1039-00005 · Torchlight Mining Corp · Witness Interviews

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

TO: File — C&H Matter No. 1039-00005

FROM: Conrad Ashby and Steven Hollander, Calderwood & Harkness LLP

DATE: April 9, 2025

RE: Witness Interview Memorandum — Patricia Sung, General Counsel and Corporate Secretary, Torchlight Mining Corp.

I. Interview Summary and Logistics

The following memorandum summarizes the substance of an interview of Patricia Sung, General Counsel and Corporate Secretary of Torchlight Mining Corp. ("Torchlight" or the "Company"), conducted in connection with the internal investigation of potential violations of the Foreign Corrupt Practices Act ("FCPA") and related laws arising out of Torchlight's mining operations in the Republic of Ganara (the "Investigation"). The key logistics and procedural details of the interview are as follows:

• Witness: Patricia Sung, General Counsel and Corporate Secretary, Torchlight Mining Corp.

• Date of Interview: April 9, 2025 (Wednesday).

• Location: Calderwood & Harkness LLP conference facility, 161 Bay Street, Suite 4200, Toronto, Ontario. This interview was conducted as part of the first wave of witness interviews scheduled for April 7–11, 2025, in Toronto.

• Interviewers: Conrad Ashby, Partner (Responsible Partner for the Investigation), and Steven Hollander, Associate (Lead Associate), both of Calderwood & Harkness LLP.

• Note-taker: Steven Hollander.

• Duration: Approximately 3.5 hours (9:30 a.m. – 1:00 p.m. EDT), with one 15-minute break taken at approximately 11:15 a.m.

• Representation: Ms. Sung was not separately represented by personal counsel. She appeared in her capacity as an officer and employee of Torchlight Mining Corp. At no point during the interview did she request separate representation or express a desire to consult with personal counsel.

• Upjohn Warnings: Standard corporate Upjohn warnings were administered at the outset of the interview, prior to any substantive questioning. Specifically, Ms. Sung was advised that: (a) Calderwood & Harkness LLP represents Torchlight Mining Corp. as its client, and does not represent Ms. Sung in her individual capacity; (b) the interview is protected by the attorney-client privilege, which belongs to the Company and not to Ms. Sung personally; (c) the Company may choose to waive that privilege at any time and in its sole discretion, including by disclosing the substance of the interview to third parties, government agencies, or regulators; and (d) Ms. Sung should not discuss the substance of the interview with other employees, officers, directors, or any third parties. Ms. Sung confirmed her understanding of each of these advisements and expressly agreed to proceed with the interview on that basis.

• Documents Referenced During Interview: The following documents were referenced or shown to Ms. Sung during the course of the interview:

1. Government Relations Advisory Agreement between Torchlight Ganara Holdings Ltd. and Crestfield Advisory Partners Ltd., dated April 12, 2019 (the "Crestfield Advisory Agreement");

2. Anonymous whistleblower complaint, Sentinel Compliance Solutions Inc. Report ID: SCH-2024-08-4417, received August 19, 2024;

3. Minutes of the Audit Committee of the Board of Directors of Torchlight Mining Corp., Special Session, September 5, 2024;

4. Resignation letter of Marcus Delacroix, VP Africa Operations, dated November 15, 2024;

5. U.S. Securities and Exchange Commission Formal Order of Investigation, File No. HO-14892, dated January 22, 2025;

6. SEC Document Subpoena to Torchlight Mining Corp., dated February 3, 2025;

7. U.S. Department of Justice, Fraud Section, Criminal Division, Voluntary Document Preservation Request, dated February 14, 2025; and

8. Torchlight Mining Corp. Form 8-K, filed with the SEC on February 7, 2025.

This memorandum is based on contemporaneous notes taken by Steven Hollander during the interview and is intended to reflect the substance of Ms. Sung's statements. It is not a verbatim transcript. The memorandum is protected by the attorney-client privilege and the attorney work product doctrine and is prepared in anticipation of litigation and in connection with the provision of legal advice to Torchlight Mining Corp.

II. Background and Role of the Witness

Ms. Sung provided the following background information regarding her professional history and current role at Torchlight Mining Corp.

Patricia Sung, age 52, is a Canadian citizen residing in Toronto, Ontario. She was appointed General Counsel and Corporate Secretary of Torchlight Mining Corp. in 2020, a position she has held continuously since that date. In her capacity as General Counsel, Ms. Sung oversees all legal affairs for Torchlight and its subsidiaries on a global basis, including, as relevant to this Investigation, Torchlight Ganara Holdings Ltd. ("TGH"), a British Virgin Islands–incorporated intermediate holding company, and Torchlight Ganara Mining S.A. ("TGM"), the operating subsidiary incorporated in the Republic of Ganara.

Prior to joining Torchlight, Ms. Sung was a partner at Bartlett Keene & Ostrander LLP ("BKO"), a prominent Toronto-based law firm, where she practiced in the areas of corporate law and securities regulation for approximately 18 years. As a result of her prior tenure at BKO, Ms. Sung is personally and professionally familiar with Richard Bartlett III, who currently serves as BKO's lead partner on the Canadian-counsel engagement in connection with the Investigation. Ms. Sung stated that her prior relationship with Mr. Bartlett is collegial but professional and does not, in her view, create any conflict of interest. Calderwood & Harkness has noted this prior professional association for the record.

In her role as General Counsel, Ms. Sung is responsible for the full scope of Torchlight's legal function, including corporate governance, securities compliance, commercial contracts, regulatory matters, litigation management, and oversight of outside counsel engagements globally. She reports directly to Gerald R. Vandermeer, Torchlight's Chief Executive Officer, and maintains a dotted-line reporting relationship to the Audit Committee of the Board of Directors, which is chaired by Dr. Eleanor Fiske. Ms. Sung regularly attends meetings of the Audit Committee and provides legal updates to the full Board on a quarterly basis.

Ms. Sung serves as the primary client contact for Calderwood & Harkness LLP's engagement in connection with the Investigation. That engagement was formalized by letter agreement dated March 5, 2025, pursuant to which the Audit Committee retained Calderwood & Harkness to conduct an independent internal investigation into the matters described in this memorandum. Under the terms of that engagement, Ms. Sung is responsible for coordinating Torchlight's response to the SEC and DOJ inquiries, managing the Company's relationships with its various external counsel—including Calderwood & Harkness LLP (Investigation counsel, New York/Toronto), BKO (Canadian securities counsel, Toronto), Hargrove Whitfield LLP (BVI corporate counsel, Road Town), and Ndong & Keïta Cabinet Juridique (Ganaran counsel, Libreville)—and overseeing the litigation hold and document preservation process.

Ms. Sung stated that she takes her responsibilities in connection with the Investigation seriously and is committed to ensuring full cooperation with the investigation team and with any government inquiries.

III. Awareness of Crestfield Advisory Partners Ltd. Engagement

A. Initial Knowledge of Crestfield

Ms. Sung was asked to describe when and how she first became aware of Crestfield Advisory Partners Ltd. ("Crestfield") and its advisory relationship with Torchlight's Ganaran subsidiaries. She provided the following account.

Ms. Sung stated she first became aware of Crestfield in general terms in approximately mid-2020, shortly after she joined Torchlight as General Counsel. She described the circumstances of this initial awareness as arising through a routine review of subsidiary contracts that she undertook as part of her onboarding process. Upon joining the Company, Ms. Sung explained, she made it a practice to review the contract registries maintained by each of Torchlight's principal subsidiaries to familiarize herself with material contractual relationships. During her review of the TGH contract registry, she recalled seeing a reference to a "Government Relations Advisory Agreement" that was listed as having been executed on April 12, 2019.

Ms. Sung stated that the Crestfield Advisory Agreement had been executed prior to her appointment as General Counsel and that she played no role in negotiating, drafting, reviewing, or approving the agreement. She stated that, based on her review of corporate records, the agreement had been negotiated and approved by Marcus Delacroix, then Vice President, Africa Operations, and Raymond Osei-Bonsu, then Country Manager of TGM. She did not recall seeing any evidence that the agreement had been reviewed or approved by Torchlight's legal department, the Audit Committee, or the Board of Directors at the time of its execution, though she acknowledged she could not be certain on that point given that the agreement predated her tenure.

Ms. Sung confirmed that the Crestfield Advisory Agreement was between TGH, as the contracting party on behalf of the Torchlight group, and Crestfield Advisory Partners Ltd., which she understood to be a Mauritius-incorporated entity. She described the scope of the agreement as covering "government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara." She stated that this scope description, as reflected in the agreement, appeared to her to contemplate a broad range of activities relating to Torchlight's interactions with various Ganaran government agencies and officials in connection with its mining operations.

B. Understanding of Contractual Terms

Ms. Sung was shown a copy of the Crestfield Advisory Agreement and asked to describe her understanding of its financial terms. She provided the following account.

Ms. Sung recalled that the agreement provided for three categories of compensation to Crestfield: (i) a monthly retainer of $15,000 (denominated in United States dollars); (ii) success fees of $100,000 per mining or environmental permit obtained by TGM with respect to which Crestfield had provided advisory services; and (iii) reimbursement of documented out-of-pocket expenses, subject to a cap of $25,000 per calendar quarter.

When asked about the total contractual value over the life of the agreement, Ms. Sung acknowledged that, based on those terms, the contractual maximum should not have exceeded approximately $2,040,000. She explained this calculation as follows: monthly retainers of $15,000 over a period of approximately 66 months (from April 2019 through approximately September 2024, the period during which she understood the agreement to have been operative) would total approximately $990,000; success fees of $100,000 per permit for the five permits that were ultimately issued would total $500,000; and maximum quarterly expense reimbursements of $25,000 per quarter over the same period would total approximately $550,000. The sum of these amounts is approximately $2,040,000.

Ms. Sung stated that she did not, during her tenure as General Counsel, undertake a review of individual Crestfield invoices. She explained that invoice review and approval for TGH and TGM were handled at the subsidiary level—principally by Osei-Bonsu as Country Manager and Thomas Achebe as TGM Finance Director—with consolidated financial reporting flowing to VP Finance Diane Fournier at Torchlight's Toronto headquarters. Ms. Sung stated she was unaware, until the preliminary internal review conducted in late 2024, that actual payments to Crestfield totaled $3,210,000—an amount that exceeded the contractual maximum by approximately $1,170,000 (or approximately 57% above the calculated maximum).

Ms. Sung stated she was not aware of any amendment, addendum, or side letter modifying the Crestfield Advisory Agreement to authorize payments in excess of the original contractual terms. She stated she had not been consulted regarding any such amendment and had not seen any such document in Torchlight's records. She noted that the absence of a documented amendment authorizing the excess payments was one of the most troubling findings of the preliminary review.

C. Due Diligence on Crestfield

Ms. Sung was asked about the extent of due diligence that was performed on Crestfield prior to or at any time following the execution of the advisory agreement. She provided the following account.

Ms. Sung stated that she was not aware of any due diligence file on Crestfield in Torchlight's compliance records. She stated she had searched for such records during the preliminary internal review and had been unable to locate any file reflecting background screening, reference checks, beneficial ownership analysis, or reputational due diligence on Crestfield or its principal, Jean-Philippe Renard. She described the absence of such records as a significant compliance failure.

Ms. Sung acknowledged that Torchlight's anti-corruption compliance program, as overseen by VP Compliance and Ethics Nadia Berenson (who was appointed to that position in 2021), should have required third-party due diligence for any agent, consultant, or intermediary engaged in government-facing activities. She stated that Torchlight's Third-Party Due Diligence Policy, which was adopted in 2021 as part of the compliance enhancements she and Berenson spearheaded, requires risk-based due diligence screening for all such engagements. However, she noted that the Crestfield Advisory Agreement predated both the policy and Berenson's appointment, and she acknowledged that the agreement was never retroactively subjected to the due diligence requirements of the new policy—an oversight she characterized as a failure of implementation.

Ms. Sung stated that she understood Crestfield's principal, Jean-Philippe Renard, was personally introduced to the Company by Delacroix. She did not have independent knowledge of the circumstances of that introduction—specifically, how Delacroix came to know Renard, whether Renard had prior government connections in Ganara, or whether any competitive process or alternative candidates were considered before engaging Crestfield. She stated that these are questions she would have asked had the engagement come to her for review, but that it had not.

