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Parsons Behle & Latimer Mining Short Course Outline and Handbook

U.S. Mining Course Outline and Handbook for 2017 PDAC - Parsons Behle & Latimer - March 4, 2017

Parsons Behle & Latimer Mining Short Course Outline and Handbook

  1. 1. NATIONAL EXPERTISE. REGIONAL LAW FIRM. 201 South Main Street, Suite 1800 Salt Lake City, Utah 84111 801.532.1234 PARSONS BEHLE & LATIMER SALT LAKE CITY | BOISE | RENO | WASHINGTON D.C. | PARSONSBEHLE.COM U.S. Mining Law One Day Short Course Handbook March 5 - 8 Toronto, Canada
  2. 2. 1 4850-3545-7593 v20 U.S. MINING LAW ONE DAY SHORT COURSE HANDBOOK Parsons Behle & Latimer 201 S. Main Suite 1800 Salt Lake City, UT 84111 Tel: 801 532 1234 Presented: March 4, 2017 Prospectors & Developers of Canada – Toronto, Canada For Additional Copies, Please Contact: Jason Castor Parsons Behle & Latimer 201 S. Main Suite 1800 Salt Lake City, UT 84111 Tel: 801 532 1234 © 2017. All Rights Reserved. Course Description This full-day course contains a comprehensive overview of the mining law in the United States relating to the acquisition, exploration, development, operation and closure of hard rock mining projects. The course provides in-depth coverage of types of land and mineral ownership in the U.S., types of mineral claims, historical and current issues under the General Mining Law of 1872, the process and issues involved in obtaining, holding and financing mineral tenures, an overview of environmental permitting, acquiring power, and an overview of water law in the western U.S. The course includes an overview of the typical methods for entering into exploration and development joint venture arrangements, including the revised Rocky Mountain Mineral Law Foundation “Form 5” limited liability company agreement, lease, purchase and sale of exploration and mining project issues, and a discussion of the standard royalty mechanisms including net smelter return and net profits interest royalties. The course also covers current significant environmental issues in the exploration and development of operations, including key air and water discharge issues, environmental impact statements, permitting of tailings facilities, bonding, and mine closure and reclamation issues. The course is ideal for persons who are interested in acquiring mining projects in the U.S., or simply wish to have a refresher on key concepts. Authors and Contributing Authors: Richard J. Angell, Parsons Behle & Latimer – rangell@parsonsbehle.com Vicki M. Baldwin, Parsons Behle & Latimer – vbaldwin@parsonsbehle.com Chad C. Baker, Parsons Behle & Latimer – cbaker@parsonsbehle.com Jim Butler, Parsons Behle & Latimer – jbutler@parsonsbehle.com Wendy Bowden Crowther, Parsons Behle & Latimer – wcrowther@parsonsbehle.com Bruno Hegner, Parsons Behle & Latimer – bhegner@parsonsbehle.com
  3. 3. 2 4850-3545-7593 v20 Stephen J. Hull, Parsons Behle & Latimer – shull@parsonsbehle.com Kevin W. Johnson, Parsons Behle & Latimer – kwjohnson@parsonsbehle.com R. Craig Johnson, Parsons Behle & Latimer – cjohnson@parsonsbehle.com Michael McCarthy, Barrick Gold – mmccarthy@barrick.com Gregory Morrison, Parsons Behle & Latimer – gmorrison@parsonsbehle.com Nora Pincus, Parsons Behle & Latimer – npincus@parsonsbehle.com DISCLAIMER: This handbook, the attached appendices and any presentations related to it, was prepared as an introduction to the basic concepts of mining law in the United States, and is summary in nature. The information contained herein, therefore, is general and is not to be considered or relied on as legal advice or legal opinion. It is not intended to provide a complete analysis of the matters covered, and there are potentially important exceptions and qualifications that are not reflected herein. Any sample provisions contained herein are intended only to serve as examples of hypothetical provisions and should not be relied on as applicable to a particular transaction. This handbook, including any presentations related to it, does not create either an attorney-client relationship or an attorney-client privilege.
  4. 4. i 4850-3545-7593 v20 TABLE OF CONTENTS I. OVERVIEW OF LAND AND MINERAL OWNERSHIP IN THE U.S............................1 A. Federal......................................................................................................................1 B. State..........................................................................................................................3 C. Private ......................................................................................................................4 1. Private Ownership in General......................................................................4 2. Railroad Land Grants...................................................................................5 3. Other Private – Spanish and Mexican Land Grants.....................................6 4. Indian Country. ............................................................................................7 D. Split Estates..............................................................................................................7 II. OVERVIEW OF THE U.S. MINING LAWS...................................................................13 A. General...................................................................................................................13 B. Indian Country. ......................................................................................................13 C. Minerals on Public Lands. .....................................................................................14 1. Leasable Minerals......................................................................................14 2. Salable Minerals.........................................................................................14 3. Hard Rock Minerals – the General Mining Law of 1872 ..........................15 III. DETAILED REVIEW OF THE GENERAL MINING LAW OF 1872............................16 A. The Unique Nature of the Unpatented Mining Claim. ..........................................16 B. Types of Mining Claims. .......................................................................................16 1. Lode Claims...............................................................................................17 2. Placer Claims. ............................................................................................17 3. Millsites......................................................................................................17 4. Tunnel Sites. ..............................................................................................17 C. Extralateral Rights. ................................................................................................18 1. Vein or Lode. .............................................................................................19 2. Apex...........................................................................................................19 3. Dip..............................................................................................................19 4. Continuity. .................................................................................................20 5. End Lines. ..................................................................................................20 D. Unpatented Mining Claim Title and Validity Issues. ............................................21 1. General Validity Issues..............................................................................21 E. Record Title Issues.................................................................................................24 1. Is (was) the Land Open to Location...........................................................24 2. Patented Land and Other “Segregative” Entries........................................24 3. Conflicting Claims.....................................................................................25 4. Withdrawals and Classifications................................................................26 5. Record Evidence of a Valid Location........................................................26 6. Certificate or Notice of Location Filings...................................................27 7. FLPMA Filing Requirements – 1976 to 1993. ..........................................28 F. Maintaining a Mining Claim -- Assessment Work and Maintenance Fees. ..........31 1. Assessment Work Requirements. ..............................................................32 2. State Law Requirements. ...........................................................................33 3. Location and Maintenance Fees – 1993 to the Present..............................33 4. The Small Miner Exemption......................................................................35 5. Compliance with State Laws. ....................................................................36
  5. 5. ii 4850-3545-7593 v20 6. Transfers of Interest...................................................................................37 G. Curing Defects in Mining Locations -- Amendments and Relocations.................37 IV. ACQUISITION OF MINERAL TENURES. ....................................................................37 A. Federal “Locatable” Minerals under the 1872 Law...............................................37 1. Location of Mining Claims under the 1872 Law.......................................38 B. Mineral Leasing. ....................................................................................................52 1. Federal Coal...............................................................................................52 2. Federal Oil and Gas. ..................................................................................55 C. FLPMA and MUSYA............................................................................................56 D. Location vs. Leasing Conflicts -- Two Miners in the Same Hole. ........................58 E. Acquisition of Mineral Tenures on Reservation Lands (Indian Country). ............62 F. Acquisition from Private Entity.............................................................................66 1. Due Diligence. ...........................................................................................68 G. Acquisition of State Mineral Lands.......................................................................73 H. Type of Exploration, Development Agreements. ..................................................73 1. Common Law Joint Ventures. ...................................................................73 2. Earn-In. ......................................................................................................75 3. Limited Liability Company Model............................................................76 4. Form 5........................................................................................................77 5. Form 5 LLC variants..................................................................................78 V. ANCILLARY CONCEPTS...............................................................................................80 A. Evolution of a Mining Project................................................................................80 B. Royalty Interests. ...................................................................................................82 1. Net Smelter Return Royalty.......................................................................82 2. Net Profits Interest Royalty. ......................................................................85 3. Minimum and Advance Royalty Payments. ..............................................85 4. Deed vs. Contract.......................................................................................86 C. Smelting and Refining Issues.................................................................................86 D. Confidentiality Agreements...................................................................................87 E. Land Exchanges.....................................................................................................89 VI. FINANCING THE PROJECT...........................................................................................94 A. Mining Project Security Interests...........................................................................94 B. Security on Indian Mineral Interests....................................................................103 1. Personal Property.....................................................................................105 2. Real Property. ..........................................................................................106 3. Federal Government BLM and Lessee Issues. ........ Error! Bookmark not defined. 4. State Lease Security Interests. ...................Error! Bookmark not defined. C. Private Placements...............................................................................................107 VII. STRUCTURE OF U.S. ENVIRONMENTAL LAWS AND REGULATIONS APPLICABLE TO MINING...........................................................................................113 A. Overview..............................................................................................................113 B. Federal Environmental Laws...............................................................................114 1. Clean Air Act ...........................................................................................114 2. Clean Water Act.......................................................................................114 3. Resource Conservation and Recovery Act ..............................................115
