Mining and Land Resources Institute and Land Resources Institute March 19-20, 2015 Peppermill Resort...

Mining and Land Resources Institute March 19-20, 2015

Peppermill Resort Spa & Casino

Reno, NV

Schedule of Events:

THURSDAY, March 19th, 2015 7:30-7:45 am: Registration & Continental Breakfast

7:45-8:00 am: Opening Remarks

Christopher Halaszynski, AAPL’s Director of Education

Cy Wilsey, NLA President

8:00-9:00 am: Reviewing and Commenting on BLM Draft Management Plans: Wilderness You Prove

Otherwise- On Your Own Dollar

Greg Ekins

9:00-10:00 am: Mining Royalties

Tom Erwin, Erwin & Thompson LLP

10:00-10:15 am: Break

10:15-11:15 am: Utah’s Transfer of Public Land Act

Pat Winmill, Attorney at Law

11:15-12:15 pm: Water Rights

John Zimmerman, Parsons Behle & Latimer

12:15-1:30 pm: Lunch

1:30-2:30 pm: Nevada Update

Richard Perry, NV Division of Minerals

2:30-2:45 pm: Break

2:45-3:45 pm: Hard Rock Mining Communication Strategies: Case Histories of Strategies that Worked –

and One that Did Not

Debra Struhsacker, Pershing Gold Corporation

3:45- 4:45 pm: Industrial Minerals/ Lithium

Dennis Bryan, Western Lithium USA Corporation

5:30-6:30 pm: Social Hour

6:30-9:00 pm: Seated Dinner and Entertainment (ADDITIONAL $25 FEE)

FRIDAY, March 20th, 2015 8:30-8:45 am: Continental Breakfast

8:45-9:00 am: Friday Opening Remarks

MALRI Co-Chair

9:00-10:00 am: Legislative Update

Braiden Chadwick, Mitchell Chadwick LLP

10:00-11:00 am: Title Opinions/ Reports for Attorneys

Kirk Williams, Mineral Title Services

11:00-11:15 am: Break

11:15-12:15 pm: Sage Grouse Update

Megan Maxwell, Independent Consultant

12:15 – 1:30 pm: Lunch

1:30-2:30 pm: Ethics

Charles Kazaz, Blake, Cassels and Graydon

2:30pm: Adjourn

Front cover photo taken by

Dean Tichborne, KCGM



Reno, NV

Notes:



Reno, NV

Reviewing and Commenting on BLM Draft Management

Plans: Wilderness You Prove Otherwise – On Your Own

Dollar

- Greg Ekins Bio: Greg Ekins MS, RPL, holds a Master of Science in Land Use Planning and is a Registered Professional Landman with the American Association of Professional

Landmen. He is also a Nevada Commissioned Abstractor. Greg owns GIS Land Services, where he is a practicing landman specializing in locatable hard rock minerals.

Mr. Ekins attended Cal State University Northridge majoring in geology from 1974-1975. From 1976 through 1991 he worked at or owned four gold producing properties in El Dorado, Placer, Nevada and Plumas Counties, California. In 1993 he received a Bachelor of Science degree in Geography and in 1995 a Master of Science degree in Land Use Planning from the University of Nevada, Reno. In 1994 the National Honor Society awarded him with a gold medal for his academic achievements.

In 1995 Mr. Ekins was employed by Homestake Mining Company. Mr. Ekins established GIS Land Services (GISLS) on January 1, 1999, and Homestake Mining Company became his first of several hundred clients.

As president of GISLS, Mr. Ekins currently employees two landmen, one geologist, and one office manager. GISLS provides title reviews, due diligence, royalty reviews, claim maps, certificates of location, cartographic and geologic support for the mineral exploration and mining sectors. Over the years GISLS has provided title reviews on more than 100,000 mining claims, 500,000 acres of fee lands and 100 royalties throughout the Western USA. GISLS is known for concise title reviews supported by excellent cartographic products. It is this combination of the word and the map that make GISLS a top tier service.

Mr. Ekins is landman and co-manager of Diversified Inholdings LLC (Div In) that began accumulating mineral rights

in the Excelsior Mountains of Mineral County, Nevada in 1992. Currently Div In controls 390 acres in fee lands and 281 lode claims all of which are leased to a mineral exploration company.

Greg is a three time past president of the Nevada Landmen's Association and past Trustee to the Rocky Mountain Mineral Law Foundation. In 2000 he was Chairman of the Mining and Land Resources Institute. He satisfies his passion for prospecting and mining as a member of the Geological Society of Nevada and the Nevada Mining Association. Greg is also an avid off-road enthusiast whether driving a two seat Polaris 800RZR or riding a KTM 350 XCFW.His publications include "Planning Scenarios for Aggregate Sites, " May 1996, University of Nevada, Reno Press and "AReview of Software for Natural Resource Mapping," March 2001, Mining and Land Resource Institute. He has authored over 150 title reviews, averaging 50 pages each that are not in the public domain.

Greg married his college sweetheart Linda in February 1977. The young couple moved to Reno, Nevada, later in 1977 where they raised three daughters, Jessica, Natalie and Diana who are also college graduates. Greg and Linda's growing family now includes two sons-in law and four grandchildren.



Reno, NV

Mining Royalties

- Tom Erwin, Erwin & Thompson LLP

Bio: Thomas P. Erwin is a member of the firm of Erwin & Thompson LLP. He has been engaged in the practice of law in Reno, Nevada since 1976. His practice includes business, corporate, litigation, natural resources and real estate law with an emphasis on the representation of natural resources exploration and operating companies. His transactional experience includes the formation and organization of business entities and the acquisition, exploration, development, financing and operation of mineral properties. He is an instructor in the College of Business Administration of the University of Nevada, Reno. He earned his undergraduate degree from the University of Nevada, Reno, Nevada, his Juris Doctor from the University of Texas, Austin, Texas, and a Masters of Taxation from Golden Gate University, San Francisco, California. He is admitted to practice in Arizona, California, Nevada and Texas.

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MINERAL PRODUCTION ROYALTIES Thomas P. Erwin1 A mineral production royalty is a relatively simple concept. The parties agree to a formula for the calculation of the amount of money to be paid to the royalty holder for the minerals produced from the burdened property. Typically, a royalty is a formula which consists of three components. The first component is the revenue or production stream to which the royalty applies. The second component is the rate of the royalty, for example, an amount to be paid for each unit of production or an amount to be paid based on a percentage of the revenue stream to which the royalty applies. The third component includes the procedure and timing for the accrual, calculation and payment of the royalty. This paper addresses some of the issues encountered in the drafting, construction and enforcement of mineral production royalties. A. The Top Line – Production and Revenue Streams.

1. Unit Royalties.

A royalty may be based upon the number or volume of units of minerals produced, for example, “$1.00 for each unit of gravel produced from the property.” These types of royalties raise the following issues:

What is the unit – cubic yard, cubic meter, ton or tonne?

What substance constitutes the measureable unit – a general description of the mineral material, a specific description of the mineral material, the terms “materials,” “minerals,” or “ores”?

Do the units consist of raw, beneficiated, concentrated, crushed, processed or treated units?

1 Mr. Erwin has been engaged in the practice of law in Reno, Nevada since 1976. He practices with Frank W. Thompson in the firm Erwin & Thompson LLP. His practice includes business, commercial, corporate, natural resources and real estate law with an emphasis on representation of natural resources exploration and operating companies. He has lectured and presented papers for several organizations, including the Nevada Bar Association, the Rocky Mountain Mineral Law Foundation, the Society for Mining, Metallurgy, and Exploration of AIME, American Bar Association, American Institute of Professional Geologists, American Association of Professional Landmen, and the Northwest Mining Association. He is an adjunct professor in the College of Business of the University of Nevada, Reno. He earned an undergraduate degree from the University of Nevada, Reno, Nevada, a Juris Doctor from the University of Texas, Austin, Texas, and a Masters of Taxation from Golden Gate University, San Francisco, California.

