FreeGoldFanatic

Lode Vs. Placer ?

53 posts in this topic

Definition clarification:

What is a correct definition on a Lode mining claim?

What is a correct definition of a Placer mining claim?

It would seem that the answer is easy and straight forward but consider this:

If I have a lode claim that covers some dry river wash and an adjoining hillside and someone else files a placer claim over my Lode claim;

1. What area can they legally work?

2. Can they work any land in my claim if "I was there first"?

3. Can I state that the fine gold, 200 mesh minus fine, in the dry river wash is gold that washed off of the hillside and has come from a lode ore body and therefore is considered lode, even if it is in the dry river wash.

4. Can the new comer go up on the hillside and work the soil, without crushing anything, and claim that they are capturing the 200 mesh minus gold therefor they have placer mining rights on my lode claim?

5. When can free gold in lode mining claim area be considered placer gold?

6. Is free gold always considered placer gold?

Thank you to all who help me answer these questions.

Definition clarification:What is a correct definition on a Lode mining claim?What is a correct definition of a Placer mining claim?It would seem that the answer is easy and straight forward but consider this:If I have a lode claim that covers some dry river wash and an adjoining hillside and someone else files a placer claim over my Lode claim;1. What area can they legally work?2. Can they work any land in my claim if "I was there first"?3. Can I state that the fine gold, 200 mesh minus fine, in the dry river wash is gold that washed off of the hillside and has come from a lode ore body and therefore is considered lode, even if it is in the dry river wash.4. Can the new comer go up on the hillside and work the soil, without crushing anything, and claim that they are capturing the 200 mesh minus gold therefor they have placer mining rights on my lode claim?5. When can free gold in lode mining claim area be considered placer gold?6. Is free gold always considered placer gold?Thank you to all who help me answer these questions.

Edited by FreeGoldFanatic
Got the bug likes this

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I would suggest you get a copy of Mineral Law by Terry S. Maley.

At least you could look up precedent court decisions that may help

to shed light on some of your questions.

rjcjid likes this

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Definition clarification:What is a correct definition on a Lode mining claim?What is a correct definition of a Placer mining claim?It would seem that the answer is easy and straight forward but consider this:If I have a lode claim that covers some dry river wash and an adjoining hillside and someone else files a placer claim over my Lode claim;1. What area can they legally work?2. Can they work any land in my claim if "I was there first"?3. Can I state that the fine gold, 200 mesh minus fine, in the dry river wash is gold that washed off of the hillside and has come from a lode ore body and therefore is considered lode, even if it is in the dry river wash.4. Can the new comer go up on the hillside and work the soil, without crushing anything, and claim that they are capturing the 200 mesh minus gold therefor they have placer mining rights on my lode claim?5. When can free gold in lode mining claim area be considered placer gold?6. Is free gold always considered placer gold?Thank you to all who help me answer these questions.

Good luck.

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Get the mineral law book mentioned by Chickenminer. It will tell you that case law has decided that one cannot stake placer over existing lode or lode over existing placer without the permission of the underlying claim owner. People can come onto your claims for fishing, camping, hiking, etc. No one can come onto your claims to extract minerals - that is called mineral entry. Staking claims is also mineral entry.

 

You will note that big mining companies with lawyers on staff do not stake double claims - placer over lodes, etc. That tells you what you need to know if it was necessary to protect your mineral rights, they would do it. 

Clay likes this

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I'm on the road this week and don't have the time to go into this question in the detail it probably deserves but I'll try to cover the basics.

 

The simplest answer to the question as to whether one type of claim can be made over another is:

 

A lode claim can, and sometimes must, be made over a placer claim but a placer claim can never be made over a perfected lode claim.

