Pattern Analysis. For GL 7450 entries, Pinnacle analyzed the frequency, amounts, and timing of cash withdrawals from the TGM local account, identifying patterns of increased withdrawal activity preceding key regulatory milestones. The analysis also assessed the adequacy of supporting documentation for each withdrawal.
In-Kind Benefit Cross-Referencing. Pinnacle cross-referenced procurement records for vehicle purchases and travel expenditures against the identities of known Ganaran government officials and their family members, associates, and controlled entities. This analysis was supported by public records research and open-source intelligence compiled by Pinnacle's investigative team.
It is important to note that the forensic work remains ongoing. The findings presented in this memorandum are preliminary and subject to supplementation as additional data becomes available — particularly with respect to downstream tracing of Crestfield account flows and the completion of second-wave witness interviews scheduled for late April and early May 2025.
III. Payment Channel 1: TGH Payments to Crestfield Advisory Partners Ltd.
A. Background on the Crestfield Engagement
The Government Relations Advisory Agreement (the "Agreement") between TGH and Crestfield Advisory Partners Ltd. was executed on April 12, 2019. Under the Agreement, TGH is designated as the "Client" and Crestfield as the "Advisor." The Agreement was signed on behalf of TGH by Marcus Delacroix, then Vice President, Africa Operations, and on behalf of Crestfield by Jean-Philippe Renard, its sole principal.
Crestfield Advisory Partners Ltd. was incorporated in Mauritius in 2016. Its registered address is 7th Floor, Nexus Tower, Ebène Cybercity, Port Louis, Mauritius. Our investigation has confirmed that this address is a registered-agent office providing corporate domiciliation services; Crestfield has no physical office space, employees, or operational presence at this location. The sole beneficial owner and operator of Crestfield is Jean-Philippe Renard, a French citizen, age 54, who resides and is based primarily in Dakar, Senegal. No other directors, officers, or employees of Crestfield have been identified.
The stated scope of the engagement, as set forth in Section 2 of the Agreement, is "government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara." The Agreement does not contain any detailed description of the specific services to be rendered, nor does it include deliverable requirements, reporting obligations, or performance metrics.
Notably, Crestfield was personally introduced to TGH by Marcus Delacroix. Our review of the available documentation indicates that no competitive selection process was conducted, and no alternative government relations advisors were evaluated prior to the engagement of Crestfield. No due diligence file on Crestfield exists in Torchlight's compliance records — a fact that is particularly significant given Torchlight's own Third-Party Due Diligence Policy, which requires enhanced due diligence for all intermediaries engaged to interact with government officials on the Company's behalf.
B. Contractual Fee Structure
The Agreement establishes the following fee structure for Crestfield's services:
• Monthly Retainer: $15,000 per month, payable within 30 days of invoice submission, for ongoing government relations advisory services.
• Success Fees: $100,000 per permit obtained, payable upon the issuance of each mining permit, environmental approval, or license upgrade that Crestfield assisted in procuring.
• Expense Reimbursement: Reimbursement of reasonable out-of-pocket expenses incurred in connection with the engagement, at cost, capped at $25,000 per calendar quarter. The Agreement requires Crestfield to submit expense reports with supporting receipts, although no specific format or level of detail is prescribed.
Section 9.2 of the Agreement contains an anti-corruption representation pursuant to which Crestfield warranted its compliance with "all applicable anti-corruption laws" in the performance of its services. However, this representation is notably deficient in several respects: it does not specifically reference the FCPA or any other named statute; it does not require Crestfield to maintain books and records or internal controls; and it does not include a right of termination in the event of a breach of the anti-corruption warranty. Additionally, the Agreement does not contain an audit rights clause that would have permitted TGH or Torchlight to inspect Crestfield's books, records, or accounts.
Based on the contractual fee structure and the duration of the engagement (April 2019 through October 2024, a period of approximately 66 months), Pinnacle has calculated the contractual maximum that should have been payable to Crestfield as follows:
• Retainers: $15,000 per month × 66 months = $990,000
• Success fees: $100,000 × 5 permits obtained = $500,000
• Expenses: up to $25,000 per quarter × 22 quarters = $550,000 (maximum)
• Total contractual maximum: $2,040,000
As detailed in Section III.C below, the actual amounts invoiced by Crestfield and paid by TGH exceeded this contractual maximum by $1,170,000.
