MINING

This page primarily focuses on metallurgical mining, though many of the terms, processes, and concepts are the same within the non-metallurgical extraction industry.  These other industry sectors include gas and oil production, non-metallic mining, and aggregate production.  Mining: Water, Power, Rocks, Environment, Society and Labor.

California Mining

Nevada Mining

 I.        DISCOVERY

1.0  Mining Law of 1872 May 10, 1872 (17 Stat. 91, 30 U.S.C. 22 -54).

1.1  Discovery of Mineral Deposit,
1.2  Locating and Recording Mining Claims
1.3  Site Development
1.4  Annual Maintenance

1.5  Mineral Patents.

1.6  Other Mining Laws and Regulations

An individual may exercise their fundamental and unalienable right to mine minerals on federally owned land by staking a claim to and on the land.  Upon establishing claim, the individual must maintain the claim to exercise and keep rights for beneficial use of the land and property assets.  The fee-simple title remains with the government. 

Before the Federal land Policy and Management Act of 1976 (FLMPA) the claimant had the right to extract minerals and use the surface unimpaired and unqualified. However, the land management agencies, as backed by courts, currently only allow the claimant use of surface as necessary to develop the claim according to provisions of surface management regulations (36 CFR 228, 3209, et. al) promulgated by the land management agency.  This claim remains a taxable private property that can be leased or sold.  When abandonment of the claim, or otherwise defaulted (eminent domain, unpaid taxes, and similar) the property rights revert to federal control. 

1.1       What is a Valuable Mineral Deposit

The term Valuable Mineral Deposit is contained, though not described or defined, in the federal statutes.  As such, the government has since developed two definitions.  The first is the economic definition which proscribes to the concept of an economic ore body.  Further development of the concept in case law established the "prudent man rule" in 1894, Castle v.Womble, 19 LD 455 (1894), which provided"...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 statutes have been met."

The Supreme Court approved a parallel concept, the marketability test, in U.S. v. Coleman, 290 US 602-603 (1968) which requires that the claimant show a reasonable prospect of selling minerals from a claim – where a profit is a reasonable likelihood.

1.2       Locating and Recording Claims

The following site does a great job detailing the process of striking a claim

http://www.theprospector.com/html/howtostakeclaims.html

Mining claims

Mineral Leasing Act of 1920 removed coal, oil, oil shale and gas, among other minerals (30 USC §§81-287) and the Act of July 23, 1955 (30 USC §612(b)) removed sand, stone, and gravel from the Mining Law of 1872.  Further, in 1913 in Hughes v. Florida, the court determined that as a building material, shell rock is not a locatable mineral under the Mining Law of 1872.   

•               Locating a load claim

•                   Locating a placer claim

•                   Locating a mill site

•                  Tunnel right

•                  Amending/patenting mining claims

1.3       Site Development

1.3.1  Construction of Access and Haul Roads, Rail Spurs and Ports

1.3.2  Construction of Mining Buildings and Utilities

Some miners need to build homes, recreation, and stores for their workers, especially when located way out in the boonies of Nevada or Australia.

1.3.3  Construction of Beneficiation Facilities

Construction of trams, pipelines, conveyances, leach pads, and processing mills and ponds.

1.4             1.4    Annual Maintenance

Major recent deliberations regarding the requirements for annual surface work per (30 U.S.C. 28) were decided via UNITED STATES v. LOCKE, [471 U.S. 84 (1985)] and are contained here: http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=us&vol=471&invol=84

1.5       Mineral Patents.

Patented Lands

Through the patent process, a claimant may buy out the fee-simple interest from the government entirely.  The owner of this patented property may abandon rights to the land. For patented rights, the land does not revert to the government but remains private land.  These private lands become ‘inholdings’ surrounded by Federal Land Management Agency (FLMA) land.  New owners of such lands have rights to both access and use of the land, though the FLMA typically impedes such rights.

Unpatented Lands Reversion to Federal Control

Unpatented and abandoned mine/mill sites entirely on federal lands may revert to federal control per the establishing and implementing regulations of the federal land management agency having ‘jurisdiction, custody or control of the site. 

1.6       Law and Regulations

Definition of mining and extraction: The physical and mechanical methods such as blasting and crushing of rock than enables miners to concentrate metal-bearing ores.

The following laws and regulations govern not only the mineral extraction and mining activities but all the other ancillary support activities that must also be conducted such as social and environmental work, permitting, and bonding.

The godfather of all resource activities is the Mining Act of 1872.  This United States federal law authorizes and governs prospecting and mining for hard rock minerals such as gold and silver on publicly owned lands.  Various provisos apply [http://library.findlaw.com/1999/Jan/1/241491.html] though extraction can generally proceed without any compensation provided to taxpayers should activities meet and stay within certain thresholds and parameters.  No royalties are collected by the Federal Government.  It codifies the system of acquiring mining claims on public land that was formed in California and Nevada in the late 1840s, 1850s, and 1860s, during the California gold rush.

