Appendix — Humboldt Placer Mining Co. v. Andrus

In The .

SUPREME COURT OF THE UNITED STATES

October Term 1976

No. 76-1856

HUMBOLDT PLACER MINING COMPANY,

Petitioner,

Vv.

CECIL ANDRUS, SECRETARY OF THE

INTERIOR OF THE UNITED STATES

OF AMERICA,

Respondent.

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

VOLUME I A-1 to A-63

William Braly Murray

Attorney for Petitioner

1610 Standard Plaza

Portland, Oregon 97204

Telephone: (503) 226-3819

INDEX TO APPENDIX

VOLUME I

Order denying petition for

rehearing Court of Appeals

for the Ninth Circuit

Opinion of the United States

Court of Appeals for the Ninth

Circuit Case No. 74-2763,

249 F2d 622, January 6, 1977

Summary Judgment, U.S. District

Court for the Eastern District

of California, Civil S-2755,

entered June 12, 1974.

Interior Board of Land Appeals

Decision December 20, 1972,

8 IBLA 407, IBLA 70-205

Decision of Francis A, Patton,

Acting Chief, Office of Appeals

and Hearings, June 9, 1970.

VOLUME II

Decision of Hearing Examiner,

Rudolph M. Steiner, March 6,1969

Hearing Examiner's Rulings or:

Proposed Findings, March 6, 1969

Requested Findings and Findings

Adopted

Administrative Procedure Act

5 uScC §557, Agency Findings

Common Varieties Act, 30 USC §611l

Rule 56, Federal Rules of Civil

Procedure - Summary Judgment

Page

A-2

A-39

A-64

A-91

A-96

A-130

A-132

A-133

A-1

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HUMBOLDT PLACER MINING COMPANY, )

a corporation, and DEL DE ROSIER. )Filed

Plaintiffs-Appellants, )Mar. 28,

)1977

vs. )

)No. 74-

SECRETARY OF THE DEPARTMENT OF THE ) 2762

INTERIOR OF THE UNITED STATES OF )

AMERICA, ) ORDER

Defendant~-Appellee. )

Before: MERRILL and HUFSTEDLER, Circuit

Judges, and JAMESON, District

Judge

The panel as constituted in the above

case has voted to deny the petition for

rehearing. Judge Hufstedler has voted to

reject the suggestion for rehearing in

banc and Judges Merrill and Jameson have

recommended such rejection,

The full court has been advised of the

suggestion for an in banc hearing, and no

judge of the court has requested a vote

on the suggestion for rehearing in banc.

Fed. R. App. P. 35(b).

The petition for rehearing is denied

and the suggestion for a eetibaring in

banc is rejected.

A-2

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HumBoipr PLacer Minina Company, a corpo |

ration, and De. De Rosmsr,

Plaintifs-Appellants, | 01, 74.0762

V8.

SECRETARY OF THE DEPARTMENT OF THE InTE- | OPINION

RIOR OF THE UNITED STATES OF AMERICA,

Defendant-Appellee. ;

[January 6, 1977]

On Appeal from the United States District Court

for the Eastern District of California

Before: MERRILL and HUFSTEDLER, Circuit Judges,

and JAMESON,® District Judge

MERRILL, Circuit Judge:

At issue are appellants’ rights to compensation for the seizure

by the United States of appellants’ interests in certain unpat-

ented placer mining claims, located on Stuart’s Fork of the

Trinity River in Trinity County, California. On June 27, 1957,

the United States commenced a condemnation action in the Dis-

trict Court for the Northern District of California to secure title

to these claims and other property for use in connection with the

construction of Trinity Dam and Reservoir. Later, on March 17,

1960, the Secretary of the Interior commenced administrative

proceedings to contest the validity of the claims. The jurisdic-

tional propriety of these proceedings was challenged but ulti-

mately upheld. Best v. Humboldt Mining Co., 371 U.S. 334

(1963). In this action appellants seek judicial review of those

proceedings.

*Honorable William J. Jameson, United States District Judge for the

District of Montana, sitting by designation.

A- 3

2 Humboldt Placer Mining Con-.pany, et al. vs.

Appellants’ claims were all located more than fifty years ago,

but applications for patents were not made until 1954. The dis-

covery originally claimed was of gold, assertedly embedded in

the gravel of what is known as the Weaverville Formation

on Stuart’s Fork. The appellants’ claims are northeast of the

LaGrange mine, which is on the same Weaverville Formation

and for many years was operated with apparent success.