  6. 6. iii 4850-3545-7593 v20 4. Endangered Species Act ..........................................................................115 5. National Historic Preservation Act ..........................................................116 6. Comprehensive Environmental Response, Compensation and Liability Act of 1980................................................................................116 7. Archaeological Resources Protection Act of 1979 ..................................117 8. Migratory Bird Treaty Act of 1918..........................................................117 9. Bald and Golden Eagle Protection Act of 1940.......................................117 C. National Environmental Policy Act.....................................................................117 1. Is an EIS required?...................................................................................118 2. Public Involvement..................................................................................118 3. Alternatives..............................................................................................119 4. Mitigation.................................................................................................119 5. Judicial Review........................................................................................119 D. State Laws............................................................................................................119 E. Permitting on Federal Lands................................................................................120 VIII. POWER AND ENERGY ISSUES ..................................................................................123 A. Introduction and Definitions................................................................................123 B. Utility Service......................................................................................................123 1. Generating or Transmission Import Capacity..........................................123 2. Rate Volatility..........................................................................................124 3. Distribution and Facilities Charges..........................................................125 C. Market Purchases.................................................................................................125 1. Purchase Contracts...................................................................................126 2. Market......................................................................................................126 3. Delivery of Energy from the Trading Hub to the Project. .......................126 D. Remote Self-Generation.......................................................................................127 1. Delivery Path. ..........................................................................................128 2. Fuel Supply..............................................................................................130 E. Behind-the-Meter Generation..............................................................................131 1. Environmental Permits.............................................................................132 2. Fuel Price Volatility and Delivery...........................................................132 IX. ESSENTIAL CONCEPTS OF U.S. WATER LAW .......................................................132 A. General.................................................................................................................132 1. Eastern Water Law—Riparian “Reasonable Use” and the Evolution of “Regulated Riparianism.”...................................................133 2. Western Water Law—Prior Appropriation System.................................133 3. Acquisition of Water for Mining Projects in Arid Climates....................135 X. CURRENT CRITICAL ISSUES AND PROPOSED RULES ........................................138 A. Industry Guide 7 Revision. ..................................................................................138 B. Financial Assurances Rules. ................................................................................142
  7. 7. 1 4850-3545-7593 v20 Preface: This course is a comprehensive high level overview of the mining law in the United States relating to the acquisition, exploration, development, operation and closure of hard rock mining projects. The course will provide coverage of types of land and mineral ownership in the U.S., types of mineral claims, historical and current issues under the General Mining Law of 18721 (hereafter sometimes referred to as the “1872 Law”), the process and issues involved in obtaining, holding and financing mineral tenures, an overview of water law in the western U.S., and issues relating to acquisition and generation of electrical power for the operation. The course includes an overview of the typical methods for entering into exploration and development joint venture arrangements, including the revised Rocky Mountain Mineral Law Foundation “Form 5” limited liability company agreement, lease, purchase and sale of exploration and mining project issues, and a discussion of the standard royalty mechanisms including net smelter return and net profits interest royalties. The course also covers current significant environmental issues in the exploration and development of operations, including key air and water discharge issues, environmental impact statements, permitting of tailings facilities, bonding, and mine closure and reclamation issues. Attendees will leave with an excellent foundation for understanding the major issues involved in acquiring, holding, financing and developing mining interests in the U.S. and the related environmental, water, power and closure issues. The course is ideal for persons who are interested in acquiring mining projects in the U.S., or simply wish to have a refresher on key concepts. Naturally, there are significant complexities and nuances in each topic and in any particular situation, those nuances may vary the outcome under the general concept. Thus, you should consult with a properly licensed practitioner on your particular situation. I. OVERVIEW OF LAND AND MINERAL OWNERSHIP IN THE U.S. There are three main divisions of real property ownership in the United States: Public lands, consisting of Federal or State lands; Private lands, consisting of fee title or a portion of fee title; and Indian Country, which has its own peculiarities stemming from the existence of native title held directly or in trust for these domestic dependent (sovereign) nations (“Tribes”). Any given parcel of real property may have one, two, or all three types, such as where the surface is owned by a private party, the underlying minerals and subsurface is held by the Federal government, and the parcel is contained within “Indian Country” boundaries.2 A. Federal Federal ownership of property is derived through original conquest from the English and Native Americans, purchases or cessions from France, Spain, Denmark and Russia, and treaties and settlements with Mexico. Prior to the Revolutionary War, Britain, Spain and France had claimed vast amounts of land in the “New World.” Land grants were often made by the various rulers, such as the large land grant made by King George to William Penn, which covered most of 1 30 U.S.C. §§ 22, 23, 35, 161 et seq. 2 Another type of landholding stems from the land grants to Mexican citizens within the continental United States that were recognized by the United States in the Treaty of Guadalupe Hidalgo and Gadsden Purchase. See Section I(C)(3).
  8. 8. 2 4850-3545-7593 v20 what is now Pennsylvania, who then on-sold the land to other private individuals. In the French and Indian Wars between 1754 and 1763, which were part of the larger conflict between Britain and France during the Seven Year’s War of 1756, the French, along with their Indian allies, engaged in a war with Britain which resulted in the French ceding lands east of the Mississippi to Britain at the conclusion of the War. Shortly thereafter, Britain established the Proclamation Line of 1763, which set aside lands roughly outside of the original 13 colonies and east of the Mississippi, for Native Americans. The establishment of that line, which was viewed by the colonists that had fought in the French and Indian Wars as an affront to their desires for westward expansion, and indeed already had been partly settled, was one of the factors giving rise to the Declaration of Independence in 1776. After the Declaration of Independence and the defeat of the British, in 1783 Great Britain ceded the original territory of the thirteen colonies and lands east of the Mississippi that were held by Britain, to the newly formed United States. On December 20, 1803 through the Louisiana Purchase from France, the United States acquired the Louisiana territory (828,000 square miles) and for which France was paid fifty million francs ($11,250,000 USD) and a cancellation of debts worth eighteen million francs ($3,750,000 USD) for a total of sixty-eight million francs ($15,000,000 USD). The Louisiana territory included land overlying fifteen present U.S. states and two Canadian provinces. The territory contained land that forms Arkansas, Missouri, Iowa, Oklahoma, Kansas, and Nebraska; the portion of Minnesota west of the Mississippi River; a large portion of North Dakota; a large portion of South Dakota; the northeastern section of New Mexico; the northern portion of Texas; the area of Montana, Wyoming, and Colorado east of the Continental Divide; Louisiana west of the Mississippi River (plus New Orleans); and small portions of land within the present Canadian provinces of Alberta and Saskatchewan.3 Following the Louisiana Purchase, through exchanges between Britain and the United States, portions of Canada that were acquired in the Purchase were ceded to Great Britain, which in turn ceded parts of the Dakotas and Minnesota. Next, through a Spanish cession in 1819, parts of East Florida and West Florida, a portion of Colorado and western Louisiana were ceded to the United States. The United States then annexed the Republic of Texas in 1845. Next, the Oregon Territory was acquired in 1846 through a treaty with Great Britain, which included Washington, Oregon and parts of Idaho and Montana. The next major acquisition was through the February 2, 1848 Treaty of Guadalupe Hidalgo with Mexico that ended the Mexican War and that drew the boundary between the United States and Mexico at the Rio Grande and the Gila River. The United States made a payment to Mexico of $15,000,000 and received more than 525,000 square miles of land (now Arizona, California, western Colorado, Nevada, New Mexico, Texas, and Utah) from Mexico and in return agreed to settle the more than $3,000,000 in claims made by U.S. citizens against Mexico.4 On December 30, 1853 through the Gadsden Purchase (Treaty of La Mesilla), the United States acquired from Mexico nearly 30,000 square miles of northern Mexican territory which is now southern Arizona 3 https://en.wikipedia.org/wiki/Louisiana_Purchase, accessed September 26, 2016. 4 https://www.britannica.com/event/Treaty-of-Guadalupe-Hidalgo, accessed September 26, 2016.
  9. 9. 3 4850-3545-7593 v20 and southern New Mexico in exchange for $10,000,000.5 In 1867, Alaska was purchased from Russia. In 1898, Hawaii was annexed6 and also in 1898, Puerto Rico was ceded by Spain. Finally, the Virgin Islands were purchased from Denmark in 1917, thus completing the majority of the existing United States of America.7 B. State After Britain’s initial cession of the original 13 colonies and lands east of the Mississippi, and acquisition by treaty, conquest or purchase of additional areas outside of the 13 colonies, additional states were created by various enabling acts in the acquired territories in the continental United States, with Alaska and Hawaii added separately. Although the original concept was that each of the new states after the thirteen colonies were to be admitted to the United States on an “equal footing” with the original thirteen colonies, including land ownership and title, for many of the western states, the enabling act that created a state from the Federal territory contained a waiver of the equal footing principle. In most of the western states, in lieu of assuming ownership of lands pursuant to the equal footing principle, the states were granted specific land grants including sections of land for schools, hospitals and other uses.8 Of these various grants, the most important for mining law purposes is the grant of state school land sections. Generally, if the same were available at statehood and had not previously been granted to other private interests (including settlers and miners), Section 16 of each Township (comprised of 36 “sections” each 1 square mile or 640 acres) was granted to the state being admitted, to support the common schools. In Colorado, Idaho, Montana, Nebraska, North & South Dakota, Oklahoma, Washington and Wyoming, an additional section, Section 36, was granted. Finally, for Utah, Arizona and New Mexico, because of the arid nature of those states, Sections 2 and 32, along with Sections 16 and 36, were granted in fee to the state for the purposes of supporting schools. Often if such sections were not available as of the date of vesting, then the state was able to select “in-lieu” lands in replacement. Under the state school land sections and on most of the “in-lieu” lands, often, but not always, the state is the owner of the underlying 5 https://www.britannica.com/event/Gadsden-Purchase, accessed September 26, 2016. 6 In addition, other territories of the United States include: Puerto Rico, acquired in 1898 by cession by Spain; the U.S. Virgin Islands, purchased in 1917 from Denmark; Guam (recaptured from the Japanese in 1944) (https://en.wikipedia.org/wiki/Guam, accessed September 26, 2016), Northern Mariana Islands (recaptured from the Japanese in 1944) (https://en.wikipedia.org/wiki/Northern_Mariana_Islands, accessed September 26, 2016); American Samoa (partitioned between US and Germany on Tripartite Convention of 1899) (https://en.wikipedia.org/wiki/Tripartite_Convention, accessed September 26, 2016); and some minor outlying islands. 7 Certain additional lands of Guam, the Northern Mariana Islands, and American Samoa were acquired as noted in the immediately preceding footnote. 8 Title to state land grants is anything but straightforward. The title often did not “vest” at statehood, but the vesting date often depends on whether the lands were known to be “mineral in character” or not, the date of the survey, the date of any “confirmatory patent” issued by the Federal government, and in the case of lands known to be “mineral in character”, the later of the date of the survey or January 25, 1927 which was the date of the Jones Act, 43 U.S.C. § 870. Prior to vesting, the lands were subject to other divestment by the Federal government, including through the mining laws. See American Law of Mining, 2d ed. Chapter 95.