Primary Laws and Regulations Governing Mining

Abandoned mine reclamation funds 30 CFR Part 872.  The Office of Surface Mining provides some information here:

http://www.osmre.gov/federalregister/44fr67057.txt

Mining has always been one of the more regulated industries in the US.  Parts of the following laws and regulation govern mining today:

• Clean Air Act (42 U.S.C. 7401 et seq.)

• Clean Water Act (33 U.S.C. 1251 et seq.),

• Federal Land Policy and Management Act of 1976 (90 Stat. 2743,
  43 U.S.C. 1701 et seq.), part of which redefines claim recording procedures and provides for abandonment if the procedures are not followed.

• Forestry Act of 1897

• The Mineral Leasing Act of 1920 (which made certain nonmetallic minerals not open to claim staking)

• The Mineral Materials Act of 1947, which provides for the sale or public giveaway of certain minerals, such as sand or gravel.

• The Multiple Mineral Use Act of 1954, which provided for the development of multiple minerals on the same tracts of public land;

• The Multiple Surface Use Mining Act of 1955, which withdrew common varieties from mineral entry; and

• Mining and Mineral Policy Act of 1970.

            (Promulgated per Departmente Of Interior [DOI] Mining and Minerals Policy, 1973) 

• Mining Law of 1872 May 10, 1872 (17 Stat. 91, 30 U.S.C. 22 -54).

• USC Title 12 Chapter 2 Subchapter 1V

• National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C))

• Public land authority in 43 U.S.C,.2, 1201 and 1457

• Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), as required under 43 CFR part 3800.
   

• Rural Abandoned Mine Program 7 CFR

• Southern Nevada Public Lands Management Act

• Surface Resources Act of 1955 (69 Stat. 367, 30 U.S.C. 601-615),

• Surface Mining Control and Reclamation Act of 1975

• Gold Confiscation Act of May 21, 1933 (U.S. Treasury Act 416F)

• Unlawful Occupancy and Inclosures of Public Lands Act (43 U.S.C. 1061 et seq.)

• Comprehensive Environmental Response, Compensation and Liability Act [aka 'Superfund']

• Emergency Planning and Community Right to Know Act

• Solid Waste Disposal Act

• Safe Drinking Water Act

• Migratory Bird Treaty Act

• Toxic Substances Control Act

• Endangered Species Act

• National Historic Preservation Act

• Native American Graves Protection and Repatriation Act

• Federal Mine Safety and Health Act of 1977 (Mine Act)

Interior Department Regulations

Title 43; Chapter II - Department of Interior

http://www.access.gpo.gov/nara/cfr/waisidx_00/43cfrv2_00.html

Bureau of Land Managements (BLM's) 1980 Regulations 43 CFR part 3800,

Restrictions on Patented Land Use

http://www.nplnews.com/library/1872mininglaw/occupancy/jul161996-43cfr3715.htm

CALIFORNIA CODE OF REGULATIONS

TITLE 14. Natural Resources

Division 2. Department of Conservation

Chapter 8. Mining and Geology

Subchapter 1. State Mining and Geology Board

Article 1. Surface Mining and Reclamation Practice

NEVADA REVISED STATUES AND NEVADA ADMINISTRATIVE CODE

II. EXPLORATION

Exploration entails the prospecting, sampling, mapping, drilling and other exploratory work involved in searching for properties containing commercially viable ore.

Let’s go over each step in detail.

Goals:

Define valuable information on mineralogy, structure, alteration patterns and the controls on precious metal mineralization

NOTE: A ‘qualified person’ under the governing regulations (e.g.  Canada’s National Instrument 43-101) such as a qualified and certified geologist typically oversees exploration and development field work including drilling activities.

2.1 Prospecting/Surveying

2.2 Sampling

2.3 Mapping

2.4 Drilling

2.5 Ore Assay

2.6 Pre-Feasibility Study

2.1       Prospecting/Surveying

Prospectors find gold.  They may use many forms and techniques to discover gold deposits and ore bodies, some quite advanced and many as old as the hills themselves.]

Desk-top surveying includes review of geologic geophysical and aerial maps and previous mining locations and production values.