Before a hearing examiner of the Bureau of Land Manage-

ment, appellants asserted that the claims had value not only as

a gold placer but also as a gravel deposit. Under the Act of

July 23, 1955, 30 U.S.C. §611, deposits of “common varieties”

of gravel are declared not to be valuable mineral deposits within

the meaning of the mining laws. Thus the facts present four dates

having varying points of relevance: that of the patent applica-

tion in 1954, that of the effective date of the common varieties

act in 1955, that of the taking of the claims by the United

States in 1957 and that of the filing of contest by the United

States in 1960. Arguments can be advanced in support of any

one of them as the critical date for ascertainment of either gold

or gravel value. We resist the temptation to resolve the question.

Instead, we assume for the purposes of this case that if value

existed on any one date, it existed on all.

The hearing examiner held that value was lacking both as to

gold and as to gravel. His decision was upheld by the Interior

Board of Land Appeals (IBLA). United States v. Humboldt

Placer Mining Co., 8 I.B.L.A. 407 (1972). Appellants then sought

judicial review and revereal of the IBLA decision. The district

court granted summary judgment in favor of the Secretary and

this appeal followed. We affirm.

Gold

In support of its contest the United States conducted a com-

prehensive exploration program on the claims between 1957 and

1961.1 Four mining engineers and geologists testified before the

|

:

H

A- 4

Sec’y of the Depart. of the Interior of the U.S.of America 3

hearing examiner that as a result of this exploration program

they had formed the opinion that on none of the claims had

there been a valid discovery of gold of value sufficient to meet

the prudent-man test. See United States v. Coleman, 390 U.S.

599, 602 (1968), citing the standards set in Castle v. Womble,

19 L.D. 455, 457 (1894): “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 devel-

oping a valuable mine.”

In support of their claim of gold value, appellants submitted

various reports. The hearing examiner acted well within his dis-

eretion as a finder of fact in discounting these reports. Some of

them were business records of the appellants, written prior to

1942. While they reflected some significant gold values, they were

very general. The appellants also submitted a report by Merrill

Yost which included some drill logs and contained evidence of

high gold values. This evidence, however, was refuted by the

appellee’s sampling conducted in the immediate vicinity of Yost’s

excavations and drill holes. Moreover, Yost did not testify and

subject himself to cross-examination to support his report,

although he was apparently available. In weighing the evidence,

the hearing examiner could reasonably have found the appel-

lants’ reports to be unpersuasive.

Much of appellants’ case was based on the fact that the claims

were on the Weaverville Formation, the value of which had been

established by the success of the LaGrange mine. Discovery must,

however, be made on the claims themselves. The LaGrange prox-

imitvy might indeed persuade a reasonable prospector to continue

to search for valuable minerals, but he must succeed in his search

before discovery occurs. Henault Mining Co. v. Tysk, 419 F.2d

766 (9th Cir.), cert. denied, 398 U.S. 750 (1970). The reason-

ably prudent man we are concerned with is the miner who has

made his discovery and not the prospector who is still looking.

Appellants also rely on testimony by Florian Gibson, a geolo-

gist, that the claims had high value placer gold deposits. As to

this testimony the hearing examiner stated:

“The fantastic gold values reported by Gibson were based

on surface samples taken over a five hour period, as con-

A-5

ms Humboldt Placer Mining Company, et al. vs.

trasted with the extensive exploration program conducted by

the Contestant involving several man-years. The samples were

assayed by the so-called Douglas process involving the use

of unidentified solutions. There is no supporting evidence of

the nature of the unidentified solutions or positive evidence

of the process by which the gold could be recovered. Gold

values averaging one hundred dollars per cubic yard, consist-

ing of either coarse or microscopic particles, would surely

be identifiable by normal fire assay. The Douglas tests refiect-

ing average gold values of one hundred dollars per cubic

yard, and as high as two hundred dollars gold per cubic

yard of material in place, are simply unworthy of belief.”

Appellants criticized the exploratory work of the government

as not extensive enough to establish a lack of value. They assert

that the government drill holes should have been extended down

to bedrock, where gold is most likely to lodge. Appellants, how-

ever, mistake the burden of proof in these cases. The burden of

nited States in contesting validity is to make out a prima

i of lack of value. The burden then shifts to the claim-

by a preponderance of evidence, that the claim is

ited States v. Springer, 491 F.2d 239, 242 (9th Cir.),

419 U.S. 834 (1974); United States v. Zweifel, 508

1157 (10th Cir.), cert. denied, 423 U.S. 829, reh.