 

In Section 11 of the 1872 "An Act to promote the Development of the mining Resources of The United States" better known as the General Mining Act of 1872 we are given specific instructions as to how and why a lode claim might be placed over a placer claim:

 

SEC. 11. That where the same person, association, or corporation is in possession of a placer-claim, and also a vein or lode included within the boundaries thereof; application shall be made for a patent for the placer or lode claim, with the statement that it includes such vein or lode, and in such case (subject to the provisions of this act and the act entitled "An act to amend an act granting the right of way to ditch and canal owners over the public lands, and for other purposes," approved July eighteen hundred and seventy) a patent shall issue for the placer-claim, including such vein or lode, upon the payment of five dollars per acre for such vein or lode claim, and twenty-five feet of surface on each side thereof. The remainder of the placer-claim, or any placer-claim not embracing any vein or lode claim, shall be paid for at the rate of two dollars and fifty cents per acre, together with all costs of proceedings; and where a vein or lode, such as is described in the second section of this act, is known to exist within the boundaries of a placer-claim, all application for a patent for such placer-claim which does not include an application for the vein or lode claim shall be construed as a conclusive declaration that the claimant of the placer-claim has no right of possession but where the existence of a vein or lode in a placer-claim is not known, a patent for the placer-claim shall convey all valuable mineral and other deposits within the boundaries thereof.

 

This is just one of the requirements to achieve a "perfected" mining claim that gives you more than the rights to possession and the exclusive right to explore for valuable minerals. Don't be fooled by the "Patent" portion of the verbiage. Although the funding of mineral patent application processing has been suspended the requirements for a perfected claim are still contained in the laws to obtain patent. Perfected claims are still possible and are the only claims that are valid against a government "taking".

 

If you discover mineral in place on your placer claim it would be prudent to follow the wording and the intent  found in the mineral location laws.

 

As I wrote in the beginning this is the "simple" answer. If your placer claim is unperfected  you might well consider the ramifications of allowing another man to prospect your claim with your knowledge and permission. Non-adverse possession is just as valid under the law as an original claim when the possession involves mineral in place discovered on a placer claim.

 

There are a lot more permutations possible than my simple answer above but that should give you a start in your research of the laws regarding valid over claims.

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Clay,

  You've brought up a point here that I would love to delve more into

when you get back home.

 That is the definition of the term "perfected',  pertaining to mining claims.

 

It was my understanding a person that makes a valid discovery, stakes a

proper claim and records according to the law, has a "perfected" claim.

 

 Now, we throw this into the arena of all the complicated land status'

the the term "valid existing rights" comes up.

 

 We get a real soup here when a 1998 BLM solicitors opinion is

no claim is "perfected" until it has gone to patent. Plus there is a

difference between "valid existing rights" and "valid existing claims".

 

 More on this as it relates to BLM if you get the time .....

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Thanks for your patience Dick. What I was referring to was the common misunderstanding of the nature of the two distinct grants as restated in Section 1 of the 1872 Mining Act. These are commonly misunderstood to be a single grant accomplished through the Act itself. Let's look a little closer at the actual wording I'm referring to:

 

That all valuable mineral deposits in lands belonging to the United States, both surveyed and unsurveyed, are hereby declared to be free and open to exploration and purchase, and that the lands in which they are found to occupation and purchase

 

The first Grant contains the right to explore for valuable mineral deposits and the second Grant contains the right to occupy those valuable mineral lands.

 

Neither of these Grants are complete as presented. Each must be earned by completing the retained requirements contained in the 1872, 1870 and 1866 mining Acts as well as compliance with the intent of the 1862 Homestead Act. Mineral lands in and of themselves do not provide a granted right.

 

To be a little more clear the courts consistently separate these two grants into a possessory right against other prospectors exploration or removal of the minerals contained in a valid location and the title rights held in trust through the Congress.

 

Big difference there when it comes to Congressional actions regarding title whether it be through legislation or agency action. A claim location may be perfected against other prospectors by following the laws of location. However discovery and perfection of a discovery as against the fee of the U.S. is an entirely different matter. The Courts have always set a very high standard for "perfection" when it comes to actual title to the land. Indeed title is required in absolute form if not deed to prove a "taking" defense against government action.