Field sampling may include review of previously published data and remote sensing.  Remote sensing can be accomplished through both satellite or field aerial reconnaissance.   Each ore body is comprised of minerals that have unique physical properties such as grain size and crystalline structure.  These physical properties, in turn, determine how a mineral will absorb and reflect sunlight.  Remote sensing survey's will pick up on the a properties unique absorption and reflection of light - a spectral signature.  This technique works better in certain geographic basin than others.  For instance: http://www.digistar.mb.ca/minsci/finding/remote1.htm
 

Geologists also use remote sensing as a remedial cleanup tool.  Many modern environmental remediation methods were born of the mining industry.  The same techniques first use to find the minerals in a ore are also used to find minerals released into the environment.  Here is a write-up on use of remote sensing in remediation techniques:

http://www.emporia.edu/earthsci/student/lawrence1/lawrence.htm

Surveying also includes geophysical methods such as seismic refraction which can determining the composition of material underground by inducting a shock wave and then, using sensitive geophones, recording the time it takes for that wave to bounce off a buried body of rock and return to the surface.  This technique will identify geologic formations that may provide favorable mineral targets.

2.2       Sampling

Mining is a matter of milligrams and tons.  The metal or other sought material must be present in both amounts and form that warrants setting up an operation and investing further resources.  Grades are determined by the amount of metal per volume and can be expressed as a percentage such as ounces per ton or milligrams per kilograms.  The amounts are expressed as volumes such as cubic yards or as mass, such as tons.  See Weights and Measures for additional information on measurements.

Simple surface determinations

Bulk-till sampling is a sampling protocol or process used to determine the mineralization grade of glacial till. Typically, samples are developed either via backhoe trenching or a standard reverse circulation drill rig to develop a series of soil samples from the area of glacially deposited till. The samples are then assayed under a microscope to determine particle counts.

Samples must meet standards for Precision, Accuracy, Representativeness, Comparability and Completeness (PARCC). These standards provide that the data set represents actual conditions of the media that was sampled (Precision); Provides a very close approximation of actual conditions in the media (Accuracy); Provides a true view of the overall media resource, and not just some sub-set thereof (Representativeness), can be replicated and analyzed next to other similar data sets collected for the same reasons from the same media (Comparability); and gives a full picture indication of the likely conditions that will be encountered throughout the data set and media (Completeness).

These requirements are simple in theory but extremely difficult to provide in a field sampling program.  Often numerous phases of data collection are necessary to provide that these indicators are fully met.

Metallurgical and Geotechnical Testing and Determinations

Soil science provides the basic sampling and determination methodology that miners employ first to determine if the first few feet of earth show promise that warrants exploration into deeper earth.  The Russians developed modern soil science, the Germans developed modern geologic methods, and the Americans developed modern hard rock mining determinations and technology.  (All very generally, mining goes back thousands of years, of course)

Initial Soil and Metallurgical Determinations

Plasticity, Percolation texts, compaction and density tests are typically conducted surface sampling methods that can be accomplished with minor expenditures because the samples can be collected almost directly from the surface. All soil sampling is actually on the mineral portion of the soil. The organic material, i.e. ‘duff’ (in soil science parlance the O_i, O_a,and O_e horizons) is scraped off the surface and the underlying mineral soil (in soil science parlance, the ‘A’ horizon) is collected and analyzed.

Drilling test work may follow surface tests, should surface sampling prove promising.

2.3             2.3    Mapping

Geological mapping support the intent to provide sufficient information necessary to prepare a resource estimate of gold resources.

2.4       Drilling

A proper drilling program determines the extents of the mineralization down dip and along strike.  Different drilling goals may require differing drilling techniques and methodologies.

Resource definition drilling:

Pre-feasibility

Feasibility study

Phase I Drilling

Exploration geologists use drill rigs to collect samples from cores of ore bodies beneath the surface with the intents to gather a representative samples that may determine whether further exploration is warranted.

Drill Program Design

Long-hole open stope: A method of mining involving the drilling of holes up to 90 feet long into an orebody and then blasting a slice of rock that falls into an open space. The broken rock is extracted and the resulting open chamber is not filled with supporting material.

Exploratory Shafts: The installation of a collar made of concrete and timber around the mouth of a shaft/drill hole

2.4.1  Drilling Types

Air Rotary:  This drilling method uses air pumped from a tank at the surface, down through the drilling rods and back up the circular ring to the surface; simultaneously cooling the drill bits while also keeping the borehole from collapsing inward.  The re-circulated air brings drill cuttings back to the surface.

Cone Penetrometer: Actually a direct push, rather than a drilling technology, cone penetrometers (CPTs) push rather than drill through a soil via large force exerted by a truck on the surface.  The inserted cone is able measure soil properties.

Diamond:  Drilling with a hollow bit and a diamond cutting rim produces a cylindrical core that is used for geotechnical and geological study and assays. Used in minerals exploration.

Direct Push: A surface mounted truck, using static weight and vertical force, pushes a sampling core barrel directly into the soil, collecting samples, measurements, and readings. 