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How is the payment calculated – fixed payment per unit, fixed payment per unit adjusted for market prices or other formula?

2. Revenue-Based Royalties.

Revenue based royalties raise a variety of issues many of which lead to disputes

and litigation. The choice of a single word in the instrument may significantly influence the royalty calculation.

(a) Which revenues? Draftsmen use (and misuse) a variety of terms:

“income” “value” “gross proceeds” “gross profits” “gross returns” “gross revenues” “gross value” “gross sales” “net proceeds” – contractual or statutory? “net profits” “net returns” “net smelter returns” “net value” “proceeds” “profits” “revenue” “sales”

(b) Revenues from which products? Draftsmen use a variety of terms to

describe the products whose sales generate the revenues to which the royalty applies, including:

“concentrates” “doré” “materials” “minerals” “mineral materials” “mineral products” “ores” “products” – beneficiated, concentrated, processed, treated, washed, etc.?

B. The Top Line – Allowable Deductions.

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Which costs are deductible? Allowable deductions from the top revenue line may include:

“agglomeration” “beneficiation” “concentration” “crushing” “handling” “leaching” “milling” “royalties” – contractual and governmental? “processing” “taxes” – net proceeds of mines, sales, severance, etc.? “transportation.” If so, from mine site to which destination? Mine to buyer? Mine to mill? Mine to refiner or smelter?

C. The Middle Line - Royalty Rates

1. Unit based rates. How is the payment calculated – fixed payment per unit,

fixed payment per unit adjusted for market prices or other formula? 2. Percentage royalty rates. 3. Fixed percentage. 4. Sliding scale rate based upon metal prices – which price and pricing date? 5. Sliding scale based upon grade? 6. Sliding scale based upon production benchmarks, for example, an

increased rate following production of an agreed number of ounces of gold? 7. Does a sliding scale royalty based on the price of gold affect the royalty

rate for other minerals subject to the royalty?

D. The Bottom Line - Accrual and Payment of the Royalty

1. When does the royalty accrue? Examples of terms used to describe the trigger event for accrual include:

“extraction” “mining” “production” “receipt of revenues” “shipment” or “transportation” of material, minerals, ores or other products

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“sales” of materials, concentrates, doré, minerals or other products “receipt of payment” for sales “stockpiling” of concentrates, doré and ores

2. Timing of royalty payment?

Monthly? Quarterly?

A fixed date following the end of the accrual month or quarter, for example, “before the end of the quarter following the quarter during which the minerals are produced.”

3. Data and audit rights. Many royalty provisions obligate the royalty obligor

to produce minimal information, for example, the net smelter return statements only. Royalty holders desire and need more information, including reports of ore produced, ore processed, ore stockpiled, concentrates and doré shipped and ore reserves and resource calculations for the remaining mine life.

In order to assure proper calculation and payment of the royalty, the royalty

calculations must be audited. This raises the following issues: Frequency of audits? By whom conducted – royalty holder,royalty obligor or independent auditor? Who pays for the audit? Corrections of over and under-payment of the royalty?

E. Other Issues.

1. Commingling.

Sound mining practice encourages commingling of ores from multiple properties in a single or consolidated mining, processing and recovery operation. Commingling increases mine efficiency and reduces costs, theoretically resulting in greater revenue for the royalty obligor. Case law indicates that in the absence of an express provision authorizing commingling, the mine operator may not commingle ores from the property with ores produced from other parcels. Absent the grant of such authority, the royalty holder may assert a claim for breach of the royalty instrument and damages based on the doctrine

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of confusion of goods. This doctrine provides that if severed minerals, which are considered personal property, are commingled and confused, the burden of proof falls on the mine operator to prove with reasonable certainty that the royalty holder’s share of the “goods” has been properly accounted for.

Commingling disputes require proof of the materials mined, the ores processed, the contained mineral values in the respective ores, the recovery rates of minerals from the respective ores and accounting for the actual production of minerals from the respective ores. This involves scientific and technical evidence requiring extensive expert testimony. The costs of litigating a commingling dispute are substantial.

To avoid disputes, the royalty instrument should include a commingling clause which assures the royalty holder that the production royalties payable for the minerals removed from the burdened property will be accurately determined. The commingling clause may be a simple authorization which requires the mine operator to account for the minerals in the commingled ores in accordance with industry standards or it may be a lengthy and complex commingling agreement. In any event, the commingling clause must require the mine operator to identify the payable metals in the commingled ores, the grade of the commingled ores, and the respective recovery rates. It should also provide for the periodic reconciliation of the metals actually produced from the commingling ores.

Common issues relating to commingling include:

Royalty obligor’s obligation to inform the royalty holder of the proposed commingling plan?

Royalty holder’s right to review proposed commingling plan? Royalty holder’s right to approve the proposed commingling plan? Veto right?

Does the royalty obligor’s obligation to mine in a “miner-like” manner or in accordance with “highest industry standards” outweigh a prohibition or restriction on commingling or impose an implied obligation to commingle absent an express contractual authorization?

2. Credits for pre-production payments. Many leases and royalty instruments allow the royalty obligor credit for pre-

production payments. Draftsmen use a variety of terms to describe pre-production payments including the following:

“advance payments”

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“advance mineral payments” “advance royalty payments” “advance minimum royalty payments” “minimum advance payments” “minimum advance royalty payments” “minimum royalty payments” “payments” “rents” “rentals” “rental payments”

Are the applicable payments cumulatively or periodically credited, for example,

“all minimum advance royalty payments shall be credited” versus “minimum advance royalty payments made during the Lease Year shall be credited against the Royalty due during the Lease Year.”

Are the applicable payments fully or partially credited?

3. Amendments and relocations of unpatented mining claims subject to

royalty burdens.

4. Area of interest royalties. Many leases and royalty instruments provide that the royalty obligation burdens properties described in the instrument as well as properties which the royalty obligor subsequently acquires. Such royalties raise the issues pertinent to area of interest provisions generally.

5. Rule Against Perpetuities.

In Bullion Monarch Mining, Inc. v. Barrick Goldstrike Mines, Inc., Case No. 61059, the Nevada Supreme Court accepted certified questions from the United States Court of Appeals for the Ninth Circuit. The following questions were certified: (1) under Nevada law, does the Rule Against Perpetuities apply to an area-of-interest provision in a commercial mining agreement; and (2) if the Rule Against Perpetuities does apply, is reformation of the agreement available under the Nevada Revised Statutes §111.1039(2). Nevada’s Constitution and Revised Statutes provide:

Nevada Constitution. Article 1, Section. 1. Inalienable rights. All men are by Nature free and equal and have certain inalienable rights among which are those of enjoying and defending life and liberty; Acquiring, Possessing and Protecting property and pursuing and obtaining safety and happiness.

Article 15, Section 4. Perpetuities; eleemosynary purposes. No perpetuities shall be allowed except for eleemosynary purposes.