C. Actual Invoiced and Paid Amounts — Year-by-Year Breakdown
Pinnacle's invoice-by-invoice analysis of the 24 Crestfield invoices yields the following year-by-year summary:
The total amount invoiced and paid — $3,210,000 — exceeds the contractual maximum of $2,040,000 by $1,170,000. This excess represents approximately 57% above the contractual ceiling.
No contract amendment, addendum, side letter, or written justification for payments exceeding the contractual maximum has been identified in TGH's corporate files, Torchlight's corporate records, or the custodial files of any of the 23 individuals whose electronic data has been collected and reviewed. The absence of any documented authorization for the excess payments is a significant red flag, as it suggests that the overpayments were either deliberately concealed or approved through informal channels outside the normal governance process.
The last Crestfield invoice was paid on October 31, 2024, in the amount of $115,000. Payments ceased after that date following the initiation of the Company's internal compliance review in November 2024, which preceded the formal engagement of Calderwood & Harkness LLP in January 2025.
A complete register of all 24 invoices, including dates, amounts, descriptions, and approval chain information, is set forth in Tab 1 of the Payment Flow Analysis Workbook.
D. Invoice Approval Irregularities
Torchlight's Delegation of Authority Policy (the "DOA Policy"), as adopted by the Board of Directors and most recently updated in March 2018, requires dual approval for all expenditures exceeding $50,000. Specifically, the DOA Policy provides that any payment in excess of $50,000 must be approved by both the requesting business unit manager and a designated financial officer at the corporate level — in this case, Diane Fournier, Vice President, Finance, based at Torchlight's Toronto headquarters.
Of the 24 Crestfield invoices, 14 exceeded $50,000, with individual invoice amounts ranging from $55,000 to $185,000. Each of these 14 invoices was approved solely by Raymond Osei-Bonsu, then Country Manager for TGM, without any secondary authorization from Fournier or any other Toronto-based financial officer. This constitutes a direct and systematic violation of the DOA Policy.
The remaining 10 invoices, each of which was under $50,000, were also approved solely by Osei-Bonsu. While these invoices did not technically require dual approval under the DOA Policy, the fact that all 24 invoices — without exception — were approved by a single individual is a significant internal controls deficiency. It reflects a complete absence of independent oversight over the Crestfield payment stream.
Our review has identified no evidence that Diane Fournier, or any other member of Torchlight's Toronto-based finance organization, reviewed, approved, or was even made aware of any Crestfield invoice prior to payment. The invoices were processed through TGH's BVI accounts and did not flow through Torchlight's centralized accounts payable function in Toronto.
E. Wire Transfer Analysis
All 24 Crestfield payments were wired from the TGH primary operating account at Meridian Commercial Bank, Road Town, Tortola, BVI (Account No. 7740-2281-0056). The wire beneficiary on each transfer was Crestfield Advisory Partners Ltd. The receiving account details reference a Mauritian bank account, the full details of which are currently being traced by Pinnacle through international banking records.
Pinnacle's preliminary downstream tracing — conducted through analysis of available Crestfield bank records and corroborating wire transfer documentation — has identified that Crestfield maintained at least two additional accounts beyond its primary Mauritian receiving account: one at a commercial bank in Dakar, Senegal, and one at a bank in the Republic of Ganara. Portions of the payments received from TGH were subsequently transferred from the Mauritian account to these downstream accounts, and further disbursements were made from those accounts to individuals and entities associated with Ganaran government officials.
Based on the tracing analysis completed to date, Pinnacle estimates that approximately $2,410,000 — representing roughly 75% of the $3,210,000 in total Crestfield payments — was ultimately disbursed from Crestfield's accounts to individuals and entities associated with Ganaran government officials. The remaining approximately $800,000 appears to be attributable to Crestfield's own operating costs, including Renard's personal compensation, travel expenses, and such legitimate advisory services as may have been rendered. Further analysis is ongoing to confirm the precise allocation and to identify the specific recipients of the diverted amounts.