Geoprobe: A direct push, rather than a drilling technology, the geoprobe can be advanced through soil using either a percussion hammer or direct force.  These rigs can be mounted on relatively small trucks, useful for initial soil sampling – especially in tight areas.

Large Diameter Boreholes: Using an auger drill with bucket, the tool ends rotates in soil, stops and raises. The cuttings are them dumped into the waste pile.

Mud Rotary: This drilling method uses a water/bentonite (clay) slurry that is pumped from a tank at the surface, down through the drilling rods, and back up the circular ring to the surface, where the slurry (mud) is recycled. This methodology both cools the drill bits while also keeping the borehole from collapsing inward.  Additionally, the circulated mud brings the drill cuttings back to the surface where they settle and then are removed (or disposed with the mud) from the slurry tank.

Percussion Drilling:  The simplest yet very effective drilling method using an engine or percussion-powered and cable-driven core and barrel sampler can be placed in almost any situation yet produce fine cuttings of 80-90% (minus 8 mesh).  These folks did a great write-up on their model:

http://www.consallen.com/forager/cable-tool/cable-tool-drilling.htm

Reverse Circulation (RC): Used in hard host rock and for deeper depth, this drilling technique produces rock chips rather than core.  The chips are forced by air to the surface and are collected for examination and analysis.  This technique is both faster and cheaper than diamond drilling.

Rotary air blast (RAB) Drilling: An air percussion reciprocating piston drives a hardened, hollow steel core with hardened tungsten or carbide bits into hard host rock.  Recirculated air pushed sampling material up along the outside of the steel rod, along the host rock.  Since RAB can drill hardened host rock, the mining industry typically used this drilling method for initial large scale sampling programs with necessary drill depths between 10 and 150 meters.

Rotosonic Drilling: A dual barrel sampler within an outer casing, encrusted with hardened carbide bits, penetrate soil through use of vibration and rotational force.

2.4.2  Drilling Methods

Condemnation Drilling

A systematic condemnation drilling program

Goal: To show there is no economically significant metal mineralization on a property. This type of drilling design typically serves one of three purposes: A) The land owner is trying to determine that cutoff grades are insufficient to continue exploration (finding the edge of the economical lode). B) The landowner is trying to utilize or transfer the lands for other purposes. C) Legal dispute over land and the holding party wants to show that the land is not as valuable as another party may claim.

Infill Drilling  Diamond drilling at shorter intervals between existing holes, used to provide greater geological detail and to help establish reserve estimates.

Developers must focus on Infill drilling, the placement of new drilling bores within areas of previously quantified resources or known previous production. Canon in the resource extraction industry provides that the best place to find gold is where you find it and the next best place is where somebody else had previously found it.

As such, new drilling programs on previously unidentified, quantified, or known production areas provides additional risk.  This additional risk provided hopeful developers with the nickname ‘wildcatters’, those looking for resources in areas not previously determined by drilling, sampling, assay and geochemical results. 

Of course, as with any venture, the riskier the venture the more profitable the potential return. Those that can find a new economically developable resource put themselves in a fine point for selling out their claim, or first rights on production.

The new potential development basin, simply because it is new and unproven, may have a hard time attracting standard potential then those production basin with proven and known production history and potential.  The greater risk, though, provides willing investors with a greater potential return on their capital.

Drilling Program Objectives

­      Determine and outline indicated and inferred mineral resources

­      Establish economic feasibility of production based upon a gross metal value per tonne cut-off.

Sometimes results are presented as Gross Equivalent Ounce. (GEO). In this case other metals are considered as a credit of gold.  For example, the ore may have 10 ounces of gold and enough copper and silver to equal the monetary value of two ounces of gold - hence the ore is rich in 12 Gross equivalent ounces.

The drill hole plan and drilling field work requires oversight of a Qualified Person.

Drill Results

Drillers report results within an initial drill program, pre-feasibility study or feasibility study.  Here is on example of how drill results are presented, as shown by Pelangio Mines, Inc., reported in June, 2006:

Table: Drill Hole Data

---------------------------------------------------------------------------------------------

HOLE         COLLAR       AZIMUTH      DIP                FINAL

NUMBER   LOCATION   (DEGREES)  (DEGREES)  DEPTH(METRES)

----------------------------------------------------------------------------------------------

PM-113       18560E         180               50                  270

                     20135N

---------------------------------------------------------------------------------------------

PM-114       18480E         180               50                  303

                    20135N

 --------------------------------------------------------------------------------------------

The following table presents results from a pre-feasibility study conducted by Golden Star at two African properties. The full results can be found at:

http://www.gsr.com/Operations/WestAfrican.asp

Note in this example showing results from the pre-feasibility study, has more information than the results provided in the table above.  The further along an exploration program goes, the higher order of information is provided.