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NRS 111.1031. A nonvested property interest is invalid unless: 1. (a) When the interest is created, it is certain to vest or terminate no later than 21 years after the death of a natural person then alive; or (b) The interest either vests or terminates within 365 years after its creation. 2. A general power of appointment not presently exercisable because of a condition precedent is invalid unless: (a) When the power is created, the condition precedent is certain to be satisfied or become impossible to satisfy no later than 21 years after the death of a natural person then alive; or (b) The condition precedent either is satisfied or becomes impossible to satisfy within 365 years after its creation. 3. A nongeneral power of appointment or a general testamentary power of appointment is invalid unless: (a) When the power is created, it is certain to be irrevocably exercised or otherwise to terminate no later than 21 years after the death of a natural person then alive; or (b) The power is irrevocably exercised or otherwise terminates within 365 years after its creation. 4. In determining whether a nonvested property interest or a power of appointment is valid under paragraph (a) of subsection 1, paragraph (a) of subsection 2 or paragraph (a) of subsection 3, the possibility that a child will be born to a person after his or her death is disregarded. 5. If, in measuring a period from the creation of a trust or other property arrangement, language in a governing instrument seeks to disallow the vesting or termination of any interest or trust beyond, seeks to postpone the vesting or termination of any interest or trust until, or seeks to operate in effect in any similar fashion upon, the later of: (a) The expiration of a period of time not exceeding 21 years after the death of the survivor of specified lives in being at the creation of the trust or other property arrangement; or (b) The expiration of a period of time that exceeds or might exceed 21 years after the death of the survivor of lives in being at the creation of the trust or other property arrangement, that language is inoperative to the extent it produces a period of time that exceeds 21 years after the death of the survivor of the specified lives. (Added to NRS by 1987, 62; A 1991, 116; 2005, 537, 959)

The case arose from an agreement entered in 1979 pursuant to which Bullion Monarch reserved a 1% net smelter returns royalty on certain mining claims in Nevada’s

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Carlin Trend. The royalty instrument provided that the royalty would apply to properties acquired in the area of interest defined in the royalty instrument. During the 1990’s, Barrick acquired an interest in the properties subject to the royalty.

In 2009, Bullion Monarch sued Barrick in the United States District Court for the District of Nevada, Reno, Nevada, Case 3:09-CV-00613 ECI-VPC, claiming that the royalty applied to other properties which Barrick owned in the area of interest. These properties were not described in the instrument by which Bullion Monarch reserved the royalty. Among the defenses which Barrick asserted was that the area of interest royalty provision violated the Rule Against Perpetuities and was void.

On February 7, 2011, the United States District Court, entered summary

judgment in favor of Barrick holding that a royalty imposed on lands acquired subject to an area of interest provision is a nonvested interest subject to a 21-year perpetuities period. The court held that when the parties to a transaction are corporations and no measuring lives are specified in the parties’ agreement, the perpetuities period is 21-years, and that a contractual term greater than 21 years is void because the contingent event of acquisition of a property within the area of interest could occur at any time following 21 years thus violating the Rule Against Perpetuities. The court also held that Nevada’s Rule Against Perpetuities reformation statute, NRS 111.1039(2), does not apply to nondonative commercial transaction. The court concluded that an area of interest clause in a contract between two corporations would be void ab initio if the area of interest provision applied to property interests applied after 21 years.

Bullion Monarch appealed to the Ninth Circuit Court of Appeals, Case No. 11-

15479. On June 13, 2012, the Ninth Circuit Court of Appeals entered its order certifying the questions to the Nevada Supreme Court. The matter is presently before the Nevada Supreme Court.

Hypothetically, the Nevada Supreme Court’s agreement with the decision of the United States District Court ruling may be grounds for invalidation of area interest provisions in existing royalty deeds and other mining agreements which burden mineral properties in Nevada. F. Conclusion. An easy to calculate and problem free royalty requires careful negotiation and accurate drafting. The provisions for each of the top, middle and bottom lines and all definitional terms must be accurate and fully understood by the parties in order to avoid disputes.

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Example of a problematic mineral lease royalty provision: Section 5A of the Lease provides:

Advance Royalty: beginning on the first anniversary, and continuing only so long thereafter as the Agreement remains in effect, Lessee shall pay Owner Advance Royalty according to the following schedule:

Section 5B of the Lease, as amended, provides:

Production Royalty: for the purposes of this Lease, the mining and marketing of Leased Substances shall include any event in which the Lessee receives a payment, or other compensation, for Leased Substances or retains produced Leased Substances, whether or not such Leased Substances are extracted and sold to third parties. A production month shall be any month in which the mining and marketing of Leased Substances occurs. The NSR royalty shall be calculated by multiplying the decimal fraction equivalent of the percent NSR royalty times the Net Smelter Returns for a production month.

Section 5C of the Lease as amended, provides as follows:

In the event Lessee mines and markets Leased Substances from the Leased Premises, Lessee shall pay to Owner, as a production royalty, a 5% Net Smelter Return (NSR) royalty.

Section 18 of the Lease incorporates by reference the parties’ letter of intent and provides that the documents together comprise the parties’ agreements and understanding. Section 1 of the letter of intent provides that the advance royalty payments to be paid per the letter of intent are paid “against” the production royalty payments described in the Letter of Intent.



Reno, NV

Utah’s Transfer of Public Land Act

- Pat Winmill, Attorney at Law

Bio:

Pat Winmill is happily retired after practicing law with the law firm of Parsons Behle & Latimer for over 30 years. Her practice focused on mining, public lands and access issues. Over the years, Pat has been actively involved with the Rocky Mountain Mineral Foundation as an author, program chair, trustee, and member of the board of directors. She currently serves as the secretary of the foundation. This is Pat’s fourth presentation for MALRI, and she is happy to be back. Presentation Summary:

In 2012, the State of Utah passed the Utah Transfer of Public Lands Act, which demanded that before December 31, 2014, the federal government transfer to the State of Utah a majority of federal public land located within the State. The deadline for the demanded transfer has come and gone, with the federal government simply ignoring the request. This presentation will not address the public policy questions underlying the statute or whether a transfer of public lands to the State would be a good result for the State or its public lands. Instead, the presentation will be limited to a discussion of the legal arguments on each side of the State’s demand, considering whether there is any merit to the State’s position or whether the statute is simply political posturing.

The Transfer of Public Lands Statute

63L-6-103. Transfer of public lands.

(1) On or before December 31, 2014, the United States shall:

(a) extinguish title to public lands; and

(b) transfer title to public lands to the state.

(2) If the state transfers title to any public lands with respect to which the state receives title under Subsection (1)(b), the state shall:

(a) retain 5% of the net proceeds the state receives from the transfer of title; and

(b) pay 95% of the net proceeds the state receives from the transfer of title to the United States.

(3) In accordance with Utah Constitution Article X, Section 5, the amounts the state retains in accordance with Subsection (2)(a) shall be deposited into the permanent State School Fund.

. . . . .

Note: Section 63L-6-102 of the statute provides a detailed definition of the term “public lands,” which

excludes national parks, six of Utah’s eight national monuments, an historic site and a number of

designated wilderness areas. Notably, the 1.7 million acre Grand Staircase National Monument is not

excluded from the definition, nor are any wilderness study areas.

http://le.utah.gov/xcode/Title63L/Chapter6/63L-6-S103.html?v=C63L-6-S103_1800010118000101#63L-6-103(1)(b)

http://le.utah.gov/xcode/Title63L/Chapter6/63L-6-S103.html?v=C63L-6-S103_1800010118000101#63L-6-103(2)(a)

Relevant Provisions of Utah’s Enabling Act

Section 3 (2)

That the people inhabiting said proposed State do agree and declare that they forever disclaim all right

and title to the unappropriated public lands lying within the boundaries thereof; and to all lands lying

within said limits owned or held by any Indian or Indian tribes; and that until the title thereto shall have

been extinguished by the United States, the same shall be and remain subject to the disposition of the

United States, and said Indian lands shall remain under the absolute jurisdiction and control of the

Congress of the United States; that the lands belonging to citizens of the United States residing without

the said State shall never be taxed at a higher rate than the lands belonging to residents thereof; that no

taxes shall be imposed by the State on lands or property therein belonging to or which may hereafter be

purchased by the United States or reserved for its use; but nothing herein, or in the ordinance herein

provided for, shall preclude the said State from taxing, as other lands are taxed, any lands owned or held

by any Indian who has severed his tribal relations and has obtained from the United States or from any

person a title thereto by patent or other grant, save and except such lands as have been or may be granted

to any Indian or Indians under any act of Congress containing a provision exempting the lands thus granted

from taxation; but said ordinance shall provide that all such lands shall be exempt from taxation by said

State so long and to such extent as such act of Congress may prescribe.