F. Estimated Distribution to Government Officials via Crestfield Channel
Based on Pinnacle's preliminary tracing analysis, the estimated distribution of diverted Crestfield funds to identified Ganaran government officials is as follows:
Hon. Boubacar Diallo — Former Minister of Mines and Natural Resources of the Republic of Ganara, serving from 2018 to 2023. Diallo held the ministerial portfolio responsible for the issuance of mining licenses and the oversight of the mining regulatory framework in Ganara during the critical period of Torchlight's permit applications. Pinnacle estimates that approximately $1,850,000 was channeled through Crestfield and intermediary accounts to Diallo and/or entities controlled by or associated with Diallo. The specific accounts and entities through which these payments were routed are detailed in Pinnacle's working papers, which are being updated as additional tracing is completed.
Amadou Traoré — Director of Environmental Permitting at the Ministry of Environment of the Republic of Ganara. Traoré was responsible for the review and approval of environmental impact assessments submitted in connection with mining permit applications. Pinnacle estimates that approximately $620,000 was directed to Traoré through a combination of Crestfield payments routed through intermediary accounts and direct wire transfers from Crestfield's Ganaran account.
Tracing of the remaining diverted amounts is ongoing. The outstanding balance includes payments to entities and individuals who have not yet been fully identified, and Pinnacle is pursuing additional banking records and corporate registry information to complete this analysis.
G. Timing Correlation: Crestfield Invoices and Permit Issuance
Pinnacle's timeline correlation analysis has revealed a striking and consistent pattern: in each of the five instances in which TGM obtained a mining permit, environmental approval, or license upgrade during the period under review, Crestfield submitted one or more invoices at elevated amounts within the 30–60 day window preceding the issuance of that permit or approval. The following table details this correlation:
Several observations emerge from this analysis:
First, the pattern is remarkably consistent. In all five instances, Crestfield invoiced amounts substantially in excess of the monthly retainer of $15,000 during the period immediately preceding permit issuance. The invoice amounts in these pre-permit windows range from approximately $120,000 to $185,000 — amounts that cannot be explained by the retainer or reasonable expense reimbursement and that far exceed the $100,000 success fee that would have been payable only after permit issuance.
Second, the Kousseri Copper-Cobalt Mining License (KCC-2019-0047), which was the first permit obtained after Crestfield's engagement, was issued on September 14, 2019 — approximately four months after TGM submitted its application. According to publicly available data from Ganara's Ministry of Mines and Natural Resources, the statutory average processing time for a copper-cobalt mining license during this period was approximately eight months. The fact that this license was obtained in roughly half the average processing time, contemporaneously with the largest single Crestfield invoice ($185,000), is a significant indicator of improper influence.
Third, the temporal correlation between elevated invoice amounts and permit issuance dates is statistically improbable as a coincidence. While this memorandum does not present a formal statistical analysis, the consistent 30–60 day lead time between invoice spikes and permit issuance across all five regulatory milestones strongly suggests that the payments were tied to the procurement of specific regulatory approvals rather than to any routine advisory function.
A detailed timeline chart mapping all 24 Crestfield invoice dates and amounts against the five permit issuance dates is included in Tab 5 of the Payment Flow Analysis Workbook.
IV. Payment Channel 2: TGM Cash Withdrawals — GL 7450 ("Community Relations Expenses")
A. Overview
TGM maintained local currency operating accounts at Regency International Bank in Ganara City, Republic of Ganara (Account No. GAN-4419-8837). Between 2019 and 2024, a total of $890,000 (or the local currency equivalent) in cash withdrawals were made from this account and booked to General Ledger account 7450, described in TGM's chart of accounts as "Community Relations Expenses."
GL 7450 is a vague, catch-all general ledger code that was created in TGM's chart of accounts without detailed sub-categories, without mandatory supporting documentation requirements, and without any defined approval workflow beyond a single signatory authorization. The existence of such a broadly defined account code — particularly one from which nearly $900,000 in cash was withdrawn over a five-year period — represents a fundamental internal controls deficiency that created an environment conducive to the misuse of corporate funds.