U.S. 1008 (1975). The United States here undoubt-

established a prima facie case. If anyone had the bur-

to bedrock it was appellants in order to rebut the

the government.

examiner concluded that the United States had

its prima facie case of lack of value and that appel-

not met the burden of overcoming that case. IBLA, in

cEfe

ret

Toe

4! ae

A-6

Sec’y of the Depart. of the Interior of the U.S.of America 5

gravel occur in the claims. Substantial deposits of material

suitable for fill and sub-base in highway construction and

more limited deposits of recent stream gravels suitable for

use as concrete aggregate do occur on the claims. However,

these deposits do not constitute valuable mineral deposits

unless they are shown to be marketable. There is not a shred

of evidence in the record that there has ever been any

demand for the subject sand and gravel deposits, or that

any portion thereof has ever been removed from the claims

for use in concrete aggregate or for any other purposes.

The fact that there is a very limited annual market in small

towns in Northern California which have other existing

sources of supply, and the possibility of the future con-

struction of highways and dams in the area, do not consti-

tute evidence of a demand for these particular deposits.

In the absence of more specific evidence that these particular

sand and gravel deposits could have been removed and dis

posed of-at a profit on or before July 23, 1955, it must be

concluded that the same do not constitute valuable mineral

deposits within the meaning of the mining laws.”

marketed at a profit prior to July 23, 1955. Moreover, appel-

lants have failed to establish by substantial and probative

Appellants, citing Verrue v. United States, 457 F.2d 1202,

1204 (9th Cir. 1972), argue that lack of sales of gravel from the

claims figures unduly in the findings of the hearing examiner

and IBLA to the effect that marketability of the material had

not been established. In Verrue we held that “positive evidence

in the record of marketability” was not offset by evidence of the

lack of sales of material and the availability of comparable mate-

rial from other sources.*? Verrue does not apply here. Here there

was no positive evidence of marketability to to overcome the gov

ernment’s prima facie case. Further the determination of IBLA

that the government had made out a prima facie case of lack

of discovery was supported by testimony disparaging the quality

of the gravel on the claima

F

t

see

FE

A-8

Sec’y of the Depart. of the Interior of the U.S.of America 7

The first record citation is apparently an error. The second has

reference to the following testimony of government witness,

George Scarfe, on cross-examination:

“Q Now, do you agree with this statement that: ‘Sand

and gravel deposits along the Trinity River and Stuart’s

Fork are being considered as sources for concrete aggregate

for the Trinity and Lewiston Dams and tunnel lining, while

gravels which occur upon land contained in the above Placer

Mining locations are being considered as the sources to the

required impervious embankment material for the Fairview

Dam.’

Do you agree with this statement that the material on

these claims among which are those that you examined are

suitable for this particular purpose?

A They said they are being considered. I agree, well, I

have no reason to disagree. I hadn’t seen this report.”

Finding No. 6 is to read as a paraphrase of this testimony;

it is the only construction supported by the record. So construed

we do not find it to conflict with the Board’s decision. See Ideal

Basic Industries, Inc. v. Morton, No. 74-2298 at 5-8 (9th Cir.

Sep. 28, 1976).

Judgment affirmed.

PERNAU-WALSH PRINTING 0O., SAN FRANCISCO 1-13-77—410

A-9

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

HUMBOLDT PLACER MINING COMPANY, )

a corporation, and DEL DE ROSIER. ) Civil

Plaintiffs, )S-2755

Vv. )

)

)

)

)

SECRETARY OF THE DEPARTMENT OF THE

INTERIOR OF THE UNITED STATES OF

AMERICA,

Defendant

SUMMARY JUDGMENT

Defendant's Motion for Summary Judgment

having been submitted to the Court on Aug-

ust 30, 1973, and the Court having con-

sidered the pleadings in the action, de-

fendant’s Memorandum of Points and Author-

ities, dated May 22, 1973, Plaintiff Hum-

boldt’s Motion for Summary Judgment in

Response to Defendant's Motion, filed Aug-

ust 13, 1973, Defendant's Memorandum in

Opposition to Plaintiff's Motion for Sum-

mary Judgment and in Response to Plain-

tiff’s Opposition to Defendant's Motion

for Summary Judgment, filed August 28,

1973, and the certified administrative

record, and having found that there is no

genuine issue as to any material fact, and

having concluded that defendant is entitled

to judgment as a matter of law, it is

hereby

ORDERED, that defendant's Motion for

Summary Judgment is in all respects

granted, and it is further

ORDERED, ADJUDGED AND DECREED that

plaintiffs’ Complaint in the above entitled

action be and hereby is dismissed with

A-10

prejudice.

Dated: [June 12, 1974]

/s/ a anh P. Wilkins

UNITED STATES DI JUDGE

UNITED STATES DEPARTMENT OF THE INTERIOR

OFFICE OF HEARINGS AND APPEALS

INTERIOR BOARD OF LAND APPEALS

4015 Wilson Boulevard, Arlington VA

22203

UNITED STATES

Vv.

