Minerals Rights Law

• Backbone Law is Mining Law of 1872– Individual who discovers minerals on public

lands may stake a claim to the deposit

• Four Basic Kinds of Claims are Recognized– Lode Claim– Placer Claim– Mill Site Claim– Tunnel Site Claim

Lode Claims

• Lode Claims are used to claim deposits that found in intact rock formations with boundaries to adjacent unmineralized rock– Intended target was vein type

mineralization– Now used on disseminated mineral

deposits such as Porphyry Copper and Molybdenum

Lode Claim Size

• Can Go 1500 feet down the Strike of the Vein

• Can Go 300 feet on either side of the Vein

• End Lines Should be Parallel but Sides do not have to be perpendicular

• Need to Place Monument on Each of the Corners– Some State Laws require means of tracing

edges

Special Load Claim Features

• Extra-Lateral Rights– Can follow the vein down dip as far as it

continues

• Reason the Parallel Sides Issue is Important– If Sides Converge they will squeeze out your

extralateral rights– If they diverge viewed as an attempt to

spread claim out beyond law - have no extra-lateral rights

Limitations on Lode Claims

• Extra-Lateral Rights– Vein can have some faults or thinning but if

trace is lost right ends

• Horizontal Deposits Have No Extra-lateral rights– Feature may often effect disseminated

deposit locations

Placer Claims

• Used to locate deposits that are weathered and disturbed from original location or structure are located at surface or with shallow loose cover– Placer Claim is 20 acres in Size and must

correspond to the public land survey system– Association of up to 8 individuals may locate

up to 160 acres in a claim

Limitations of Placer Claims

• Placer Claims do not have external rights

• Placer Claims do not establish a right to lode claims on the property– Sometimes people put lode claims over the

top of Placer Locations

• Part of Practice Used for Lodes and Placers Called Blanket Claims - no limit on how many claims one can have

Tunnel Sites

• Locate the mouth of the tunnel and the direction of the tunnel run up to 3000 feet.– Have to keep on working with no more than a 6

month stop

• Can claim any lode hit as if prospected from the surface– the 1500 and 300 foot limits apply around each

lode– creates effect of a 3000 X 3000 foot claim

Mill Sites

• Used to Claim Non mineral land for use of mills or other ancillary works for a mining operation– Owner need not have a mineral claim but

must use land for intended purpose

• Mill Site Limited to 5 acres in Size

The Battle of the Mill Site

• One use of mill sites is for management of mill tailings and waste rock

• No one really knew how many mill sites someone could have

• With low grade mineralization got larger waste dumps - companies mill site claim groups got big

The 1999-2000 Battle

• Legal language being put forth to say one mill site claim per lode or placer claim– Acerage is disproportional current mineral

grades– Essentially sterilizes low grade deposits

(no its not an accident)

Developing Mining Claims

• Law Protects Only Bonafide Claims to Lands being truly pursued for mineral development

• Valid Claim Must Have a Deposit of Valuable Minerals

• Can Stake a Claim and Hold it While actively working on making discovery but it is not a valid claim until mineral find is made

Pedis Possessio

• In mineral rushes of the 1800s had incidents of shootings of people working on making discoveries on their claims

• 1960s a major Berillium Find in the Utah desert + major minerals rush– companies had to physically occupy every

one of their blanket claims - got college students and set up camps

Range War in the Desert

• Anaconda hired an army of Pinckerton Guards– Went in with bulldozers and burned the

camps in mid winter– Other side sent in own guards started

shooting war and launching attacks on drill rigs

• So Much for the Idea we are more civilized

Unpatented Mining Claims• Following Discovery must make filings with

the BLM and the county as to the claim– County can levy property tax against claims

• Every year must do at least $100 per claim of work to develop the deposit - geophysical surveys and drilling count (have a Sept 1 year)– Fees to government now allowed

Patented Mining Claims

• Unpatented Mining Claims are the Property of the Government and Surface Use Must Correspond to BLM Standards (Actually part of multiple land use planning act)

• Person who has developed his claim to a commercial ready property can apply for a patent– Patent allows developer to buy land fee simple

for $1/acre

Does the Public Get the Shaft

• Provision to buy Federal Land for $1/acre source of outrage among critics– Idea was to allow developers to get equity

fast that could be mortgaged for mine development capital

• The prudent man test– must show that the deposit is of sufficient

size grade to generate revenue needed for commercial operation

Who Really Gets the Shaft

• BLM tracks metals market and periodically launches challenges to claims when metal prices are down

• When Claims go for Patent– Check every claim for demonstrated discovery -

objective is to brake a few claims in the group– Then attacks the balances of claims as lacking

continuity for commercial development

Does 60 Minutes Tell the Truth

• Case reported on 60 minutes several years ago - investor patented mining claims near Phoenix and then sold them for a golf course– Forgot the details that BLM challenges on

the claims had put investors so far in debt from legal battles that they couldn't develop

• Many companies don’t patent

Limitations of the Mining Law of 1872

• Law applied only to open public lands being developed at the time - not all states even have lands subject– Alaska, Arizona, Arkansas, California,

Colorado, Florida, Idaho, Louisiana, Mississippi, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming

– Note that Illinois (Northwest Territories Act of 1787) is not covered by 1872 law

Open Public Lands

• Lands may be withdrawn by executive order or act of Congress– Set asides for native Americans withdraw

lands– Set asides for military reservations

withdraw land– Set aside for Wilderness Areas withdraw

land

Open Public Lands Cont.• National Parks are Created by an Act of

Congress usually but not always withdraws– Great Basin National Park in Nevada did not

exclude claims

• National Monuments are by executive order and do exclude– In 1992 Bill Clinton came in 3rd place behind a

fringe candidate in Utah– Clinton created a wilderness area over about

1/2 of mineral reserves of southeastern Utah

Open Public Lands Continued

• National Forests do not exclude unless special provision is made– Under the Multiple Land Use Planning Act

Surface Uses of Unpatented lands are more closely monitored

• recreational cabins get burned

• Acquired Lands are never open public lands (reason that Illinois is totally excluded)

Mineral Exclusions

• Beginning in the 1890s efforts were made to limit oil and some sedimentary minerals - laws converged in 1920 with first big alternate law

• Mineral Leasing Act of 1920– Rights to Fuel Minerals and Sedimentary

Minerals were to be obtained by lease