B. Nature and Pattern of Withdrawals
Cash withdrawals from the TGM local account coded to GL 7450 occurred at irregular intervals throughout the period under review. However, Pinnacle's pattern analysis has identified a pronounced increase in both the frequency and size of withdrawals during periods immediately preceding key regulatory milestones, including permit application deadlines and scheduled government site inspections of TGM's mining operations in Kousseri Province.
Individual withdrawal amounts varied across a wide range, the details of which are compiled in the accompanying Payment Flow Analysis Workbook (Tab 2). The withdrawals were made in local currency, and the U.S. dollar equivalent amounts referenced in this memorandum have been calculated by Pinnacle using the applicable exchange rates as of the date of each withdrawal.
Supporting documentation for the GL 7450 withdrawals is sparse and, where it exists, inadequate. The majority of GL 7450 entries are backed only by brief internal memoranda prepared by Raymond Osei-Bonsu, the TGM Country Manager. These memoranda contain generic descriptions such as "community engagement activities," "stakeholder gifts," "local community support," and "customary contributions," without identifying specific recipients, communities, activities, or purposes. No third-party receipts, beneficiary acknowledgments, signed gift registers, or community development project reports have been located for the majority of these disbursements. The absence of such documentation is inconsistent with the nature and scale of the expenditures and is a significant red flag.
C. Suspected Recipients
Based on the investigation to date, including the analysis of available documentation and preliminary witness interviews, the following suspected recipients have been identified:
Col. Ibrahim Konaté — Former Regional Prefect of Kousseri Province, serving from 2019 to 2023. Col. Konaté served as the senior administrative official in the province where TGM's mining operations are located and exercised significant discretionary authority over local regulatory matters, including land use approvals, security arrangements, and community relations oversight. Pinnacle estimates that approximately $340,000 in cash and in-kind benefits was directed to Col. Konaté, with a significant portion of the GL 7450 cash withdrawals believed to have been provided to him under the guise of "community development" contributions that were, in fact, personal in nature. Witness interview evidence (discussed below) and procurement records corroborate the direction of benefits to Col. Konaté.
The remaining cash disbursements under GL 7450 are attributed to other government officials and unidentified recipients whose identities have not yet been confirmed. Pinnacle is continuing its analysis of withdrawal records, cross-referencing the timing and amounts of withdrawals against known interactions with specific officials. Across all three payment channels, the total payments directed to officials and recipients other than Hon. Diallo, Traoré, and Col. Konaté amount to approximately $1,920,000 ($4,730,000 − $1,850,000 − $620,000 − $340,000), the specific allocation of which remains under investigation.
D. Internal Controls Observations
The internal controls environment surrounding the GL 7450 cash withdrawals was severely deficient in multiple respects:
Single signatory authorization. Cash withdrawal authorizations at TGM required only a single signatory — Raymond Osei-Bonsu. There was no requirement for a counter-signature from a finance officer, a compliance officer, or any other independent individual. This single-signatory arrangement eliminated any check on Osei-Bonsu's discretion to withdraw cash from the TGM operating account.
Lack of segregation of duties. There was no segregation of duties between the individual authorizing withdrawals (Osei-Bonsu) and the individual recording the corresponding general ledger entries. While Thomas Achebe, Finance Director of TGM, was responsible for processing the GL 7450 entries, he did so at the direction of Osei-Bonsu and without independent verification of the purpose or recipients of the withdrawn funds. In his witness interview conducted on April 28, 2025, Achebe stated that he was told by Osei-Bonsu that the funds were designated for legitimate community relations activities, and that he did not have reason to question this characterization at the time. The credibility and completeness of Achebe's account remain subject to further assessment as the investigation proceeds.
External audit oversight. Clarendon Group LLP, the external auditor of Torchlight Mining Corp. (engagement partner: Alain Beaumont), issued unqualified (clean) audit opinions on Torchlight's consolidated financial statements for fiscal years 2019 through 2023 without identifying or raising any concerns regarding the GL 7450 irregularities. The $890,000 in cash withdrawals booked to this account over the five-year period apparently did not trigger any heightened scrutiny from Clarendon during the audit process. The FY2024 audit is currently delayed and has been placed on hold pending the outcome of the internal investigation.
