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Explanation of "Discovery"

 Explanation of "Discovery"

Locatable Minerals

The General Mining Law of 1872, as amended, opened the public lands of the United States to mineral acquisition by the location and maintenance of mining claims.  Mineral deposits subject to acquisition in this manner are generally referred to as "locatable minerals." Locatable minerals include both metallic minerals (gold, silver, lead, copper, zinc, nickel, etc.) and nonmetallic minerals (fluorspar, mica, certain limestones and gypsum, tantalum, heavy minerals in placer form, and gemstones).  It is very difficult to prepare a complete list of locatable minerals because the history of the law has resulted in a definition of minerals that includes economics.

Starting in 1873, the United States Department of the Interior (DOI) began defining locatable minerals as those minerals that are recognized as a mineral by the standard experts, are not subject to disposal under some other law, and make the land more valuable for mining purposes than for agriculture.  Minerals normally locatable on lands acquired (purchased or received) under the Acquired Lands Act of 1947 by the United States or found on American Indian reservations are subject to lease only (43 CFR Group 3500).  Therefore, it is easier for BLM to list the minerals that are not locatable because of the complexities listed previously.  

Since July 23, 1955, common varieties of sand, gravel, stone, pumice, pumicite, and cinders were removed from the General Mining Law and placed under the Materials Act of 1947, as amended.  Use of salable minerals requires either a sales contract or a free-use permit.

Disposals of salable minerals from BLM-administered lands are regulated by 43 CFR Part 3600.

 


Uncommon varieties of salable-type minerals may be locatable if the deposits meet certain tests created by various judicial and administrative decisions.  See McClarty v. Secretary of the Interior, 408 F. 2d 907 (9th Cir., 1969).  Federal certified mineral examiners determine uncommon variety on a case-by-case basis.  (See 43 CFR Part 3830, Subpart C, for further information concerning the locatability of minerals.) 

Since 1920, the Federal Government has leased fuels and certain other minerals (see 43 CFR 3000-3590). Today, minerals that are subject to lease include oil and gas, oil shale, geothermal resources, potash, sodium, native asphalt, solid and semisolid bitumen, bituminous rock, phosphate, and coal. In Louisiana and New Mexico, sulphur is also subject to lease.   

Discovery of a Valuable Mineral Deposit

Federal statute does not describe what constitutes a valuable mineral deposit, therefore the government has adopted the "prudent man rule." This rule determines value based on whether or not a person will consider investing time and money to develop a potentially viable mineral deposit.  This rule was first stated by the DOI in 1894, in the adjudication of Castle v. Womble, 19 L.D. 455 (1894), the holding of which states: 

"...where minerals have been found and the evidence is of such a character 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, the requirements of the statute have been met."

The U.S. Supreme Court approved this definition in Chrisman v. Miller, 197 U.S. 313 (1905).

The DOI's Solicitor issued an opinion in 1933 on the issue of widespread nonmetallic minerals with questionable marketability.  The Solicitor noted a need for a distinct showing that the mineral could be mined, removed, and marketed at a profit.  In 1968, the U.S. Supreme Court approved the opinion in U.S. v. Coleman, 390 U.S. 602-603 (1968).  The marketability test is supplemental to the prudent man rule and considers deposit economics and market entry.  The claimant is required to show a reasonable prospect of making a profit from the sale of minerals from a claim or a group of contiguous claims.

DOI decisions require a discovery on each claim based on an actual physical exposure of the mineral deposit within the claim boundaries.  The DOI's holding in Jefferson-Montana Copper Mines Co., 41 L.D. 321 (1912), established the full test for a lode claim:

"To constitute a valid discovery upon a lode claim, three elements are necessary:
1)  There must be a vein or lode of quartz or other rock-in-place;
2)  The quartz or other rock-in-place must carry gold or some other valuable mineral deposit;  
3)  The two preceding elements, when taken together, must be such that as to warrant a prudent man in the expenditure of his time and money in the effort to develop a valuable mine."

For traditional placer claims, in addition to proof of a discovery of a pay streak, each 10 acres must be shown to be mineral-in-character (there is a reasonable expectation of further economic mineral under these lands).  Mineral-in-character may be based on geologic inference from adjoining lands and a reasonable opportunity for profitable extraction.  An actual exposure of the valuable mineral deposit is not necessary.  Mineral-in-character may be used to show the potential extent of the valuable mineral deposit on the claim(s), but cannot be used alone for such purposes.

Under the holding in Schlosser v. Pierce, 93 I.D. 211 (1986), contiguous mining claims on the same mineral deposit may be grouped togehter into a logical mining unit and evaluated as an economic unit.  Each claim must still contain a physical exposure of the ore-bearing mineral deposit whose value meets or exceeds the cutoff grade for the mining of the mineral deposit as a whole.