 

I'm sure you know of the "Prudent man" standard and it's subset the "Marketability test". Consider the "perfected" claim regarding marketability after the crash of the valuable mineral's monetary value in the real market. "Perfected" discoveries can go out the door in this situation and the locator could, and often does, find himself once again in the position of only a senior locator against other subsequent locations. Hardly "perfected" as if it were already patented.

 

Add to that scenario already exhausted proven deposits, changes in access or transportation costs, shrinking local markets etc. and you can see why the mineral examiners and the courts are reluctant to proclaim a truly "perfected" location that has not yet been patented.

 

Add in the fact that very few locators today could pony up on the proof required for a perfected discovery should a mineral challenge be issued and we find ourselves in the present position. A bunch of distressed "miners" who have lost the skills and knowledge to defend our mineral discoveries against government actions. We cry "takings" yet fail to understand that to defend against those takings we must produce much more than a location notice and some evidence there are some valuable minerals present.

 

The mining Acts themselves provide us with all the requirements to achieve a perfected discovery and the courts have guided us in the proper understanding of the forms of proof of those discoveries should we be ready to proceed with our perfected claims yet many still rely on myth or a single quote from a Supreme Court decision.

 

I'm not really very concerned with any Solicitor General's opinions. They are neither law nor regulation. They tend to change as fast as the management teams they support. I'm not sure exactly which opinion you are referring to Dick but I'd just about bet it was reversed within four years of it's issue - or it was only referential and not dispositive of agency action. Such is the nature of "opinion" when the executive changes course every few years and his administrators are employed at will.

 

Perfected claims are still possible and your description of a "perfected" claim fits very well with the possessory aspect of the grants. If you have amassed the experience, knowledge and verifiable documented facts about your location's deposit to sustain a mineral examination your description may well rise to a location that you have "perfected" to the full letter and intent of both of those grants. In which case you are in the minority of claim locators and I congratulate you on your hard work and diligence. My comment was directed to those who feel that a simple discovery and location protects them from a taking.

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Freegold, I remember there being a couple articles in the CMJ in 1982 that dealt with the problem. Perhaps Google or Chris can give you a lead to them. Den

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Clay...

  Really appreciate the insight. This needs more thought.

I can't see how there are degrees of "perfected" claims!

 Rather than side-track this thread any more maybe

I will start a new one on the subject.

 

 Thanks again!

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I understand your confusion Dick. "Common" knowledge would tell you otherwise but the law is very familiar with the concept of the multiple grants and the differing requirements for their perfection. I have many other examples but this one is pretty straightforward in it's explanation.

 
Andrew L. Freese, 2D v. the United States., 639 F.2d 754 (Fed. Cir. 1981)

cites omitted in the following text

 

It is a matter beyond dispute that federal mining claims are "private property" enjoying the protection of the fifth amendment...

 

The case before us, however, does not present such facts. Instead, all of plaintiff's "valid existing rights" in his mining claims are expressly recognized and preserved by the Sawtooth Act. His rights of use, enjoyment and disposition in his unpatented mining claims remain undiminished...

 

Plaintiff's argument rests upon the two following propositions:

 

1) that his right to the issuance of a patent upon each of his mining claims vested as soon as he completed the discovery and location of each claim,

 

and

 

2) that, as a consequence, he has suffered an unconstitutional divestment of his vested rights through the denial of his ability to obtain patents upon his claims.

 

Plaintiff is correct in his assumption that the divestment of a vested right to a patent is tantamount to divestment of the patent itself, i. e., a divestment of "property". The flaw in plaintiff's argument, however, inheres in his view that he has a vested right to the issuance of patents.

 

The law is well-settled that this vested right does not arise until there has been full compliance with the extensive procedures set forth in the federal mining laws for the obtaining of a patent.  In this case, plaintiff had not yet taken the first step towards obtaining patents upon any of his mining claims when the Sawtooth Act intervened on August 22, 1972.

 

Notice the first step comment from the court?

 

Although the funding for the processing of mineral patents has been suspended every two years since 1994 there is no prohibition on completing the requirements for perfecting your claim in anticipation of patent. Even mineral surveys can still be accomplished in the interest of a full completion of the required acts of perfection of one's discovery.

