Prospecting & Detecting
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How to Stake Your Own Mining Claims—Part II
April 2016 by Chris
In the first article of this series, I took a look at the basic steps a person needs to follow in order to stake their own mining claim. Staking a mining claim is a rare opportunity for Americans that is left over from the time when our government wanted to grow our economy and had a lesser interest in controlling the citizens of the nation. I am writing this series of articles to encourage our readers to look further into this matter and seriously consider staking a claim. As I noted, once you have completed the basic claim staking steps described in part I, you have created a valid mining claim of your own.
However, you must file paperwork and pay fees each year to maintain your mining claim for the following year, and failure to complete the steps required by law will make your claim no longer valid. Let’s take a look at the process you need to complete to keep your claim valid year after year.
The paperwork and fees you pay keep your claim valid for another year, and you can only file one year at a time. However, so long as you complete your annual paperwork and pay the fees each year, you can maintain your mining claim as long as you like. There are mining claims out there that were staked way back in the early days more than a century ago that are still valid.
Federal law requires an annual claim maintenance fee, which is currently $155 per year per claim, to be paid before September 1st. The fee must be paid at the state mining claims office of the Bureau of Land Management, but can also be paid online. These fees are increased every 5 years as the law allows them to be adjusted upward for inflation. This can add up to a lot of money and large mining companies that hold many claims can end up paying tens of thousands or even hundreds of thousands of dollars in mining claim fees each year. It is pretty simple just to pay the fee each year and be done as far as the BLM is concerned until the following year, though the cost can really add up if you are holding a number of claims. Luckily for us small miners, there is an alternative to those expensive fees known as the “small miner’s exemption.”
If you own, are a partner in, or have a legal interest in 10 or fewer federal mining claims nationwide and also meet certain other requirements, you can be exempted from the annual maintenance fees if you file the right paperwork by September 1 of each year. While most prospectors who qualify for the exemption take advantage of it, it is optional, and you can choose to pay the fees. If you make use of the exemption, then you must perform assessment work on the claim and file evidence of the assessment work both with the county and the BLM state office.
All claimants who do not qualify for the small miner exemption option must pay an annual maintenance fee of $155 per claim or site to the BLM. So, if you have eleven or more claims, you must pay the fees or drop claims until you have 10 or fewer. If you do have 10 or fewer, you must either pay the fee or file for a Maintenance Fee Waiver Certification (assuming you meet all the qualifications) by September 1 of each year. Failure to do one or the other by September 1st will result in the claim being forfeited. The law is very strict on this—you must meet the deadlines or your claim is no longer valid. Now in many cases, if one forgets to file on time, one can re-file (or relocate) your claim from scratch so long as someone else has not filed on it in the meantime. The current federal BLM fee to file a new claim (or to re-file an old one) is $212.
Paying the fees is a pretty straightforward matter. Most individual prospectors hold 10 or fewer claims and therefore qualify for the exemption. If you use the exemption, you must perform annual assessment work (also sometimes called “proof of labor” documents) for your claim, so let’s take a look at what that entails. In some states, even if you pay the BLM fees, you still must file assessment paperwork with the local county, so check on the rules of your state to be sure.
Assessment work includes any labor or other improvements that tend to benefit the claim or group of claims (if there are more than one in a block) which would identify or develop valuable minerals on the claims. Typical types of assessment work can include the cost of sinking shafts, pits, or trenches; or running underground adits or drifts. It also includes the actual mining of ore, and mining is one of the most positive types of assessment work that can be done. Assessment work can include the value of materials actually consumed in these activities (explosives for example) or the salary of a watchman. It includes drilling and assaying costs, as well as the purchase and installation of necessary machinery or buildings. It includes pumping the water out of old workings, the costs of building roads, and any geological, geochemical or geophysical work conducted by qualified experts. The costs of any labor must be figured at the prevailing wages for the area.
Repetitive road maintenance, annual clearing of brush, and other such activities that do not actually disclose or develop the minerals on the claims are not considered valid annual assessment work. Among the other expenditures that cannot be used for assessment work are costs of any claim negotiations, attorney fees, travel costs to the site and other personal expenses. The assessment work may be done by the owner if he so chooses, but it can be done by anyone the owner designates.
The assessment work must be performed within the time period defined by the law as the assessment year. The assessment year begins on September 1 and ends on the following September 1 of each year. For small miners, the exemption form paperwork must be filed with the BLM by September 1. Forms for the small miner’s exemption are available on the Internet or at the state BLM offices. The assessment paperwork describing the assessment work that was completed is then filed with the county and a copy of that paperwork must be filed with the BLM by December 30 of the calendar year in which the assessment year ended. There are assessment work forms available on the Internet and in books to allow the prospector to follow the required format. Many states have a specific form that they want prospectors to use to satisfy state laws for the recorders of that state. (Generally these laws describe margin spaces, space that must be left for the recorder to stamp the document, etc.).
