CHAPTER 7 EXAMINATION OF TITLE TO UNPATENTED MINING CLAIMS
| Jurisdiction | United States |
(Feb 1992)
EXAMINATION OF TITLE TO UNPATENTED MINING CLAIMS
Parsons Betile & Lafimer
Salt Lake City, Utah
TABLE OF CONTENTS
Page
1. INTRODUCTION
2. UNIQUE NATURE OF UNPATENTED MINING CLAIMS
a. TYPES OF CLAIMS; INITIATION OF TITLE
(i) Lode and Placer Claims
Locatable Minerals
Discovery
Pedis Possessio
Possessory Right
(ii) Mill Sites
(iii) Tunnel Sites
(iv) Miscellaneous
Qualified Locator
Extralateral Rights
Association Placer Claims
Adverse Possession
Amendments and Relocations
(v) Importance of Surface Inspection
b. RECORDS TO BE SEARCHED
(i) BLM Records
(ii) County Records
(iii) State Records
3. LAND OPEN TO LOCATION
a. PATENTS; OTHER SEGREGATIVE ENTRIES
(i) Effect of Entries
(ii) Determination of Effective Date
b. WITHDRAWALS
c. CLASSIFICATIONS
d. STATE GRANTS
e. CONFLICTING CLAIMS
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4. RECORD EVIDENCE OF A VALID LOCATION
a. GENERAL FEDERAL AND STATE REQUIREMENTS
(i) Federal Requirements—Mining Law of 1872
(ii) State Requirements
Certificates of Location
Discovery Work
Mill Sites and Tunnel Sites
Consequences of Defective Certificates
b. FLPMA REQUIREMENTS
(i) General
(ii) When Filing is Excused
(iii) Curable Defects
(iv) Proper Form
(v) Timely Filed
(vi) Fees
(vii) Transfers of Interest
5. PROPER MAINTENANCE—ASSESSMENT WORK
a. GENERAL FEDERAL AND STATE REQUIREMENTS
(i) Federal Requirements—Mining Law of 1872
Work Which Satisfies Obligation
Group Assessment Work
Suspension and Deferment
Effect of Non-Compliance
(ii) State Requirements
b. FLPMA REQUIREMENTS
(i) General
(ii) When Filing is Excused
(iii) Curable Defects
(iv) Proper Form
(v) Place of Filing
(vi) Timely Filed
(vii) Claims Filed Twice
(viii) Fees
6. EFFECTS OF PROPOSED CHANGES TO THE MINING LAWS
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1. INTRODUCTION.
In the mining business, title to the mineral property is examined most frequently in connection with project financings or large acquisitions involving millions of dollars. Unlike the oil and gas business, with its drilling and division order title opinions, mining title reports or opinions generally are not prepared each time exploration activities are undertaken or mineralization is encountered. Indeed, it is not uncommon for a party to acquire an interest in unpatented mining claims through a lease or joint venture and commit to spend substantial sums of money to explore or develop the claims without obtaining a title opinion.
Because mining claims1 are real property, the issues and problems encountered in examining title to mining claims are, in many respects, the same as those encountered in examining title to other types of property. However, other issues unique to mining claims must also be examined through record searches and addressed in the title report. These issues are:
— Have the claims been located on land open for mineral entry?
— Were the claims properly located?
— Have the claims been properly maintained?
Matters ordinarily included in all title reports or opinions, such as identification of the property examined, the materials examined, and the current ownership of the property, are included in a mining title report. Likewise, defects in the chain of title must be reported as in other types of mineral title opinions. These matters may be supplemented in a mining title report by qualifications, limitations and requirements unique to the nature of the property covered. For example, a qualification or limitation regarding the nature of the rights to possess and use the surface and minerals may be appropriate. In addition, for a title report prepared without the benefit of a surface inspection, which is critical to the determination of the validity of mining claims, limitations and qualifications should be included in the report about facts which might otherwise be revealed by a surface inspection and about the proper location and maintenance of the claims. Additional requirements may be appropriate for claim conflicts, defects in the certificates of location,
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defects in the assessment work performed, and problems with the filings required by Section 314 of the Federal Land Policy and Management Act of 1976 ("FLPMA").2
The goal of the author of this paper is to alert the title examiner to the particular issues that may be encountered in examining title to mining claims and that should be addressed in the title report. To provide the title examiner with useful background, this paper first describes the nature of unpatented mining claims and the records to be searched in a title examination. Section 3 of this paper addresses the issue of whether the land on which the mining claims are located is open to location. Section 4 addresses the record evidence of a valid location which, when considered with the discussion in Section 2.a below, provides the material useful in resolving the issue of whether the mining claims have been properly located. Section 5 discusses the issue of whether the claims have been properly maintained. Sections 4 and 5 also discuss in considerable detail the filings required by FLPMA, which are essential to the validity of mining claims. Finally, Section 6 considers the efforts under way to change the mining laws and how such change will impact the examination of title to mining claims.
