The Prudent Man is what the mining law requires a miner to be: In order
to hold a valid claim there must be a value such that a prudent man would exert
time effort and money to bring ore to market. The Prudent Man Rule was first defined in
Castle v Womble, 19 LD 455 (1894), where the Secretary of the Interior held
that: "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." Hence the title of this blog. We will help cut through the clutter and give small and artisanal miners the understanding, knowledge and tools necessary to be successful. Our first article is a brief review of the small miner exception to Assessment fees.
Each September 1 small miners go through an annual ritual known as
assessment work. What is assessment
work? When and how did it go from being work to being a government fee?
What is assessment work?
43 CFR § 3836.12 What work qualifies as assessment work?
Assessment work includes, but is not limited to—
(a) Drilling, excavations, driving shafts and tunnels, sampling
(geochemical or bulk), road construction on or for the benefit of the mining
claim; and
(b) Geological, geochemical, and geophysical surveys.
Note that road construction and drilling and shaft driving will
probably cause you to have to file a notice and plan of operations but sampling
qualifies as casual use. You want to do casual level of assessment work because
non casual work requires a plan of operations and a financial bond be paid to
the BLM.
In addition to either geochemical or bulk sampling of minerals,
you can conduct geological, geochemical and geophysical surveys as your
assessment work.
43 CFR § 3836.13 What are geological, geochemical, or
geophysical surveys?
(a) Geological surveys are surveys of the geology of mineral
deposits. These are done by, among other things, taking mineral samples,
mapping rock units, mapping structures, and mapping mineralized zones.
(b) Geochemical surveys are surveys of the chemistry of mineral
deposits. They are done by, among other things, sampling soils, waters, and
bedrock to identify areas of anomalous mineral values and quantities that may
in turn identify mineral deposits.
(c) Geophysical surveys are surveys of the physical
characteristics of mineral deposits to measure physical differences between
rock types or physical discontinuities in geological formations. These surveys
include, among other things, magnetic and electromagnetic surveys, gravity
surveys, seismic surveys, and multispectral surveys.
These surveys were allowed by Congress as assessment work starting
in 1958
43 CFR § 3836.14 What other requirements must geological,
geochemical, or geophysical surveys meet to qualify as assessment work?
(a) Qualified experts must conduct the surveys and verify the
results in a detailed report filed in the county or recording district office
where the claim is recorded. A qualified expert is a geologist or mining
engineer qualified by education and experience to conduct geological,
geochemical, or geophysical surveys. [See this site or this site for more information on surveys that meet the requirement for assessment work]
(b) You must record the report on the surveys with BLM and the
local recording office, as provided in part 3835 of BLM regulations. This
report must set forth fully the following:
(1) The location of the work performed in relation to the point
of discovery and boundaries of the claim;
(2) The nature, extent, and cost of the work performed;
(3) The basic findings of the surveys; and
(4) The name, address, and professional background of persons
conducting the work and analyzing the data.
(c) You may not count these surveys as assessment work for more
than 2 consecutive years or for more than a total of 5 years on any one mining
claim.
(d) No survey may repeat any previous survey of the same claim
and still qualify as assessment work.
Perverting prospecting into a fee structure
Patents were the logical end game for miners wanting to mine. To
keep the process moving along the law required a miner to expend time and or
money doing assessment work. ($100 per claim per year until the claim was
patented) Failure to perform this work allowed someone else to restake and
reclaim the property. It was designed to prevent someone from merely claiming
but not working their mine. The law was written in 1872 by William Morris Stewart, a miner and lawyer who became senator from Nevada. The 1872 Mining laws were written by miners, for miners, and the laws worked.
I've seen the past, and it works...
-T.J.Hooker
Essentially any expenditure that help access or develop a claim
is assessment work. Work done to explore or find or discover a mineral
deposit is not assessment work, except survey work IS allowed since 1958. The
distinction stems from the historic patenting process and the exploration tax credits that the IRS allows miners.
Patent: the process of obtaining buying your claim from the US
and passing same from public to private property. It involves showing via
application a mineral valuation in such marketable quantities that a prudent
man would exert time effort and money to bring ore to market. The entire patent process was suspended on October 1, 1994 and no new applications are being
accepted. At that time it was expected that the 1872 Mining laws would be
scrapped and replaced with a leasing system. Thankfully, the 1872 Mining Laws
are alive and well. We are still reelin in the years!