V. Payment Channel 3: In-Kind Benefits — Vehicle Purchases and Travel
A. Overview
In addition to the Crestfield invoiced payments and the GL 7450 cash withdrawals, Pinnacle has identified approximately $630,000 in in-kind benefits provided to Ganaran government officials or their associates between 2019 and 2024. These benefits consist principally of vehicle purchases and travel-related expenses, and were booked across two general ledger accounts: GL 7200 (Equipment and Vehicles) and GL 7310 (Travel and Hospitality). The characterization of these expenditures in TGM's accounting records was designed to obscure their true nature and intended beneficiaries.
B. Specific In-Kind Benefits Identified
Pinnacle's review of TGM procurement files and purchase orders has identified the following categories of in-kind benefits:
Vehicle Purchases. Multiple vehicles were procured by TGM through its standard procurement channels and subsequently delivered to government officials rather than deployed for operational use by TGM. The beneficiaries of these vehicle deliveries include Col. Ibrahim Konaté and other provincial officials in Kousseri Province. The vehicles were purchased from authorized dealers, with TGM invoices and payment records reflecting the purchases as "operational equipment" for the Kousseri mining site. However, delivery records and witness testimony indicate that certain vehicles were delivered directly to government officials' personal residences rather than to TGM's operational facilities.
Travel Expenses. Airfare, hotel accommodations, and per diem payments were provided to government officials who attended purported "technical site visits" and "training seminars" at locations outside the Republic of Ganara. The legitimate business justification for these trips is questionable in several instances, and the associated costs — which in some cases included business-class international airfare and multi-night stays at luxury hotels — were disproportionate to the stated purposes of the travel. These expenses were booked to GL 7310 (Travel and Hospitality) and characterized in TGM's records as "site visit logistics" and "training program expenses."
Kwame Mensah, Procurement Manager for TGM, processed the vehicle purchase orders at the direction of Raymond Osei-Bonsu. In his witness interview conducted on April 29, 2025, Mensah confirmed that he was aware that certain vehicles were delivered directly to Col. Konaté's personal residence. Mensah stated that he raised concerns with Osei-Bonsu regarding the propriety of these deliveries but was told that the vehicles were "gifts authorized by management" and that the arrangements had been approved at senior levels within the Company. Mensah did not escalate his concerns beyond Osei-Bonsu, nor did he report them through Torchlight's ethics hotline or any other compliance reporting channel.
C. Procurement Process Deficiencies
The procurement process surrounding the in-kind benefits exhibited several material deficiencies:
First, vehicle purchases intended for government officials were not flagged by TGM's procurement system as gifts to foreign officials. TGM's procurement system does not include a field or check-box requiring the purchaser to identify whether the end-user or recipient of a procured item is a government official or a government-affiliated entity. This deficiency allowed vehicles to be procured and delivered to government officials without triggering any automated compliance review or alert.
Second, no Gift and Hospitality Policy review or compliance pre-clearance was conducted for any of the identified in-kind benefits. Torchlight's Gift and Hospitality Policy requires pre-clearance from the Chief Compliance Officer for any gift or hospitality to a government official exceeding $250 in value. None of the vehicle purchases or travel arrangements identified in this review were submitted for pre-clearance, notwithstanding that their individual values far exceeded the $250 threshold.
Third, invoices for vehicles and travel were deliberately characterized in procurement records using terminology designed to obscure the true nature and intended beneficiary of the expenditures. Vehicle purchases were described as "operational equipment" for the mining site, and travel expenses were characterized as "site visit logistics" — descriptions that would not alert a reviewer to the involvement of government officials as beneficiaries.
