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STATEMENT OF FACTS RELIED ON:
Introduction
1. Cabin Ridge Project Limited (“Cabin Ridge") and Cabin Ridge Holdings Limited
(CRA bring tis clsim for damages aginst Her Majesty the Queen in righ of Alera
(“Alberts”) for de facto expropriating thei freehold mineral rights and co leases (collectively,
the “Cabin Ridge Property"). Cabin Ridge also seeks monetary compensation pursuant 0 the
doctrines of private nuisance and unjust enrichment.
2. Chbin Ridge and CRHL acquired the, Cabin Ridge Property and additional property
interests (including a pipeline and right of way leading to a railway) (the “Project Assets”) for the
purpose of developing one of the world’s leading metallurgical (steel-making) coal projects,
Known as the “Cabin Ridge Project”. The Cabin Ridge Project would have created around 500
jobs, provided $2 billion or more in taxes and other revenue for the provincial and federal
governments, and generated approximately $9 billion in pre-tax profits.
3. To date, Cabin Ridge and CRHL have incurred approximately $56 million to acquire,
invest in and take steps to explore and develop the Cabin Ridge Property, Cabin Ridge Project and
Project Assets.
4. In February 2021, Alberta announced an immediate ban on mounain top mining on lands
that include the Cabin Ridge Property (the “Prohibition”; however, Alberta did not, and has not,
defined mountain top mining.
5. ln March 2022, Alberta imposed an indefinite moratorium on coal exploration and
development on lands that include the Cabin Ridge Property (the “Indefinite Moratorium”).
6. Asa result of the Indefinite Moratorium—and, possibly, as a result of the Probibition—
Cabin Ridge. and CRHL cannot proceed with the Cabin Ridge Project. More fundamentally,
Alberta-has climinated all reasonable uses of the Cabin Ridge Property for purposes of further
developing a metallurgical (steel-making) coal project and otherwise. The effect of Alberta’s
actions has been to deprive Cabin Ridge and CRHL of the value, and all reasonable uses, of the
Cabin Ridge Property, Project Assets and Cabin Ridge Project. As such, Alberta is liable to Cabin
Ridge and CRHL for damages in the amount of approximately $3.441 billion, representing the loss