  10. 10. 4 4850-3545-7593 v20 minerals.9 In Nevada, on the other hand, the state chose to select its land by a single grant, rather than await survey of the lands within its borders. Finally, Alaska was allowed to select almost 1.5 million acres, approximately 28% of its total area, rather than specific sections inasmuch as the area had not yet been surveyed.10 In addition, through the principle of sovereignty, upon statehood the states were deemed to be the owners of the beds of navigable waters within their borders, although the criteria for establishing navigability continues to evolve.11 Acquisition of the minerals and right to mine minerals owned by a state is normally arranged through leasing mechanisms, which vary in terms from state to state, including payments, development obligations, term and royalties. C. Private 1. Private Ownership in General. Much Federal property has been transferred to private ownership through a number of different conveyance vehicles. Originally, after the Revolutionary War, for unsettled lands outside of the original 13 colonies, there was an ad-hoc method of selling and establishing the boundaries of land for private ownership. The Land Ordinance of 1785 established a standardized method of boundary surveys, which divided land into 6 mile square townships, which in turn was divided into 36 sections, each 1 square mile with 640 acres. An individual could purchase an entire 640 acre section (and no less) for $1 per acre. In 1800, the minimum lot size was changed to 320 acres due to the cost of buying an entire Section. Settlers were able to pay in 4 installments, at $1.25 per acre. In 1854, the pricing was changed to a graduated scale based on the desirability of the lot, with some that had been on the market for 30 years reduced to 12 ½ cents per acre. Some additional incentives were granted to veterans and to those who wished to settle the Oregon territory. In 1862, after much controversy including the question of slavery in the western Federal territories, the Homestead Act of 1862 was passed.12 Under that law, a person could acquire land by filing an application, improving the land and filing for a deed of title. Any U.S. citizen who 9 Originally, only lands that were not of “known mineral character” were included as school lands and only non- mineral lands could be selected as indemnity lands. The Jones Act, 43 U.S.C. § 870, changed that, although the United States Supreme Court took the position that the Jones Act did not extent the mineral character to “in-lieu” lands. Charleston Mining Co. v. United States, 273 U.S. 220, 225-227 (1927). See also 43 U.S.C § 871. In 1958, Congress allowed selection of “in-lieu” lands that were mineral in character, so long as the original base lands were mineral in character. 43 U.S.C. § 852(a)(1). See American Law of Mining 2d Ed. Section 95.02[3][c]. Also, lands that were properly conveyed as “non-mineral” in character on which minerals are later discovered, are owned by the State. See S. Dev. Co. v. Endersen, 200 F. 272 (D. Nev. 1912). 10 See Rocky Mountain Mineral Law Foundation, Mining Law Short Course (May 17-21, 2010), Part 12, § 3, p. 8 (hereafter referred to as “Short Course”). 11 See Illinois Central Railroad Co. v. Illinois, 146 U.S. 387 (1892). 12 Pub. L. No. 37-64, 12 Stat. 392 (1862); see also https://www.nathankramer.com/settle/article/homestead.htm, accessed Sept. 30, 2016.
  11. 11. 5 4850-3545-7593 v20 had not borne arms against the U.S. could file an application for up to one hundred sixty acres of surveyed lands. The homesteader had to live on the land and improve it by constructing a 12x14 dwelling and growing crops. After five years, the homesteader could file for his deed (patent) by submitting proof of residency and the required improvement and paying $1.25 per acre or, if 80 acres or less, $2.50 per acre. Union soldiers were able to deduct their time of service from the residency requirements after the Civil War. Such deeds included full fee title to both the surface and the minerals, subject to the reservation of water rights and the right of the Federal government to ditches and canals. In 1909, the Enlarged Homestead Act was passed, which doubled the allotted acreage from 160 to 320 acres.13 In 1916, the Stock Raising Homestead Act was passed.14 Under the Stock Raising Homestead Act, for the first time only the surface estate was conveyed and the Federal government reserved the right to the subsurface minerals. For lands located east of the 100th Meridian, virtually all former Federally-owned lands were transferred into private ownership, although some have been reacquired by the Federal government for various forest, grassland and other purposes. For the vast majority of these private lands east of that Meridian, the original patents included mineral interests, along with the surface interests. For lands west of the 100th Meridian, it is a different situation. For most of the western states, the ownership of the majority of lands is held by the government, with Federal ownership being the largest proportion.15 Where ownership has passed out of government ownership, whether a private tract includes the mineral interests or the surface interests or both, depends on the original Congressional Act by which the land was transferred, and/or specific reservations in the patent itself by the Federal government, or through reservations from subsequent conveyances by private owners.16 2. Railroad Land Grants. In western states, it is common to find lands that were initially granted to railroads under various railroad land grants as an incentive to construct the rail lines. Originally, the Congressional Acts authorizing the conveyances specified that no mineral lands were to be included in the grants.17 Charged with implementing the Acts, the government agents charged with implementing the Grants commenced reserving and excepting from the grants coal, iron and other minerals. In 1914, the U.S. Supreme Court held that such reservations were ultra vires and thus unenforceable, resulting in the railroads finding themselves holding rights to large sections of mineral-containing lands and thus owning both the surface and the minerals.18 Consequently, mineral title may be privately held in these former tracts, whether currently or formerly owned by the railroads or their successors in interest and in such cases, may be treated as private mineral interests and dealt with as such. While some railroads have retained their lands, some have disposed of the mineral 13 https://en.wikipedia.org/wiki/Homestead_Acts, accessed Oct. 4, 2016. 14 Pub. L. No. 64-290, 39 Stat. 862 (1916). 15 http://www.propertyrightsresearch.org/2004/articles6/state_by_state_government_land_o.htm. 16 Short Course, Part 12, Section 4, pp. 8, 9. Note. Careful title examination of each parcel and each conveyance is needed to determine the current ownership of the minerals, inasmuch as title insurance policies normally exclude coverage for minerals. 17 See, e.g., Barden v. Northern Pacific R.R. Co., 154 U.S. 288 (1894). 18 Burke v. Southern Pacific R.R. Co., 234 U.S. 669 (1914).
  12. 12. 6 4850-3545-7593 v20 interests. As a consequence, when dealing with the privately-owned odd numbered sections in former railroad land grant areas (west of the Mississippi), careful attention is needed to determine the actual ownership of the mineral estate.19 3. Other Private – Spanish and Mexican Land Grants. Not all Mexican interests were extinguished upon acquisition or treaty with Mexico. There are vast acreages in the American Southwest that arise from Spanish and Mexican land grants. Prior to the Treaty of Guadalupe Hidalgo that ended the Mexican-American war, numerous grants of land were made by Spain, and after its independence in 1821, by Mexico, in the areas now encompassed within the states of Arizona, California, Colorado, New Mexico, Nevada, Utah, and Texas. Those land grants, as well as similar land grants within the area encompassed by the Gadsden Purchase in the Treaty of December 30, 1853, were largely recognized by the U.S. In New Mexico alone, 295 grants have been documented, of which 154 were “community” land grants and the rest were individual land grants.20 One of the more famous of the grants, the “Baca” Grant, originally encompassed over 500,000 acres and included the current location of Las Vegas, but which was substituted for 5 separate parcels in New Mexico and Colorado totaling approximately 500,000 acres, to resolve an overlapping land grant.21 The nature and extent of these grants was often contested and various procedures were implemented between 1866 and 1891 to determine the validity of the grants. Under Spanish and Mexican law, the ownership of minerals remained in the Crown, notwithstanding a land grant.22 In general, after the Treaty of Guadalupe Hidalgo and the Gadsden Purchase, once a claim was validly presented pursuant to the required procedures and either affirmed by a special act of Congress or a patent issued, such claim included the associated minerals. It should be noted, however, that the conveyance of the minerals was not pursuant to the original land grant itself, but through the quitclaim conveyance in the land grant patent or Congressional Act by the U.S. government in its capacity as the owner of the mineral interest as successor in interest to Spain and Mexico. In Texas, the 1866 Constitution of Texas released to the surface owners all minerals included within the surface boundaries.23 However, if a claim was not either validated by a special act of Congress, or was not confirmed by a patent, the underlying minerals likely do NOT belong to the surface owner, and in the case of community land grants that were not formalized into allocated separate parcels, may vest in the community only in the proceeds from the mineral dispositions. Thus, acquisition of an interest that includes part of the original Spanish or Mexican land grant requires careful analysis of the basis for the land grant (often from the original Spanish document), and a careful determination whether minerals are included or not by reference to an actual patent issued by the U.S., or a determination that the land was included in a special act of Congress validating the 19 Short Course Part 12 Page 9. Also, see Union Pac. R.R. Co. v. Santa Fe Pac. Pipelines, Inc., 231 Cal.App.4th 134 (Cal. Ct. App. 2014), which analyzes title to railroad lands before 1871 and those granted after 1875. 20 United States General Accounting Office, Report to Congressional Requesters, Treaty of Guadalupe Hidalgo, Definition and List of Community Land Grants in New Mexico, September 2001, page 1. 21 See “Land, water, grass & animals: History of the Baca Grant”, http://www.crestoneeagle.com/land-water-grass- animals-history-of-the-baca-grant-part-1/ accessed November 30, 2016. 22 See American Law of Mining, §13.02[1][e]. 23 Id.