Ms. Sung further stated that she was unaware, until the facts were surfaced during the preliminary internal review, that Crestfield had no website or public internet presence, no employees other than Renard himself, and a registered address that matched a registered-agent office in Port Louis, Mauritius (Suite 401, Heritage House, 18 Rue du Port, Port Louis, Mauritius). She stated that these facts, taken together, represent classic red flags for a high-risk third-party intermediary and would have warranted enhanced due diligence had they been known to the compliance function at the time of the engagement.

D. Anti-Corruption Clause in the Agreement

Ms. Sung was asked about the anti-corruption provisions in the Crestfield Advisory Agreement. She directed the interviewers' attention to Clause 9.2 of the agreement, which she described as containing a representation by Crestfield that it would comply with "all applicable anti-corruption laws" in the performance of its services under the agreement.

Ms. Sung acknowledged, however, that Clause 9.2 was drafted in general terms and did not specifically reference the United States Foreign Corrupt Practices Act, the Canadian Corruption of Foreign Public Officials Act ("CFPOA"), the United Kingdom Bribery Act 2010, or any other specific anti-corruption statute. She characterized this as a drafting deficiency that limited the enforceability and specificity of the anti-corruption representation.

She further noted the absence of an audit rights clause in the Crestfield Advisory Agreement—that is, a clause granting Torchlight or its agents the contractual right to inspect and audit Crestfield's books, records, and accounts in connection with the services provided under the agreement. Ms. Sung described this omission as a "significant gap" in the contractual framework and stated that, in her experience as both outside and in-house counsel, an audit rights clause is a standard and essential component of any advisory agreement involving a government-facing intermediary in a high-risk jurisdiction. She stated that the absence of such a clause effectively deprived Torchlight of a contractual mechanism to verify how Crestfield was using the funds paid to it under the agreement.

IV. Receipt and Handling of the Whistleblower Complaint

A. Timeline of Receipt and Escalation

Ms. Sung was asked to describe the events following the receipt of the anonymous whistleblower complaint that initiated the Company's preliminary internal review. She provided the following account of the timeline and escalation process.

Ms. Sung stated that Torchlight received an anonymous whistleblower complaint on August 19, 2024, via Torchlight's third-party ethics hotline, which is operated by Sentinel Compliance Solutions Inc. under a services agreement with Torchlight. The complaint was assigned Sentinel Report ID: SCH-2024-08-4417. The Sentinel platform is configured to receive complaints from Torchlight employees and third parties on a confidential and, at the complainant's election, anonymous basis. The complaint in question was submitted anonymously, and Ms. Sung stated that the identity of the complainant is unknown to her.

Ms. Sung stated that she was not the initial recipient of the complaint report from Sentinel. Under Torchlight's established procedures, ethics hotline reports are routed in the first instance to Nadia Berenson, VP Compliance and Ethics. Ms. Sung stated that Berenson received the complaint report from Sentinel and, after conducting an initial review and assessment of the complaint's substance and severity, escalated it to Dr. Eleanor Fiske, Audit Committee Chair, on August 26, 2024. This escalation was consistent with Torchlight's complaint handling procedures, which require that complaints involving allegations of potential violations of law, fraud, or financial misconduct by senior management be reported to the Audit Committee.

Ms. Sung stated that Berenson informed her of the complaint on the same date—August 26, 2024—and shared the substance of the allegations. According to Ms. Sung, the complaint alleged, in substance, that "payments being made to government ministers through a fake consulting company in Mauritius to get mining permits approved faster" and that "the country manager and VP from Toronto both know about it." Ms. Sung stated that, upon reviewing the substance of these allegations, she immediately recognized the complaint as potentially referencing the Crestfield Advisory Partners relationship and Torchlight's Ganaran mining operations. She stated that the references to a "consulting company in Mauritius," "government ministers," "mining permits," and the involvement of the "country manager" and "VP from Toronto" collectively pointed to the Crestfield engagement, the Ganaran operations, Osei-Bonsu as Country Manager of TGM, and Delacroix as VP Africa Operations.

Ms. Sung stated that she took the complaint seriously from the outset and advised Berenson and Dr. Fiske that the allegations, if substantiated, could give rise to potential violations of the FCPA, the CFPOA, and local Ganaran anti-corruption laws, and that the matter warranted immediate and careful attention by the Audit Committee.

B. Ms. Sung's Role in the Audit Committee Response

Following the escalation of the whistleblower complaint to the Audit Committee, Dr. Fiske convened a special session of the Audit Committee on September 5, 2024. The Committee members present at that session were Dr. Eleanor Fiske (Chair), Warren Ogilvy, and Marguerite Chen, comprising the full membership of the Audit Committee. Ms. Sung stated that the purpose of the special session was to discuss the whistleblower complaint, assess its credibility and seriousness, and determine appropriate next steps.

Ms. Sung stated that she was asked to attend the September 5 session in her capacity as General Counsel and Corporate Secretary, in order to advise the Committee on legal obligations, potential exposure, and the structure and scope of a preliminary internal review. She stated that she provided advice to the Committee at that meeting regarding the Company's obligations under the FCPA and CFPOA, the potential implications of the allegations for the Company's books-and-records obligations and internal controls, and the importance of conducting a review that was independent of the individuals referenced in the complaint.

Ms. Sung stated that she recommended to the Audit Committee that the preliminary review be directed to be conducted at arm's length from management—particularly from Delacroix and Osei-Bonsu, who were the individuals referenced in the complaint. She stated that she advised the Committee that the integrity and credibility of the review required that neither Delacroix nor Osei-Bonsu be informed of the complaint or involved in the review process at that stage. The Committee accepted this recommendation.

Ms. Sung stated that she did not personally conduct the substantive work of the preliminary internal review. Rather, she served as the legal coordinator for the review, working with Berenson and Diane Fournier, VP Finance, to assemble the initial documentation necessary to evaluate the complaint's allegations. This documentation included the Crestfield Advisory Agreement, available invoice records and payment histories from TGH and TGM, TGH and TGM financial data (including general ledger detail), and relevant corporate governance documents.

C. Preliminary Findings That Led to External Counsel Retention

Ms. Sung stated that the preliminary internal review was conducted between approximately September and November 2024. She described the review as having surfaced a number of concerns that, in the aggregate, warranted the engagement of external counsel with FCPA expertise to conduct a full, independent internal investigation. The concerns identified during the preliminary review included, without limitation:

• The excess payments to Crestfield totaling approximately $1,170,000 above the calculated contractual maximum, without any documented contract amendment;

• The absence of any competitive selection process or documented business justification for the initial engagement of Crestfield;

• Multiple violations of Torchlight's Delegation of Authority Policy, including instances in which invoices exceeding the $50,000 single-approval threshold were approved by Osei-Bonsu alone without obtaining the required dual authorization;

• Vague general ledger coding of certain payments and cash withdrawals under GL 7450, characterized as "Community Relations Expenses," which appeared inconsistent with the nature of the underlying transactions; and

• The absence of any third-party due diligence file on Crestfield.

Ms. Sung stated that, based on these preliminary findings, the Audit Committee authorized the engagement of external counsel with specific expertise in FCPA investigations and enforcement matters. Following an evaluation of several qualified firms, the Audit Committee selected Calderwood & Harkness LLP. The engagement was formalized by letter agreement dated March 5, 2025, under C&H Matter No. 1039-00005.

Ms. Sung acknowledged that there was a gap of approximately three to four months between the close of the preliminary internal review (approximately November 2024) and the formal engagement of Calderwood & Harkness (March 5, 2025). She attributed this gap to several intervening developments, including the receipt of the SEC formal order of investigation in January 2025, the SEC document subpoena in February 2025, and the DOJ voluntary preservation request in February 2025, as well as the time required for the Company's internal process of selecting and retaining external investigation counsel. She stated that the intervening government inquiries added complexity to the counsel-selection process, as the Audit Committee sought a firm with both investigation and government-facing defense capabilities.

V. Delacroix's Resignation and Osei-Bonsu's Termination

A. Marcus Delacroix

Ms. Sung was asked to describe the circumstances surrounding the departure of Marcus Delacroix from Torchlight. She provided the following account.

Marcus Delacroix served as Vice President, Africa Operations, from November 3, 2018, until his resignation, which was effective November 15, 2024. In that role, Delacroix had overall responsibility for Torchlight's operations across its West African portfolio, including the Ganaran mining operations conducted through TGH and TGM. Ms. Sung stated that Delacroix was a senior member of Torchlight's management team and reported directly to CEO Vandermeer.

Ms. Sung stated that in approximately late October 2024, following the preliminary internal review's identification of the concerns described in Section IV.C above, she and CEO Vandermeer met with Delacroix. The purpose of the meeting was to inform Delacroix of the existence of the preliminary internal review and the specific concerns that had been identified regarding the Crestfield relationship, including the excess payments, the lack of due diligence, and the allegations contained in the whistleblower complaint. Ms. Sung stated that this meeting was conducted carefully, in consultation with outside Canadian employment counsel, in order to balance the Company's obligation to investigate with Delacroix's rights as an employee.

Ms. Sung stated that during this meeting, Delacroix did not provide substantive responses to the concerns raised. She characterized his demeanor as guarded and non-committal. He did not deny the allegations, nor did he provide any explanation for the excess payments or the absence of due diligence on Crestfield. Ms. Sung stated that Delacroix indicated he needed time to consider his position and consult with personal counsel.

Approximately two weeks later, on November 15, 2024, Delacroix submitted his resignation, effective immediately. Ms. Sung described the resignation letter as brief—approximately four sentences in length—and stated that it cited only "personal reasons" as the basis for the resignation. The letter did not acknowledge the investigation, the whistleblower complaint, the Crestfield matter, or any of the specific concerns that had been raised in the October 2024 meeting.

Ms. Sung stated that the Company did not attempt to prevent or contest the resignation. She explained that, in consultation with legal counsel, the Company determined that it was not in Torchlight's interest to compel Delacroix to remain as an employee given the circumstances. However, Ms. Sung confirmed that, contemporaneously with accepting the resignation, the Company formally notified Delacroix in writing of his continuing obligations under his employment agreement, including but not limited to his obligation to cooperate with any investigation or legal proceeding arising out of his employment, his continuing confidentiality obligations, and his obligation to comply with the litigation hold that was subsequently issued on March 17, 2025.

Ms. Sung confirmed her awareness that Delacroix is a French-Canadian dual citizen who is currently residing in Lyon, France, at 47 Rue de la République, 69002 Lyon. She stated that the Company has had no direct communication with Delacroix since his departure. Ms. Sung further stated that she is aware Delacroix has retained Whitmore & Sharpe LLP in Washington, D.C., with Helen Whitmore serving as lead partner, as personal counsel in connection with the Investigation and related government proceedings.

Ms. Sung noted that she was informed by Conrad Ashby that Helen Whitmore, on behalf of Delacroix, declined a voluntary interview request extended by Calderwood & Harkness on approximately April 2, 2025. Ms. Sung understood that the basis for the declination was Delacroix's potential criminal exposure and Fifth Amendment concerns. Ms. Sung stated she was not surprised by this response but expressed concern about the implications of Delacroix's non-cooperation for the completeness of the Investigation.

B. Raymond Osei-Bonsu

Ms. Sung was asked to describe the circumstances surrounding the departure of Raymond Osei-Bonsu from TGM. She provided the following account.

Raymond Osei-Bonsu's employment as Country Manager of TGM was terminated on January 8, 2025. Ms. Sung stated that the termination was for cause, based on the findings of the preliminary internal review regarding Osei-Bonsu's role in the matters under investigation. Specifically, Ms. Sung identified the following grounds for the for-cause termination:

• Osei-Bonsu's role in approving Crestfield invoices without obtaining the required dual authorization. Ms. Sung stated that the preliminary review identified that 14 of 24 invoices submitted by Crestfield exceeded the $50,000 single-approval threshold established under Torchlight's Delegation of Authority Policy, and that in each of those 14 instances, Osei-Bonsu had approved the invoice as sole authorizer, without obtaining the required second-level approval from VP Africa Operations (Delacroix) or VP Finance (Fournier);

• Osei-Bonsu's direction to TGM Finance Director Thomas Achebe regarding the coding of certain cash withdrawals from TGM's local bank account at Regency International Bank to GL 7450 ("Community Relations Expenses"), which the preliminary review identified as a potentially misleading characterization of the nature and purpose of those expenditures; and

• Osei-Bonsu's general supervision of the Crestfield relationship at the in-country level, including his role as the primary point of contact for Jean-Philippe Renard in Ganara.

Ms. Sung stated that the termination was coordinated with Ndong & Keïta Cabinet Juridique (Maître Salif Ndong, lead counsel) to ensure compliance with the requirements of Ganaran labor law, including any applicable notice, severance, or procedural requirements. She stated that the termination was effectuated in accordance with the advice of local counsel and that, to her knowledge, Osei-Bonsu has not filed any employment claim or challenge to the termination under Ganaran law.

Ms. Sung confirmed her awareness that Osei-Bonsu has retained Okoro Law Chambers (Barrister Emeka Okoro) in Ganara as personal counsel in connection with these matters. She stated that the Company has had no direct communication with Osei-Bonsu since his termination, and that all communications have been directed through Barrister Okoro.

C. Delacroix's Use of Personal Email

Ms. Sung was asked about the use of personal email by Torchlight personnel in connection with the Crestfield relationship. She provided the following account.

Ms. Sung stated that she learned during the preliminary internal review that Delacroix had used a personal, non-company email account in at least 37 identified communications with Jean-Philippe Renard of Crestfield. She stated that these communications were identified through metadata analysis conducted by Torchlight's IT department during the preliminary review and that the content of many of these communications is not in the Company's possession or control, as they reside on Delacroix's personal email servers.

Ms. Sung described Delacroix's use of personal email for Company business as a violation of Torchlight's information governance policies, which require that all business communications be conducted through Company-provided email systems and accounts. She noted that this violation created significant challenges for the document preservation and collection process, as the Company lacks direct access to Delacroix's personal email account and cannot compel its production absent legal process.

Ms. Sung further stated that the litigation hold notice issued on March 17, 2025, expressly covered personal devices and personal email accounts to the extent they contained documents or communications relating to Company business within the scope of the hold. The hold notice was distributed to all 23 identified custodians, including Delacroix. However, Ms. Sung acknowledged that Delacroix's compliance with the litigation hold is uncertain, given his resignation from the Company, his current residence in Lyon, France, and his counsel's declination of the voluntary interview request. She stated that this is an area requiring follow-up and potentially legal process to secure the preservation and production of the personal email communications.

VI. Torchlight's Response to SEC and DOJ Inquiries

A. SEC Formal Order of Investigation

Ms. Sung was asked to describe Torchlight's receipt of and response to the SEC's formal order of investigation. She provided the following account.

Ms. Sung stated that Torchlight received the SEC's formal order of investigation (File No. HO-14892), dated January 22, 2025, which initiated a formal investigation into potential violations of the FCPA, including both the anti-bribery provisions and the books-and-records and internal controls provisions, in connection with Torchlight's West African operations and, specifically, its mining operations in the Republic of Ganara. Ms. Sung stated that the formal order was received by Torchlight's registered agent for service of process in the United States and was promptly forwarded to her office.

Ms. Sung further stated that the SEC served a formal document subpoena on Torchlight on February 3, 2025. The subpoena sought extensive categories of documents relating to Torchlight's Ganaran operations, including but not limited to: all agreements and communications with Crestfield Advisory Partners Ltd.; all documents relating to payments to, or for the benefit of, Ganaran government officials or their family members; all internal and external audit reports relating to the Ganaran operations; all documents relating to Torchlight's anti-corruption compliance program and its implementation at the subsidiary level; all documents relating to the five mining and environmental permits at issue; and all documents relating to internal controls over disbursements and payments in connection with the Ganaran operations.

Ms. Sung stated that upon receipt of the subpoena, she immediately coordinated with Torchlight's internal legal and compliance team to begin the process of identifying responsive documents and preserving relevant data. Subsequently, following the formal engagement of Calderwood & Harkness LLP, Ms. Sung coordinated with the investigation team and with Marlowe Asset Management Digital Forensics Inc. ("Marlowe Asset Management"), the digital forensics and e-discovery vendor retained for the Investigation (with Rachel Hartley serving as engagement lead), to initiate the formal document collection and preservation process. She stated that this process is ongoing and that Calderwood & Harkness has been in communication with the SEC staff regarding the scope and timing of document production.

B. DOJ Voluntary Document Preservation Request

Ms. Sung stated that, in addition to the SEC inquiry, Torchlight received a voluntary document preservation request from the DOJ Fraud Section, Criminal Division, dated February 14, 2025. The request was received approximately three weeks after the SEC's formal order of investigation and approximately eleven days after the SEC's document subpoena.

Ms. Sung noted that the DOJ request was characterized as voluntary and that the DOJ had not, as of the date of the interview, issued any formal subpoenas, grand jury subpoenas, or other compulsory process to Torchlight. She stated that she understood the DOJ inquiry to have originated from a referral by the SEC, though she acknowledged that the precise genesis of the DOJ's interest was not known to her with certainty.

Ms. Sung confirmed that Calderwood & Harkness, through Conrad Ashby, sent a formal acknowledgment letter to Assistant Chief Margaret Calloway of the FCPA Unit, DOJ Fraud Section, Criminal Division, on March 18, 2025. The letter confirmed Torchlight's receipt of the voluntary preservation request, the implementation of the Company's litigation hold, and Torchlight's willingness to cooperate with the DOJ. Ms. Sung stated that the letter was carefully drafted to preserve the Company's options regarding the scope and manner of cooperation, including the potential for voluntary self-disclosure, without making premature commitments.

C. 8-K Disclosure

Ms. Sung described Torchlight's public disclosure of the SEC investigation via a Form 8-K filed with the SEC on February 7, 2025. She stated that the decision to make a public disclosure was made by Torchlight's Board of Directors, on the advice of counsel, in light of the Company's obligations under the U.S. securities laws and applicable Canadian securities regulations to disclose material developments that could reasonably be expected to have a significant effect on the Company's financial condition, results of operations, or securities.

Ms. Sung stated that the 8-K filing was prepared in close coordination with Bartlett Keene & Ostrander LLP, with Richard Bartlett III taking the lead on the Canadian securities law analysis, and was reviewed by the full Board prior to filing. The filing disclosed the existence of the SEC formal order of investigation, the general nature of the allegations under investigation, and the Company's retention of external counsel to conduct an independent internal investigation.

Ms. Sung noted that the market reaction to the 8-K filing was significant. Torchlight's share price declined from CAD $34.80 (the closing price on February 6, 2025, the last trading day before the filing) to CAD $27.15 (the closing price on February 10, 2025, the first full trading day following the disclosure), representing a decline of approximately 22.0%. Based on approximately 166.7 million shares of common stock outstanding, this price decline resulted in an estimated market capitalization loss of approximately CAD $1.28 billion.

Ms. Sung further stated that, following the 8-K filing, Kingsley Institutional Partners LP, an institutional shareholder holding approximately 8.2% of Torchlight's outstanding common shares, sent governance inquiry letters to Torchlight's Board of Directors. The letters were sent under the signature of Annette Kingsley, Managing Partner of Kingsley Institutional Partners. Ms. Sung did not elaborate on the specific substance of those letters during the interview but indicated, in general terms, that they expressed concern about the adequacy of the Board's and management's oversight of the Ganaran operations and the internal controls that should have been in place to prevent the conduct under investigation. Ms. Sung deferred further discussion of the Kingsley letters pending review of privilege implications.

D. Litigation Hold and Data Preservation

Ms. Sung confirmed her direct involvement in the preparation and issuance of the litigation hold notice, which was issued on March 17, 2025. The hold notice was prepared by Calderwood & Harkness in coordination with Ms. Sung and the Torchlight legal and IT teams.

The scope of the litigation hold, as described by Ms. Sung, covers all documents, communications (including those on personal devices and personal email accounts to the extent they contain Company business within the scope of the hold), financial records, and electronic data related to the Ganaran operations, Crestfield Advisory Partners Ltd., and named Ganaran government officials, for the period from January 1, 2018, to the present. Ms. Sung stated that the hold is broadly framed to ensure comprehensive preservation of potentially relevant materials.

Ms. Sung confirmed that 23 custodians were identified for purposes of the litigation hold and document collection. These custodians include 12 current employees of Torchlight and its subsidiaries, 4 former employees (including Marcus Delacroix and Raymond Osei-Bonsu), and 7 shared or departmental mailboxes (including the inboxes for the Africa Operations department, the Legal department, the Compliance and Ethics department, and certain TGM departmental accounts).

Ms. Sung stated that Marlowe Asset Management Digital Forensics Inc. was retained on approximately March 14, 2025, to support the digital forensics, data collection, and e-discovery processes. Based on preliminary assessments conducted by Marlowe Asset Management, the estimated total data volume subject to collection is approximately 1.625 terabytes, comprising approximately 1.2 terabytes of email data, approximately 340 gigabytes of financial systems data (including data from Torchlight's ERP system and TGM's local accounting platform), and approximately 85 gigabytes of shared-drive documents.

VII. Knowledge of Specific Payments and Government Officials

A. Payments Through Crestfield

Ms. Sung was asked directly about her knowledge of specific payments to Ganaran government officials and the alleged channeling of funds through Crestfield to those officials. She was clear and unequivocal in her response.

Ms. Sung stated that she had no contemporaneous knowledge of any payments to Ganaran government officials, whether through Crestfield or through any other channel. She stated that she first learned the details of the suspected improper payment scheme during the preliminary internal review in late 2024. At that time, the review team identified total suspected improper payments estimated at $4,730,000, broken down as follows:

• $3,210,000 in payments routed through the Crestfield channel (i.e., payments made by TGH to Crestfield Advisory Partners Ltd. under the Crestfield Advisory Agreement, which are suspected to have been used, in whole or in part, to make or facilitate improper payments to Ganaran government officials);

• $890,000 in cash withdrawals from TGM's account at Regency International Bank (Account No. GAN-4419-8837), coded in TGM's general ledger under GL 7450 as "Community Relations Expenses," which the preliminary review identified as potentially reflecting direct cash payments to or for the benefit of Ganaran government officials; and

• $630,000 in in-kind benefits, including vehicle purchases and travel expenditures, that are suspected to have been provided to or for the benefit of Ganaran government officials.

Ms. Sung emphasized that these figures represent preliminary estimates and that the precise scope and amount of suspected improper payments will need to be confirmed through the full Investigation.

B. Government Officials

Ms. Sung was asked about her knowledge of the specific Ganaran government officials who are alleged to have received improper payments or benefits.

Ms. Sung stated that she was aware, in general terms, that TGM interacted with various Ganaran government agencies and officials in the ordinary course of its mining operations, including the Ministry of Mines and Natural Resources and the Ministry of Environment. Such interactions are inherent in the business of obtaining and maintaining mining licenses and environmental approvals in any jurisdiction, and Ms. Sung stated that she understood these interactions to have been conducted in the ordinary course of business.

However, Ms. Sung stated that she had no prior personal interactions with the three Ganaran government officials who have been identified in the preliminary review as suspected recipients of improper payments, namely:

• Hon. Boubacar Diallo, former Minister of Mines and Natural Resources;

• Amadou Traoré, Director of Environmental Permitting, Ministry of Environment; and

• Col. Ibrahim Konaté, former Regional Prefect, Kousseri Province.

Ms. Sung stated that she was unaware of any alleged improper payments to these individuals until the preliminary internal review surfaced those allegations in late 2024.

Ms. Sung identified the five mining and environmental permits that are at issue in the Investigation, and which correspond to the $500,000 in success fees provided for under the Crestfield Advisory Agreement:

1. Kousseri Mining License (License No. KCC-2019-0047), issued September 14, 2019;

2. Kousseri Environmental Impact Approval (Approval No. ENV-KCC-2020-113), issued March 27, 2020;

3. Dembélé Exploration License (License No. DRE-2021-0092), issued July 8, 2021;

4. Dembélé Mining License Upgrade (License No. DRE-M-2023-0018), issued February 14, 2023; and

5. Kousseri Expansion Permit (Permit No. KCC-2019-0047-A1), issued April 3, 2024.

Ms. Sung stated that each of these permits was material to Torchlight's Ganaran mining operations and that the timing of their issuance correlates with Crestfield's engagement period and the payment of success fees under the Crestfield Advisory Agreement.

C. Cash Withdrawals and In-Kind Benefits

Ms. Sung was asked specifically about the $890,000 in cash withdrawals from TGM's account at Regency International Bank and the $630,000 in in-kind benefits. She stated that she had no knowledge of either category of expenditure until they were identified during the preliminary internal review.

Ms. Sung explained that TGM's local financial operations in Ganara were managed by Thomas Achebe, TGM's Finance Director, and supervised at the country level by Raymond Osei-Bonsu, Country Manager. Financial results from TGM were consolidated and reported upward through the corporate reporting chain to Diane Fournier, VP Finance, at Torchlight's Toronto headquarters. Ms. Sung stated that she did not receive or review detailed general ledger reports from TGM and was not aware of the specific GL 7450 coding used for the cash withdrawals until the preliminary review brought it to light. She stated that the level of detail reflected in the GL 7450 entries—specifically, the characterization of significant cash withdrawals as "Community Relations Expenses"—was not visible in the consolidated reporting that she would have seen at the General Counsel level.

VIII. Torchlight's Compliance Program and Oversight

Ms. Sung was asked to describe the current state of Torchlight's anti-corruption compliance program and her assessment of its effectiveness, particularly as it relates to the Ganaran operations.

Ms. Sung stated that Torchlight's anti-corruption compliance program has been significantly enhanced since her appointment as General Counsel in 2020 and, in particular, since the appointment of Nadia Berenson as VP Compliance and Ethics in 2021. She described the enhancements as including the adoption of a formal anti-corruption policy, the implementation of a Third-Party Due Diligence Policy for agents, consultants, and intermediaries engaged in government-facing activities, the establishment of the third-party ethics hotline through Sentinel Compliance Solutions Inc., and the development of compliance training programs for employees across the organization.

However, Ms. Sung was candid in acknowledging that the compliance program's implementation at the subsidiary level—and particularly at TGH and TGM in the Ganaran operations—appeared to have been materially deficient. She identified several specific areas of concern:

• Due Diligence: The absence of any due diligence file on Crestfield demonstrated that the Third-Party Due Diligence Policy was not applied retroactively to pre-existing third-party relationships and that legacy engagements in high-risk jurisdictions were not subjected to the enhanced screening that the policy required for new engagements.

• Delegation of Authority: The Delegation of Authority Policy, which required dual authorization for payments exceeding $50,000, was not enforced at the TGM level, as evidenced by the 14 instances of single-approval violations identified in the preliminary review.

• Training: Compliance training was delivered to Toronto headquarters staff on an annual basis, but records for in-country TGM staff were incomplete or, in certain years, entirely nonexistent. Ms. Sung stated she could not confirm that TGM personnel received anti-corruption training in any year during the relevant period.

Ms. Sung expressed concern that the compliance program was not adequately monitored or audited at the operational level in Ganara. She stated that, to her knowledge, no internal audit or compliance monitoring review of TGM's operations was conducted during the period in which the suspected improper payments occurred. She noted that this gap in monitoring and auditing will need to be addressed as part of any remediation program that the Company undertakes in connection with the resolution of the Investigation and the government inquiries.

Ms. Sung acknowledged that these compliance deficiencies represent both a substantive vulnerability in the Company's anti-corruption framework and a potential issue in any future discussions with the SEC or DOJ regarding the adequacy of Torchlight's internal controls.

IX. Interaction with External Auditors

Ms. Sung was asked to describe Torchlight's relationship with its external auditors in light of the matters under investigation. She provided the following account.

Ms. Sung stated that Clarendon Group LLP serves as Torchlight's external auditor, with Alain Beaumont serving as the engagement partner for the Torchlight audit. She noted that Clarendon has served as Torchlight's auditor for a number of years and has issued clean (unqualified) audit opinions on Torchlight's consolidated financial statements for fiscal years 2019 through 2023—the period during which the suspected improper payments are believed to have occurred.

Ms. Sung noted that the audit for fiscal year 2024 is currently delayed and has not been completed. She stated that the delay is attributable to the ongoing internal investigation and the SEC and DOJ proceedings, which have created uncertainty regarding the accuracy and completeness of the Company's financial statements for the relevant periods. She stated that Clarendon has informed the Company that it is unable to complete the FY2024 audit until it has sufficient information to assess the impact, if any, of the investigation's findings on the Company's financial statements and disclosures.

Ms. Sung stated that she has been in regular contact with Alain Beaumont to keep Clarendon informed of the status of the Investigation and the government proceedings. She stated that Clarendon has indicated that, depending on the findings of the Investigation, it may need to reassess its prior-year audit opinions for FY2019 through FY2023. Ms. Sung understood this to mean that Clarendon is considering whether the information that has come to light regarding the Crestfield payments, the cash withdrawals, and the in-kind benefits may constitute a material misstatement or omission in the Company's previously issued financial statements, which could require restatement or correction. She stated that this is a matter of significant concern to the Company and the Board and that Calderwood & Harkness's analysis of the potential financial statement implications is ongoing.

X. D&O Insurance

Ms. Sung was asked to describe the status of Torchlight's directors' and officers' liability insurance coverage in light of the Investigation and government proceedings. She confirmed the following.

Torchlight maintains directors' and officers' ("D&O") liability insurance through Dalton & Mercer Inc. The applicable policy is identified as Policy No. DM-0092-FCPA-2024. Ms. Sung stated that the policy provides coverage with limits of $50 million per occurrence and $100 million in the aggregate, subject to a self-insured retention of $2.5 million. She stated that the policy covers defense costs and indemnification for claims arising out of acts or omissions by directors and officers in their capacity as such, subject to the policy's terms, conditions, and exclusions.

Ms. Sung stated that a formal notice of claim was submitted to Robert Dalton Jr. at Dalton & Mercer on March 8, 2025, by Calderwood & Harkness on behalf of Torchlight. The notice of claim covered the SEC investigation, the DOJ inquiry, the internal investigation, and any related proceedings, including potential shareholder litigation arising from the 8-K disclosure and the resulting share price decline.

Ms. Sung stated that, as of the date of the interview, she is awaiting a reservation-of-rights letter from Dalton & Mercer in response to the notice of claim. She stated she anticipated that the insurer would reserve certain rights, potentially including rights related to the "conduct exclusion" and other policy provisions that may apply in cases involving alleged intentional misconduct, but that the Company expects the policy to provide coverage for defense costs at a minimum.

XI. Voluntary Self-Disclosure Considerations

Ms. Sung was asked about the Company's consideration of a voluntary self-disclosure ("VSD") to the DOJ under its Corporate Enforcement Policy ("CEP") and related programs. She provided the following account, noting that much of the analysis is being conducted under the direction of Calderwood & Harkness and is subject to the attorney-client privilege.

Ms. Sung stated that she, the Audit Committee, and CEO Vandermeer are actively considering whether Torchlight should make a voluntary self-disclosure to the DOJ. She described this as one of the most consequential strategic decisions facing the Company in connection with the Investigation. She noted that the DOJ's Corporate Enforcement Policy provides that a company that voluntarily self-discloses misconduct, fully cooperates with the government's investigation, and timely and appropriately remediates the misconduct may be eligible for significant cooperation credit, including a presumption of a declination of prosecution in certain cases.

Ms. Sung stated that the target date for a decision on whether to proceed with VSD is June 30, 2025. She identified the interim investigation report to the Audit Committee, which is targeted for completion by May 15, 2025, as a key input into that decision. She stated that the Audit Committee will need to have a substantially complete understanding of the scope and nature of the misconduct, the identities of the individuals involved, the adequacy of the Company's cooperation and remediation, and the likely government exposure before it can make an informed decision on VSD.

Ms. Sung expressed awareness that VSD could result in significant cooperation credit from the DOJ, potentially reducing the Company's total government exposure. She stated that the current estimated exposure range for government penalties and disgorgement, based on preliminary analysis, is approximately $14.19 million to $19.63 million. She acknowledged, however, that VSD also carries risks, including the potential for increased scrutiny from the government, the possibility that the disclosure could accelerate the government's timeline for enforcement action, and the need for the Company's cooperation to be complete and credible in order to realize the full benefit of the CEP.

Ms. Sung stated that she defers to Calderwood & Harkness's pending privileged analysis of the strategic considerations surrounding VSD and that any final recommendation to the Board will be made in close coordination with the investigation team.

XII. Assessment of Witness Credibility and Demeanor

Ms. Sung was cooperative and forthcoming throughout the entire 3.5-hour interview. She appeared to answer all questions candidly and without evasion, providing detailed and responsive answers and volunteering relevant context where appropriate. Her manner was professional and composed, though she displayed visible concern when discussing the potential impact of the Investigation on the Company, its employees, and its shareholders.

Ms. Sung acknowledged gaps in her oversight—particularly regarding the lack of periodic review of Crestfield invoices and the absence of a due diligence file—and did not attempt to minimize the significance of the identified compliance failures. She was forthright in characterizing certain deficiencies, such as the absence of audit rights in the Crestfield Advisory Agreement and the failure to apply the Third-Party Due Diligence Policy retroactively, as significant gaps that should have been addressed. This level of candor supports a positive assessment of her credibility as a witness.

Ms. Sung expressed genuine concern about the potential impact of the Investigation on Torchlight, its employees, its shareholders, and its operations in Ganara. She stated her commitment to full cooperation with the Investigation and with the government proceedings, and she indicated a willingness to make herself available for follow-up interviews as needed.

The interviewers noted no inconsistencies between Ms. Sung's account and the documentary evidence reviewed to date, including the Crestfield Advisory Agreement, the whistleblower complaint, the Audit Committee minutes, and the financial records assembled during the preliminary review. Nor did the interviewers identify any material inconsistencies between Ms. Sung's account and the accounts provided by other witnesses interviewed during the first wave of interviews in Toronto, including Nadia Berenson (interviewed April 7, 2025) and Diane Fournier (interviewed April 8, 2025).

Overall, Ms. Sung presented as a credible, knowledgeable, and cooperative witness whose account is consistent with the available documentary record and corroborated by other witness statements.

XIII. Open Items and Follow-Up

The following items remain open following the interview and require follow-up action:

1. Kingsley Institutional Partners Governance Letters. Ms. Sung requested copies of the governance inquiry letters sent by Kingsley Institutional Partners LP (Annette Kingsley, Managing Partner) to Torchlight's Board of Directors. Before any copies are shared with Ms. Sung or other Company personnel, the letters should be reviewed for privilege implications, including whether they contain or reference privileged communications, legal advice, or investigation-related information.

2. October 2024 Meeting with Delacroix. Follow-up with Ms. Sung is needed regarding the precise timing—specifically, the exact date—and the detailed substance of her October 2024 meeting with CEO Vandermeer and Delacroix, at which Delacroix was informed of the preliminary internal review and the Crestfield concerns. The interviewers should request any contemporaneous notes, calendar entries, or correspondence relating to this meeting.

3. September 5, 2024, Audit Committee Minutes. Obtain and review the minutes of the Audit Committee's special session on September 5, 2024, at which the preliminary internal review was authorized. The minutes were referenced during the interview but were not reviewed in full with Ms. Sung. They may contain additional detail regarding the scope of the review authorized, any limitations on the review's mandate, and the Committee's instructions to management and counsel.

4. Delacroix Litigation Hold Compliance. Confirm the status of Marcus Delacroix's compliance with the March 17, 2025, litigation hold notice. Given Delacroix's resignation, his current residence in Lyon, France, his retention of personal counsel (Whitmore & Sharpe LLP), and his counsel's declination of the voluntary interview request, there is a significant risk that Delacroix is not preserving relevant documents, including the 37 identified personal email

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
TO: File — C&H Matter No. 1039-00005
FROM: Conrad Ashby and Steven Hollander, Calderwood & Harkness LLP
DATE: April 9, 2025
RE: Witness Interview Memorandum — Patricia Sung, General Counsel and Corporate Secretary, Torchlight Mining Corp.
I. Interview Summary and Logistics
The following memorandum summarizes the substance of an interview of Patricia Sung, General Counsel and Corporate Secretary of Torchlight Mining Corp. ("Torchlight" or the "Company"), conducted in connection with the internal investigation of potential violations of the Foreign Corrupt Practices Act ("FCPA") and related laws arising out of Torchlight's mining operations in the Republic of Ganara (the "Investigation"). The key logistics and procedural details of the interview are as follows:
• Witness: Patricia Sung, General Counsel and Corporate Secretary, Torchlight Mining Corp.
• Date of Interview: April 9, 2025 (Wednesday).
• Location: Calderwood & Harkness LLP conference facility, 161 Bay Street, Suite 4200, Toronto, Ontario. This interview was conducted as part of the first wave of witness interviews scheduled for April 7–11, 2025, in Toronto.
• Interviewers: Conrad Ashby, Partner (Responsible Partner for the Investigation), and Steven Hollander, Associate (Lead Associate), both of Calderwood & Harkness LLP.
• Note-taker: Steven Hollander.
• Duration: Approximately 3.5 hours (9:30 a.m. – 1:00 p.m. EDT), with one 15-minute break taken at approximately 11:15 a.m.
• Representation: Ms. Sung was not separately represented by personal counsel. She appeared in her capacity as an officer and employee of Torchlight Mining Corp. At no point during the interview did she request separate representation or express a desire to consult with personal counsel.
• Upjohn Warnings: Standard corporate Upjohn warnings were administered at the outset of the interview, prior to any substantive questioning. Specifically, Ms. Sung was advised that: (a) Calderwood & Harkness LLP represents Torchlight Mining Corp. as its client, and does not represent Ms. Sung in her individual capacity; (b) the interview is protected by the attorney-client privilege, which belongs to the Company and not to Ms. Sung personally; (c) the Company may choose to waive that privilege at any time and in its sole discretion, including by disclosing the substance of the interview to third parties, government agencies, or regulators; and (d) Ms. Sung should not discuss the substance of the interview with other employees, officers, directors, or any third parties. Ms. Sung confirmed her understanding of each of these advisements and expressly agreed to proceed with the interview on that basis.
• Documents Referenced During Interview: The following documents were referenced or shown to Ms. Sung during the course of the interview:
1. Government Relations Advisory Agreement between Torchlight Ganara Holdings Ltd. and Crestfield Advisory Partners Ltd., dated April 12, 2019 (the "Crestfield Advisory Agreement");
2. Anonymous whistleblower complaint, Sentinel Compliance Solutions Inc. Report ID: SCH-2024-08-4417, received August 19, 2024;
3. Minutes of the Audit Committee of the Board of Directors of Torchlight Mining Corp., Special Session, September 5, 2024;
4. Resignation letter of Marcus Delacroix, VP Africa Operations, dated November 15, 2024;
5. U.S. Securities and Exchange Commission Formal Order of Investigation, File No. HO-14892, dated January 22, 2025;
6. SEC Document Subpoena to Torchlight Mining Corp., dated February 3, 2025;
7. U.S. Department of Justice, Fraud Section, Criminal Division, Voluntary Document Preservation Request, dated February 14, 2025; and
8. Torchlight Mining Corp. Form 8-K, filed with the SEC on February 7, 2025.
This memorandum is based on contemporaneous notes taken by Steven Hollander during the interview and is intended to reflect the substance of Ms. Sung's statements. It is not a verbatim transcript. The memorandum is protected by the attorney-client privilege and the attorney work product doctrine and is prepared in anticipation of litigation and in connection with the provision of legal advice to Torchlight Mining Corp.
II. Background and Role of the Witness
Ms. Sung provided the following background information regarding her professional history and current role at Torchlight Mining Corp.
Patricia Sung, age 52, is a Canadian citizen residing in Toronto, Ontario. She was appointed General Counsel and Corporate Secretary of Torchlight Mining Corp. in 2020, a position she has held continuously since that date. In her capacity as General Counsel, Ms. Sung oversees all legal affairs for Torchlight and its subsidiaries on a global basis, including, as relevant to this Investigation, Torchlight Ganara Holdings Ltd. ("TGH"), a British Virgin Islands–incorporated intermediate holding company, and Torchlight Ganara Mining S.A. ("TGM"), the operating subsidiary incorporated in the Republic of Ganara.
Prior to joining Torchlight, Ms. Sung was a partner at Bartlett Keene & Ostrander LLP ("BKO"), a prominent Toronto-based law firm, where she practiced in the areas of corporate law and securities regulation for approximately 18 years. As a result of her prior tenure at BKO, Ms. Sung is personally and professionally familiar with Richard Bartlett III, who currently serves as BKO's lead partner on the Canadian-counsel engagement in connection with the Investigation. Ms. Sung stated that her prior relationship with Mr. Bartlett is collegial but professional and does not, in her view, create any conflict of interest. Calderwood & Harkness has noted this prior professional association for the record.
In her role as General Counsel, Ms. Sung is responsible for the full scope of Torchlight's legal function, including corporate governance, securities compliance, commercial contracts, regulatory matters, litigation management, and oversight of outside counsel engagements globally. She reports directly to Gerald R. Vandermeer, Torchlight's Chief Executive Officer, and maintains a dotted-line reporting relationship to the Audit Committee of the Board of Directors, which is chaired by Dr. Eleanor Fiske. Ms. Sung regularly attends meetings of the Audit Committee and provides legal updates to the full Board on a quarterly basis.
Ms. Sung serves as the primary client contact for Calderwood & Harkness LLP's engagement in connection with the Investigation. That engagement was formalized by letter agreement dated March 5, 2025, pursuant to which the Audit Committee retained Calderwood & Harkness to conduct an independent internal investigation into the matters described in this memorandum. Under the terms of that engagement, Ms. Sung is responsible for coordinating Torchlight's response to the SEC and DOJ inquiries, managing the Company's relationships with its various external counsel—including Calderwood & Harkness LLP (Investigation counsel, New York/Toronto), BKO (Canadian securities counsel, Toronto), Hargrove Whitfield LLP (BVI corporate counsel, Road Town), and Ndong & Keïta Cabinet Juridique (Ganaran counsel, Libreville)—and overseeing the litigation hold and document preservation process.
Ms. Sung stated that she takes her responsibilities in connection with the Investigation seriously and is committed to ensuring full cooperation with the investigation team and with any government inquiries.
III. Awareness of Crestfield Advisory Partners Ltd. Engagement
A. Initial Knowledge of Crestfield
Ms. Sung was asked to describe when and how she first became aware of Crestfield Advisory Partners Ltd. ("Crestfield") and its advisory relationship with Torchlight's Ganaran subsidiaries. She provided the following account.
Ms. Sung stated she first became aware of Crestfield in general terms in approximately mid-2020, shortly after she joined Torchlight as General Counsel. She described the circumstances of this initial awareness as arising through a routine review of subsidiary contracts that she undertook as part of her onboarding process. Upon joining the Company, Ms. Sung explained, she made it a practice to review the contract registries maintained by each of Torchlight's principal subsidiaries to familiarize herself with material contractual relationships. During her review of the TGH contract registry, she recalled seeing a reference to a "Government Relations Advisory Agreement" that was listed as having been executed on April 12, 2019.
Ms. Sung stated that the Crestfield Advisory Agreement had been executed prior to her appointment as General Counsel and that she played no role in negotiating, drafting, reviewing, or approving the agreement. She stated that, based on her review of corporate records, the agreement had been negotiated and approved by Marcus Delacroix, then Vice President, Africa Operations, and Raymond Osei-Bonsu, then Country Manager of TGM. She did not recall seeing any evidence that the agreement had been reviewed or approved by Torchlight's legal department, the Audit Committee, or the Board of Directors at the time of its execution, though she acknowledged she could not be certain on that point given that the agreement predated her tenure.
Ms. Sung confirmed that the Crestfield Advisory Agreement was between TGH, as the contracting party on behalf of the Torchlight group, and Crestfield Advisory Partners Ltd., which she understood to be a Mauritius-incorporated entity. She described the scope of the agreement as covering "government relations advisory services, including regulatory liaison, permit facilitation, and stakeholder engagement in the Republic of Ganara." She stated that this scope description, as reflected in the agreement, appeared to her to contemplate a broad range of activities relating to Torchlight's interactions with various Ganaran government agencies and officials in connection with its mining operations.
B. Understanding of Contractual Terms
Ms. Sung was shown a copy of the Crestfield Advisory Agreement and asked to describe her understanding of its financial terms. She provided the following account.
Ms. Sung recalled that the agreement provided for three categories of compensation to Crestfield: (i) a monthly retainer of $15,000 (denominated in United States dollars); (ii) success fees of $100,000 per mining or environmental permit obtained by TGM with respect to which Crestfield had provided advisory services; and (iii) reimbursement of documented out-of-pocket expenses, subject to a cap of $25,000 per calendar quarter.
When asked about the total contractual value over the life of the agreement, Ms. Sung acknowledged that, based on those terms, the contractual maximum should not have exceeded approximately $2,040,000. She explained this calculation as follows: monthly retainers of $15,000 over a period of approximately 66 months (from April 2019 through approximately September 2024, the period during which she understood the agreement to have been operative) would total approximately $990,000; success fees of $100,000 per permit for the five permits that were ultimately issued would total $500,000; and maximum quarterly expense reimbursements of $25,000 per quarter over the same period would total approximately $550,000. The sum of these amounts is approximately $2,040,000.
Ms. Sung stated that she did not, during her tenure as General Counsel, undertake a review of individual Crestfield invoices. She explained that invoice review and approval for TGH and TGM were handled at the subsidiary level—principally by Osei-Bonsu as Country Manager and Thomas Achebe as TGM Finance Director—with consolidated financial reporting flowing to VP Finance Diane Fournier at Torchlight's Toronto headquarters. Ms. Sung stated she was unaware, until the preliminary internal review conducted in late 2024, that actual payments to Crestfield totaled $3,210,000—an amount that exceeded the contractual maximum by approximately $1,170,000 (or approximately 57% above the calculated maximum).
Ms. Sung stated she was not aware of any amendment, addendum, or side letter modifying the Crestfield Advisory Agreement to authorize payments in excess of the original contractual terms. She stated she had not been consulted regarding any such amendment and had not seen any such document in Torchlight's records. She noted that the absence of a documented amendment authorizing the excess payments was one of the most troubling findings of the preliminary review.
C. Due Diligence on Crestfield
Ms. Sung was asked about the extent of due diligence that was performed on Crestfield prior to or at any time following the execution of the advisory agreement. She provided the following account.
Ms. Sung stated that she was not aware of any due diligence file on Crestfield in Torchlight's compliance records. She stated she had searched for such records during the preliminary internal review and had been unable to locate any file reflecting background screening, reference checks, beneficial ownership analysis, or reputational due diligence on Crestfield or its principal, Jean-Philippe Renard. She described the absence of such records as a significant compliance failure.
Ms. Sung acknowledged that Torchlight's anti-corruption compliance program, as overseen by VP Compliance and Ethics Nadia Berenson (who was appointed to that position in 2021), should have required third-party due diligence for any agent, consultant, or intermediary engaged in government-facing activities. She stated that Torchlight's Third-Party Due Diligence Policy, which was adopted in 2021 as part of the compliance enhancements she and Berenson spearheaded, requires risk-based due diligence screening for all such engagements. However, she noted that the Crestfield Advisory Agreement predated both the policy and Berenson's appointment, and she acknowledged that the agreement was never retroactively subjected to the due diligence requirements of the new policy—an oversight she characterized as a failure of implementation.
Ms. Sung stated that she understood Crestfield's principal, Jean-Philippe Renard, was personally introduced to the Company by Delacroix. She did not have independent knowledge of the circumstances of that introduction—specifically, how Delacroix came to know Renard, whether Renard had prior government connections in Ganara, or whether any competitive process or alternative candidates were considered before engaging Crestfield. She stated that these are questions she would have asked had the engagement come to her for review, but that it had not.
Ms. Sung further stated that she was unaware, until the facts were surfaced during the preliminary internal review, that Crestfield had no website or public internet presence, no employees other than Renard himself, and a registered address that matched a registered-agent office in Port Louis, Mauritius (Suite 401, Heritage House, 18 Rue du Port, Port Louis, Mauritius). She stated that these facts, taken together, represent classic red flags for a high-risk third-party intermediary and would have warranted enhanced due diligence had they been known to the compliance function at the time of the engagement.
D. Anti-Corruption Clause in the Agreement
Ms. Sung was asked about the anti-corruption provisions in the Crestfield Advisory Agreement. She directed the interviewers' attention to Clause 9.2 of the agreement, which she described as containing a representation by Crestfield that it would comply with "all applicable anti-corruption laws" in the performance of its services under the agreement.
Ms. Sung acknowledged, however, that Clause 9.2 was drafted in general terms and did not specifically reference the United States Foreign Corrupt Practices Act, the Canadian Corruption of Foreign Public Officials Act ("CFPOA"), the United Kingdom Bribery Act 2010, or any other specific anti-corruption statute. She characterized this as a drafting deficiency that limited the enforceability and specificity of the anti-corruption representation.
She further noted the absence of an audit rights clause in the Crestfield Advisory Agreement—that is, a clause granting Torchlight or its agents the contractual right to inspect and audit Crestfield's books, records, and accounts in connection with the services provided under the agreement. Ms. Sung described this omission as a "significant gap" in the contractual framework and stated that, in her experience as both outside and in-house counsel, an audit rights clause is a standard and essential component of any advisory agreement involving a government-facing intermediary in a high-risk jurisdiction. She stated that the absence of such a clause effectively deprived Torchlight of a contractual mechanism to verify how Crestfield was using the funds paid to it under the agreement.
IV. Receipt and Handling of the Whistleblower Complaint
A. Timeline of Receipt and Escalation
Ms. Sung was asked to describe the events following the receipt of the anonymous whistleblower complaint that initiated the Company's preliminary internal review. She provided the following account of the timeline and escalation process.
Ms. Sung stated that Torchlight received an anonymous whistleblower complaint on August 19, 2024, via Torchlight's third-party ethics hotline, which is operated by Sentinel Compliance Solutions Inc. under a services agreement with Torchlight. The complaint was assigned Sentinel Report ID: SCH-2024-08-4417. The Sentinel platform is configured to receive complaints from Torchlight employees and third parties on a confidential and, at the complainant's election, anonymous basis. The complaint in question was submitted anonymously, and Ms. Sung stated that the identity of the complainant is unknown to her.
Ms. Sung stated that she was not the initial recipient of the complaint report from Sentinel. Under Torchlight's established procedures, ethics hotline reports are routed in the first instance to Nadia Berenson, VP Compliance and Ethics. Ms. Sung stated that Berenson received the complaint report from Sentinel and, after conducting an initial review and assessment of the complaint's substance and severity, escalated it to Dr. Eleanor Fiske, Audit Committee Chair, on August 26, 2024. This escalation was consistent with Torchlight's complaint handling procedures, which require that complaints involving allegations of potential violations of law, fraud, or financial misconduct by senior management be reported to the Audit Committee.
Ms. Sung stated that Berenson informed her of the complaint on the same date—August 26, 2024—and shared the substance of the allegations. According to Ms. Sung, the complaint alleged, in substance, that "payments being made to government ministers through a fake consulting company in Mauritius to get mining permits approved faster" and that "the country manager and VP from Toronto both know about it." Ms. Sung stated that, upon reviewing the substance of these allegations, she immediately recognized the complaint as potentially referencing the Crestfield Advisory Partners relationship and Torchlight's Ganaran mining operations. She stated that the references to a "consulting company in Mauritius," "government ministers," "mining permits," and the involvement of the "country manager" and "VP from Toronto" collectively pointed to the Crestfield engagement, the Ganaran operations, Osei-Bonsu as Country Manager of TGM, and Delacroix as VP Africa Operations.
Ms. Sung stated that she took the complaint seriously from the outset and advised Berenson and Dr. Fiske that the allegations, if substantiated, could give rise to potential violations of the FCPA, the CFPOA, and local Ganaran anti-corruption laws, and that the matter warranted immediate and careful attention by the Audit Committee.
B. Ms. Sung's Role in the Audit Committee Response
Following the escalation of the whistleblower complaint to the Audit Committee, Dr. Fiske convened a special session of the Audit Committee on September 5, 2024. The Committee members present at that session were Dr. Eleanor Fiske (Chair), Warren Ogilvy, and Marguerite Chen, comprising the full membership of the Audit Committee. Ms. Sung stated that the purpose of the special session was to discuss the whistleblower complaint, assess its credibility and seriousness, and determine appropriate next steps.
Ms. Sung stated that she was asked to attend the September 5 session in her capacity as General Counsel and Corporate Secretary, in order to advise the Committee on legal obligations, potential exposure, and the structure and scope of a preliminary internal review. She stated that she provided advice to the Committee at that meeting regarding the Company's obligations under the FCPA and CFPOA, the potential implications of the allegations for the Company's books-and-records obligations and internal controls, and the importance of conducting a review that was independent of the individuals referenced in the complaint.
Ms. Sung stated that she recommended to the Audit Committee that the preliminary review be directed to be conducted at arm's length from management—particularly from Delacroix and Osei-Bonsu, who were the individuals referenced in the complaint. She stated that she advised the Committee that the integrity and credibility of the review required that neither Delacroix nor Osei-Bonsu be informed of the complaint or involved in the review process at that stage. The Committee accepted this recommendation.
Ms. Sung stated that she did not personally conduct the substantive work of the preliminary internal review. Rather, she served as the legal coordinator for the review, working with Berenson and Diane Fournier, VP Finance, to assemble the initial documentation necessary to evaluate the complaint's allegations. This documentation included the Crestfield Advisory Agreement, available invoice records and payment histories from TGH and TGM, TGH and TGM financial data (including general ledger detail), and relevant corporate governance documents.
C. Preliminary Findings That Led to External Counsel Retention
Ms. Sung stated that the preliminary internal review was conducted between approximately September and November 2024. She described the review as having surfaced a number of concerns that, in the aggregate, warranted the engagement of external counsel with FCPA expertise to conduct a full, independent internal investigation. The concerns identified during the preliminary review included, without limitation:
• The excess payments to Crestfield totaling approximately $1,170,000 above the calculated contractual maximum, without any documented contract amendment;
• The absence of any competitive selection process or documented business justification for the initial engagement of Crestfield;
• Multiple violations of Torchlight's Delegation of Authority Policy, including instances in which invoices exceeding the $50,000 single-approval threshold were approved by Osei-Bonsu alone without obtaining the required dual authorization;
• Vague general ledger coding of certain payments and cash withdrawals under GL 7450, characterized as "Community Relations Expenses," which appeared inconsistent with the nature of the underlying transactions; and
• The absence of any third-party due diligence file on Crestfield.
Ms. Sung stated that, based on these preliminary findings, the Audit Committee authorized the engagement of external counsel with specific expertise in FCPA investigations and enforcement matters. Following an evaluation of several qualified firms, the Audit Committee selected Calderwood & Harkness LLP. The engagement was formalized by letter agreement dated March 5, 2025, under C&H Matter No. 1039-00005.
Ms. Sung acknowledged that there was a gap of approximately three to four months between the close of the preliminary internal review (approximately November 2024) and the formal engagement of Calderwood & Harkness (March 5, 2025). She attributed this gap to several intervening developments, including the receipt of the SEC formal order of investigation in January 2025, the SEC document subpoena in February 2025, and the DOJ voluntary preservation request in February 2025, as well as the time required for the Company's internal process of selecting and retaining external investigation counsel. She stated that the intervening government inquiries added complexity to the counsel-selection process, as the Audit Committee sought a firm with both investigation and government-facing defense capabilities.
V. Delacroix's Resignation and Osei-Bonsu's Termination
A. Marcus Delacroix
Ms. Sung was asked to describe the circumstances surrounding the departure of Marcus Delacroix from Torchlight. She provided the following account.
Marcus Delacroix served as Vice President, Africa Operations, from November 3, 2018, until his resignation, which was effective November 15, 2024. In that role, Delacroix had overall responsibility for Torchlight's operations across its West African portfolio, including the Ganaran mining operations conducted through TGH and TGM. Ms. Sung stated that Delacroix was a senior member of Torchlight's management team and reported directly to CEO Vandermeer.
Ms. Sung stated that in approximately late October 2024, following the preliminary internal review's identification of the concerns described in Section IV.C above, she and CEO Vandermeer met with Delacroix. The purpose of the meeting was to inform Delacroix of the existence of the preliminary internal review and the specific concerns that had been identified regarding the Crestfield relationship, including the excess payments, the lack of due diligence, and the allegations contained in the whistleblower complaint. Ms. Sung stated that this meeting was conducted carefully, in consultation with outside Canadian employment counsel, in order to balance the Company's obligation to investigate with Delacroix's rights as an employee.
Ms. Sung stated that during this meeting, Delacroix did not provide substantive responses to the concerns raised. She characterized his demeanor as guarded and non-committal. He did not deny the allegations, nor did he provide any explanation for the excess payments or the absence of due diligence on Crestfield. Ms. Sung stated that Delacroix indicated he needed time to consider his position and consult with personal counsel.
Approximately two weeks later, on November 15, 2024, Delacroix submitted his resignation, effective immediately. Ms. Sung described the resignation letter as brief—approximately four sentences in length—and stated that it cited only "personal reasons" as the basis for the resignation. The letter did not acknowledge the investigation, the whistleblower complaint, the Crestfield matter, or any of the specific concerns that had been raised in the October 2024 meeting.
Ms. Sung stated that the Company did not attempt to prevent or contest the resignation. She explained that, in consultation with legal counsel, the Company determined that it was not in Torchlight's interest to compel Delacroix to remain as an employee given the circumstances. However, Ms. Sung confirmed that, contemporaneously with accepting the resignation, the Company formally notified Delacroix in writing of his continuing obligations under his employment agreement, including but not limited to his obligation to cooperate with any investigation or legal proceeding arising out of his employment, his continuing confidentiality obligations, and his obligation to comply with the litigation hold that was subsequently issued on March 17, 2025.
Ms. Sung confirmed her awareness that Delacroix is a French-Canadian dual citizen who is currently residing in Lyon, France, at 47 Rue de la République, 69002 Lyon. She stated that the Company has had no direct communication with Delacroix since his departure. Ms. Sung further stated that she is aware Delacroix has retained Whitmore & Sharpe LLP in Washington, D.C., with Helen Whitmore serving as lead partner, as personal counsel in connection with the Investigation and related government proceedings.
Ms. Sung noted that she was informed by Conrad Ashby that Helen Whitmore, on behalf of Delacroix, declined a voluntary interview request extended by Calderwood & Harkness on approximately April 2, 2025. Ms. Sung understood that the basis for the declination was Delacroix's potential criminal exposure and Fifth Amendment concerns. Ms. Sung stated she was not surprised by this response but expressed concern about the implications of Delacroix's non-cooperation for the completeness of the Investigation.
B. Raymond Osei-Bonsu
Ms. Sung was asked to describe the circumstances surrounding the departure of Raymond Osei-Bonsu from TGM. She provided the following account.
Raymond Osei-Bonsu's employment as Country Manager of TGM was terminated on January 8, 2025. Ms. Sung stated that the termination was for cause, based on the findings of the preliminary internal review regarding Osei-Bonsu's role in the matters under investigation. Specifically, Ms. Sung identified the following grounds for the for-cause termination:
• Osei-Bonsu's role in approving Crestfield invoices without obtaining the required dual authorization. Ms. Sung stated that the preliminary review identified that 14 of 24 invoices submitted by Crestfield exceeded the $50,000 single-approval threshold established under Torchlight's Delegation of Authority Policy, and that in each of those 14 instances, Osei-Bonsu had approved the invoice as sole authorizer, without obtaining the required second-level approval from VP Africa Operations (Delacroix) or VP Finance (Fournier);
• Osei-Bonsu's direction to TGM Finance Director Thomas Achebe regarding the coding of certain cash withdrawals from TGM's local bank account at Regency International Bank to GL 7450 ("Community Relations Expenses"), which the preliminary review identified as a potentially misleading characterization of the nature and purpose of those expenditures; and
• Osei-Bonsu's general supervision of the Crestfield relationship at the in-country level, including his role as the primary point of contact for Jean-Philippe Renard in Ganara.
Ms. Sung stated that the termination was coordinated with Ndong & Keïta Cabinet Juridique (Maître Salif Ndong, lead counsel) to ensure compliance with the requirements of Ganaran labor law, including any applicable notice, severance, or procedural requirements. She stated that the termination was effectuated in accordance with the advice of local counsel and that, to her knowledge, Osei-Bonsu has not filed any employment claim or challenge to the termination under Ganaran law.
Ms. Sung confirmed her awareness that Osei-Bonsu has retained Okoro Law Chambers (Barrister Emeka Okoro) in Ganara as personal counsel in connection with these matters. She stated that the Company has had no direct communication with Osei-Bonsu since his termination, and that all communications have been directed through Barrister Okoro.
C. Delacroix's Use of Personal Email
Ms. Sung was asked about the use of personal email by Torchlight personnel in connection with the Crestfield relationship. She provided the following account.
Ms. Sung stated that she learned during the preliminary internal review that Delacroix had used a personal, non-company email account in at least 37 identified communications with Jean-Philippe Renard of Crestfield. She stated that these communications were identified through metadata analysis conducted by Torchlight's IT department during the preliminary review and that the content of many of these communications is not in the Company's possession or control, as they reside on Delacroix's personal email servers.
Ms. Sung described Delacroix's use of personal email for Company business as a violation of Torchlight's information governance policies, which require that all business communications be conducted through Company-provided email systems and accounts. She noted that this violation created significant challenges for the document preservation and collection process, as the Company lacks direct access to Delacroix's personal email account and cannot compel its production absent legal process.
Ms. Sung further stated that the litigation hold notice issued on March 17, 2025, expressly covered personal devices and personal email accounts to the extent they contained documents or communications relating to Company business within the scope of the hold. The hold notice was distributed to all 23 identified custodians, including Delacroix. However, Ms. Sung acknowledged that Delacroix's compliance with the litigation hold is uncertain, given his resignation from the Company, his current residence in Lyon, France, and his counsel's declination of the voluntary interview request. She stated that this is an area requiring follow-up and potentially legal process to secure the preservation and production of the personal email communications.
VI. Torchlight's Response to SEC and DOJ Inquiries
A. SEC Formal Order of Investigation
Ms. Sung was asked to describe Torchlight's receipt of and response to the SEC's formal order of investigation. She provided the following account.
Ms. Sung stated that Torchlight received the SEC's formal order of investigation (File No. HO-14892), dated January 22, 2025, which initiated a formal investigation into potential violations of the FCPA, including both the anti-bribery provisions and the books-and-records and internal controls provisions, in connection with Torchlight's West African operations and, specifically, its mining operations in the Republic of Ganara. Ms. Sung stated that the formal order was received by Torchlight's registered agent for service of process in the United States and was promptly forwarded to her office.
Ms. Sung further stated that the SEC served a formal document subpoena on Torchlight on February 3, 2025. The subpoena sought extensive categories of documents relating to Torchlight's Ganaran operations, including but not limited to: all agreements and communications with Crestfield Advisory Partners Ltd.; all documents relating to payments to, or for the benefit of, Ganaran government officials or their family members; all internal and external audit reports relating to the Ganaran operations; all documents relating to Torchlight's anti-corruption compliance program and its implementation at the subsidiary level; all documents relating to the five mining and environmental permits at issue; and all documents relating to internal controls over disbursements and payments in connection with the Ganaran operations.
Ms. Sung stated that upon receipt of the subpoena, she immediately coordinated with Torchlight's internal legal and compliance team to begin the process of identifying responsive documents and preserving relevant data. Subsequently, following the formal engagement of Calderwood & Harkness LLP, Ms. Sung coordinated with the investigation team and with Marlowe Asset Management Digital Forensics Inc. ("Marlowe Asset Management"), the digital forensics and e-discovery vendor retained for the Investigation (with Rachel Hartley serving as engagement lead), to initiate the formal document collection and preservation process. She stated that this process is ongoing and that Calderwood & Harkness has been in communication with the SEC staff regarding the scope and timing of document production.
B. DOJ Voluntary Document Preservation Request
Ms. Sung stated that, in addition to the SEC inquiry, Torchlight received a voluntary document preservation request from the DOJ Fraud Section, Criminal Division, dated February 14, 2025. The request was received approximately three weeks after the SEC's formal order of investigation and approximately eleven days after the SEC's document subpoena.
Ms. Sung noted that the DOJ request was characterized as voluntary and that the DOJ had not, as of the date of the interview, issued any formal subpoenas, grand jury subpoenas, or other compulsory process to Torchlight. She stated that she understood the DOJ inquiry to have originated from a referral by the SEC, though she acknowledged that the precise genesis of the DOJ's interest was not known to her with certainty.
Ms. Sung confirmed that Calderwood & Harkness, through Conrad Ashby, sent a formal acknowledgment letter to Assistant Chief Margaret Calloway of the FCPA Unit, DOJ Fraud Section, Criminal Division, on March 18, 2025. The letter confirmed Torchlight's receipt of the voluntary preservation request, the implementation of the Company's litigation hold, and Torchlight's willingness to cooperate with the DOJ. Ms. Sung stated that the letter was carefully drafted to preserve the Company's options regarding the scope and manner of cooperation, including the potential for voluntary self-disclosure, without making premature commitments.
C. 8-K Disclosure
Ms. Sung described Torchlight's public disclosure of the SEC investigation via a Form 8-K filed with the SEC on February 7, 2025. She stated that the decision to make a public disclosure was made by Torchlight's Board of Directors, on the advice of counsel, in light of the Company's obligations under the U.S. securities laws and applicable Canadian securities regulations to disclose material developments that could reasonably be expected to have a significant effect on the Company's financial condition, results of operations, or securities.
Ms. Sung stated that the 8-K filing was prepared in close coordination with Bartlett Keene & Ostrander LLP, with Richard Bartlett III taking the lead on the Canadian securities law analysis, and was reviewed by the full Board prior to filing. The filing disclosed the existence of the SEC formal order of investigation, the general nature of the allegations under investigation, and the Company's retention of external counsel to conduct an independent internal investigation.
Ms. Sung noted that the market reaction to the 8-K filing was significant. Torchlight's share price declined from CAD $34.80 (the closing price on February 6, 2025, the last trading day before the filing) to CAD $27.15 (the closing price on February 10, 2025, the first full trading day following the disclosure), representing a decline of approximately 22.0%. Based on approximately 166.7 million shares of common stock outstanding, this price decline resulted in an estimated market capitalization loss of approximately CAD $1.28 billion.
Ms. Sung further stated that, following the 8-K filing, Kingsley Institutional Partners LP, an institutional shareholder holding approximately 8.2% of Torchlight's outstanding common shares, sent governance inquiry letters to Torchlight's Board of Directors. The letters were sent under the signature of Annette Kingsley, Managing Partner of Kingsley Institutional Partners. Ms. Sung did not elaborate on the specific substance of those letters during the interview but indicated, in general terms, that they expressed concern about the adequacy of the Board's and management's oversight of the Ganaran operations and the internal controls that should have been in place to prevent the conduct under investigation. Ms. Sung deferred further discussion of the Kingsley letters pending review of privilege implications.
D. Litigation Hold and Data Preservation
Ms. Sung confirmed her direct involvement in the preparation and issuance of the litigation hold notice, which was issued on March 17, 2025. The hold notice was prepared by Calderwood & Harkness in coordination with Ms. Sung and the Torchlight legal and IT teams.
The scope of the litigation hold, as described by Ms. Sung, covers all documents, communications (including those on personal devices and personal email accounts to the extent they contain Company business within the scope of the hold), financial records, and electronic data related to the Ganaran operations, Crestfield Advisory Partners Ltd., and named Ganaran government officials, for the period from January 1, 2018, to the present. Ms. Sung stated that the hold is broadly framed to ensure comprehensive preservation of potentially relevant materials.
Ms. Sung confirmed that 23 custodians were identified for purposes of the litigation hold and document collection. These custodians include 12 current employees of Torchlight and its subsidiaries, 4 former employees (including Marcus Delacroix and Raymond Osei-Bonsu), and 7 shared or departmental mailboxes (including the inboxes for the Africa Operations department, the Legal department, the Compliance and Ethics department, and certain TGM departmental accounts).
Ms. Sung stated that Marlowe Asset Management Digital Forensics Inc. was retained on approximately March 14, 2025, to support the digital forensics, data collection, and e-discovery processes. Based on preliminary assessments conducted by Marlowe Asset Management, the estimated total data volume subject to collection is approximately 1.625 terabytes, comprising approximately 1.2 terabytes of email data, approximately 340 gigabytes of financial systems data (including data from Torchlight's ERP system and TGM's local accounting platform), and approximately 85 gigabytes of shared-drive documents.
VII. Knowledge of Specific Payments and Government Officials
A. Payments Through Crestfield
Ms. Sung was asked directly about her knowledge of specific payments to Ganaran government officials and the alleged channeling of funds through Crestfield to those officials. She was clear and unequivocal in her response.
Ms. Sung stated that she had no contemporaneous knowledge of any payments to Ganaran government officials, whether through Crestfield or through any other channel. She stated that she first learned the details of the suspected improper payment scheme during the preliminary internal review in late 2024. At that time, the review team identified total suspected improper payments estimated at $4,730,000, broken down as follows:
• $3,210,000 in payments routed through the Crestfield channel (i.e., payments made by TGH to Crestfield Advisory Partners Ltd. under the Crestfield Advisory Agreement, which are suspected to have been used, in whole or in part, to make or facilitate improper payments to Ganaran government officials);
• $890,000 in cash withdrawals from TGM's account at Regency International Bank (Account No. GAN-4419-8837), coded in TGM's general ledger under GL 7450 as "Community Relations Expenses," which the preliminary review identified as potentially reflecting direct cash payments to or for the benefit of Ganaran government officials; and
• $630,000 in in-kind benefits, including vehicle purchases and travel expenditures, that are suspected to have been provided to or for the benefit of Ganaran government officials.
Ms. Sung emphasized that these figures represent preliminary estimates and that the precise scope and amount of suspected improper payments will need to be confirmed through the full Investigation.
B. Government Officials
Ms. Sung was asked about her knowledge of the specific Ganaran government officials who are alleged to have received improper payments or benefits.
Ms. Sung stated that she was aware, in general terms, that TGM interacted with various Ganaran government agencies and officials in the ordinary course of its mining operations, including the Ministry of Mines and Natural Resources and the Ministry of Environment. Such interactions are inherent in the business of obtaining and maintaining mining licenses and environmental approvals in any jurisdiction, and Ms. Sung stated that she understood these interactions to have been conducted in the ordinary course of business.
However, Ms. Sung stated that she had no prior personal interactions with the three Ganaran government officials who have been identified in the preliminary review as suspected recipients of improper payments, namely:
• Hon. Boubacar Diallo, former Minister of Mines and Natural Resources;
• Amadou Traoré, Director of Environmental Permitting, Ministry of Environment; and
• Col. Ibrahim Konaté, former Regional Prefect, Kousseri Province.
Ms. Sung stated that she was unaware of any alleged improper payments to these individuals until the preliminary internal review surfaced those allegations in late 2024.
Ms. Sung identified the five mining and environmental permits that are at issue in the Investigation, and which correspond to the $500,000 in success fees provided for under the Crestfield Advisory Agreement:
1. Kousseri Mining License (License No. KCC-2019-0047), issued September 14, 2019;
2. Kousseri Environmental Impact Approval (Approval No. ENV-KCC-2020-113), issued March 27, 2020;
3. Dembélé Exploration License (License No. DRE-2021-0092), issued July 8, 2021;
4. Dembélé Mining License Upgrade (License No. DRE-M-2023-0018), issued February 14, 2023; and