If a number of claims are held as a group or block and are contiguous to each other, the labor or improvements done on one or a few are considered to be for the benefit of all the group, so the work can be done on any of the claims in the group and then counted toward the entire group. The total assessment work must be equivalent to or more than the combined assessment requirements of at least $100 for each claim. Claims held by the same locator that lie side-by-side or end-to-end with common boundaries or overlap are considered contiguous. Ones that only touch on a corner (or not at all) are not considered as contiguous. There is a charge for recording the affidavit of annual labor with the BLM and that is $10 per claim, but this is obviously much less than $155 per claim, which is why most small miners make use of this exemption.
Some states have certain specific requirements as far as the assessment work. As an example, Nevada requires the assessment paperwork be filed with the County Recorder on or before November 1; the assessment documents must be signed by the person making the statement; and must be notarized by a Notary Public. California does not require the documents to be notarized, but they are due to the county recorder’s office by September 30, which is a month earlier than they are due in Nevada. Most counties also have small fees for filing these documents and the fees must be paid for the filing to be valid. The difference between states is minor, but they are important to know.
One of the things I recommend is getting this all done in plenty of time before the deadlines. If you wait to the very end and mess something up, it’s possible you will not be able to get the problem solved and still make the deadlines. Maybe you get sick and are feeling terrible, or a loved one needs to go to the hospital—there are many reasons that you might get distracted and forget. Remember the deadlines are hard and fast—they are not suggestions. If you go in to file your small miner’s exemption on September 2 even though it’s due on the 1st, it won’t be accepted and you will have to re-file your claim if you can. That’s why it’s smart to take care of all this a month or more early. If you wait to the last minute and forget you are out of luck. Trust me, because I have done it. I know very well how easy it is to get busy and forget to take care of your paperwork, so get it in early and be able to relax when the deadline comes.
In some locations, old claims can be held if they were staked long ago, but cannot be renewed if you forget and fail to make the deadline. These locations are considered to be “grandfathered” in, so long as they are kept valid. An example is a location where a mining claim was staked, but the area was later declared as a National Monument or some other special status. You cannot re-stake in locations that are grandfathered. Once lost, they are lost forever.
A great example is a large number of claims in southern California where President Obama recently created national monuments. Old claims within those areas are still valid claims, but if one forgets to do the annual paperwork or pay the fees on time, the claims will expire and cannot be renewed. The same is true for claims in the new federal Sage Grouse Mineral Withdrawal protection area of Nevada, Idaho, Utah, Wyoming, Montana and Oregon. There are nearly 7,000 mining claims in this new 10-million-acre special area. If they are lost, they can never be re-filed. This is a critical issue as millions and millions of acres of land are being withdrawn by the government every year.
One other thing to note about having a mining claim is that permits are still required for extensive work. Any mining activity conducted on federal lands is subject to regulation. The lowest level of mining activity, considered by regulators as “casual use,” is designed for the small miner or weekend prospector doing sampling or other small-scale hand work that creates only negligible surface disturbance, and this does not require a permit. Most small miners keep their activities within that range. In general, small-scale activities that do not involve earth-moving equipment or explosives may be considered casual use, but the interpretation of what constitutes a significant disturbance is open to a wide range of interpretations and what one federal official may call “casual use” may not be called casual by another. Mining permits for BLM-administered lands are handled by the BLM, but other federal agencies like the US Forest Service have their own, differing regulations regarding surface management.
I’d like to offer some practical comments about staking and maintaining mining claims. Owning your own claim is the dream of many prospectors. I’ve made good money off my mining claims, both from the minerals I have found on them as well as from leasing out some of my claims to larger mining and exploration companies. At times there are more or less good properties available to be claimed. I have seen some pretty good properties come open in the past, but for the moment, the number is a bit fewer than it has been. This is because when gold and silver prices were high a few years back, there was a claim-staking frenzy for a while. While the staking frenzy is not continuing, most of the claims staked a few years ago are still good and have not been abandoned. However, for those who are willing to search, explore, and get out in the field and check the ground, there are still some good sites available to be claimed.
It is work to study and learn the mining claims laws, but as I have said, it does not take an expert to master them, and an “average Joe” certainly can figure it out. I hope a number of you will decide it is worthwhile and move forward with staking your own mining claims.
Editor’s Note: Please also read our “Legislative and Regulatory Update” in this issue regarding the BLM’s proposed budget, which seeks to increase maintenance fees and eliminate the small miner’s waiver.
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