  13. 13. 7 4850-3545-7593 v20 claim.24 4. Indian Country. A special case of property rights that is often not well-understood by mining companies is the rights of Native Americans on certain lands, known as “Indian Country”. As defined in the U.S. Code, “Indian Country” means: (a) All land within the limits of any Indian reservation under the jurisdiction of the United States government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation; (b) All dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state; and (c) All Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.25 Under U.S. law, Indian Tribes are “domestic dependent nations.”26 Consequently, when conducting business with an Indian Tribe or in Indian Country, it is critical to note that the business is being conducted with a sovereign state with immunity from lawsuits (“sovereign immunity”) for most of its actions. In many respects, it is very similar to doing business with a different country, including the concept of sovereign immunity that precludes a suit against the government entity. Within the jurisdiction of the Tribe, most state laws do not apply, tribal courts often have jurisdiction, taxation and regulatory regimes may control over conflicting state laws and regulations, and the Federal government, in its role as trustee, has significant control and approval rights, particularly as such issues relate to land and the disposal thereof. Many of the protections that create liens in the normal mining transaction thus do not apply, inasmuch as the Tribe cannot simply create and enforceable security interest that would result in loss of the mining property. The lack of Federal approvals can, in many instances may well void a transaction, and the non- Indian party may be left with no right or remedy.27 D. Split Estates Real property has often been compared to a number of sticks in a bundle. If all of the sticks 24 See American Law of Mining, §13.02 for a thorough discussion on this subject. 25 18 U.S.C. § 1151. 26 This doctrine was established in the United States Supreme Court in the Marshall case trilogy brought before the Court from 1823 to 1832 - Johnson v. M’Intosh, 21 U.S. 543 (1823); Cherokee Nation v. Georgia, 30 U.S. 1 (1831); and Worchester v. Georgia, 31 U.S. 575 (1832). 27 See Jennifer Weddle, Greenberg Traurig, LLP, “Energy and Mineral Development in Indian Country,” Rocky Mountain Mineral Law Foundation Special Institute, Tucson, Arizona (Nov. 7, 2014), page 10-1.
  14. 14. 8 4850-3545-7593 v20 are there, the person is deemed to hold fee simple absolute in the real property, which includes surface and minerals. At times, however, when a person purchases a piece of real property, they may not be afforded all of the rights in the bundle. It is not unusual to find that ownership of one of the sticks in the bundle has been conveyed to another individual. Interesting examples of this are frequently seen in the oil and gas context where various components of a mineral estate – the right to develop (right of ingress and egress); the right to lease; the right to receive bonus payments; the right to receive delay rentals; or the right to receive royalty payments – are all held by different persons. In the mining context, for most countries, and in virtually all Civil Code countries, ownership of minerals underlying the surface of the land is reserved to the state (or “Crown”), resulting in a situation where the surface owner does not own the underlying minerals. This situation is otherwise known as a “split estate.” Although ultimately, all private property in the U.S. was acquired either from the Crown or from the Federal government, the U.S. has been rather psychotic in its approach to privatizing lands, at times adopting the approach of transferring minerals along with the surface, and at other times, adopting something more akin to the Civil Code rule where the minerals are retained by the Crown. East of the Mississippi, in most cases where land was transferred to private ownership, the underlying minerals were included.28 However, for the “public lands” west of the Mississippi, that is not always the case. For Spanish and Mexican Land Grants, where the grant was affirmed by either a “patent” issued for the land by the U.S. government, or the grant affirmed by a special act of Congress, normally, the minerals were included.29 Grants to the respective States upon statehood Acts, and the “inherent” ownership by the State of the beds of navigable waters, carried with it the ownership of the underlying minerals.30 Land grants to railroads were initially not intended to include “mineral lands,” but by failed administrative solutions as to determination of “mineral lands” and subsequent judicial decisions, the minerals were deemed to be included in such grants as a result of a judicial decision.31 Originally, with the 1872 Law, certain minerals could be “located” and thus owned by the locator of the minerals. However, upon passage of the Federal Mineral Leasing Act of 1920,32 coal, oil, gas and other hydrocarbons were eliminated from the location and private acquisition under the 1872 Law and instead were reserved to the Crown and made subject to a leasing regime, rather than an ownership regime. Also, while the original homestead acts included the underlying minerals upon issuing a homestead title, that approach was changed by the Stock Raising Homestead Act of 1916, which reserved to the Crown the minerals underlying a homestead allocation. Even under the 1872 Law, the “ownership” was not complete until a mining patent was issued by the U.S. Prior to issuance of a patent, and among other obligations, the claimant had to demonstrate that the necessary annual assessment work had been done on the claim, with a required filing each year. Until late 1994, upon application and demonstration of the required discovery, a claimant could obtain a patent for the mining claim, which was essentially fee title to the property, including the underlying minerals. However, a moratorium was placed on issuing patents effective as of October 1, 1994, which has continued to this day, although the existing law 28 In Michigan, however, vast swaths of land exhibit split estates, including a third type of estate, for timber lands. 29 See Section I(A), supra. 30 See Section I(B), supra. 31 Burke v. Southern Pacific R.R. Co., 234 U.S. 669 (1914). 32 30 U.S.C §§181 et seq.
  15. 15. 9 4850-3545-7593 v20 has not been repealed.33 The Federal Land Policy Management Act of 1976, (“FLPMA”)34 which also repealed the homestead acts, converted the assessment work requirement on mining claims to the requirement that the mining claimant pay a claim maintenance fee annually to the Bureau of Land Management. Together with the patent moratorium, that has essentially converted the ownership of “locatable” minerals on public lands to a quasi-leasehold system, although still subject to the vagaries of the mining law including the requirements of a valid discovery, extra-lateral rights, type of mineral location (lode, placer or millsite), the doctrine of “pedis possessio” and the other criteria unique to unpatented mining claims.35 The set of legal rights afforded to a real estate title owner includes the right of possession, control, exclusion, quiet enjoyment and the right to sell or lease. As a consequence of the foregoing, throughout the U.S., and particularly in the western states, it is not uncommon to encounter parcels where the minerals are owned by one entity and surface by another and despite the surface ownership, the minerals are “open to location” under the 1872 Law. The various laws under which public land was initially “privatized” can have drastic effects on landowners down the line, as can the language of prior deeds in the chain of title. Such effects are almost always permanent, and may not manifest themselves for decades. As set forth in the table below, whether this is an issue for the mineral developer is largely dependent by the location of the project. State Acres Managed by BLM Split Estate – Federal Minerals Alaska 73.0M 0 Arizona 12.2 M 3.0M Colorado 11.6M 5.2M Idaho 11.6M 3.4M Montana 8.0M 11.7M Nevada 47.0M 0.3M New Mexico 13.4M 9.5M Utah 22.8M 1.2M Wyoming 18.3M 11.6M From its earliest days, the Federal government sought to retire the national debt through land sales. Later, the Federal government sought to encourage settlement of the West through the Homestead Acts. Creation of split estates, through Federal retention of minerals is largely a reflection of the perceived economic needs of the nation at various stages of the industrial 33 The Interior and Related Agencies Appropriation Act of 1994 imposed the moratorium on processing a patent application. That moratorium has been continued and extended by subsequent appropriation acts. The procedure for patenting a mining claim is, however, found in 43 CFR § 3860 et seq. 34 Pub. L. No. 94-579, 90 Stat. 2743 (1976); codified at 43 U.S.C. §§ 1701 et seq. 35 See Section III(D), below.
  16. 16. 10 4850-3545-7593 v20 revolution at the enactment of each stage of Homesteading. The Homestead Act of 186236 has been called one of the most important pieces of legislation in the history of the U.S. The intent of the Homestead Act of 1862 was to liberalize the homesteading requirements of the Preemption Act of 1841. The “yeoman farmer” ideal of Jeffersonian democracy was powerful in American political history, and during the 1850s, politicians believed a homestead act would help increase the number of virtuous yeomen. The Free Soil Party of 1848–52 and the new Republican Party after 1854 demanded that the new lands opening up in the west be made available to independent farmers. Signed into law by Abraham Lincoln shortly after the secession of southern states, the Homestead Act turned over vast amounts of the public domain to private citizens. Under the Act, homesteaders claimed and settled over 270 million acres, or 10 percent of the area of the U.S. The Homestead Act, as subsequently amended, remained in effect until it was repealed in 1976 by FLPMA.37 Under the Homestead Act, an applicant could receive fee title to 160 acres, if the applicant lived on the land for 5 years; cultivated it; and constructed at least a small building on it. At patent from the U.S., the homesteader received fee simple title, including the minerals.38 The Homestead Act worked well east of the 100th Meridian where there was annual precipitation sufficient for 160 acres to support a family. However, as settlement moved west into more arid country, new dry land farm techniques and new legislation were required. Because much of the prime low-lying alluvial land along rivers had already been homesteaded by the turn of the twentieth century, a major update called the Enlarged Homestead Act was passed in 1909. To enable dryland farming, the Act of 1909 gave 320 acres to farmers who accepted more marginal lands, which could not be irrigated. The patent requirements were made more flexible, allowing homesteaders to work at other jobs part of each year away from the subject land. In 1912 the “prove-up” period was lowered from five to three years. Upon patent from the U.S., the homesteader still received surface and mineral rights.39 During the early homesteading days the Federal government didn’t retain the minerals, or if it did, it retained only the coal. However, as the industrialized economy grew, so did concerns that strategic minerals needed to fuel the economy were being locked up by a relatively few people. Congress recognized that some Federal lands had surface that was valuable for agriculture and subsurface that was desired for mineral extraction. The Stock Raising Homestead Act of 1916 (“SRHA”)40 changed the privatization scheme 36 Pub. L. No. 37-64, 12 Stat. 392 (1862). 37 However, FLPMA included provisions for homesteading in Alaska until 1986. Alaska was one of the last places in the country where homesteading remained a viable option into the latter part of the 1900’s. 38 Id. 39 See Public Land Law Review Commission, History of Public Land Law Development (1968), at pp. 505-509. 40 Pub. L. No. 64-290, 39 Stat. 862 (1916); codified at 43 U.S.C. §§ 291 et seq.