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ofthe relax net present value of the Cabin Ridge Property, Project Assets, and Cabin Ridge
Project.
7. Nétwithstanding Alberta's immediate, indefinite and complete ban on coal exploration and
development on the Cabin Ridge Property, Alberta has not compensated nor offered to compensate
Cabin Ridge or CRHL. As a resul, Cabin Ridge and CRHL seek damages against Alberta for de
facto expfopistion or, futher oti the altermative, private nuisance andlor just enrichment.
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Cabin Ridge
1
8. Cabin Ridge is a privately held stecl-making coal mining company located in Calgary,
Alberta, registered under the Alberta Business Corporations Act. Cabin Ridge holds the rights to
~ con resgurces in about 4,700 hectares of land located approximately 0 kilometres north of
Coleman, Alberta. Approximately 95 percent of Cabin Ridge’ mineral rights in Alberta are
freehold mineral rights
9. CRHL is a privately held Alberta holding corporation. It is the parent company of Cabin
Ridge afd affiliate companies, Cabin Ridge Investments Limited (‘CRIL”) and Discovery
Resource Management Limited (“Discovery”). CRHL holds all of the shares in Cabin Ridge,
CRIL and Discovery, which together own all of the assets that comprise the Cabin Ridge Project.
CRHL is registered under the Alberta Business Corporations Act with a registered office located
in Calgary, Alberta.
The Cabin Ridge Property and the Project Assets
10. Cabin Ridge holds tile to the following assets comprising the Cabin Ridge Property:
(Cabin Ridge holds a 100% fee simple interest! in either: () all mines and mirieals
and the right to work the same; or, (if) all coal and the right to work the same.
© (together, the “Freehold Mineral Rights").
(b) Further, Cabin Ridge holds four coal leases relating to five quarter sections of land
tobe used for the Cabin Ridge Project (the “Coal Leases”). The: Coal Leases
1 Specialy, Cabin Ridge holds legal tl to Tie Nos. 112Y162, 112Y1624, 112Y163, 112Y164, 1 12Y164A,
T12Y165, 112Yi66, 112Y167, 112168, 112Y169, 112Y170, 112Y171, 1 12Y172, [12Y173, 1121174,
112Y175, H2Y176, 112Y177, 12Y178, 112179, 12Y160, and 1127150.
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| commenced on August 31, 2020 for a term of 15 years and granted Cabin Ridge
“the exclusive right to win, work and recover coal...together with the right to
| romove..any sos seovered™
11. Additionally, Cabin Ridge end CRHL hold title to the following assets comprising the.
1
Projet Assets:
(9) CRHL holdsall of the shares in Discovery, which holds a ipelinc and right of way
"spanning from the lands over which Cabin Ridge holds Frechold Mineral Rights
and Coal Leases to the rail line.
() Cabin Ridge holds three frechold land parcels located at the same rail line (the
! “Railhead Lands").
(9) Cabin Ridge holds all mining and exploration data for the above-noted lands (the
| “Coal Data").
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(@ Cabin Ridge holds three additional coal lease applications to be used to support the
"Cabin Ridge Project.
The 1976 Coal Policy . -
12. The Cabin Ridge Property is on lands known as the “Eastern Slopes” (a map of which is
appended hereto). The Eastern Slopes arc an area in westem Alberta described in the Alberta
Ministry|of Energy's 1976 policy document “A Coal Development Policy for Alberta” (the “1976
Coal Policy"), which became effective on June 15, 1976. Alberta adopted the 1976 Coal Policy to
encourage and describe Alberta's then policy on coal exploration and development. However, it
was not enacted as a legislative tool and did not have the force of aw or create legally binding
restrictions.
13. Among other things, the 1976 Coal Policy classified lands in Alberta ito categories |
through 4 (the “Land Categories”), with a distinct level of restriction on coal exploration and
development applying to each category as a matter of then government policy.
14. Pursuant to the 1976 Coal Poliy, the Cabin Ridge Property fulls entirely within category
2: lands in the Rocky Mountains and Foothills “in which limited exploration is desirable and may
be permitted under strict control but in which commercial development by surface mining will not


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normally be considered a he present me”. Accordingly, ss & mate of policy, the 1976 Coal
Policy pied explora nd development on catgory 2 nds os 197)
15. The 1976 Coal Policy also describes goverment policy with respect o purchasing rights
affected by the Land Categories, stating that, among other things, where freehold rights and leases
of thos rights re affected by the restitons imposed by category 2, Albert is prepared (0
purchase fh lessor rights at fi value determined by agreement or asitation, and fo acquire any
lessee rights on the same basis as for lessees of Crown rights (the “Fair Value Commitment”).
Alberta Represented that Development was Available on Category 2 lands .
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16. Notwithstanding the policy-based limitations on commercial development of category 2
lands in fhe 1976 Coal Policy, Alberta, its representatives and statutory decision-makers have
represented since a least 1983 that cach application for the ight o explore lease, o develop coal
on category 2 lands will be considered on its own merits.
17. Further, since at least May 2016, Alberta, its representatives, and statutory decision-makers ~~ _
have reptesented that exploration and commercial development on category 2 lands was available
and any application for coal exploration and development on category 2 lands would follow the
normal airy assessment processes.
18. Moreover, since at least May 2016, Alberta and its representatives have actively
encouraged coal mining companies to invest in Alberta’s metallurgical co resources, much of
which are on category 2 lands.
19. Based on their understanding that metallurgical coal development was permitted on
category 2 lands, Cabin Ridge and CRHL took steps and incurred significant costs to acquire the
Cabin Ridge Property and Project Assets and to advance the Cabin Ridge Project.
Alberts Rescinded the 1976 Coal Policy
20. 1976, the Province of Alberta lacked many of the regulatory tools to assess the
economic, environmental and social impacts of coal development that are in force today. Since
then, Alberta has adopted a robust regulatory framework that has codified, modified, or superseded.
most of all of the 1976 Coal Policy, aside from the Land Categories. These legislative

