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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIES
General legal matters
Other than routine litigation incidental to our business, or as described below, the Company is not currently a party to any material pending legal proceedings that management believes would be likely to have a material adverse effect on our financial position, results of operations or cash flows.
White Mesa Mill
In 2013, the Ute Mountain Ute Tribe filed a Petition to Intervene and Request for Agency Action challenging the Corrective Action Plan approved by the State of Utah Department of Environmental Quality (“UDEQ”) relating to nitrate contamination in the shallow aquifer at the White Mesa Mill. The challenge is currently being evaluated and may involve the appointment of an administrative law judge to hear the matter. The Company does not consider this action to have any merit. If the petition is successful, the likely outcome would be a requirement to modify or replace the existing Corrective Action Plan. At this time, the Company does not believe any such modification or replacement would materially affect its financial position, results of operations or cash flows. However, the scope and costs of remediation under a revised or replacement Corrective Action Plan have not yet been determined and could be significant.
On January 19, 2018, the UDEQ renewed, and on February 16, 2018 reissued with minor corrections, the White Mesa Mill’s license (the “Radioactive Materials License”) for another ten years, and Groundwater Discharge Permit (the “GWDP”) for another five years, after which renewal periods further applications for renewal of the License and GWDP will need to be submitted. During the review period for each application for renewal, the Mill can continue to operate under its existing Radioactive Materials License and GWDP until such time as the renewed Radioactive Materials License or GWDP is issued. In March 2019, the DWMRC issued a revised GWDP to incorporate the addition of Dissolved Oxygen into the list of field parameters measured during groundwater sampling. Additionally, DWMRC modified Ground Water Compliance Limits for several wells as a result of their acceptance of several source assessment reports. The source assessment reports concluded that the previous exceedances in the wells were due to natural background influences or well construction abnormalities and were not a concern. Most recently, the GWDP was revised again in March 2021 to delete references to certain completed requirements from Part I.H. (Completed Compliance Schedules) of the GWDP, to add certain new required compliance schedules to the same section, and make other regulatory amendments and adjustments, including modification of select Groundwater Compliance Limits, for certain monitoring constituents, in certain and rigorously evaluated monitoring wells, as required by the GWDP.

In 2018, the Grand Canyon Trust, Ute Mountain Ute Tribe and Uranium Watch (collectively, the “Mill Plaintiffs”) served Petitions for Review challenging UDEQ’s renewal of the Radioactive Materials License and GWDP and Requests for Appointment of an Administrative Law Judge, which they later agreed to suspend pursuant to a Stipulation and Agreement with UDEQ, effective June 4, 2018. The Company and Mill Plaintiffs held multiple discussions over the course of 2018 and 2019 in an effort to settle the dispute outside of any judicial proceeding. On February 1, 2019, the Mill Plaintiffs submitted to the Company their proposal for reaching a settlement agreement. The proposal remains under consideration by the Company, which may choose to submit a counterproposal constituting the Company’s final position on all disputed matters if it determines that meaningful settlement can be reached by the parties. The Company does not consider these challenges to have any merit and, if a settlement cannot be reached, intends to participate with UDEQ in defending against the challenges. If the challenges are successful, the likely outcome would be a requirement to modify the renewed Radioactive Materials License and/or GWDP. At this time, the Company does not believe any such modification would materially affect its financial position, results of operations or cash flows.

Pinyon Plain Project

In March 2013, the Center for Biological Diversity, the Grand Canyon Trust, the Sierra Club and the Havasupai Tribe (the “Pinyon Plaintiffs”) filed a complaint in the U.S. District Court for the District of Arizona (the “District Court”) against the USFS Forest Supervisor for the Kaibab National Forest and the USFS (together, the “Defendants”) seeking an order (a) declaring that the USFS failed to comply with environmental, mining, public land, and historic preservation laws in relation to our Pinyon Plain Project (formerly known as the “Canyon Project”), (b) setting aside any approvals regarding exploration and mining operations at the Pinyon Plain Project, and (c) directing operations to cease at the Pinyon Plain Project and enjoining the USFS from allowing any further exploration or mining-related activities at the Pinyon Plain Project until the USFS fully complies with all applicable laws. In April 2013, the Pinyon Plaintiffs filed a Motion for Preliminary Injunction, which was denied by the District Court in September 2013. On April 7, 2015, the District Court issued its final ruling on the merits in favor of the Defendants and the Company and against the Pinyon Plaintiffs on all counts. The Pinyon Plaintiffs appealed the District Court’s ruling on the merits to the United States Ninth Circuit Court of Appeals (the “Ninth Circuit”) and filed motions for an injunction pending appeal with the District Court. Those motions for an injunction pending appeal were denied by the District Court on May 26, 2015. Thereafter, Pinyon Plaintiffs filed urgent motions for an injunction pending appeal with the Ninth Circuit, which were denied on June 30, 2015.

The hearing on the merits at the Ninth Circuit was held on December 15, 2016. On December 12, 2017, the Company received a favorable ruling from the Ninth Circuit on the appeal of the merits on the Pinyon Plain Mine litigation. The Pinyon Plaintiffs petitioned the Ninth Circuit for a rehearing en banc and, on October 25, 2018, the Ninth Circuit panel withdrew its prior opinion and filed a new opinion, which affirmed the prior opinion with one exception the District Court’s decision. The Ninth Circuit panel reversed itself on its prudential standing analysis as applied to the fourth claim on “valid existing rights,” having initially determined that the Pinyon Plaintiffs lacked standing under the Mining Act of 1872. The panel remanded the claim back to the District Court to hear on the merits. On September 11, 2019, the Pinyon Plaintiffs filed their Motion for Summary Judgment and Memorandum in Support with the District Court, after which the Company filed its Intervenors-Defendants’ Motion for Summary Judgment on October 23, 2019. On November 15, the Pinyon Plaintiffs filed their Reply in Support of their Motion for Summary Judgment.

On May 22, 2020, the District Court issued its final order in favor of the Company and the Defendants. The Pinyon Plaintiffs were afforded 60 days in which to file an appeal with the Ninth Circuit, during which they filed their Notice of Appeal from a Judgment or Order of a United States District Court. The Ninth Circuit subsequently issued a Time Schedule Order setting due
dates for the parties’ briefs and actions required to perfect the appeal. The Pinyon Plaintiffs filed their Appellant’s Opening Brief with the Ninth Circuit on December 22, 2020, and the USFS and Company’s respective Answering Briefs are due April 5, 2021 following a grant of extension. As a part of the appeal, the Company may be required to maintain the Pinyon Plain Project on standby pending resolution of the matter. Such a prolonged delay of mining activities could have a significant impact on our future operations.

Daneros Mine

On February 23, 2018, the BLM issued the Environmental Assessment (“EA”), Decision Record and FONSI for the Mine Plan of Operations Modification for the Daneros Mine. On March 29, 2018, the Southern Utah Wilderness Alliance and Grand Canyon Trust (together the “Daneros Appellants”) filed a Notice of Appeal to the IBLA regarding the BLM’s Decision Record and FONSI and challenging the underlying EA. In April 2018, the Company filed a Motion to Intervene with the IBLA, requesting that the Company be allowed intervention as a full party to this appeal, which was subsequently granted.

This matter has been briefed and remains under consideration by IBLA at this time. The Company does not consider these challenges to have any merit; however, the scope and costs of amending or redoing the EA have not yet been determined and could be significant.

Mineral Property Commitments

The Company enters into commitments with federal and state agencies and private individuals to lease mineral rights. These leases are renewable annually, and annual renewal costs are expected to total $1.49 million for the year ended December 31, 2021.
Surety Bonds
The Company has indemnified third-party companies to provide surety bonds as collateral for the Company’s ARO. The Company is obligated to replace this collateral in the event of a default and is obligated to repay any reclamation or closure costs due. As of December 31, 2020, the Company has $20.82 million posted against an undiscounted ARO of $41.95 million (December 31, 2019 - $20.08 million posted against an undiscounted ARO of $41.75 million).
Commitments
The Company is contractually obligated under a non-material Sales and Agency Agreement appointing an exclusive sales and marketing agent for all vanadium pentoxide produced by the Company.