  17. 17. 11 4850-3545-7593 v20 by granting lands to ranchers to homestead lands originally deemed of no value except for livestock grazing and the growing of forage. Each SRHA parcel could be up to 640 acres of public land—a full section or its equivalent—for ranching purposes. At patent, SRHA homesteaders received fee simple title to the surface, but for the first time, the Federal government retained ownership of the mineral rights. Over 70 million acres of public lands were privatized under SRHA. These parcels have since been developed for home sites and subdivided and sold as smaller parcels—something SRHA never intended. Unlike the previous two Acts, the SRHA split the subsurface or mineral rights from the surface rights. Patents issued to settlers from 1916 forward specified that the mineral rights were retained by the U.S. The actual language found on a SRHA patent for this mineral reservation is: Excepting and reserving, however, to the United States all the coal and other minerals in the lands so entered and patented, together with the right to prospect for, mine, and remove the same pursuant to the provisions and limitations of the Act of December 29, 1916 (39 Stat., 862). Since the Federal government retains the mineral rights, the 1872 Law applies to these lands. As a result, unless such lands were withdrawn from location, a prospector had the right to enter these lands, search for minerals, file a mining claim, and then file a plan of operations to mine, notwithstanding the surface ownership held by a different party.41 Public Law 103-23 amended the SRHA in 1993 to include specific procedures for locating mineral claims on split estate lands patented under the SRHA. The mineral owner must show due regard for the interests of the surface estate owner and occupy only those portions of the surface that are reasonably necessary to develop the mineral estate. This amendment requires notification of the surface owner before their land is entered, but the landowner still has no right to prevent entry or stop mining from taking place on the property. Anyone wishing to stake mineral claims on lands patented under the SRHA, or subsequent homestead entries, to first file a Notice of Intent to Locate (“NOITL”) a mining claim with the appropriate Bureau of Land Management (“BLM”) state office. This requirement was codified at 43 CFR § 3838. The claimant must also serve a copy of the NOITL to the surface owner by registered or certified mail, return receipt requested. A separate NOITL must be served to each surface owner affected. The claimant must wait 30 days from the date of service before entering the lands to locate any mining claim. NOITLs are assigned a serial number and noted on the BLM’s Master Title Plat. Once a NOITL is filed, no one, including the surface owner, may conduct mineral activities except the person who filed notice. While the surface owner is allowed to request that their lands be entered at a convenient time, they may not prevent entry. The claimant has a further 60 days to explore and stake mining claims. After a mining claim is staked, the mining claimant cannot conduct mineral activities (other 41 See, e.g., Hansard Mining, Inc. v. McLean, 376 Mont. 48, 335 P.3d 711 (2014), in which a patentee under the SRHA unsuccessfully challenged a mining claim that was located before the SRHA grant, but which was patented after the SRHA grant. The Montana Supreme Court said that “location is the inception of title and the patent relates back to the location.”
  18. 18. 12 4850-3545-7593 v20 than non-surface disturbing activities) without written consent from the surface owner, or an approved plan of operations from the BLM. If the claimant submits a plan of operations, the BLM has 60 days to approve the plan, but can get an extension of an unspecified amount of time to comply with other applicable laws. The claimant must file a reclamation bond to cover tangible losses during operations and/or permanent losses if the land is not returned to pre-mining agricultural production levels. The BLM decides the amount and conditions of the bond. The surface owner cannot be reimbursed for loss of property values as a result of mining claims or operations. During the time that operations take place, the surface owner receives an annual rental payment based on fair market rental conditions for agricultural land. Mineral development on split estate lands has been extremely controversial over the last decade. This is largely been a result of oil and gas development, particularly in Colorado and Wyoming. Several states have enacted surface owner protection acts to protect the rights of surface owners.42 These acts do nothing to change the common law rule of mineral estate dominance, but they do codify what is known as the “accommodation doctrine,” requiring surface interests to be protected in a reasonable manner. On the whole, they apply only to oil and gas operations and not to the development of other kinds of minerals from split estate lands. Some, such as Utah, apply only to situations of private surface and private minerals. They do not limit development on the most commonly occurring situations – that of private surface and Federal minerals or private surface and state minerals. Current law and BLM regulations43 require that the operator engage the surface owner in negotiations for the purpose of obtaining a surface use agreement. This can take the form of: • Surface owner agreement for access, or • Waiver from surface owner for access, or • Agreement regarding compensation. In these situations it is recommended that the operator “go the extra mile” in negotiating surface use agreements with the surface owner. This includes: • Onsite Meeting –The surface owner is invited to attend and identify development preferences; • Terms that adequately protect property values; • Compensation for reasonable and foreseeable damages to crops, including grazing lands, and any improvements; • Minimize road traffic; • Minimize noise; and • Maintain scenic quality 42 See, e.g., The Utah the Surface Owner Protection Act, Utah Code §§ 40-6-20 & 21; Utah Admin. R. 649-3-38; Colorado Act, CRS §§ 34-60-127; Wyoming Act – W.S. §§ 30-5-401 et seq. 43 See 43 USC § 299.
  19. 19. 13 4850-3545-7593 v20 If good faith efforts fail to yield a surface use agreement, it may be feasible to “Bond On” under 43 CFR § 3814. Consequently, a mineral operator can eventually obtain approval to conduct operations on all types of split estate land, through patient compliance with the permitting requirements, notwithstanding opposition by the surface owner. The problem is that rather than in engaging in private negotiations with the surface owner, the operator will be subject to heightened BLM involvement. For the most part, the operator’s presence on split estate land will be temporary. As such, operators should use the best management practices set forth above to minimize the impact of mineral development on split estate lands. II. OVERVIEW OF THE U.S. MINING LAWS. A. General. The mineral tenure system in the U.S. is rather complex, but depends largely on (i) the type of mineral being sought and (ii) the ownership of the parcel containing the minerals. For instance, in order to develop oil & gas and coal on Federal property, private entities must lease the land from the Federal government through a competitive bidding/lease process. In the case of private ownership, access to minerals is obtained either from a mining lease or by outright purchase. In the case of lands owned by the various states, generally there is a state leasing system that, upon acquisition, enables exploration and exploitation of the mineral substances under the mineral lease. In the case of hard rock minerals on Federal land, if such land is “open to location,” private entities may acquire such minerals under the General Mining Law of 1872. In short, acquiring minerals in the U.S. differs considerably from the Canadian, Australian or usual Civil Code country models. B. Indian Country. Mineral tenures in Indian Country are quite different in that Reservation-holding recognized tribes of Native Americans hold a unique status. The U.S. Supreme Court has recognized such tribes as “dependent, sovereign nations.”44 Traditionally, most Indian Nations did not have the same concepts of “fee ownership” as the European settlers. Rather, the rights were generally held “in usufruct” that is, the right to use the renewal resources, rather than a “fee title” concept.45 As the British, French, Spanish and later the U.S. established Reservations and other “Indian Country” locations, the rights were largely converted to the European system of deeds and fee ownership, albeit that in Reservations the Federal government was deemed to hold title to the lands for the Tribes “in trust.” In dealing with mineral development on Reservation lands, the Tribe holding the Reservation has primacy in granting exploration and exploitation rights on Reservation lands, although in many cases, transactions must be approved by the U.S. Bureau of Indian Affairs acting in its capacity on behalf of the Federal government in its trustee capacity. As with any sovereign nation anywhere in the world, however, in the first instance the Tribe controls access to the minerals, where the minerals can be exploited, the conditions of the exploitation, the governing law applicable to the relationship, and the resulting disposition of the product with respect to operations conducted within the Reservation boundaries. In recent years, 44 See note 24, supra. 45 See, e.g., http://www.nativeamericandeeds.com/focuspoints3.aspx, accessed January 18, 2017.