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That five per centum of the proceeds of the sales of public lands lying within said State, which shall be

sold by the United States subsequent to the admission of said State into the Union, after deducting all the

expenses incident to the same, shall be paid to the said State, to be used as a permanent fund, the interest

of which only shall be expended for the support of the common schools within said State.



Reno, NV

Water Rights

- John Zimmerman, Parson Behle & Latimer

Bio:

John R. Zimmerman is a member of Parsons Behle & Latimer’s Environmental

and Natural Resources practice group, where he practices primarily in the

area of water and mining law. Mr. Zimmerman’s practice includes diligence

related to large water, mining, and agricultural projects. He has considerable

experience structuring and negotiating acquisitions; performing title review;

and assisting clients with the legal review, acquisition, and maintenance of

water, mineral, surface, and access rights. He has substantial experience

working with the Nevada State Engineer in obtaining and managing water rights for mining, agricultural,

industrial, and commercial real estate projects.

Presentation Summary:

This presentation will provide a brief overview of Nevada water law and a summary of recent State Engineer and Nevada Supreme Court decisions regarding water rights. Additionally, this presentation will describe proposed legislative changes to the water law that will be considered during the 2015 session.



Reno, NV

Nevada Update

- Richard Perry, NV Division of Minerals

Bio: Mr. Perry joined the Division of Minerals as Administrator in November, 2013, after a long career in production mining and natural resource management in Nevada and overseas. He began his career as an exploration geologist in Reno in 1981, later moving to Elko where he worked for Independence and Newmont Mining in various operating positions at Jerritt Canyon and Gold Quarry, respectively. He was the start-up general manager at Newmont’s Batu Hijau copper mine in Indonesia, and finished his career with Newmont as the Vice-President of North American operations. Prior to his recent assignment as Administrator at NDOM, he worked for the Nevada State Engineer as his representative in Eastern Nevada, and also served as an Elko City Councilman. He is a graduate of the Mackay School of Mines and currently resides in Carson City, Nevada.



Reno, NV

Hard Rock Mining Communication Strategies: Case

Histories of Strategies that Worked – and One that Did Not

- Debra Struhsacker, Pershing Gold Corporation

Bio:

Debra Struhsacker is Senior Vice President of Pershing Gold Corporation where she is responsible for environmental permitting, regulatory affairs, government relations, and land and legal matters. She has 30 years of hands-on expertise with the environmental and public land laws and regulations pertaining to mineral exploration and mine development on public lands. Ms. Struhsacker is a Phi Beta Kappa graduate of Wellesley College where she majored in both geology and French. She also has a Master of Science degree in geology from the University of Montana. She is one of the founders of the Women’s Mining Coalition and currently serves on the Coalition’s Board of Directors. She is an American Institute of Professional Geologists

Certified Professional Geologist and is a member of the Mining and Metallurgical Society of America; the Society for Mining, Metallurgy, and Exploration, Inc.; and the Geological Society of Nevada.

Presentation Summary: This presentation will discuss some of the fundamentals of developing and implementing an effective communications strategy to build public support for proposed mineral exploration and development projects and to manage project opposition. Four case histories: the Buckhorn Mountain Project in Washington, the Long Canyon Project in Nevada, and the Crandon and Flambeau Projects in Wisconsin will be presented to illustrate ways to differentiate between and manage legitimate community concerns versus ideological anti-mining opposition.

3/3/2015

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Hard Rock Mining Communica1ons Strategies Case Histories

American Associa, on of Professional Landmen 2015 Mining &Land Resources Ins , tute

Debra Struhsacker Senior Vice

President Pershing Gold Corpora5on

March 19, 2015

A Successful Communica1ons Strategy MustConsider Many Issues

Dropping Any of These Balls May Cause Delays, Higher Costs, and Possible Failure

Landmen & Geologists Create the First Impression

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Each Project is UniqueThere are No Blueprints

• There is no one-‐size-‐fits-‐all approach

• Site-‐specific factors and issues may requirespecial exper1se

• These factors can be on-‐the-‐ground environmental issues or local social and poli1cal issues, or external events

Who Ya’ Gonna Call?• The experts on your team should reflect

project-‐specific condi1ons and issues

• Local exper1se is especially important for legal and poli1cal/community advice

• Make sure your team has good workingrela1onships with key regulators, elected officials, and community leaders

• Communica1on and teamwork are essen1al– The Project Manager must carefully coordinate all

work and integrate all issues

You Must Select the Right Tools for the Job

You Must Have Good Facts• Your facts, science, and

engineering must be right

• The layout must reflectsite-‐specific concerns– Collect baseline data to

understand site condi1ons

• The design must mi1gatesite-‐specific concerns

• You need to have all of the answers – or plans to get them

Unanswered Technical Ques1ons will CauseControversy, Delays, and Higher Costs

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Know When to Hold ‘em –Know When to Fold ‘em

• Know your company’s tolerance for delays, controversy, high costs, and uncertainty

• This is a very difficult decision – no two projects or companies are alike

Know When to Walk Away – Know When to Run

Case History: Build a Beder Mousetrap Buckhorn Mtn. Mine, Ferry Co., WA

• Failed proposal for largeopen-‐pit mine with a new, on-‐site mill (Crown Jewel)

• Successful proposal for underground mine with off-‐site processing at exis1ng mill near Republic, WA– Addressed concerns about a

new tailings impoundment

• Required integrated lobbying and community outreach efforts

• Technically sound design was essen1al to success

Case History: Work w/the Community Long Canyon Project, Elko Co., NV

• Proximity to Big Springs caused many companies to walk away– Spring is part of West

Wendover’s water supply

• Fronteergold addressed community’s concerns bydrilling new water supplywell in 2009 (≈$1.5 M)

• Project now has > 2 M oz.• Newmont acquired in

April 2011– Target produc1on in 2017

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Case History:A Tale of Two Wisconsin Mines

Kennecod s uccessfully permided and operated small, high-‐grade supergene enriched cap of a massive sulfide deposit

35-‐acre open-‐pit mine operatedfrom 1991 – 1999

No on-‐site processing/no tailings Direct ship copper-‐gold-‐silver ore to off-‐site processing facility

Controversial, high-‐profile permio n gprocess

Tailored scope of mining project to acquire social license/secure permits

Created many community benefits

Success at Flambeau Failure at Crandon

Exxon/Rio Algom never successfully permided

Large Zn-‐Cu-‐Pb massive sulfideMul1-‐decade projectUnderground mine with mill and tailings disposal facility

Highly controversial statewideSpawned legisla1on to create a mining moratorium (91 – 6)

Key issues:

Acid mine drainageTailings disposal

Ar ermath – compromised the future forhardrock mining in Wisconsin

“This is a true story of howordinary people fought a 20 plus year badle to protect for future genera1ons the pris1ne Wolf River from a huge proposed copper and zinc mine in its headwaters in Wisconsin. It tells how a loosely organized, buthigh mo1vated, group of Na1veIndians, environmental groups, sports people, lake and riverproperty owners, and ordinary ci1zens took on and defeated poli1cians and giant mining companies.”