Enter Sandman BLM
The rights acquired by locating a valid mining claim are terminable by others unless the claim is maintained. The 1872 Mining laws require that not less than $100 worth of labor be performed or improvements made each year to keep the claim closed to acquisition by other claimants.
The assessment work year commences at 12 o-clock noon local time September 1. Assessment work need not be performed during the assessment work year in which the claim is located.
What type of work will satisfy the annual labor requirements? The work must be performed in good faith and said work must tend to develop the claim and facilitate the extraction of minerals. The work should be part of developing the deposit rather than in the form of exploration work done for the discovery of a new deposit.
Note that it is the reasonable value of the labor that is considered in calculating the $100 and not necessarily the amount paid for said work. Thus work you perform on the claim is considered part of the $100 threshold even if you do not pay yourself for your labor.
Historically, assessment work used to be the only evidence a
claim was not abandoned or unworked. The notice of assessment work was filed
with the county recorder. There was no national database of mine claimants and
no requirement to pay fees other than filing fees to the county. FLPMA (the Federal
Land Policy and Management Act) changed everything in 1976.
It required that assessment work be filed with BLM. Now that
a national agency was involved with the filing requirements it became tempting to suddenly view the exertion of actual physical work to be an unwanted outcome
throughout the Mining West. An agency that was unenthusiastic about mining
suddenly decided that actually working on developing a claim was no longer
desired and assessment work became a fee to be collected from each claimant. The assessment fee was charged starting in 2001. In every nation but the United States the crown king or government
claimed ownership of mineral values.
Only in America does the law state that minerals belong to those that
find them. Suddenly the BLM was making money and charging a rental fee for each claim staked on public land.
The owner of the claim must also file with the BLM a notice of intention to hold, an affidavit of assessment work, or a copy of the detailed report concerning the performance of geologic, geochemical or geophysical surveys. The BLM filing must be made on or before Dec 30 of each year following the calendar year in which the claim is located Even though assessment work is not required in the ensuing calendar year for a claim located after Sept 1 and before Dec 31 in a given year, the BLM filing must nonetheless be made. Copies of the document must be filed in both the recorder’s office and the BLM office, and the notice must include the BLM serial number assigned to the claim.
Each of the western states in the USA has a statute prescribing the
information needed in the affidavit or “proof” of labor and the time in which
it must be filed. Six states require the affidavit to be filed within a
specified time after the closing of the assessment year: Ninety days time in
Alaska and Montana; 60 days in ID, 30 days in CA, UT and WA. Two states require
the document to be filed within a specified time after the work is completed:
60 days for WY and 20 days for OR. In NV the deadline is Nov. 1 and in AZ, CO
and NM you must file your affidavit on or before Dec 30 of the year in which
the time expires for doing the work.
A small miner exception and waiver to paying the fee is all that
remains of the original law that allows development work and sweat equity to
count in determining whether $100 per claim per year has been expended. IF you
hold less than 10 claims nationwide you can file a notice detailing what
assessment work you have performed on your claims instead of paying the fee.
Hold 10 or more claims and you cannot avoid paying an assessment fee each year
for all claims.
Assessment year
The assessment year starts September 1 of each year. Confusion
as to whether assessment work was needed in the year of discovery has led the
BLM to take advantage of the confusion and add additional fees in the first
year of claim discovery and staking.
Thus in the first year of asking a claim you owe the BLM an assessment
fee, which if holding 10 claims or less nationwide you can avoid in subsequent
years by filing a notice of assessment work performed.
So if you hold less than 10 claims nationwide you can take
advantage of our original mining law legacy and perform assessment work in lieu of
paying a fee and continue to work your claim. If and when patent applications
are again accepted, each years assessment work is credited to you as proof that
the mine is and should be patentable. The legacy of assessment work is a testament
to the original intent of our mining law heritage that encouraged prospecting and
development and the recovery of resources on our public lands. I hope this brief overview of assessment work gives you added incentive to develop your claim by qualifying and using the small miner exception.
The forms can be found here:
Assessment work affidavit:
Waiver:
Other forms of interest:
