PDF: URI v Kleberg County - Texas Supreme Court Opinion (No. 16-0336)
CENTENNIAL, Colo., March 26, 2018 – Westwater Resources, Inc. (Nasdaq: WWR) (“WWR” or “Westwater”) is pleased to announce that, on March 23, 2018, the Supreme Court of the State of Texas issued a unanimous (8-0) decision favorable to Westwater in its long-running lawsuit between a Westwater subsidiary, URI, Inc., and Kleberg County, Texas. The lawsuit involved a post-mining restoration standard, as reflected in a 2004 settlement agreement between URI, Inc. and Kleberg County, for one specific water well (out of a total of 39 wells) at URI’s Kingsville project. Kleberg County argued that only baseline data taken in 1985 should be used to determine the clean-up standard for the well, which showed that the water in the specific well was allegedly suitable for agricultural irrigation purposes prior to the start of mining. URI argued that baseline data taken in both 1985 and 1987 should be used to determine the clean-up standard for the well, and that averaging the two data sets showed no suitable use prior to the start of mining. The Supreme Court ruled in complete favor of URI and denied Kleberg County any further relief.
Chris Jones, Westwater’s President, expressed satisfaction with the decision. “We have long believed that the restoration process at Kingsville was performed in full compliance with all state requirements as well as the 2004 settlement agreement. Now the Texas Supreme Court agrees with us. Both parties have spent considerable time and money to reach this outcome, and Westwater is pleased that the rule of law has been properly applied. We will continue to restore the Kingsville project as required by state law and look forward to future opportunities to demonstrate our commitment to the health and safety of the citizens of Kleberg County.”
In this litigation, which began in 2007, the trial court concluded in 2013 that URI breached its contractual obligation, under the 2004 settlement agreement with Kleberg County, to restore one of 39 wells to its pre-mining use based on baseline data obtained for that specific well in 1985. The trial court ordered URI to continue restoring that one specific well until the water was suitable for agricultural irrigation use. The court of appeals affirmed in 2016 on liability, reversed on remedies, and held that Kleberg County was entitled to its attorney’s fees as a result of prevailing on URI’s contract breach. The issue before the Supreme Court was whether the specific language contained in the 2004 settlement agreement required URI to apply only the 1985 baseline data or whether URI should apply both 1985 and 1987 baseline data. Although the 2004 settlement agreement was silent on the use of either 1985 or 1987 data, both URI and Kleberg County agreed, and the trial court and the court of appeals concluded, that on this issue the 2004 settlement agreement was unambiguous and clear on its face.
In its decision the Supreme Court found that the 2004 settlement agreement did not refer to any particular set of data, or prescribe the use of particular data, or place limitations on the data that may be considered or require restoration of any well let alone a particular well. The Supreme Court then reasoned as follows:
“The lower courts concluded, however, that URI could not use the 1987 baseline data, alone or in combination with the 1985 baseline data, precisely because this outcome would ensue from a plain and objective reading of the Settlement Agreement. Even though the contract admits no ambiguity, the lower courts engrafted limitations that are entirely external to the instrument and directed to fulfill Kleberg County’s unexpressed subjective intent. This is not a proper use of surrounding facts and circumstances. Courts cannot rewrite the parties’ contract to add to or subtract from its language.”
In conclusion, the Supreme Court stated “. . . as a matter of law, URI did not breach . . . the Settlement Agreement . . .” and then it “reversed the court of appeals judgment and rendered judgment that Kleberg County take nothing on its breach-of-contract claim.” A complete copy of the Supreme Court’s decision can be found on Projects Overview page of Westwater’s website at www.westwaterresources.net.
Westwater was represented before the Texas Supreme Court by Duncan C. Norton with the Austin law firm of Lloyd Gosselink Rochelle & Townsend, P.C.
WWR or the “Company” (formerly Uranium Resources, Inc.) is focused on developing energy-related minerals. The Company has developed a dominant land position in three prospective lithium brine basins in Nevada and Utah in preparation for exploration and potential development of any lithium resources that may be discovered there. In addition, WWR remains focused on advancing the Temrezli in-situ recovery (ISR) uranium project in Central Turkey when uranium prices permit economic development of this project. WWR controls extensive exploration properties in Turkey under eight exploration and operating licenses covering approximately 39,000 acres (over 16,000 ha) with numerous exploration targets, including the potential satellite Sefaatli Project, which is 30 miles (48 km) southwest of the Temrezli Project. In Texas, the Company has two licensed and currently idled uranium processing facilities and approximately 11,000 acres (4,400 ha) of prospective ISR uranium projects. In New Mexico, the Company controls mineral rights encompassing approximately 188,700 acres (76,394 ha) in the prolific Grants Mineral Belt, which is one of the largest concentrations of sandstone-hosted uranium deposits in the world. Incorporated in 1977, WWR also owns an extensive information database of historic drill hole logs, assay certificates, maps and technical reports for uranium properties located in the Western United States.
Furthermore, on December 13, 2017, WWR announced it had entered into a definitive agreement to acquire Alabama Graphite Corp. (AGC) (TSX-V: CSPG) (OTCQB: CSPGF) pursuant to an arrangement agreement and plan of arrangement. The primary asset of AGC is the Coosa graphite project, located across 41,900 acres in east-central Alabama. Finalization of the acquisition is subject to shareholder votes, as well as customary regulatory agency and court approvals. Closing of the acquisition is targeted for early in the second quarter of 2018.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” and other similar words. All statements addressing events or developments that WWR expects or anticipates will occur in the future, including but not limited to statements relating to developments at the Company’s projects, are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include, but are not limited to, (a) the Company’s ability to close its transaction with AGC and successfully integrate AGC’s business into its own; (b) the Company’s ability to raise additional capital in the future; (c) spot price and long-term contract price of graphite, uranium and lithium; (d) risks associated with our foreign and domestic operations; (e) operating conditions at the Company’s projects; (f) government and tribal regulation of the graphite industry, uranium industry, the lithium industry, and the power industry; (g) world-wide graphite, uranium and lithium supply and demand, including the supply and demand for lithium-based batteries; (h) maintaining sufficient financial assurance in the form of sufficiently collateralized surety instruments; (i) unanticipated geological, processing, regulatory and legal or other problems the Company may encounter in the jurisdictions where the Company operates or intends to operate, including in Alabama, Texas, New Mexico, Utah, Nevada and Republic of Turkey; (j) the ability of the Company to enter into and successfully close acquisitions or other material transactions, (k) the results of the Company’s lithium brine exploration activities at the Columbus Basin, Railroad Valley, and Sal Rica projects, and the possibility that future exploration results may be materially less promising than initial exploration result; (l) any graphite, lithium or uranium discoveries not being in high enough concentration to make it economic to extract the metals; and (m) other factors which are more fully described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company’s forward-looking statements. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.
Westwater Resources Contact:
Christopher M. Jones, President and CEO Jeffrey L. Vigil, VP Finance and CFO