Google Books

Should You Fight or Collaborate?• Dis1nguishing between ideological opponents

versus stakeholders with legi1mate concerns

• Ideologues: It’s their job to oppose your project

– Their business model is to stop your business

– Try to find common ground through dialogue – but don’t expect to find it

• Community Stakeholders: It’s your job to workwith them and find collabora1ve solu1ons– Nurture community as surrogate project advocates

Leverage Your Efforts with Community Stakeholders to Marginalize the Ideological Opponents

3/3/2015

5

Find a Common Cause

• Look for meaningful opportuni1es to go theextra mile beyond what’s required

• Collaborate with the community to define“the extra mile”

• Don’t impose your vision of what’s important

• Work with stakeholders to define what’s meaningful and important to them

Capitalize Upon Regulatory Process and Environmental Protec1on Requirements

• Embrace permio n g and environmental protec1on requirements to persuade public thatthe project will be safe– Become an expert on and advocate for the

environmental standards in regulatory requirements

• Permio n g process is a key opportunity to gain public trust by explaining the environmental controls, monitoring, and bonding

• Dis1nguish between delays and costs associated with permio n g process vs. benefits of environmental safeguards

Forging Good Working Rela1onships is Essen1al

• Listen and learn

• Design the best facility

• Act transparently

• Be accessible

• Stress collabora1on

• Show commitment

• Be trustworthy

• Always follow through

• Earn respect

3/3/2015

6

Big is Not Always Beder• Big (mul1-‐decades) projects can create public

concerns about big environmental impacts and result in serious public and poli1cal opposi1on– Crandon: Wisconsin mining moratorium

– MacDonald Meadows: Montana cyanide ban

– Pebble, AK: EPA pre-‐project permit denial

• Tension between showing large resource/ reserve vs. best social licensing strategy

Playing for Keeps: Long-‐Term Consequences

Dis1lling the Message

Technical &EngineeringStudies

Permit ApplicaCons

Key Messages

Talking Points

Community Outreach Materials

Media Interviews Social Media

TechnicalPresentaCons

Delivering the Message

Technical reports

Permit applica1ons

Talking points

Media interviews

Social Media

Co

nsisten

cy of M

essage



Reno, NV

Industrial Minerals/ Lithium

- Dennis Bryan, Western Lithium USA Corporation

Bio:

Dennis received a BS in Geological Engineering from the South Dakota School of Mines in 1970 and MS degree in Geology from the Mackay School of Mines, University of Nevada, in 1972. He is a Professional Engineer in Nevada and Idaho and a Registered Geologist in California and Oregon. He has been a consultant in the industrial minerals (IM) sector of the mining industry for the majority of his career. His experience in IM includes exploration, evaluation, testing, market studies, due diligence, environmental and reclamation permitting, mine planning and resource estimation. He has been involved in the development of several IM resources in the Western U.S., and at one time was an owner of a lightweight aggregate operation in Arizona. For the past 7 years he has been with Western Lithium Corporation as Senior Vice President of Development. Western Lithium is developing one of the world’s

largest known lithium deposits, a hectorite clay located in Northern Nevada, to support the new generation of electric vehicles and specialty drilling fluids markets. In Nevada, Dennis serves as a Commissioner for the State of Nevada Commission on Mineral Resources, representing the small miner and prospector and the industrial minerals sector of the mining industry in the State. Presentation Summary: Western Lithium Corporation (WLC) has a large hectorite clay deposit on public lands in Northern Humboldt County, Nevada that is being developed for both specialty drilling fluids and lithium. It is a near surface clay and is considered one of the largest known hectorite deposits in the world. Lithium is the element of choice in the rapidly expanding energy storage market. In addition, portions of the clay deposit have proven to be suitable for specialty drilling fluids, especially in the rapidly expanding unconventional drilling industry. An organoclay plant which will utilize the hectorite clay was recently completed and commissioned in Fernley, Nevada.



Reno, NV

Legislative Update

- Braiden Chadwick, Mitchell Chadwick LLP

Bio:

Braiden Chadwick represents commercial, residential, agricultural, and industrial project proponents before

local, state and federal administrative agencies in connection with use permits and other entitlements.

He handles all aspects of environmental compliance under the California Environmental Quality Act (CEQA)

and the National Environmental Policy Act (NEPA), land-use permitting and any resulting litigation. His

permitting work extends from California’s largest ski resorts, to residential developers, oil gas and energy

companies, wineries, agricultural entities, and mining companies.

Braiden is one of the state’s most knowledgeable authorities on mitigation/conservation banking, and has

recently been on the faculty for several legal and industry conferences on cutting-edge banking issues. The key

to his success is working closely with the California Department of Fish and Wildlife, the U.S. Fish and

Wildlife Service, and the Army Corps of Engineers to permit mitigation banks throughout California. This work

is highly specialized, and includes resolving conflicts with mineral rights, State and federal endangered species,

jurisdictional waters, traditional land-use laws, and creating crediting methodologies used by administrative

agencies

Braiden is also one of California’s leading experts on the Williamson Act. He was directly involved on behalf of

the solar industry to help shape recent legislation modifying the Williamson Act to accommodate solar facilities

on non-productive farmland. He also frequently represents multinational oil and mining companies, residential

and commercial developers and a variety of landowners on Williamson Act issues, including compatible use

determinations, potential litigation, and petitions for cancellation of existing Williamson Act contracts.



Reno, NV

Title Opinions/ Report for Attorneys

- Kirk Williams, Mineral Title Services

Bio: W. Kirk Williams is the manager of Mineral Title Services, LLC (MTS), an Idaho limited liability company, existing for the purpose of providing independent landman services. Just prior to launching MTS Mr. Williams was Corporate Counsel/Holdings Manager for ISR Capital LLC in Boise, Idaho, an investment fund company designed to invest in mining properties. Immediately prior to joining ISR Capital he was a partner in the law firm of Baird Hanson Williams L.L.P., a boutique law firm specializing in the law related to the natural resource extraction business. Mr. Williams’ career, approaching 40 years, started as a landman for Kerr-McGee in Oklahoma City. He has been an independent landman, corporate landman, in-house legal counsel and private practitioner, and all of the work, both domestic and international, has been related to land matters in mining, oil & gas, geothermal and some site acquisition.

Presentation Summary: When preparing title reports the landman should be keeping the client’s needs in mind. The scope of the title report may vary significantly for business clients; whereas, attorneys generally want everything. Suggestions on preparing title reports and dealing with some title problems based on selected experiences will be presented.



Reno, NV

Sage Grouse Update

- Megan Maxwell, Independent Consultant

Bio:

Megan Maxwell is an independent biologist with a Master’s of Natural Resources Law and Policy from the University of Denver, Sturm College of Law. As a consultant, Ms. Maxwell has performed and prepared various Endangered Species Act (ESA), and National Environmental Policy Act (NEPA) compliance studies and documents. Ms. Maxwell has an in-depth understanding of the process and informational requirements of NEPA, various federal agencies standards and procedures, stakeholder concerns, expertise in resource issues, and impact analysis. Ms. Maxwell also has extensive knowledge of federal regulations, including the Federal Land Policy Management Act (FLPMA), National Forest Management Act (NFMA), the Migratory Bird Treaty Act (MBTA), and the ESA, among others. Recently, Ms. Maxwell has assisted clients in third-party technical review of the United States Fish and Wildlife Services’ “Greater Sage-grouse (Centrocercus

urophasianus) Conservation Objectives: Final Report” (COT Report), the Bureau of Land Management’s “A Report on National Greater Sage‐Grouse Conservation Measures” (NTT Report), and other important greater sage-grouse scientific literature for consistency with the “Information Quality Act” (Pub. L. No. 106‐554, § 515, 114 Stat. 2763, 2763A‐153‐154 (2000)). Ms. Maxwell has also provided American Exploration & Mining Association (AEMA, formerly Northwest Mining Association) with technical assistance in the review of government regulation and policy regarding the greater sage-grouse, which includes researching and authoring a white paper titled “The BLM’s NTT Report: Is it the Best Available Science or a Tool to Support a Pre-determined Outcome?” (May 2013). Ms. Maxwell has also conducted review and prepared comments on several of the Bureau of Land Management (BLM) and United States Forest Services’ draft land use plans and environmental impact statements, which were drafted to include provisions of the BLM’s NTT Report. Her work for AEMA has been used to develop and coordinate the industry’s response to the regulation and management of the mining industry with respect to greater sage-grouse. Ms. Maxwell has also testified before the House Natural Resources Committee on the topic “ESA Decisions by Closed-Door Settlement: Short-Changing Science, Transparency, Private Property, and State & Local Economies” (December 12, 2013).