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dvclopmcns includ the ensctment of nd use planing satis and land us plans therunder
which soemies the development of metallurgical coal in the Eastern Slopes.
21. By atleast March 2018, Alberta began to consider rescinding or modifying the 1976 Coal
Policy anf notified coal lease applicants that coal leases would not be issued on eatgory 2 ands
unl Alta made decison on th 1976 Cos Policy.
22. On February 13,2020, Alera confined that all prjct aplication in ctogory 2 are to
be re in accordance with normal regulatory processes.
23. On March 31,2020, Alberta, through the Minister of Energy, decided to rescind the 1976
Coal Policy and undertake a 120 day process to resolve existing coal lease applications.
24. On May 15, 2020, Alberta advised the public that it had rescinded the 1976 Coal Policy,
which came into effect on June 1, 2020.
25. Byway of explanation, Alberta advised that the Land Categories were the only remaining
mechaniims from the 1976 Coal Policy and were no longer require to ffectively manage Crown
coal leases or the location of exploration and development activities. Alberta cited decades of
improved policy, planning, and regulatory processes which made the 1976 Coal Policy
secs.
26. The rescission of the 1976 Coal Policy removed all policy-based limitations on coal
exploration and development on category 2 lands.
27. Following its decision to rescind the 1976 Coal Policy, Alberta offered a right of first
refusal o all existing coal lease applicants to acquire leases on category 2 lands for which they had
outstanding applications.
© Cabin Ridge's Exploration and Development of the Cabin Ridge Property
28. Following Alberta’s rescission of the 1976 Coal Policy, Cabin Ridge and CRHL took
further steps and incurred costs to acquire the Cabin Ridge Property and Project Assets, and to
further éxplore and develop the Cabin Ridge Project. In doing so, Cabin Ridge relied on Alberta’s
escissign of the 1976 Coal Policy and proceeded on the understanding that there were no unique
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restrictions to developing a metallurgical (stel-making) coal projec aside from the restrictions
that applied to other industrial users, including regulatory approval requirements.
29. Ilpartiular, Cabin Ridge and CR invested significant resources and took the following
steps to advance the Cabin Ridge Project:
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(® Two days after Alberta's rescission of the 1976 Coal Policy came into effect, Cabin
| Ridge applied to the Alberta Energy Regulator (“AER”) for: () a Coal Exploration -
| ‘Permit (the “CEP Application”) to conduct coal exploration activities on the Cabin
| Ridge Property; and, (ii) a Deep Drilling Permit (the “DDP Application”) to
| ‘conduct an exploratory coal deep drilling program.
® In support of the CEP Application and DDP Application, Cabin Ridge engaged in
| extensive consultation and entered into several agreements with stakeholders and
Indigenous communities and groups, making payments pursuant to. those
|" agreements in the cumulative amount of approximately $866,000.
©) Cabin Ridge and CRHL closed transactions to acquire the Cabin Ridge Property
and Project Assets and made payments or incurred liabilities pursuant thereto that,
to date, total approximately $41 million.
(@ On or about June 8, 2020, Cabin Ridge exercised ts right of first refusal in respect
| ofits coal lease applications and, on o about September 1, 2020, Alberta grand
Cabin Ridge the Coal Leases with commencement dates of August 31, 2020.
(9) On September 25, 2020, the AER granted the CEP Application and issued Coal
. Exploration Permit 200001 (the “CEP Permit"). Also on September 25, 2020, the
| ABR granted the DDP Application and issued Permit No. C2020-6 (the “DDP
| Permit).
(0 Following receipt of the Coal Leases, CEP Permit and DDP Permit, Cabin Ridge
began the first phase of a drilling campaign that was completed by the end of 2020.
(9 In addition to the amount referenced at paragraph (b), Cabin Ridge expended
approximately $14 million to obtain the CEP and DDP Permits and conduct
! cxploraton and ing.
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(1) Cabin Ridge completed a preliminary economic assessment of the Cabin Ridge
© Property that confirmed, among other things, the economic viability of the Cabin
| Ridge Project and assessed the resource as among the highest quality sesh-making
| cogiovay
Alberta Changed its Position by Reinstating the 1976 Coal Policy and Imposing the