  20. 20. 14 4850-3545-7593 v20 the influence of Tribes has expanded beyond Reservation boundaries through requirements of Federal agency consultation in connection with various environmental impact studies and other major Federal actions and recognition of traditional religious and cultural rights. Hence, in virtually any major mining project in the U.S., there are bound to be issues regarding Native American rights.46 C. Minerals on Public Lands. 1. Leasable Minerals. The Mineral Leasing Act of 1920, as amended (the “MLA”), removed certain minerals from acquisition by “location” under the 1872 Law. Those minerals included oil and gas, oil shale, coal, geothermal resources, potash, sodium, native asphalt located in certain geographic regions, solid and semisolid bitumen, bituminous rock, phosphate, chlorides, sulfates, carbonates, borates, silicates or nitrates of potassium or sodium and related products, sulphur on public lands in Louisiana and New Mexico and certain other minerals. Those minerals are now commonly referred to as “leasable minerals.” The MLA governs the acquisition of leasable minerals separate and apart from the 1872 Law from and after the date of the enactment of the MLA.47 2. Salable Minerals. The Materials Disposals Act of 1947, as amended (the “MDA”), further removed common varieties of mineral materials from acquisition by “location” under the 1872 Law. The MDA authorizes the Secretary of the Interior and the Secretary of Agriculture to “dispose of minerals materials (including but not limited to common varieties of the following: sand, stone, gravel, pumice, pumicite, cinders, and clay) ... on public lands of the United States ... if the disposal of such materials (1) is not otherwise expressly authorized by law, including, but not limited to ... the United States mining laws, and (2) is not expressly prohibited by laws of the United States, and (3) would not be detrimental to the public interest.” “Common varieties” of minerals subject to materials sales are those that do not possess any specific property giving them a distinct or special value. The classification of materials available for mineral sales is not absolute because it is dependent upon the characteristics of each individual deposit and use of the materials once extracted. It is not uncommon for conflicts to arise over whether a mineral deposit is a common variety and disposable under the MDA or an uncommon variety locatable under the 1872 Law.48 To resolve these disputes, courts have generally followed a five-part test to determine whether a deposit is a common or uncommon variety: (1) Comparison of the mineral deposit in 46 See Section I(B)(4), supra. 47 See Section IV(B), below. 48 State law may take a different position. Compare Copeland Sand & Gravel, Inc. v. Estate of Dillard, 341 P.3d 187 (Or. Ct. App. 2014), aff’d on Reh’g, 346 P.3d 529 (Or. Ct. App. 2015) (per curiam) (in a reservation of “all minerals in, under and upon the premises,” the minerals included common rock) and U.S. ex rel. Southern Ute Tribe v. Hess, 348 F.3d 1237 (10th Cir. 2003) (in exchange lands the reserved “minerals” does not include gravel under Colorado law).
  21. 21. 15 4850-3545-7593 v20 question with other deposits of the same mineral generally; (2) Whether the mineral deposit in question has any unique qualities; (3) Whether the unique quality gives the deposit a distinct or special value; (4) Whether the use of the materials is dependent upon the material’s unique qualities; and (5) Whether the material commands a higher price due to its unique qualities. Minerals available for materials sales thus include sand, stone, gravel, pumice, cinders, clay and other widely occurring and available substances that are generally used for construction, agriculture, animal husbandry, abrasion, landscaping and similar uses. Materials sales can cover both minerals and vegetative substances such as moss and peat. Certain materials have specifically been excluded from materials sales, however, through case law and statutory enactments because of their unique characteristics and value. Specifically, block pumice, limestone suitable for the production of cement, metallurgical grade limestone, chemical-grade limestone, limestone suitable as a soil additive and gypsum have all been excluded from material sales and are instead available for location under the 1872 Law. 3. Hard Rock Minerals – the General Mining Law of 1872. The relevant Federal law with respect to the acquisition of hard rock mining claims on Federal ground is the General Mining Law of 1872 (the “1872 Law”).49 That law, which superseded a number of predecessor laws, is underpinned by six fundamental principles: (i) The right of free entry; (ii) The right to prospect; (iii) The protection of the interest of the discoverer (with some limitations – see below); (iv) The requirement for development; (v) The right to purchase (but which has been superseded by the “patent moratorium” see below); and (vi) The right to be free of any royalty burden imposed by the Federal government.50 The 1872 Law originally provided that “all valuable mineral deposits in lands belonging to the United States, both surveyed and unsurveyed, shall be free and open to exploration and purchase.” However, over time certain minerals were withdrawn from location under the 1872 Law and were covered under other Federal mineral development laws discussed in the previous sections. The BLM administers about 250 million surface acres of public land and about 700 million acres of mineral estate in the western U.S. and Alaska. Except to the extent the mineral estate in such lands are reserved or withdrawn from mineral entry, or are subject to other valid mining claims or patents, the lands are generally open to location under the 1872 Law. With the vast holdings by the U.S. in the western states, much of the mineral development is actually conducted on Federal lands, rather than private or state lands. As of the end of 2015, roughly 341,000 unpatented mining claims, encompassing 7.6 million acres of land, were active and in good standing under the 1872 Law. Under the 1872 Law, the acquisition of mining claims is “self-initiated” – that is, without prior governmental authorization, a claimant has the right to prospect on Federal lands that are open to location, and to stake a mining claim on those lands upon making a discovery. The right to such minerals is thus obtained through the self-initiated process of conducting the necessary prospecting and then by (i) staking a claim under the 1872 Law; (ii) making a “discovery” of valuable minerals; (iii) exercising pedis possessio rights and diligently developing the claims, and 49 17 Stat. 91, 30 USC §§22, 23, 35, 161 et seq. 50 Short Course, Part 13, Page 16.
  22. 22. 16 4850-3545-7593 v20 (iv) obtaining an approved plan of operation after approval of an environmental impact statement with the relevant Federal agency to enable exploitation of the claims. Also, unlike most mineral tenure systems in other countries, there is not a distinction as to the “tenure” generally between exploration and exploitation on Federal lands, although the actual permitting requirements increase with the larger scope of disturbance resulting from actual exploitation. The minerals that are currently subject to the 1872 Law are commonly referred to as “hard rock minerals,” or “locatable minerals.” The current list of locatable minerals include metallic minerals (gold, silver, cinnabar, lead, copper, tin, zinc, nickel, uranium, etc.), nonmetallic minerals (fluorspar, mica, certain limestones and gypsum, tantalum, heavy minerals in placer form, and gemstones) and certain uncommon variety minerals, which are valuable because of their unique characteristics. Such uncommon variety minerals that are available for location include block pumice, limestone suitable for the production of cement, metallurgical grade limestone, chemical grade limestone, limestone suitable as a soil additive and gypsum, which have all been excluded from material sales and are instead available for location under the 1872 Law. III. DETAILED REVIEW OF THE GENERAL MINING LAW OF 1872. A. The Unique Nature of the Unpatented Mining Claim.51 The 1872 Law52 allows an individual to locate mining claims on land owned by the Federal government. The interest is “self-initiated”; no act of the Federal government is necessary to establish the right. The locator has a valid interest in such land, as long as (i) the land was open to location; (ii) the location is properly made; (iii) a discovery of a valuable mineral deposit is made; and (iv) the claim is properly maintained through annual filings and/or payments. For millsite claims, similar requirements apply, except that the land must be nonmineral in character and the claim must be actively used for mining or milling purposes. Although the BLM may challenge the validity of a mining claim for failure to comply with various statutory requirements, it has no say in whether a claim is located in the first instance. The owner of a valid mining claim or millsite thus has the exclusive right to use and possess the property for mining purposes and to develop and sell the mining products from the same free of any royalty to the Federal government. The right does not extend to using the property for non-mining purposes or (except with respect to very old claims) excluding other uses of the land.53 A mining claim can be sold, mortgaged, inherited and otherwise treated like other real property interests. B. Types of Mining Claims. The 1872 Law provides for four types of claims: lode mining claims, placer mining claims, millsite claims and tunnel sites. It is important to distinguish among these types of claims and sites as each has its own, quite different, characteristics. Moreover, locating the wrong type of claim or site on any particular parcel of land can invalidate the claim or site. For example, locating a lode claim on a placer deposit is invalid. Locating a placer claim on a lode deposit is generally 51 For an in depth discussion of the nature of the ownership right in an unpatented mining claim, see 2 American Law of Mining, Chapter 36. 52 See Chapter 3 of this Handbook for an excellent overview of the Mining Law. 53 See 30 U.S.C. § 612.
  23. 23. 17 4850-3545-7593 v20 invalid.54 Finally, locating a millsite on land valuable for lode or placer deposits is not permitted by the 1872 Law. 1. Lode Claims. Lode mining claims are located on lands where the minerals are contained in “veins or lodes of quartz or other rock in place.” Generally this means that the deposit being located using a lode claim has to be a mineralized zone held in place by adjoining rock. Lode deposits are usually mined by drilling into the lode and blasting the rock to permit mucking, hauling and subsequent processing. Lode claims are limited to a maximum of 1500 feet along the length of the claim and 300 feet on either side of the middle of the vein. 2. Placer Claims. Placer mining claims are located on “all forms of deposits, excepting veins of quartz, or other rock in place. . . .” In other words, by using the negative, the placer deposit is defined as any deposit that does not qualify as a lode. These deposits are typically heavy metals that have been transported over time from their point of origin to a new point where they are concentrated mechanically. A classic placer deposit is one where gold is found in loose sand or gravel in a stream bed that can be mined using a sluice or pan and that does not require drilling and blasting. A placer claim is thus staked on any deposit that is not a lode or vein and covers deposits that are not fixed in rock, i.e., those that are loose in the earth, sand or gravel. The maximum size of an individual placer claim is twenty (20) acres, and the claims should, where practicable, be located in accordance with subdivisions of the public land survey system. Two or more locators may form what is known as an association placer claim, which allows a larger claim up to a maximum size of 160 acres, (six times larger than a single locater can stake) but there must be a separate, and bona fide, locator for each 20 acres of the claim. 3. Millsites. The 1872 Law also allows location of millsites, which are used for activities related to mining or processing minerals. A millsite can be located on up to five acres but cannot include more land than is necessary or used for mining or milling purposes. There are two types of millsites: (1) dependent millsites, which are located in association with lode or placer claims; and (2) independent millsites, located by “[t]he owner of a quartz or reduction works, not owning a mine….” Independent millsites are very rare, and are unlikely to be encountered. The chief distinction between a millsite and a mining claim (other than size) is that a millsite can be located only on land that is non-mineral in character. 4. Tunnel Sites. The 1872 Law also allows land to be staked as “tunnel sites.” Section 4 of the 1872 Law, called the Tunnel Site Act, is generally only of historic interest, as driving a tunnel is no longer an economic means of exploring for lode deposits. Thus these are rare, and it is unlikely a miner will 54 See, e.g., TAGS Realty, LLC v. Runkle, 2015 Mont. 166, 352 P.3d 616 (2015), in which the Montana Supreme Court in analyzing conflicting claims and citing 30 U.S.C. §§ 22-47, stated that “a valid, unpatented lode claim, supported by a proper lode discovery, includes with it all placer deposits found within its boundaries.”