Presentation Summary: Political Limbo or Not-So Much? An Update & What it Means for Access to Public Lands-Sage-grouse has become one of the most important issues facing our public lands in recent history. Between “unprecedented collaboration” by stakeholders to conserve the species, State and Federal management plans and policies, litigation, Congressional intervention, and evolving science, making sense of it all, and how it impacts use and access to our public lands is of the utmost importance. These issues, along with the listing history and “Information Quality Act,” will be discussed.

3/3/2015

1

Sage Grouse: Politics, Pseudoscience, Lawsuits & Uncertainties for Landowners & Public Lands Users

Megan Maxwell

Mining and Land Resources Institute 2015

Biological Overview of Greater Sage-Grouse (GSG)• Sagebrush obligate

• Low reproductive rates

• Some populations are

migratory

• High fidelity to seasonal

habitats

• Uses more than 1 habitat

type to complete annual

life cycle

Overview of Habitat• Sagebrush is required

• Not all sagebrush habitat is suitable

• Must have healthy understory- ex. bunch grasses

• Short seed bank persistence

• Long restoration times: 20 to > 100 years (depending on species of sagebrush)

• Fire Kills Sagebrush

3/3/2015

2

THREATS• Habitat fragmentation & loss of habitat

• Fragmentation can decrease habitat functionality & use by GSG

• Western Portion of the Range:

• Invasive Species & Fire!!!!

• Eastern Portion of the Range

• Anthropogenic disturbances (energy development, infrastructure, ex-urban development)

• Invasive species & fire to a lesser extent

Background & Listing History• 1999–2003: Petition to list GSG as a T&E species

• 2005: USFWS determined listing “not warranted”

• 2007: Lawsuits challenging USFWS’ decision

• Idaho District Court remands to USFWS

• 2008: Idaho District Court approves a stipulated agreement between the government & the plaintiffs to issue a new finding in May 2009, contingent on the availability of a new monograph of information on the GSG & its habitat

• Subsequently amended twice due to delay of the monograph’s publication to March 5, 2010

Background (continued)• 2010: USFWS Warranted but Precluded (“WBP”)

listing determination makes GSG a candidate species

• Habitat loss/ fragmentation, & inadequate regulatory mechanisms to conserve GSG & GSG habitat poses significant threat to the species (Factors A & D)

• BLM is identified as having unique opportunity to protect GSG in it’s LUPs

• GSG becomes a candidate species-Listing Priority Number - 8 out of 12

• Key question: Are existing regulatory mechanisms adequate to conserve GSG habitat?

3/3/2015

3

Background: 2011

• August-in response to Factor D finding, BLM convened the National Technical Team (NTT) to develop conservation measures to protect GSG which would be included in their LUPs

• September Litigation settlement addressing over 250 pending listing (WBP) decisions • USFWS agrees to eliminate the statutory WBP (“candidate

species) option leaving : “warranted” or “not warranted” (de facto warranted because of policy where science is in doubt)

• WWP v. Salazar (Craters, Idaho District Court)• Craters & Pinedale-RMPs/EIS failed to adequately address the

best science & the agency’s own policies designed to protect GSG habitat (Manual 6840/2004 Strategy)

• December-Secretary Salazar invites western governors to develop state based conservation plans similar to WY to preclude a listing

BLM’s GSG Planning Strategy & the NTT Report• 12-21-2011: BLM’s NTT Report is published• 12-27-2011: IM 2012-044 “Land Use Planning Strategy” • requires BLM to consider all applicable conservation

measures when revising or amending its RMPs in sage-grouse habitat. The conservation measures developed by the NTT must be considered & analyzed, as appropriate, & a reasonable range of conservation measures must be considered in the land use planning alternatives.

• Expired 9-30-2013• LUP/EIS documents must include 1 “NTT Alternative”

• BLM is lead agency in revising LUPs• BLM will include a “State Plan Alternative”• 11-20-12: WWP v. Salazar (Craters)- NTT Report contains

the Best Available Science• Puts state plans/strategy at risk

• 3-2013: The NTT Report recommendations are being incorporated into 88 RMPs/10 states

• Comment periods have closed

3/3/2015

4

The NTT Report• The primary objective is “to protect sage-grouse habitats from

anthropogenic disturbances that will reduce distribution or abundance of sage-grouse”

• Provides habitat management recommendations for GSG across its entire range (within priority habitat)

• One-size fits all approach to GSG conservation

• Does not adequately address fire & invasive species

• Prescriptive restrictions on “allowable” cumulative surface disturbance in priority habitat

• Limits surface disturbance to 3% in priority habitat (de facto withdrawal)

• 50-70% sagebrush landscape cover in priority habitat

• 4-mile lek buffers

• NSO

• Timing restrictions

• Noise restrictions

• Withdrawals

Review of the NTT Report (Maxwell 2013, Ramey 2013)

• The NTT Report does not in fact represent the “Best Available Science” & instead consists of:

• invalid assumptions

• mischaracterization & misrepresentation of sources

• omission of existing programs that benefit sage-grouse

• personal opinion substituted in place of science

• lack of credible peer review

• misrepresents impacts from oil & gas operations

• consists of bias

• reliance on studies that have been criticized for:

• significant mischaracterization of previous research;

• substantial errors & omissions;

• lack of independent authorship & peer review;

• methodological bias;

• a lack of reproducibility;

• invalid assumptions & analysis; &

• inadequate data

“impacts [from energy development] are universally negative and typically severe…”

“the[NTT] Report does not represent the best available science, but rather a policy document that hastily and selectively applied scientific studies”Maxwell Oral Testimony

“the NTT report represents a partial presentation of scientific information to justify a narrow range of preferred conservation measures and policies” Ramey 2013

“Applying a “one-size-fits-all” approach focusing solely on the NTT report is not appropriate for management of the variations that occur across the sage-grouse

range.. Our concern is that using the NTT,

in [a] vacuum, would undermine sage-grouse

conservation range-wide” WAFWA

3/3/2015

5

Gov. Otter files FOIA request re: NTT Report Response reveals:

• At best, a Department divided on this issue.

• At worse, an effort to preclude new development on 40-60 million acres of public land.

• NTT Report is a reversed-engineered, policy first, science second document

• Supports conclusions found in NTT review papers

From: Dwight FielderTo: Pat Diebert, et al.Date: December 21, 2011

_______________________________________

“But, does the NTT really want to

recommend something that is blatantly

illegal? It seems to me that the caveat

provided makes it clear that the NTT

document IS a technical document that has not

undergone a policy or legal review.”

NTT Report: “Blatantly Illegal”

From: Jim PerryTo: Raul Morales, Dwight FielderDate: Thursday, December 22, 2011_______________________________________

“It appears to me the BLM is being unnecessarily set up for immediate failure across the priority habitats. Nearly all contain roads, pipelines, power lines, homes, farms, well pads, etc…. Science says 30 – 50% in non-sagebrush cover is okay (see quote below), but the NTT Report says 3% in anthropogenic features is the NTT recommended maximum (see quote below).