VI. Consolidated Payment Flow Summary
A. Total Suspected Improper Payments
The following table consolidates the suspected improper payments identified across all three payment channels:
B. Estimated Allocation to Identified Government Officials
Based on Pinnacle's preliminary tracing analysis and the evidence gathered to date, the estimated allocation of suspected improper payments to identified Ganaran government officials is as follows:
C. Cross-Check and Reconciliation
To ensure the integrity of the foregoing analysis, Pinnacle has performed the following cross-check and reconciliation of total outflows associated with the investigation scope:
• Estimated Crestfield funds diverted to government officials: $2,410,000
• Direct and in-kind payments from TGM accounts: $1,520,000 ($890,000 in cash withdrawals + $630,000 in in-kind benefits)
• Legitimate Crestfield services and operating costs: approximately $800,000 ($3,210,000 total Crestfield payments − $2,410,000 estimated diversion)
• Total outflows associated with investigation scope: $5,530,000 ($4,730,000 suspected improper payments + $800,000 in legitimate Crestfield costs)
The $800,000 attributed to legitimate Crestfield services and operating costs remains subject to further verification. Pinnacle is continuing to analyze the Crestfield account flows to determine whether any portion of this amount was also diverted, and the allocation between legitimate and improper use may be revised as additional tracing is completed.
VII. Preliminary Observations and Red Flags
Based on the forensic analysis completed to date, the following preliminary observations and red flags have been identified. These observations are presented in summary form for the Responsible Partner's review and will be incorporated into the forthcoming interim investigation report to the Audit Committee:
1. Excess payments without contractual authorization. Crestfield invoiced and was paid a total of $3,210,000 — exceeding the contractual maximum of $2,040,000 by $1,170,000. No contract amendment, addendum, or written justification for the excess payments has been identified in any corporate records. The magnitude of the overpayment and the absence of any documented authorization strongly suggest that the excess funds were intended for improper purposes.
2. Systematic circumvention of dual-approval requirements. Fourteen of the 24 Crestfield invoices exceeded $50,000 and were approved solely by Raymond Osei-Bonsu, in direct and repeated violation of Torchlight's Delegation of Authority Policy. All 24 invoices were processed without any review or oversight by Toronto-based financial officers. This pattern reflects a deliberate circumvention of internal controls designed to prevent unauthorized or improper expenditures.
3. Shell-company indicia. Crestfield Advisory Partners Ltd. exhibited classic characteristics of a shell company: it had no website, no employees other than its sole principal (Renard), and its registered address is a registered-agent office in Port Louis, Mauritius. Crestfield maintained no physical office, no identifiable operational infrastructure, and no publicly available credentials or track record in government relations advisory services.
4. Absence of third-party due diligence. No due diligence file on Crestfield exists in Torchlight's compliance records. Torchlight's own Third-Party Due Diligence Policy, which requires enhanced due diligence for all intermediaries engaged to interact with government officials, was not followed in connection with the Crestfield engagement. The absence of any due diligence is particularly troubling given the nature of Crestfield's mandate and its sole principal's profile.
5. Use of personal email. Marcus Delacroix, who introduced Crestfield to TGH and who signed the Government Relations Advisory Agreement on behalf of TGH, used personal (non-company) email in 37 identified communications with Renard regarding Crestfield matters. The use of personal email for business communications involving a third-party intermediary engaged for government relations activities is a significant red flag, as it suggests an intent to keep these communications outside of Torchlight's corporate email system and beyond the reach of routine monitoring and compliance oversight.
6. Temporal correlation between payments and permits. As detailed in Section III.G above, there is a strong and consistent temporal correlation between elevated Crestfield invoice submissions and the issuance of each of the five mining permits or regulatory approvals obtained by TGM during the period under review. This correlation, combined with the above-market invoice amounts and the evidence of fund diversion, strongly supports an inference that the payments were made to secure regulatory approvals through the corrupt influence of Ganaran government officials.
7. Inadequate documentation for cash withdrawals. The $890,000 in cash withdrawals booked to GL 7450 ("Community Relations Expenses") lacked adequate supporting documentation. The generic descriptions used to characterize these withdrawals — "community engagement activities," "stakeholder gifts," and the like — are inconsistent with legitimate community development expenditures, which would ordinarily be supported by project plans, beneficiary lists, receipts, and reporting to community affairs departments.
8. Mischaracterization of in-kind benefits. Approximately $630,000 in vehicle purchases and travel expenses were characterized in TGM's procurement records as "operational equipment" and "site visit logistics," descriptions designed to obscure the fact that these benefits were provided to Ganaran government officials and their associates rather than used for legitimate operational purposes.