  24. 24. 18 4850-3545-7593 v20 ever have cause to consider them.55 The Tunnel Site Act, however, grants a possessory right to veins and lodes that might be discovered underground through the tunnel with a priority attaching from the date of commencement of the tunnel. The right applies to all veins or lodes discovered for a distance of 3,000 feet along the tunnel. Once discovered, the owner of the tunnel then locates a typical lode claim on the surface to provide evidence of the subsurface discovery. C. Extralateral Rights.56 One of the most unique aspects of lode mining claims, and one which is very different from other real property concepts that define the ownership by the surface boundaries, is that the property right created by the lode claim is not necessarily limited to the vertical boundaries of the claims.57 A miner has the right in certain instances to follow a vein outside the vertical side lines of a lode claim. This right is called an extralateral right and generally exists when: (1) the lode claim has parallel end lines; (2) the vein follows a continuous downward course; and (3) the apex of the vein is within the claim boundaries. Whether extralateral rights exist is a highly technical question that most title examiners do not have the expertise to answer. The 1872 Law adopted and expanded the provisions of the Lode Law of 186658 relating to the right of the miner to follow the vein downward. What this means, and what locators often find odd and surprising, is that the nature of a mining claim may well extend outside of the boundaries of the claim itself. The applicable provision of the 1872 Law states: The locators of all mining locations made on any mineral vein, lode, or ledge, situated on the public domain . . . shall have the exclusive right of possession and enjoyment . . . of all veins, lodes, and ledges throughout their entire depth, the top or apex of which lies inside of such surface lines extended downward vertically, although such veins, lodes, or ledges may so far depart from a perpendicular in their course downward as to extend outside the vertical side lines of such surface locations. But their right of possession to such outside parts of such veins or ledges shall be confined to such portions thereof as lie between vertical planes drawn downward as above described, through the end lines of their locations, so continued in their own direction that such planes will intersect such exterior parts of such veins or ledges (emphasis added).59 From this statutory language, courts have established a number of requirements that must be met in order to obtain extralateral rights. Briefly, these requirements are as follows: (1) the 55 See 2 American Law of Mining, Chapter 32 for an in-depth discussion of the types of locations and their attributes. 56 See 2 American Law of Mining, Chapter 37 for a comprehensive discussion of extralateral rights. 57 The normal concept of real property fee ownership starts with the assumption that the title holder owns the property within the vertical converging planes formed by the boundaries downward to the center of the earth and upwards by the vertical diverging planes through the sky. 58 Section 4 of H.R. 365, enacted July 26, 1866, entitled: “An Act Granting the Right of Way to Ditch and Canal Owners over the Public Lands and for other purposes.” 59 General Mining Law § 3, 30 U.S.C. § 26.
  25. 25. 19 4850-3545-7593 v20 deposit involved must be a lode or vein; (2) the vein must “apex” (in other words, “top out”) within the claim boundaries; (3) the vein must “dip,” and not be horizontal; (4) the vein must be “continuous;” and (5) the vein can only be pursued downward within planes parallel to the end lines of the mining claim. 1. Vein or Lode. In order to establish extralateral rights, a mining claim must be located on a “vein” or “lode,” which are legally interchangeable terms.60 Generally, this means that there must be a zone of rock held in place by adjoining rock and that the zone must be impregnated with, or consist of, valuable mineral.61 The existence of a footwall and a hanging wall is important in defining that the scope and continuity of a vein or lode, but the presence of mineralized material rather than the mere existence of the contact is the key factor. 2. Apex. The 1872 Law requires that, in order to establish extralateral rights to a vein or lode, the “apex” or the top of the vein, must be contained within the boundaries of the claim. When the 1872 Law was passed, considerable uncertainty existed as to what constituted the top or apex of a lode.62 Not all lodes have an apex and it is often difficult to determine the location of the apex even if it is presumed that one exists. Perhaps the best definition is Lindley’s: The top, or apex, of any part of a vein is found by following the line of its dip up to the highest point at which vein-matter exists in the fissure. According to this definition the top, or apex, of a vein is the highest part of the vein along its entire course. If the vein is supposed to be divided into sections by vertical planes at right angles to its strike, the top, or apex, of each section is the highest part of the vein between the planes that bound that section. . . .63 Thus, the apex of a vein might be irregular. It might be higher in one place within a claim and lower in another but the elevation of the upper edge of the vein at different points within the location is of no importance.64 In addition, the apex might be “blind” and not outcrop or reach up to the surface, or it might be “theoretical” where the true apex is lost to a prior location (i.e. an agricultural or placer patent), but still be an adequate apex for purposes of extralateral rights. 3. Dip. 60 Vol. 1 Rocky Mountain Mineral Law Foundation, American Law of Mining, 2d Ed. § 32.02[2] (“There is no legal distinction between a “lode” and a “vein.” Generally, in the common parlance of miners as well as in statutes and court opinions, the terms are used interchangeably without regard to technical geological distinctions.”). 61 Id.; see also Section III(B)(1), supra. 62 Lindley, A Treatise on the American Law Relating to Mines and Mineral Lands § 305-312 (3d ed. 1914). 63 Id. § 379. 64 Id. § 309.
  26. 26. 20 4850-3545-7593 v20 Because the end lines of the claim in which the apex lies establishes the length of the extralateral right, an additional requirement of the law of extralateral rights is that the vein enter and leave the claim through its end lines, and that it descend outside of the vertical side lines, rather than the end lines. In other words, when determining which claims might include extralateral rights, it is important to know whether the vein appropriately exits the end lines, or whether it exits the side lines. Although the rule states that the vein must exit the end lines, not surprisingly the issue is complex and courts have been generally liberal in permitting the exercise of extralateral rights regardless of how a vein enters and exits a claim.65 It is well accepted that end lines can be treated like side lines where a vein enters and exists through the side lines of a claim. In addition, in cases where the vein does not enter and exit the end lines, for instance, where the vein enters an end line but turns and exits a side line, parallel planes are established where the vein enters and exits the claim and extralateral rights are usually granted within such parallel planes.66 It is important to keep in mind that the previous two requirements—establishing a vein or lode with an apex—must be met before an analysis of the particular orientation of the claims at issue with respect to adjacent lands or claims can be made. In other words, once a mineralized structure with an apex on a claim is identified, the orientation of the particular claim on which the mineralized structure is located can be analyzed in relation to adjacent lands or claims. 4. Continuity. Once the preceding requirements have been satisfied, the claimant asserting extralateral rights can follow the vein downward for so far as it can be followed, provided that the vein is “continuous.”67 Continuous is a relative term, however. The courts have addressed the requirement of continuity with some liberality, recognizing that, in real life, a vein might be displaced by a fault, pinch out, or even disappear over short distances without disrupting the continuity of the system. Additionally, courts have also liberally construed the continuity of the vein itself where the continuity of the structure containing the vein is well established: “with the establishment of the existence of either the body of mineral or mineral bearing rock or the boundaries, the existence of the other may be accepted upon very slight evidence.”68 On the other hand, the courts have recognized that interpreting the continuity requirement too loosely might result in “one giant extralateral right.”69 5. End Lines. While a mineral claimant may follow the vein down dip beyond the side lines of the claims — the basic extralateral right — a claimant may not follow the vein on strike beyond the claim’s 65 Vol. 2 Rocky Mountain Mineral Law Foundation, American Law of Mining, 2d ed. § 37.03. 66 Id. 67 Lindley, § 615; Am. Law of Mining, § 37.02[3]. 68 Continuity is recognized as often presenting a difficult evidentiary issue. Am. Law of Mining, § 37.02[3]; John L. Neff, “The Law of the Apex – A Continuing Enigma,” 18 Rocky Mtn. Min. L. Inst. 387, 411 (1973). 69 Id.