Am I missing something, is it worded poorly, or is this a misapplication of professional judgment and science?”

3/3/2015

6

From: Robin SellTo: Raul Morales Date: Friday, September 16, 2011 _____________________________________________________________________

“Hi, Raul – My question, and maybe a suggestion . . . I don’t feel like we really got into (or had time to discuss) the current science out there on SG (Sage-Grouse) . . . so I would like to propose that the researchers and biologists on the NTT – maybe a few other bios if appropriate – meet again in the next few months (maybe Nov/Dec) for about three days to have a frank discussion on various studies/papers out there . . . the good, bad & ugly so to speak. It would not have to hold up the current document we have worked on…The reality, the science folks were not going to have this kind of discussion with program leads in the group, and timeline did not allow this review and scrutiny. But I think this kind of full disclosure will really benefit the Bureau, FWS, and SG down the road.”

NTT Report: Reverse Engineered

Example DLUPA(Nevada/NE California Sub-Regional Amendment)

Preferred Alternative(Quasi NTT)

NTT Alternative Conservation Alternatives (2)

State Alternative

Unspecified NSO

Close PH & GH to non-energy leasable mineral exploration & development

ROW Avoidance Areas

Seasonal Restrictions

Withdrawals (1,671,100 ac.- 3.9%)

NTT BMPs as RDFs

4-mile NSO

Close priority habitat to fluid mineral leasing, solid materials disposal, non-energy leasable minerals

3% Disturbance Cap

1 disturbance/640 acres

ROW Avoidance/Exclusion

Seasonal Restrictions

Withdrawals (13,068,200 ac.-30%)

NTT BMPs as RDFs

No livestock Grazing

Close priority habitat to fluid mineral leasing, solid materials disposal, non-energy leasable minerals

preclude mineral development on 18 million acres

Establish ACECs

3% Disturbance Cap

1 disturbance/640 acres

ROW Avoidance/Exclusion

Withdrawals(17,732,900 ac.- 41%)

NTT BMPs as RDFs

“No net loss” of habitat-avoid, minimize, mitigate

Establish a conservation Credit System

Establish the sagebrush ecosystem Technical Team

5% Disturbance Cap

NTT BMPs as RDFs

BLM administers approximately 47 million acres (52%) of GSG habitat

3/3/2015

7

The USFWS’ COT Report• Issued March 22, 2013

• An effort to develop range-wide conservation objectives for GSG, & to inform the 2015 ESA listing decision

• Intended to serve as a guidance document to other federal, state, & local agencies

• Delineates Priority Areas of Conservation (PACs)

• Key habitats

• Identifies intensity of threats across range & within populations & to what degree those threats must be ameliorated to achieve a neutral or positive population trend

• Identifies objectives & measures for each habitat threat & provides “conservation options” to address those threats

• Conservation success “will be achieved by removing or reducing threats” not population response

Dr. Ramey Review of the COT Report• The COT report is not a scientific document

• Limited & selective review of the scientific literature & unpublished reports on GSG

• Outdated information & beliefs are perpetuated in the COT Report.

• The COT overstates some threats to GSG while downplaying others

• The population predictions used in the COT threats analysis were based on an analysis that contains methodological bias & error

• The COT Report erroneously evaluates threats using a single category for all energy production, despite substantial differences in the type & permanence of impacts

• The COT Report relies on erroneous information for priority habitat mapping ,evaluation of threats, & population risk assessments

3/3/2015

8

USGS Baseline Environmental Report (BER)• The USGS Report provides summary assessment of the

environmental conditions, threats, & characterizes the legal, human & natural resource perspectives at a regional scale, in order to establish a foundation for understanding & managing impacts at biologically meaningful scales

• The purpose of the report is to help inform the BLM &USFS GSG Land Use Planning Strategy, & other planning/policy decisions at a regional level.

• Categorically oppose the use of one-size-fits-all conservation measures, & recommend the use of local data whenever possible

• Regional climate variation best predictor of population dynamics (Blomberg)

The USGS Report comes to several conclusions that undermine the conservation efforts described in the NTT Report• Uniform habitat thresholds are inappropriate range-wide

• “characterizing habitats using a single value or narrow range of values, for example, 15- to 25-percent sagebrush-canopy cover in breeding habitat, is insufficient to describe sage-grouse habitat requirements.”

• GSG are able to bypass unsuitable habitats across seasonal habitat & GSG can adapt to some level of habitat fragmentation

• habitat fragmentation “generally begins to have significant effects on wildlife when suitable habitat becomes less than 30 to 50 percent of the landscape”

• “[t]hough the presence & distribution of suitable sagebrush habitats is limited at landscape scales…maintenance of healthy sagebrush communities includes some localized disturbance in many regions” (USGS at 79)

• mineral extraction from surface mines may negatively impact sage-grouse in the short term, but studies suggest that after mine reclamation populations recover (USGS at 71)

Other Planning Considerations

•REAs

•USGS Buffer Report

•USFWS Mitigation Framework

•USGS Resistance & Resilience

•IM-2014-114

3/3/2015

9

REAs• Establish baseline conditions needed to assess changes in

conditions over time & evaluate & guide future management actions

• Identify & answer important management questions;

• Document key resource values (conservation elements), with a focus on regionally-significant terrestrial habitats, aquatic habitats, & species of concern;

• Describe influences from four environmental change agents: climate change, wildfire, invasive species, & development;

• Assess the collective effects of projected trends;

• Identify & map key opportunities for resource conservation, restoration, & development;

• Identify science gaps & data needs

http://www.blm.gov/wo/st/en/prog/more/Landscape_Approach/reas.html

USGS Buffers• “Conservation Buffer Distance Estimates for Greater Sage-Grouse—A

Review” (November 2014)

• Min/Max. buffer distances for 6 categories of human activities:• Surface disturbance- 3.1mi/5 mi• Linear features- 3.1mi/5 mi• Energy development- 3.1mi/5 mi• Tall structures- 3.1mi/5 mi• Low structures- 1.2 mi/3.2 mi• Activities (without habitat loss i.e. noise)-0.25 mi-3mi

• Studies did not test buffers, rather they documented use by male sage-grouse (5 mi), or distance from lek to nesting habitat (3.1 mi). However, there is no evidence that this range of buffer distances will result in quantifiable population level benefit to sage-grouse in terms of increased survivorship or reproduction.

“…because of variation in populations, habitats, development patterns, social context, and other factors, for a particular disturbance type,

there is no single distance that is an appropriate buffer for all populations and habitats across the sage-grouse range.”

3/3/2015

10

Mitigation Framework• The purpose is to clarify the factors the USFWS is likely to

consider in its ESA listing decision, in evaluating the effectiveness or likely effectiveness of mitigation practices & programs in reducing threats to sage-grouse

• To encourage consistency of mitigation & conservation practices across jurisdictions & various voluntary & regulatory programs

• At a minimum, mitigation programs should cover anthropogenic development actions that:

• Negatively impact sage-grouse habitat, especially those identified as threats in the COT Report;

• Create spatially discreet, measurable impacts; &

• Are implemented, funded, or permitted by federal, state, or local agencies

Avoid-Minimize-Compensate• Avoidance: Exclusion areas, permit denial, disturbance caps

• could severely restrict development of any kind throughout the west

• Minimization: Permit conditions, BMPs-timing stipulations, fence marking

• Compensate: Conservation banking (preferred), habitat credit exchanges

• Service Areas, Additionality, Durability

• Policy Issues

• Pre-listing mitigation

• Inconsistent with ESA & PECE?