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Thank you to all of you who have answered,especially Clay.  You put effort into responding and I appreciate that.

 

Fortunately my questions were hypothetical based on my intent to claim some real land.  I want to set up the claims to the best of my advantage and protection. I am not in a legal conflict but want to be prepared in case I must be.

 

You have given me helpful information, legal terms and ideas that I now will study.  It is very important that I do this right.  It is a large site and the potential is huge.

 

Thank you again

 

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That's an interesting observation about placer claims Geowizard.

 

Is your assumption about "mining companies" related to your experience with Alaska State claims?

 

In our experience mapping claims in the Western States there are very few placer claims made by juniors or major mining companies. I can think of only two in the State of Arizona. Perhaps there is a different custom in Alaska or the practice varies by region?

 

One of the mining companies making placer claims in Arizona is the Liberty Belle group near Quartzsite. Many of you may know this as the Canadian Edmonton Oilers scandal. That "claimant" was just convicted of securities fraud and sentenced to five years in prison and a 5+ million dollar fine.

 

The other is a junior who made about 8% of their claims in the Vulture as placers because, by their own account, there was too much overburden to support a lode claim. They will be making lode claims there when, and if, their drilling project bears fruit.

 

All of the majors mining, or in the process of permitting to mine, on public land in Arizona are located on lode claims. Of course that's just our knowledge of mining in the Arizona. Where we have mapped claims elsewhere in the West we have encountered the same situation.

 

Considering that lode claims outnumber placer claims in the US by a margin of more than 10 to 1* I'm inclined to believe that the vast majority of "mining companies" in the American West do indeed locate lode claims as opposed to placer claims.

 

It would be interesting to hear the experiences of miners from other areas. I suspect we will find that placer claims are made in areas where the deposits are predominately placer in nature and lode claims are made where an exposure of veins or lodes of quartz containing valuable minerals in place are discovered, no matter which type of claim is believed to be superior for other reasons.

 

* In 2011 the BLM estimated there were a total of ~375,958 Active mining claims of which ~35,000 were placer. (Federal Register 7/27/2012)

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I'm a little shocked by that fact => "......lode claims outnumber placer claims in the US by a margin of more than 10 to 1." Anyone else find that suprising?

Thanks Clay

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You are welcome JR BOI.

 

We map about 1200 square miles of existing claims each year and the preponderance of lode claims is par for the course. I think that can be attributed to several realities of mining. I'll outline a few of the more obvious ones.

 

1. Placers tend to be less common and contain fewer mineable minerals than their sources. Early gold prospectors often used the placer "float" patterns to find the gold lode source. Other minerals are not usually amenable to natural placer concentration. Most minerals mined are not gold, platinum or tungsten. Asbestos, copper, lead, zinc and most of the valuable minerals are rarely if ever found concentrated in placer form.

 

2. Lode sources have a much better chance of paying off with a paper investor than placers. Historically and today the big money is found in hard rock deposits. The little bits that have eroded out of the lode and formed placers can be a blessing for the small miner with limited funds, tools, experience and funding but the payoff tends to be short term for larger organizations.

 

3. The "Association" legal structure needed to hold large placers does not fit well with corporate mining stock investment companies. Add in the possibility of locating a lode over a valid placer but not the possibility of locating a placer over a valid lode and risk management (insurance) dictates the greater legal security of a lode.

 

Despite all of the above, the implications of making a claim either a lode or a placer location based on anything but the nature of the deposit could be considered a poor choice of standards. If the time ever comes to prove up the nature of your mineral claims the choice of lode or placer location based on anything other than the nature of the deposit can lead to a fail even though marketable valuable minerals are present.

 

As the Supreme Court ruled in 1920:
 

 

COLE et al. v. RALPH

 

While the two kinds of location—lode and placer—differ in some respects,  a discovery within the limits of the claim is equally essential to both. But to sustain a lode location the discovery must be of a vein or lode of rock in place bearing valuable mineral, and to sustain a placer location it must be of some other form of valuable mineral deposit, one such being scattered particles of gold found in the softer covering of the earth. A placer discovery will not sustain a lode location, nor a lode discovery a placer location.