  27. 27. 21 4850-3545-7593 v20 end lines.70 Although the 1872 Law itself imposes no penalty for non-parallel end lines, courts have almost uniformly held parallel end lines to be a requirement for extralateral rights.71 The one exception to this rule is converging end lines. While courts have uniformly held diverging end lines convey no extralateral rights because the divergence would create an ever-enlarging right, courts have split on whether converging end lines convey extralateral rights.72 Courts adopting a more liberal view have awarded extralateral rights based on converging end lines because as the converging planes are extended down dip, they converge and eventually meet, thereby defining a limited extralateral right.73 Courts adopting the competing view strictly construe the parallel end lines requirement, and deny extralateral rights to claims with converging end lines. Similar to the requirement that the vein dip outside the side lines, the parallel end lines requirement cannot be evaluated until the geology is sufficiently well defined to establish a vein or lode with an apex on one of the four above-listed classes of claims. When such geologic knowledge is available, the particular claims at issue can be examined to determine if they meet the parallel end lines requirement. D. Unpatented Mining Claim Title and Validity Issues. 1. General Validity Issues. There are a number of reasons why a mining claim or millsite may be invalid. Typically, many of these issues require specialized expertise in order to ascertain whether or not there is a validity problem. Accordingly, a status report or title opinion prepared by a mining lawyer regarding unpatented mining claims should contain qualifications that outline the reasons that a mining claim may be invalid. However, some of the reasons are set forth below. Much of the discussion below is primarily helpful to a title examiner, but the principles included in the discussion provide significant guidance to the mining company or geologist in understanding the issues. a. Lack of a Discovery74 The most common reason that a mining claim is invalid is that it does not contain a “discovery” of a valuable mineral. A discovery occurs when the locator finds a mineral in sufficient quantity and quality so that “a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine.”75 This standard, commonly referred to as the “prudent man test,” incorporates two requirements. First, the locator must find the mineral. This requires a physical exposure on each claim – if the mineral is not already exposed on the surface, it must be exposed by drilling or excavation. Second, the exposed deposit must be of such value that it is reasonably probable that 70 Lindley, § 582; Vol. 2 Rocky Mountain Mineral Law Foundation, American Law of Mining, 2d ed. § 37.02[4]. 71 Lindley, § 582; Vol. 2 Rocky Mountain Mineral Law Foundation, American Law of Mining, 2d ed. § 37.02[4]. 72 Vol. 2 Rocky Mountain Mineral Law Foundation, American Law of Mining, 2d ed. § 37.02[4]. 73 Id. 74 A comprehensive discussion of the discovery standard can be found at 2 American Law of Mining, Chapter 35. 75 Castle v. Womble, 19 L.D. 455, 457 (1894).
  28. 28. 22 4850-3545-7593 v20 it can be mined, removed and disposed of at a profit. A recent clarification of the discovery test, commonly applied to minerals that are of widespread occurrence, is phrased in terms of “present marketability,” which means that the claimant must establish the likelihood of developing a successful mine, based on historic and current markets, price and cost factors. Furthermore, the discovery concept poses unique challenges for a widely disseminated orebody, such as a large copper porphyry, which does not have a discovery that would support a mine on any single claim.76 As against the government, the discovery standard is an exacting one. In point of fact, many mining claims may not have a discovery that satisfies the standard. The title examiner must be sure that the client is aware that no claim is valid without one. Indeed, a claimant’s property right does not attach until there is a discovery. Until that time, the claim is subject to intervening rights and the possibility that the government may remove the land from operation of the 1872 Law! Placer claims must not only contain a discovery, but each ten acres of the claim must be “mineral in character.” The mineral in character requirement requires evidence of mineralization, but is a much lesser standard than the discovery standard. Only one discovery is required per association placer claim, whether the claim is 20 or 160 acres. However, as with other placer claims, each ten acres of the claim must be mineral in character. b. Locatable Minerals77 A lode or placer claim must be based on a “locatable mineral.” If it is not, then it is not valid. While as noted above, the 1872 Law originally extended to almost all minerals (except coal), in 1920 Congress excluded so called “leasable minerals,” including oil, gas, phosphate, sodium, potassium, oil shale and gilsonite, among others. Through the Mineral Leasing Act of 1920. Similarly, Congress excluded common varieties of sand and gravel and similar types of materials from the 1872 Law through the Materials Disposal Act of 1947. Uncommon varieties of such minerals remain subject to location as previously noted. c. Pedis Possessio Although a mining claim is not valid prior to discovery, the doctrine of pedis possessio gives a mining claimant some protection against other rival locators. Under this doctrine, a claimant who is actually occupying the claim, diligently searching for a mineral and actively, but peaceably, excluding other miners is entitled to continued possession of the land while he attempts to establish a discovery. Pedis possessio protects only against rival claimants, but not against the government, which as previously noted, can challenge a mining claim at any time for lack of a discovery. It is thus an extremely vital part of the diligence that must be undertaken by a mining company that has staked a large number of claims, prior to a discovery on each separate claim. That means, the mining company can’t simply just stake and forget, it must stake and actively occupy and diligently explore for minerals. Simply paying the annual maintenance fee is not 76 In a recent case, Freeman v. U.S. Department of the Interior, No. 1:12-cv-01094, 2015 WL 1213657 (D.D.C. March 17, 2015), the BLM’s use of a six year average for the price of the relevant mineral was upheld as reasonable, thus invalidating the claims on the basis that there was no discovery. 77 For a detailed discussion of which minerals are locatable, see 1 American Law of Mining, Chapter 8.
  29. 29. 23 4850-3545-7593 v20 sufficient. Otherwise, a rival claimant may overstake and if the rival claimant makes the discovery, such rival claimant’s claim achieves the necessary discovery validity over the original claimant that does NOT have a discovery nor has exercised the pedis possessio rights.78 d. Citizenship Requirement Only citizens of the U.S. may locate mining claims. A corporation, or other form of entity such as a limited liability company, that is organized under the laws of a state is considered to be a citizen, regardless of the ultimate foreign ownership. If a claim is held by a noncitizen, it becomes validated if it is transferred to a citizen. e. Lode vs. Placer Distinction79 A lode claim covering a placer deposit is invalid, and a placer claim staked on a lode or vein is invalid. Whether a deposit is a lode or a placer is a highly technical, geological question that most title examiners are not qualified to answer. Occasionally, a locator may attempt to stake both a lode and a placer claim over the same ground in an attempt to avoid the issue. This practice creates additional issues that should be addressed by a mining law attorney. f. Association Placer Issues80 A common issue relating to the validity of association placer claims is the extent to which there is at least one bona fide locator for each 20 acres included in the claim. The law contemplates that each locator will have his or her own independent interest in the claim. A claimant cannot use the names of relatives or friends, who are not actually involved in the claim, to claim more than the allowed 20 acres. The use of so-called “dummy locators” will invalidate the claim. g. Millsite Issues81 A millsite is also subject to a number of validity issues that cannot be assessed based on the record. First, in sharp contrast to a mining claim, a millsite must be located on land that is non- mineral in character. Millsites located in connection with a lode claim cannot be contiguous to the vein or lode, but they can be contiguous to the mining claim itself. A locator’s rights in a millsite do not vest until the land is used in good faith for mining and milling purposes. The BLM’s regulations require that every two and one half acre portion of the millsite be used or occupied for mining or milling purposes. Finally, a dependent millsite is invalid if the lode or placer claim with which it is associated is invalid. 78 See, e.g., Amax Exploration, Inc. v. Mosher, R-85-162-BRT (D.Nev. 1987). The decision was never officially published, but was widely circulated throughout the mining industry due to the view that the esteemed judge correctly set out the relevant doctrine. 79 For a detailed discussion of the lode/placer distinction, see 1 American Law of Mining § 32.02. 80 A more in-depth discussion of these issues can be found at 1 American Law of Mining, Chapter § 32.04[3]. 81 See 1 American Law of Mining § 32.06 for a discussion of these issues.
  30. 30. 24 4850-3545-7593 v20 Many of the concentrator or other beneficiation facilities in western states are located on millsite claims, as are many of the waste dumps and tailings disposal areas.82 E. Record Title Issues. In addition to the general validity issues described above, a number of validity issues can be ascertained through a record search of the various BLM and state land records, as described below. 1. Is (was) the Land Open to Location. Mining claims must be located on Federal land that is “open to location” at the time the claim was located and a discovery made. The first task is to identify from the BLM records whether there have been prior Federal actions or conflicting mining claims that may have closed the land to location at the time the claim was staked and at all times prior to the time a discovery is made. If a location is determined to be defective and the locator relocates the mining claim, the land must also be open at the time of relocation. If a claim’s discovery is on land not open to location, the claim is void in its entirety. Where a mining claim partially overlaps on land not open to location, but has a discovery on the open land, the claim is only invalid to the extent of the overlap. Volumes have been written on the subject of whether land is open to location.83 In many cases, determining whether land is available for location requires a thorough understanding of numerous public land laws. In those instances, an expert will need to review the status including noting the existence of a prior entry, withdrawal or segregation or to refer the question to a public land lawyer. 2. Patented Land and Other “Segregative” Entries. When the Federal government issues a patent for land to a private party, without a reservation of minerals, the land is no longer Federal land and is not open to location. Even if the patent contains a reservation of minerals, the statute under which the patent was issued and the governing regulations must be reviewed to determine if the reserved minerals are open to location. Under many statutes, reserved minerals are not subject to location unless the Department of Interior has adopted regulations authorizing such locations. The Stock Raising Homestead Act is the most significant statute that allowed location of reserved minerals, but the landperson must be aware that, with respect to locations made after 1992, special rules apply to entry on these lands and consider the location of such claims complied with those rules. In examining title to older claims, a title examiner must also be aware that prior to 1954, with certain exceptions, a mining claim could be not located on land subject to an outstanding oil 82 On November 7, 1997, the then Solicitor of the US Department of the Interior under then President Clinton, Mr. John Leshi, issued an opinion that only 1 five acre millsite could be patented for each lode claim. That posed a severe threat to the ability to have large tailings and processing facilities for large disseminated orebodies in the western US. The opinion was revoked on October 10, 2003 by Gale Norton, the then Secretary of the Interior. 83 An in-depth discussion of these topics can be found at Chapters 3-17 of American Law of Mining.
  • StanleyDempsey

    Jan. 30, 2021
  • lukeschuss

    Jul. 9, 2017

U.S. Mining Course Outline and Handbook for 2017 PDAC - Parsons Behle & Latimer - March 4, 2017

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