VIII. Outstanding Forensic Work and Next Steps
The forensic investigation remains ongoing. The following workstreams are in progress or planned for the near term:
1. Downstream Crestfield Tracing. Pinnacle continues to trace the downstream flows from Crestfield's Mauritian, Senegalese, and Ganaran accounts to identify the final beneficiaries of the estimated $2,410,000 in diverted funds. This analysis depends in part on the receipt of additional banking records through international production requests, as discussed below.
2. Identification of Other/Unidentified Recipients. Further analysis is required to determine the specific officials, intermediaries, and entities that received the approximately $1,920,000 currently attributed to "other/unidentified" recipients. Pinnacle is conducting additional cross-referencing of transaction data against public records, beneficial ownership registries, and open-source intelligence.
3. International Production Requests. The Firm is coordinating with Hargrove Whitfield LLP (BVI counsel; partner: Catherine Whitfield) and Ndong & Keïta Cabinet Juridique (Ganaran counsel; partner: Maître Salif Ndong) to obtain Crestfield bank records from institutions in Mauritius, Senegal, and the Republic of Ganara through formal international production requests. The timing and success of these requests will significantly impact the completeness of Pinnacle's tracing analysis.
4. Second-Wave Witness Interviews. A second wave of witness interviews is scheduled to take place in Ganara from April 28 through May 2, 2025. Key witnesses include Thomas Achebe (Finance Director, TGM) and Kwame Mensah (Procurement Manager, TGM), both of whom participated in preliminary interviews on April 28 and April 29, 2025, respectively. Follow-up interviews with these witnesses and additional TGM personnel are planned to explore topics arising from the forensic analysis in greater depth.
5. Interim Investigation Report to the Audit Committee. An interim investigation report is targeted for presentation to the Audit Committee of the Board of Directors on May 15, 2025. The Audit Committee members — Dr. Eleanor Fiske (Chair), Warren Ogilvy, and Marguerite Chen — have been briefed at a high level on the scope and status of the investigation and are expecting a substantive update, including preliminary findings and recommendations regarding remedial measures and disclosure obligations.
6. Voluntary Self-Disclosure Analysis. The findings of this investigation will directly inform the Firm's analysis of whether Torchlight should make a voluntary self-disclosure ("VSD") to the U.S. Department of Justice ("DOJ") and the U.S. Securities and Exchange Commission ("SEC"). The Firm has established a target decision deadline of June 30, 2025 for the VSD determination, in order to preserve the Company's ability to receive credit under the DOJ's revised Corporate Enforcement and Voluntary Self-Disclosure Policy and the SEC's cooperation framework.
7. Financial Impact Assessment. Pinnacle and the Firm are conducting a preliminary financial impact assessment to estimate the Company's potential government exposure in the event of an enforcement action. Based on the current findings, the estimated exposure ranges from approximately $14.19 million to $19.63 million, calculated as follows:
• DOJ criminal fine (based on applicable U.S. Sentencing Guidelines and alternative fine provisions): up to $9,460,000
• SEC disgorgement of profits derived from the improper payments: $4,730,000 (equal to the total suspected improper payments)
• Prejudgment interest on disgorgement (estimated at applicable Treasury rates): approximately $709,500
• SEC civil penalty (equal to the amount of the disgorgement, at the upper end of the penalty tiers): up to $4,730,000
These estimates are preliminary and are subject to significant revision based on additional facts, the extent of the Company's cooperation and remediation, and the applicable enforcement framework in effect at the time of any resolution.
8. Continued Coordination with Advisors. The Firm will continue to coordinate closely with Pinnacle Forensic Advisory LLC (estimated total engagement fees: $1.8 million to $2.4 million) and Marlowe Asset Management Digital Forensics Inc. (engagement contact: Rachel Hartley) on the processing, review, and production of electronically stored information and the completion of the forensic accounting analysis.
IX. Attachments and Enclosures
The following workbook is enclosed with this memorandum and is incorporated by reference herein:
Payment Flow Analysis Workbook (payment-flow-analysis-workbook.xlsx)
• Tab 1: Crestfield Invoice Register — Complete register of all 24 Crestfield invoices, including invoice dates, invoice numbers, descriptions, amounts, approval chain detail (approving officer, date of approval), and payment dates.