 

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I imagine anyone who made 1200 square miles of lode claims would be broke long before any mineral examination would reveal the nature of their folly. :)

 

But assuming your hypothetical mineral examination of 1200 square miles...

 

Each 10 acres of a placer claim must be proven to be mineral in character to survive a mineral examination.

That would be 76,800 proofs of mineral character in 12,000 square miles of placer claims.

 

A full size lode claim is 20.66 acres and requires a single point discovery and only one locator.

Thus 37,173 proofs of mineral discovery would be required in 12,000 square miles of lode claims.

 

Of course neither would determine which type of claim is appropriate. That is always left up to the nature of the deposit discovered - not the locator.

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Applying simple logic...

 

If lode claims are placed first, then it is possible that a rival "placer" claimant could place placer claims over a buried lode.  

 

- Geowizard

 

Oh my! Where on earth would you get such an idea Geowizard?

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Are you suggesting that your idea that placer claims can be made over lode claims comes from some law known to you? Yet you refrain from sharing this knowledge?

 

I have no problem with citing the law of the land. Being this is a Republic the law is by and for the people. There are no secret laws in a Republic and it is the right and duty of the citizens of the republic to know and discuss the law.

 

The 1872 Mining Act Section 3:

That the locators of all mining locations heretofore made, or which shall hereafter be made, on any mineral veln, lode, or ledge, situated on the public domain, their heirs and assigns, where no adverse claim exists at the passage of this act, so long as they comply with the laws of the United States, and with State, territorial, and local regulations not in conflict with said laws of the United States governing their possessory title, shall have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations, and of all veins, lodes, and ledges throughout their entire depth

 

I've already shared one of the many Supreme Court decisions that firmly and consistently state that any valid location has an exclusive right to the locatable minerals within. It's a very old principle of law that the possessory interest of a mineral locator is valid against subsequent locators. This principle is much older than the 1872 Act.

 

Here is the total text of the earlier 1865 Mining Act stating the very same principle:

That no possessory action between individuals in any of the courts of the United States for the recovery of any mining title, or for damages to any such title, shall be affected by the fact that the paramount title to the land on which such mines are, is in the United States, but each case shall be adjudged by the law of possession.

 

This is well established law. If you, or anyone else, believes otherwise it would be incumbent on you as Citizen's of a Republic to correct my cites on this very public forum. We all have a right to know and understand the law.

 

I hope you will contribute what you may to this discussion of the principle laws governing mineral locations.

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I'm a little shocked by that fact => "......lode claims outnumber placer claims in the US by a margin of more than 10 to 1." Anyone else find that suprising?

Thanks Clay

Here in New Mexico the norm is for the large mining companies to blanket large areas with lode claims.

JR BOI likes this

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"Applying simple logic...

 

Exploration of mineralized outcrops and exposed rock has reached a point to date that it is safe to assume that all exposures have been prospected, sampled and analyzed. Spanish explorers, immigrants, even cavalry troops knew the value of gold and silver and they scouted every exposure and outcrop. That was before the second round and third round of prospectors seeking precious metals.

 

So, with that in mind, modern exploration is taking prospectors to hidden deposits that are buried beneath alluvial sediments. The logical claimant would place a placer claim that covers the alluvium. The alluvium can be methodically sampled to define the approximate location of a buried lode. Other potentially rival "lode" claimants cannot make a valid discovery without trespassing upon the placer.  

 

If lode claims are placed first, then it is possible that a rival "placer" claimant could place placer claims over a buried lode.  

 

- Geowizard-"

[end quote]

 

Placer claims have been placed over lode claims when it it evident
that no discovery was made on the lode claim. Purely speculation on the
part of the lode claimants that a vein may be there. If I understand
correctly, a discovery must be made to file a claim.

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