2. UNIQUE NATURE OF UNPATENTED MINING CLAIMS.
The examination of title to mining claims and the preparation of a title report require an understanding of the different kinds of mining claims, the manner in which title to claims is acquired, and other unique aspects of mining claims. In addition, an understanding of the way records typically encountered in title examination affect the examination of title to mining claims will be useful.
a. TYPES OF CLAIMS; INITIATION OF TITLE.
Assume a locator has identified an area which may contain a mineral deposit and desires to further evaluate the area through mapping, sampling and, possibly, drilling. In order to obtain the right to evaluate the area, the locator establishes a land position over the area of interest by locating mining claims.3 As long as the land is open to location, the locations are properly made, a discovery of a valuable mineral deposit is made on each claim, the claims are properly maintained, and filings required by FLPMA are made, the locator has a valid interest in federal land. If a discovery is not immediately made, the locator's interest may be protected against entries by others if the locator is diligently attempting to make a discovery. No application to or approval by the Bureau of Land Management (the "BLM") is required to acquire the interest.
This system of self-initiation of rights is in contrast with other uses of federal land, such as oil and gas exploration and development, where rights are initiated only upon approval or grant by the federal government.4 This system permits a locator to be more responsive to market conditions without the time delays, frustrations and uncertainties associated with the discretionary grant system. It is a self-policing system which relieves the BLM of certain land management responsibilities. Except where FLPMA filings are at issue, the federal government is rarely called upon to challenge the validity of a location.5
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The system of self-initiation is applicable to each type of mining claim, although the method of initiating title varies depending on the type of claim.
(i) Lode and Placer Claims. Lode claims are mining claims that are based upon "veins or lodes of quartz or other rock" held in place by the adjoining rock.6 The statute limits lode claims to a maximum of 1500 feet along the length of the claim and 300 feet on either side of the middle of the vein, with parallel end lines.7 Deviations in the length or width are frequently caused by the nature of the vein, topographical features or claim conflicts. Additionally, state law or mining district rules in effect at the time of location may impose a limitation on the claim's dimensions.8 The Mining Law of 1872 essentially contemplates a rectangle or parallelogram of approximately 20 acres.9 Failure to have parallel end lines will not invalidate the claim, but will affect extralateral rights, which are discussed in Section 2.a (iv) below.10
A placer claim is a mining claim located for a deposit with defined boundaries that contains minerals not fixed in rock, but loose in the earth, sand or gravel.11 The statute defines a placer deposit as any deposit which is not a lode or vein.12 The maximum size of an individual placer claim is twenty acres,13 and it should "conform as near as practicable" to the survey.14 Elongated, "shoestring" shaped placer claims are not allowed.15
Determining whether a mining claim has been properly characterized as a lode claim or a placer claim is critical. A lode claim covering a placer deposit is invalid, and a placer claim staked for a lode or vein is invalid.16 Often the determination of whether the mining claim has been properly characterized as lode or placer is beyond the scope of the title report or the title examiner's abilities and is handled by a qualification in the title report that the characterization is assumed accurate. The locator may double-stake a particularly troublesome deposit, creating additional issues for the title examiner to resolve.17
Under the Mining Law of 1872, the specific acts necessary to initiate a location of a lode or placer claim include locating a locatable mineral of sufficient quality and quantity to establish a discovery18 and distinctly marking the location so the boundaries can be traced.19 Federal regulations also require the staking of the corners of the claim, the posting of a notice of location, and compliance with state law, such as performance of discovery work or recordation of...
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