1
Prohibition
30. d February 8, 2021 (8 months after it rescinded the 1976 Coal Policy), Alberta changed
its position and reinstated the 1976 Coal Policy in its entirety (including the Land Catogorics and
the Fair iid Commitment). Additionally, Alberta imposed the Prohibition as a new, legally-
binding Ban on development on category 2 lands that was not part of the 1976 Coal Policy.
| conjunction with the reinstatement, the Minister of Energy issued Ministerial Order 054-
2021, making the “Coal Policy Direction” that required the AER to, among other things: (i)
onside fhe Land Caegoies hn consisin an pplication fo an spproval in esp of cos
exploration or development; (i) confirm that any proposed exploration for, or development of,
coal on category 2 lands does not involve mountain top removal; and, (iii) not issue any new
approval for coal exploration on category 2 ands.

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32. On the same date (February 8, 2021), Alberta advised the public that: (i) it had made a
‘mistake in rescinding the 1976 Coal Policy; (ii all future coal development and coal lease sales
on category 2 lands would be halted indefinitely pending consultations on a new modem coal
‘policy; and, (ii) it did not intend to remove approvals already granted by the AER.
35. Altera also announced an immediate ban on mountain (0p mining and stated hit mountain
top mining will never be allowed in Alberta (the Prohibition). In announcing the Prohibition,
Alberta did not define mountain top mining; however, several interpretations of the term would
preclude metallurgical coal development on the Cabin Ridge Property.

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Alberta Established the Coal Policy Committee

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34. OnFebruary 23,2021, the Minister of Energy announced forthcoming public consultations
with Albertans on a modern coal policy.

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35. “Téms of Reference for a Coal Policy Committee were introduced six weeks later, on
March 29, 2021. The Coal Policy Committee's mandate was to conduct public engagement and
prepare fern for the Minister that addressed the management of coal resources and provided
recommendations to clarify the nature, scope, and intent of the restrictions under the 1976 Coal
policy. |
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Alberta issued the Coal Exploration Direction
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36. On April 23, 2021, while public engagement remained ongoing, the Minister of Energy
i}
issued Ministerial Order 09312021, making the “Col Exploration Direction” directing the AER to
suspend or pause ll aprovals for col exploration on category 2 ands nil December 31, 2021
or such other date as the Minister may specify in writing to the AER.
37. On the same date, the Minister announced that all coal exploration projects on category 2
ands willbe bled ffetiv immcistly with he sspenson sy in place ata mii nl
public engagement is completed, at which point the rests of public engagement will dicate the
next steps.
Ll
The AER Suspended Cabin Ridge’s Exploration and Development Approvals
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38. On April 30, 2021, the AER informed Cabin Ridge that it had: (i) reconsidered its earlier
dessions to issuc the CEP Permit, DDP Permit, and 52 regulatory temporary field authorizations
for the Cabin Ridge Property (the “Approvals”); and, (i) decided to suspend the Approvals,
effectivé immediately, until December 31, 2021.
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39. Inand around June 2021 Cabin Ridge exchanged correspondence with the AER regarding
activities that could be conducted during the suspension period. In particular, Cabin Ridge sought
clarity as to whether it could undertake activities to maintain the safety and security of the Cabin
Ridge Property during the suspension.
40. On June 18, 2021, the AER advised Cabin Ridge tha it could conduct limited routine
environmental monitoring and maintenance activites during the suspension.
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Alberta continued it Indefinite Suspension of Exploration and Development

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41. On November 10, 2021, the Minister of Energy further directed the AER to suspend all
approvallfor col exploration on category 2 lands uni further notice
a i 25,2021, Cebin Ridge sought clarification from Alberta as to whether the
indefinite suspension applied to Cabin Ridge’s Approvals.
a. oh the same date, the AER advised Cabin Ridge that suspension of its Approvals would
remain in place until further notice. :

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Alberta imposed an Indefinite Moratorium
“4. on December 29, 2021, the Minister of Energy announced that Alberta had received the
Coal Policy Committee's report. Initially, the reports were not released publicly.