• Tab 2: TGM GL 7450 Cash Withdrawal Detail — Detailed listing of all cash withdrawals from TGM Account No. GAN-4419-8837 booked to GL 7450 ("Community Relations Expenses"), including withdrawal dates, amounts (local currency and USD equivalent), supporting documentation references, and Pinnacle's preliminary assessment of each entry.
• Tab 3: In-Kind Benefit Log — Log of all identified in-kind benefits provided to government officials and their associates, including vehicle purchases (make, model, purchase price, delivery address, and identified recipient) and travel expenses (traveler name, destination, travel dates, cost breakdown, and stated purpose).
• Tab 4: Wire Transfer Detail — Complete wire transfer records for all outbound transfers from Meridian Commercial Bank (BVI), Account No. 7740-2281-0056, and relevant inbound/outbound transfers from Regency International Bank (Ganara), Account No. GAN-4419-8837, for the period under review.
• Tab 5: Timeline Correlation — Payment Dates to Permit Issuance Dates — Graphical timeline and supporting data table mapping all 24 Crestfield invoice submission and payment dates, GL 7450 cash withdrawal dates, and in-kind benefit procurement dates against the issuance dates of the five mining permits and regulatory approvals.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
This memorandum was prepared by Calderwood & Harkness LLP at the direction of counsel in connection with the provision of legal advice and in anticipation of litigation. It is protected by the attorney-client privilege and the attorney work-product doctrine. This memorandum and its attachments are strictly confidential and are not to be disclosed to any person or entity outside of Calderwood & Harkness LLP and authorized representatives of Torchlight Mining Corp. without the prior written consent of the undersigned.
Calderwood & Harkness LLP 825 Eighth Avenue, 42nd Floor New York, New York 10019
C&H Matter No. 1039-00005
Year | Number of Invoices | Total Amount
2019 (April–December) | 3 | $420,000
2020 | 4 | $575,000
2021 | 5 | $680,000
2022 | 4 | $610,000
2023 | 5 | $590,000
2024 (January–October) | 3 | $335,000
Total | 24 | $3,210,000
Permit / Approval | License No. | Issuance Date | Crestfield Invoice(s) in 30–60 Day Window | Invoice Amount(s)
Kousseri Copper-Cobalt Mining License | KCC-2019-0047 | September 14, 2019 | Invoice(s) submitted July–August 2019 | $185,000 (largest single invoice in the dataset)
Kousseri Environmental Impact Approval | ENV-KCC-2020-113 | March 27, 2020 | Invoice(s) submitted January–February 2020 | ~$150,000
Dembélé Rare Earths Exploration License | DRE-2021-0092 | July 8, 2021 | Invoice(s) submitted May–June 2021 | ~$160,000
Dembélé Mining License Upgrade | DRE-M-2023-0018 | February 14, 2023 | Invoice(s) submitted December 2022–January 2023 | ~$140,000
Kousseri Expansion Permit | KCC-2019-0047-A1 | April 3, 2024 | Invoice(s) submitted February–March 2024 | ~$120,000
Payment Channel | Amount | Source Account / Code
Crestfield Advisory invoices (TGH) | $3,210,000 | Meridian Commercial Bank (BVI), Acct. 7740-2281-0056
TGM cash withdrawals (GL 7450) | $890,000 | Regency International Bank (Ganara), Acct. GAN-4419-8837
In-kind benefits (GL 7200, GL 7310) | $630,000 | TGM procurement / Regency International Bank
Total | $4,730,000
Official | Position | Estimated Amount | Primary Channel
Hon. Boubacar Diallo | Former Minister of Mines & Natural Resources | $1,850,000 | Crestfield / intermediary accounts
Amadou Traoré | Director, Environmental Permitting, Ministry of Environment | $620,000 | Crestfield / direct wire transfers
Col. Ibrahim Konaté | Former Regional Prefect, Kousseri Province | $340,000 | Cash (GL 7450) and in-kind benefits
Other / unidentified | Various officials and intermediaries | $1,920,000 | Multiple channels
Total | $4,730,000

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

MEMORANDUM

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