• All identified GSG habitat should be categorized as avoidance areas, especially priority areas of conservation (PACs)

• Inconsistent with multiple use mandates?

• Any mitigation program whether voluntary or regulatory be enforceable, with penalties, for failure to comply or meet performance standards

“True avoidance is only achieved when sage-grouse and/or their habitat have no exposure to the activities associated with the action or the activities will have no effect on sage-grouse behavior or habitat use over time.”

Principles of Mitigation Standards of Mitigation• Observe an appropriate mitigation

sequence- compensatory mitigation or

offsets should only be used on a project after

it is determined that all avoidable impacts

have been avoided & residual impacts are

minimized.

• Attain net conservation gain- Avoidance &

minimization are not adequate on their own

to help recover populations- no net loss to

the species at the population or landscape-

scale.

• Is this achievable if regional climatic

variation is best predictor for

population dynamics?

• Use a landscape-scale approach to inform

mitigation

• Ensure transparency, consistency &

participation- any mitigation program needs

to have clear rules, a high degree of

transparency, & motivate a high degree of

participation by stakeholders

• Base mitigation decisions in science

• Siting

• Duration- Compensatory mitigation actions

should achieve targeted biological conditions

in a timeframe commensurate & proportional

with the biological impacts to be offset.

• Additionality- Actions proposed as

compensatory mitigation should provide

benefits beyond those that would be achieved

if the mitigation actions had not taken place &

should exceed what is otherwise required by

federal, state, & local regulations.

• Effectiveness

• Durability-Actions or plans proposed as

compensatory mitigation must be

accompanied by management, legal, &

financial assurances that ensure the action or

plan will be in place & effective for the

intended duration. Assurances should address

the unintentional loss as well as the

intentional loss of a compensatory mitigation

action.

• Metrics-quantitative science-based methods.

3/3/2015

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State Plans• Colorado

• Idaho

• Montana

• Nevada/California

• North Dakota

• Oregon

• South Dakota

• Utah

• Wyoming

Invasive Species & Fire!!!• Resistance & Resilience

• Can habitat be restored?

• Secretarial Order 3336: Rangeland Fire Prevention, Management & Restoration

• WO IM-2014-114: Sage-Grouse Habitat & Wildland Fire Management

Resilience & Resistance (Chambers et al. 2014)

3/3/2015

12

So

il M

ois

ture

&

Te

mp

era

ture

Re

gim

es

Can habitat be restored?

• Restoration or rehabilitation seeding offers an opportunity to increase resilience and resistance

• 20% perennial cover = more resilient• Aerial seeding of perennials ineffective at reducing cheatgrass• Drill seeding effective above 4600 ft.• Will require multiple interventions –If seeding is necessary, repeat until

establishment –ES&R policy timeline is too restrictive for arid ecosystems

• Seeding sagebrush ineffective• Alternative techniques needed-transplants, surface seeded with

compaction

• SageSTEP(Chambers et al. 2014 Knutson et al. 2014)

3/3/2015

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Can habitat be restored?

• Mimic patchy fire patterns

• Aerial seeding of sagebrush

• $21/ac (seed + trtmnt) n=13, failure rate is high – BLM ES&R reports

• Transplants

• 40 plants/ac yields 10 living plants/ac

• Yield in 3 years

• Grid - 1 surviving plant every 60 ft

• $17/ ac(McAdoo et al. 2013, Dettweiler-Robinson et al. 2013, Davies et al. 2013, Pyke ISGF 2014 power point presentation)

Administrative Action• Secretarial Order 3336- sets forth enhanced policies &

strategies for preventing & suppressing rangeland fire & for restoring sagebrush landscapes impacted by fire across the West. This effort will build upon the experience & success of addressing rangeland fire, & broader wildlandfire prevention, suppression & restoration efforts to date, including the National Cohesive Wildland Fire Management Strategy, & ensure improved coordination with local, state, tribal, & regional efforts to address the threat of rangeland fire at a landscape-level.

• WO IM-2014-114-establishes BLM guidance for management actions in renewable resource programs, fuels management, fire operations, & ESR related to habitat protection, conservation, & restoration for all species of sage-grouse

• FIAT

Data Quality Act Pub. L. No. 106‐554, § 515, 114 Stat. 2763, 2763A‐153‐154 (2000)

Directed OMB to issue "policy and procedural guidance to Federal agencies" subject to the Paperwork Reduction Act (44 U.S.C. §3516) requiring that they: • Issue their own data quality guidelines, within one year of OMB's

implementing guidelines, "ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated"

• Establish "administrative mechanisms allowing affected persons to seek and obtain correction of information maintained and disseminated by the agency that does not comply with the guidelines"; and

• Report periodically to OMB detailing "the number and nature“of data quality complaints received by the agency, as well as "how such complaints were handled."

3/3/2015

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Data Quality Act• “Quality” is defined by OMB as the all-encompassing term

referring to utility, objectivity, & integrity

• “Utility” is defined by OMB as “the usefulness of the information to its intended users, including the public,”

• “Objectivity” involves whether “disseminated information is being presented in an accurate, clear, complete, and unbiased manner. This involves whether information is presented within proper context• Credible Peer Review

• Higher standards of quality for information that is "influential“• "Influential" means that the agency can "reasonably determine that

dissemination of the information will have or does have a clear and substantial impact on important public policies or important private sector decisions"

• "Influential" scientific, financial, or statistical information must be "reproducible" • Accordingly, agencies must offer a "high degree of transparency about data and

methods" to ensure reproducibility

Data Quality Act & GSG• 2010 Listing & the Monograph

• Garton 2011-Population trends

• Zink 2014

• NTT Report

• Avoidance v. Population decline (Holloran 2005)

• Disturbance Caps

• Buffers

• COT Report

• DLUPAs

• Applegate & Owens 2014;

Kirol et al. 2014

(Technological advances

positively correlated with GSG

occupancy)

LitigationAEMA et al. v. USFWS- Alleges violation of ESA, APA & Constitution by eliminating statutorily mandated alternative of WBP in a friendly, behind-closed-doors settlement

• Violated statutory obligation to make decisions based on best scientific and commercial data available

• Violated statutory obligation to consider efforts of a state or political subdivision to protect a species

• Altered FWS legal obligations in absence of congressional action or a public rulemaking

• Consider Sec. Salazar’s invitation to western governors to develop state plans when there was no chance they would prevent a listing because of settlement deadlines

3/3/2015

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Thank [email protected]



Reno, NV

Ethics

- Charles Kazaz, Blake, Cassels and Graydon

Bio: Charles Kazaz is a Partner at Blake, Cassels and Graydon and practices in both its Toronto and Montreal offices. His practice focuses on mining, environmental and aboriginal law. Charles is past Chair of the Canadian Bar Association National Environment, Energy and Resource Law Section. Charles has been recognized as a leading lawyer by several publications including The Best Lawyers in Canada 2015 (Environmental Law and Mining Law), The 2014 Lexpert Guide to the Leading US/Canada Cross-Border Lawyers in Canada and The Canadian Legal Lexpert Directory 2014 (Most Frequently Recommended in Mining).

Presentation Summary: This presentation will focus on ethical issues that landman may face as part of their professional activities. The presentation will rely on fact patterns and will refer to the standards of practice of the American Association of Professional Landman and other ethical codes that may be relevant. The presentation seeks to discuss situations that may raise difficult issues such as the question of disclosure, confidentiality and duties of loyalty.

Mining and Land Resources Institute and Land Resources Institute March 19-20, 2015 Peppermill Resort...

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Transcript of Mining and Land Resources Institute and Land Resources Institute March 19-20, 2015 Peppermill Resort...