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45. On March 2, 2022, the Minister of Energy issued Ministerial Order 002-2002, making the
“Coal Development Direction” directing the AER to continue to suspend all approvals for coal
exploration on category 2 lands in the Eastern Slopes and to refuse new applications for coal
exploration until further notice by the Minister of Energy and/or Minister of Environment and
Pass. |
46. On March 4, 2022, Alberta announced that;

(8) effective immediately, it was extending restrictions on coal exploration and
{development by sispending all coal-related exploration and development activity
| inthe Basten Slopes (including category 2 ands);

. (©) the Coal Development Direction (and the reinstated 1976 Coal Policy) would
|" remain togaly enforceable and in place until direction on coal activity and the Land
| Categories are embedded into updated land use plans; and,

(9) corelated exploration and development in the Easter Slopes would remain
|" probibited unless Atbrta’s updated land use plans suid otherwise.
|

47. Accordingly, the Coal Development Direction imposed a legally enforceable, Indefinite:
Morton on col exploration ad development on category 2 ands n the Eaten Slopes,
including the lands necessary to develop the Cabin Ridge Project.


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The AER and Alberta Confirmed the Indefinite Moratorium
48. ol March 7, 2022, the AER confirmed that the Approvals remain suspended.
49. Oh March 8, 2022, Alberta provided policy guidance on coal tenure, advising that: (i)
Alberta will not csspt any new cos ease applications in category 2 lands; an, 7) existing cost
leases will remain in place and lessees are required to continue paying annual rentals, regardless.
of the ne ban on coal exploration and development in category 2 lands.
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Alberta is Liable to Cabin Ridge for Damages
Toso Cabin Ridge seeks damages against Alberta for imposing the Prohibition and Indefinite
Moratorium on all coal exploration and development activity at the Cabin Ridge Property and
thereby precluding the commercial development of the Cabin Ridge Project or any reasonable use
of the Chbin Ridge Property. In particular, Albeta is lable to pay Cabin Ridge damages and
compensation for its losses pursuant to the doctrines of de facto expropriation, private nuisance
and unjut event.
De Facth Expropriation
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51. Through the issuance of the Coal Policy Direction, the Coal Exploration Direction, and the
Coal Development Direction (the “Ministerial Directions"), and the implementation of same,
Alberta has imposed the Prohibition and the Indefinite Moratorium and prevented Cabin Ridge
from exploring and further developing the Cabin Ridge Property. In doing so, Alberta has de facto
expropriated the Cabin Ridge Property by depriving Cabin Ridge of al reasonable uses of that
property, including proceeding withthe Cabin Ridge Project, and rendered both the Cabin Ridge
Property and the Project Assets valueless.
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and Coal Leases; and, (i) removed all reasonable uses of the Frechold Mineral Rights and Coal
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Leases by denying Cabin Ridge the opportunity to continue the development of the Cabin Ridge.
Project nd realize on ts property rights.
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53. If not for the Prohibition and Indefinite Moratorium, Cabin Ridge estimates that the pre-
{ax net prosent value of the Cabin Ridge Property, Project Assets and Cabin Ridge Project would
be approximately $3.441 billion.
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12.
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54. Alberta has confirmed its Fair Value Commitment in section 3.15 of the reinstated 1976
‘Coal Policy. However, Alberta has not offered to acquire the Cabin Ridge Property or provide fair
value op amount) in compensation to Cabin Ridge or CRHLL.
55. At common law, Cabin Ridge and CRHL are entitled to compensation for the loss of value
of the Cabin Ridge Property and Project Assets as a result of Alberta's de facto expropriation, or
such other amount of damages or compensation, as the Court deems just and appropriate in the
drcumstinces.
private Nuisance ’
56. Ruther, or in the alterative, Alberta's Ministerial Directions, the Prohibition and the
Indefinite Moratorium constitute a private nuisance. Alberta's actions. substantially and
unreasonably ntcfre with Cabin Ridge's and CRHL'S se, enjoyment of, asses , and exercise
of their proprietary rights by preventing them from exploring and developing the Cabin Ridge
Property, using and benefiting fiom the Project Assets, and developing the Cabin Ridge Project.

