How Trump Could Revitalize the Mining Industry

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It occurred to me that there are probably investors and mining individuals who have no idea of US mining law or the history of the government’s involvement in mining.  Over the years, the US mining industry has been restricted in mine development and exploration due to increased government involvement in the form of mineral land withdrawals (wilderness areas), environmental restrictions (sage grouse habitat), added claim holding costs and BLM exploration regulations (5-acre land disturbance). As we provide the highlights of US Mining history, you will see the progression of federal intrusion and the strangle-hold on our industry.  However, we are hopeful that President-elect Donald Trump’s administration will review and relax these stifling burdens therefore revitalizing gold exploration and production.

 

A Good Beginning. (Pre-1872)

Before 1872, the US government encouraged mining. In the United States, the mining practices started with the California Gold Rush of 1849.  The miners, in each mining camp, made up their own rules and chose to essentially adopt Mexican mining law, then in effect in California.  The Mexican law gave the right to mine to the first one to discover the mineral deposit and begin mining it.  The area that could be claimed by one person was limited to that which could be mined by a single individual or a small group.

At this time in history, no federal laws governed the acquisition of mining rights, and the government’s policy was to encourage transfers of public land to private citizens if they could put it to appropriate use.

 

The Feds establish the Mining Law of 1872, but the states retain control.

The major US federal law governing locatable minerals is the Mining Law of 1872 (passed May 10, 1872), which declared all valuable mineral deposits in lands belonging to the United States to be free and open to exploration and purchase.  This law provides citizens of the United States the opportunity to explore for, discover, and purchase certain valuable mineral deposits on public domain.

Under the 1872 Law, the federal government encouraged local administrative control and accepted the state’s location and recording requirements.  States were allowed to impose their requirements for location, notice and discovery work, but they were not uniform.

The government dictated the following:

  • Size: The 1872 Act defined the maximum amount of land for a single claim.  A single placer claim could be no larger than 20 acres and a single lode claim could not exceed 1,500 feet in length along the vein or lode and could not exceed more than 300 feet on each side of the middle of the vein at the surface. This size was adequate for a mineral deposit.
  •  Recording: Miners were required to record discovery and claim to an unpatented title in the recorder’s office for the county of the state where the discovery was made.  This process was simple and only required one set of paperwork to the County.
  •  Fee:  To maintain the claim, the miner(s) had to do at least $100 of “assessment work” annually and file an affidavit to that effect in the same county courthouse.  Failure to perform the annual assessment work opened a claim for location by other miners.  Note:  The idea was good as the assessment work was supposed to help the claim owner advance his claim towards a mineral deposit.  Unfortunately, many claim owners filed “paper assessment work” and did no physical labor on their claims.
  •  Patented claim:  Miners may acquire outright title both to minerals and the land by obtaining a mineral patent, at a per-acre cost of $2.50-$5.00.  Producers do not pay royalty taxes on the minerals taken from federal lands.  Again, this was a good idea because now the miners did not have to pay the annual assessment work as described above.

 

The Government takes over control of mining claims from the states.

The Federal Land Policy and Management Act of 1976 (FLPMA) did not amend the 1872 law but did affect the recordation and maintenance of mining claims.

  • Recording:  Persons holding existing claims were required to record their claims with the Bureau of Land Management (BLM) by October 1979, and all new claims were required to be recorded with the BLM.  This was burdensome to our industry as now we have double-paperwork and double-fees to both the counties and the BLM.
  •  Fee:  The fee required under the 1872 Mining Law was not changed.  Thankfully, it remained at $100/claim for annual assessment work.

The US Government stops the patented claim procedure.

The Interior and Related Agencies Appropriation Act of 1994 placed a moratorium on new mineral patent applications.  The moratorium went into effect on October 1, 1994 and has been extended to-date.  Thus, an individual must continually pay for assessment work and/or holding costs on their claims.

 

The US Government strangles the Mining Industry and restricts exploration activities with increased claim fee requirements.

1993 – 2004

Enacted in 1993, a “one-time” location fee of $25/claim and an annual maintenance fee of $100/claim was established. For example, an individual holding 100 claims would pay $12,500 (per year!) to the U.S. Department of Interior – BLM.

2004 – 2009

The BLM continues to increase the “one-time” location claim fee.  The BLM increased the amount of the location and maintenance fees to $30/claim and $125/claim, respectively.  An individual holding 100 claims would pay $15,500 to the BLM (per year!)

2009 – 2014

The BLM increases the amount of the location and maintenance fees to $34/claim and $140/claim, respectively.  An individual holding 100 claims would pay $17,400 to the BLM (per year!).  

2014 – present – Fees our out of control!

The BLM new current fees now include: location fee of $37/claim or site, a processing fee of $20/claim and a maintenance fee of $155 for each lode mining claim, mill site or tunnel site (total of $212/claim), and $155 for each 20 acres or portion thereof for each placer mining claim.  An individual holding 100 claims will pay $21,200 to the BLM (per year!)

Next Potential Increase? In my opinion, with the current economic situation, we do not need any more increases.

 

We will soon have a new President who has declared a desire to revitalize US-based businesses; exploration and mining companies are major opportunities.  As I have tried to indicate by reviewing the US government’s increasing involvement in mining, I anticipate that President-elect Donald Trump will be proactive in revitalizing the US mining industry by:

  • critically reviewing large land withdrawals from mineral entry,
  • reducing environmental restrictions for new mine development,
  • rejecting any proposal on a minerals royalty tax,
  • reviewing BLM requirements on land disturbance for exploration permits, and
  • lowering claim holding costs.

With a business-oriented president, now is the time to aggressively explore, discover and develop mines in the United States.

 

Atoka Gold is poised to take advantage of these new opportunities.  We are a small, privately held Gold Corporation with two advanced, Greenfields gold properties located along one of the major gold belts of the world – The Battle Mountain-Eureka Gold Belt.  Our two properties are located in the “Heart of Gold Country,” North-Central Nevada, USA.  We are actively seeking investors or joint exploration venture funding to continue exploration activities.  Please see our website:  www.atokagold.com or contact: Arthur R. Leger, Arthur@atokagold.com for more information.

 

Written by Arthur R. Leger, V.P. Exploration, Atoka Gold and edited by Lauren L. Breslin, Director of Communications, Atoka Gold.

“On coming to the house, they saw the child with his mother Mary …Then they opened their treasures and presented him with gifts of gold, and of incense and myrrh.” Matthew 2:11