5. Kousseri Expansion Permit (Permit No. KCC-2019-0047-A1), issued April 3, 2024.
Ms. Sung stated that each of these permits was material to Torchlight's Ganaran mining operations and that the timing of their issuance correlates with Crestfield's engagement period and the payment of success fees under the Crestfield Advisory Agreement.
C. Cash Withdrawals and In-Kind Benefits
Ms. Sung was asked specifically about the $890,000 in cash withdrawals from TGM's account at Regency International Bank and the $630,000 in in-kind benefits. She stated that she had no knowledge of either category of expenditure until they were identified during the preliminary internal review.
Ms. Sung explained that TGM's local financial operations in Ganara were managed by Thomas Achebe, TGM's Finance Director, and supervised at the country level by Raymond Osei-Bonsu, Country Manager. Financial results from TGM were consolidated and reported upward through the corporate reporting chain to Diane Fournier, VP Finance, at Torchlight's Toronto headquarters. Ms. Sung stated that she did not receive or review detailed general ledger reports from TGM and was not aware of the specific GL 7450 coding used for the cash withdrawals until the preliminary review brought it to light. She stated that the level of detail reflected in the GL 7450 entries—specifically, the characterization of significant cash withdrawals as "Community Relations Expenses"—was not visible in the consolidated reporting that she would have seen at the General Counsel level.
VIII. Torchlight's Compliance Program and Oversight
Ms. Sung was asked to describe the current state of Torchlight's anti-corruption compliance program and her assessment of its effectiveness, particularly as it relates to the Ganaran operations.
Ms. Sung stated that Torchlight's anti-corruption compliance program has been significantly enhanced since her appointment as General Counsel in 2020 and, in particular, since the appointment of Nadia Berenson as VP Compliance and Ethics in 2021. She described the enhancements as including the adoption of a formal anti-corruption policy, the implementation of a Third-Party Due Diligence Policy for agents, consultants, and intermediaries engaged in government-facing activities, the establishment of the third-party ethics hotline through Sentinel Compliance Solutions Inc., and the development of compliance training programs for employees across the organization.
However, Ms. Sung was candid in acknowledging that the compliance program's implementation at the subsidiary level—and particularly at TGH and TGM in the Ganaran operations—appeared to have been materially deficient. She identified several specific areas of concern:
• Due Diligence: The absence of any due diligence file on Crestfield demonstrated that the Third-Party Due Diligence Policy was not applied retroactively to pre-existing third-party relationships and that legacy engagements in high-risk jurisdictions were not subjected to the enhanced screening that the policy required for new engagements.
• Delegation of Authority: The Delegation of Authority Policy, which required dual authorization for payments exceeding $50,000, was not enforced at the TGM level, as evidenced by the 14 instances of single-approval violations identified in the preliminary review.
• Training: Compliance training was delivered to Toronto headquarters staff on an annual basis, but records for in-country TGM staff were incomplete or, in certain years, entirely nonexistent. Ms. Sung stated she could not confirm that TGM personnel received anti-corruption training in any year during the relevant period.
Ms. Sung expressed concern that the compliance program was not adequately monitored or audited at the operational level in Ganara. She stated that, to her knowledge, no internal audit or compliance monitoring review of TGM's operations was conducted during the period in which the suspected improper payments occurred. She noted that this gap in monitoring and auditing will need to be addressed as part of any remediation program that the Company undertakes in connection with the resolution of the Investigation and the government inquiries.
Ms. Sung acknowledged that these compliance deficiencies represent both a substantive vulnerability in the Company's anti-corruption framework and a potential issue in any future discussions with the SEC or DOJ regarding the adequacy of Torchlight's internal controls.
IX. Interaction with External Auditors
Ms. Sung was asked to describe Torchlight's relationship with its external auditors in light of the matters under investigation. She provided the following account.
Ms. Sung stated that Clarendon Group LLP serves as Torchlight's external auditor, with Alain Beaumont serving as the engagement partner for the Torchlight audit. She noted that Clarendon has served as Torchlight's auditor for a number of years and has issued clean (unqualified) audit opinions on Torchlight's consolidated financial statements for fiscal years 2019 through 2023—the period during which the suspected improper payments are believed to have occurred.
Ms. Sung noted that the audit for fiscal year 2024 is currently delayed and has not been completed. She stated that the delay is attributable to the ongoing internal investigation and the SEC and DOJ proceedings, which have created uncertainty regarding the accuracy and completeness of the Company's financial statements for the relevant periods. She stated that Clarendon has informed the Company that it is unable to complete the FY2024 audit until it has sufficient information to assess the impact, if any, of the investigation's findings on the Company's financial statements and disclosures.
Ms. Sung stated that she has been in regular contact with Alain Beaumont to keep Clarendon informed of the status of the Investigation and the government proceedings. She stated that Clarendon has indicated that, depending on the findings of the Investigation, it may need to reassess its prior-year audit opinions for FY2019 through FY2023. Ms. Sung understood this to mean that Clarendon is considering whether the information that has come to light regarding the Crestfield payments, the cash withdrawals, and the in-kind benefits may constitute a material misstatement or omission in the Company's previously issued financial statements, which could require restatement or correction. She stated that this is a matter of significant concern to the Company and the Board and that Calderwood & Harkness's analysis of the potential financial statement implications is ongoing.
X. D&O Insurance
Ms. Sung was asked to describe the status of Torchlight's directors' and officers' liability insurance coverage in light of the Investigation and government proceedings. She confirmed the following.
Torchlight maintains directors' and officers' ("D&O") liability insurance through Dalton & Mercer Inc. The applicable policy is identified as Policy No. DM-0092-FCPA-2024. Ms. Sung stated that the policy provides coverage with limits of $50 million per occurrence and $100 million in the aggregate, subject to a self-insured retention of $2.5 million. She stated that the policy covers defense costs and indemnification for claims arising out of acts or omissions by directors and officers in their capacity as such, subject to the policy's terms, conditions, and exclusions.
Ms. Sung stated that a formal notice of claim was submitted to Robert Dalton Jr. at Dalton & Mercer on March 8, 2025, by Calderwood & Harkness on behalf of Torchlight. The notice of claim covered the SEC investigation, the DOJ inquiry, the internal investigation, and any related proceedings, including potential shareholder litigation arising from the 8-K disclosure and the resulting share price decline.
Ms. Sung stated that, as of the date of the interview, she is awaiting a reservation-of-rights letter from Dalton & Mercer in response to the notice of claim. She stated she anticipated that the insurer would reserve certain rights, potentially including rights related to the "conduct exclusion" and other policy provisions that may apply in cases involving alleged intentional misconduct, but that the Company expects the policy to provide coverage for defense costs at a minimum.
XI. Voluntary Self-Disclosure Considerations
Ms. Sung was asked about the Company's consideration of a voluntary self-disclosure ("VSD") to the DOJ under its Corporate Enforcement Policy ("CEP") and related programs. She provided the following account, noting that much of the analysis is being conducted under the direction of Calderwood & Harkness and is subject to the attorney-client privilege.
Ms. Sung stated that she, the Audit Committee, and CEO Vandermeer are actively considering whether Torchlight should make a voluntary self-disclosure to the DOJ. She described this as one of the most consequential strategic decisions facing the Company in connection with the Investigation. She noted that the DOJ's Corporate Enforcement Policy provides that a company that voluntarily self-discloses misconduct, fully cooperates with the government's investigation, and timely and appropriately remediates the misconduct may be eligible for significant cooperation credit, including a presumption of a declination of prosecution in certain cases.
Ms. Sung stated that the target date for a decision on whether to proceed with VSD is June 30, 2025. She identified the interim investigation report to the Audit Committee, which is targeted for completion by May 15, 2025, as a key input into that decision. She stated that the Audit Committee will need to have a substantially complete understanding of the scope and nature of the misconduct, the identities of the individuals involved, the adequacy of the Company's cooperation and remediation, and the likely government exposure before it can make an informed decision on VSD.
Ms. Sung expressed awareness that VSD could result in significant cooperation credit from the DOJ, potentially reducing the Company's total government exposure. She stated that the current estimated exposure range for government penalties and disgorgement, based on preliminary analysis, is approximately $14.19 million to $19.63 million. She acknowledged, however, that VSD also carries risks, including the potential for increased scrutiny from the government, the possibility that the disclosure could accelerate the government's timeline for enforcement action, and the need for the Company's cooperation to be complete and credible in order to realize the full benefit of the CEP.
Ms. Sung stated that she defers to Calderwood & Harkness's pending privileged analysis of the strategic considerations surrounding VSD and that any final recommendation to the Board will be made in close coordination with the investigation team.
XII. Assessment of Witness Credibility and Demeanor
Ms. Sung was cooperative and forthcoming throughout the entire 3.5-hour interview. She appeared to answer all questions candidly and without evasion, providing detailed and responsive answers and volunteering relevant context where appropriate. Her manner was professional and composed, though she displayed visible concern when discussing the potential impact of the Investigation on the Company, its employees, and its shareholders.
Ms. Sung acknowledged gaps in her oversight—particularly regarding the lack of periodic review of Crestfield invoices and the absence of a due diligence file—and did not attempt to minimize the significance of the identified compliance failures. She was forthright in characterizing certain deficiencies, such as the absence of audit rights in the Crestfield Advisory Agreement and the failure to apply the Third-Party Due Diligence Policy retroactively, as significant gaps that should have been addressed. This level of candor supports a positive assessment of her credibility as a witness.
Ms. Sung expressed genuine concern about the potential impact of the Investigation on Torchlight, its employees, its shareholders, and its operations in Ganara. She stated her commitment to full cooperation with the Investigation and with the government proceedings, and she indicated a willingness to make herself available for follow-up interviews as needed.
The interviewers noted no inconsistencies between Ms. Sung's account and the documentary evidence reviewed to date, including the Crestfield Advisory Agreement, the whistleblower complaint, the Audit Committee minutes, and the financial records assembled during the preliminary review. Nor did the interviewers identify any material inconsistencies between Ms. Sung's account and the accounts provided by other witnesses interviewed during the first wave of interviews in Toronto, including Nadia Berenson (interviewed April 7, 2025) and Diane Fournier (interviewed April 8, 2025).
Overall, Ms. Sung presented as a credible, knowledgeable, and cooperative witness whose account is consistent with the available documentary record and corroborated by other witness statements.
XIII. Open Items and Follow-Up
The following items remain open following the interview and require follow-up action:
1. Kingsley Institutional Partners Governance Letters. Ms. Sung requested copies of the governance inquiry letters sent by Kingsley Institutional Partners LP (Annette Kingsley, Managing Partner) to Torchlight's Board of Directors. Before any copies are shared with Ms. Sung or other Company personnel, the letters should be reviewed for privilege implications, including whether they contain or reference privileged communications, legal advice, or investigation-related information.
2. October 2024 Meeting with Delacroix. Follow-up with Ms. Sung is needed regarding the precise timing—specifically, the exact date—and the detailed substance of her October 2024 meeting with CEO Vandermeer and Delacroix, at which Delacroix was informed of the preliminary internal review and the Crestfield concerns. The interviewers should request any contemporaneous notes, calendar entries, or correspondence relating to this meeting.
3. September 5, 2024, Audit Committee Minutes. Obtain and review the minutes of the Audit Committee's special session on September 5, 2024, at which the preliminary internal review was authorized. The minutes were referenced during the interview but were not reviewed in full with Ms. Sung. They may contain additional detail regarding the scope of the review authorized, any limitations on the review's mandate, and the Committee's instructions to management and counsel.
4. Delacroix Litigation Hold Compliance. Confirm the status of Marcus Delacroix's compliance with the March 17, 2025, litigation hold notice. Given Delacroix's resignation, his current residence in Lyon, France, his retention of personal counsel (Whitmore & Sharpe LLP), and his counsel's declination of the voluntary interview request, there is a significant risk that Delacroix is not preserving relevant documents, including the 37 identified personal email

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