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s7. his interference is non-trivial as it removes Cabin Ridge’s and CRHL’s ability to obtain
approvals necessary to carry out mining activities and has caused Cabin Ridge and CRHL to suffer
and continue to suffer significant harm for which Albert is lible to compensate Cabin Ridge and
CcraL.' ‘

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Unjust Enrichment

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$8. Tn the ltomativ, Alberta has been unjustly enriched by receiving the benefit of among
other things, payments by Cabin Ridge to acquire the Coal Leases, lease rental payments, timber
and rembval charges, data Cabin Ridge acquired through ts acquisition and esploraton activtis,
and environmental monitoring and maintenance activities on the Cabin Ridge Property. Cabin
Ridge, ps payor and proponent of the Cabin Ridge Project has suffered a corresponding
deprivation
59. The benefits Alberta received from Cabin Ridge were premised on Cabin Ridges
continu abil to develo the Cabin Ridge Property which was removed by the Minseil
Dieu, Prion ad Indefinite Moratorium.


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60. Cabin Ridge submits that there is no juristic reason for Alberta’s prior or continyed
enicment in retaining these benefits.
Danages
6L. , aresult of Alberta's conduct as described above, Cabin Ridge and CRHL have suffered,
and continue to suffer, losses and damages, including:
@ the costs incurred to acquire the Cabin Ridge Property and Project Assets in the
‘amount of $41 million or such other amounts to be proved at the tial of this action;
(6) the costs incurred to explore and develop the Cabin Ridge Property in the amount
j ofStamilion, or sush fer sont to be proved at th fl ofthis eon
(©) costs incurred to support the acquisition, exploration and development of the Cabin
Ridge Property and Project Assets i the amount of approximately $3.2 million or
| such further and other amounts as to be proved at the tial of tis action;
® loss of net present value of the Cabin Ridge Property in the sum of $3.441 billion,
| or such other amounts to be proved at the rial of this action; and
(9 sch further and other amount tobe proved th ia of is action.
Place o Trial
62. Cabin Ridge proposes that the trial of this action be held at the Calgary Courts Centre in
the Cityjof Calgary, in the Province of Alberta.
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63. The ial of tis action wil ake less than 25 ays.
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REMEDY SOUGHT:
64. Cabin Ridge and CRHL claim against Alberta as follows:
(9) damages inthe amount of $3.41 billion, or such other amount o be proved at tral;
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(©) altematively, restitution in the amount of approximately $56 million plus future and
| contingent remediation cost t bo proved at rial;
(9) in the further alterative, damages to Cabin Ridge and CRHL for delaying their
ability to develop the Cabin Ridge Property and Cabin Ridge Project;
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(@ pre-and postudgment interest at a rate ordered by the Court or pursuant fo the
| Judgment Interest Act, RSA 2000, ¢J-1, as amended, and is regulations;
b the costs of tis claim; and,
(© such further and other relief as Cabin Ridge and CRHL may request and this
| Honourable Court may deem just. .
| NOTICE TO THE DEFENDANT(S)
ou aly ave short me to do someting to defend youself aginst is cen:
120 days if you are served in Alberta
[ month if you are srved outside Alberta but in Canada
2 months if you are served outside Canada.
You an respond by fling a statement of defence o a demand fo otc in th ofc of the
lek bf the Court of Queen's Bench at Calgary, Alberta, AND serving your statement of
defenbe or a demand for notice on the plaintifPs(s) addres fo service.
i
WARNING
| do not file and serve a statement of defence o a demand for notice within your time
period, you ssk losing the law suit automaticaly. 1f you do no ile, odo not serve, or are
late i doing either ofthese things, a court may give a judgment to the plaintif(s) against
vou |
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