HUMBOLDT PLACER MINING COMPANY

and

DEL DE ROSIER

IBLA 70-205 Decided December 20, 1972

Appeal from decision (California Con-

test 10-474) of the Office of Appeals and

Hearings, Bureau of Land Management, hold-

ing mining claims null and void.

Affirmed.

Mining Claims: Discovery: Marketability~--

Mining Claims: Common Varieties of Minerals:

Generally--Mining Claims: Placer Claims

To satisfy the requirements for dis-

covery on a placer mining claim located

for common varieties of sand and gravel

before July 23, 1955, it must be shown

that the materials within the limits of

the claim, by reason of accessibility,

bona fides in development, proximinty

to market, existence of present demand,

and other factors, could have been

extracted, removed, and marketed at a

profit as of that date.

A-11l IBLA 70-205

Mining Claims: Discovery: Marketability

The Government may raise a presumption

that the material on mining claims could

not be extracted and marketed at a pro-

fit by introducing evidence that the

Claimant has done nothing to develop

the claim,

Mining Claims: Contests--Mining Claims:

Discovery: Generally

Government mineral examiners have no

affirmative duty to search for indica-

tions of a discovery on a mining claim;

nor do they have a duty to go beyond

examining the discovery points of a

Claimant. Their function is to examine

the discovery points made available by

a claimant and to verify, if possible,

the claimed discovery.

8 IBLA 407

Rules of Practice: Appeals: Burden of

Proof--Contests and Protests: Generally

Where the Government has made a prima

facie showing of a lack of discovery,

the burden of producing preponderating

evidence of the existence of a valuable

mineral desposit sufficient to support

a discovery is upon claimant.

Rules of Practice: Evidence

The weight and creditibility of evi-

dence are matters properly considered

by an Administrative Law Judge in the

first instance. His findings, when

in accord with the preponderance of

the substantial and probative evidence

adduced, will not be disturbed.

APPEARANCES: William B, Murray, Esq.,

Portland, Oregon, for the appellants;

A-12 IBLA 70-205

Charles F, Lawrence, Esq., Office of the

General Counsel, Department of Agriculture,

San Francisco, California; Burton J. Stan-

ley, Esq. Office of the Solicitor, Depart-

ment of the Interior, Sacramento, Califor-

nia,

OPINION BY MR, FISHMAN

The Humboldt Placer Mining Company and

Del de Rosier have appealed from a decision

dated June 9, 1970, rendered by the Office

of Appeals and Hearings, Bureau of Land

Management, hereinafter termed the "Bureau

decision.” That decision affirmed a decis-

ion of a Hearing Examiner 1/ dated March 6,

1969. which declared the placer mining

Claims in issue null and void for lack of

a discovery of a valuable mineral deposit

on any of the claims,

The Humboldt Placer Mining Company is

a corporation which was organized in 1896.

All of its mining claims in issue were lo-

cated prior to 1920. On November 19, 1954,

Humboldt filed a patent application for

the claims in issue, On June 27, 1957,

the United States commenced an action in

the District Court to condemn certain pro-

perty which included the land embraced

within the claims in order to construct

the Trinity River Dam and Reservoir. After

obtaining a writ of possession in the

District Court, the United States, on

I7 The United States Civil Service Com-

mission has changed the title "Hearing

Examiner" to “Administrative Law Judge.”

37 F. R. 16787 (August 17, 1972). Here-

inafter that official will be referred to

as “Judge”.

A-13 IBLA 70-205

May 15, 1958, instituted a contest pro-

ceeding in the local Land Office of the

Bureau seeking an administrative deter-

mination of the validity of the unpatented

mining claims. Humboldt thereupon brought

suit to enjoin the administrative proceed-

ings, contending that the proper jurisdic-

tion to determine the validity of the

claims was in the courts. The issue of

jurisdicticn was ultimately decided by the

United States Supreme Court — Best v.

Humboldt Placer Mining C 371 U.S.

337 (1963), in which it was held chet the

issue of the validity of the claims was

to be resolved by the Department of Inter-

ior. In the interim, contestees prosecuted

an appeal to the Secretary of the Interior

from a decision rejecting their answer to

an amended complaint, and denying their

motion to dismiss the complaint. The

Secretary reinstated the contest proceed-

ings by decision United States v. Humboldt

Placer Mini ny and Del De Rosier,

K-30058 (Bape) Checembor Te, 1864)

The contestant, the United States, filed

a second amended complaint on July 20, 1966,

alleging in part as follows:

a. There is not disclosed within

the boundaries of the mining claims

mineral materials of a variety sub-

to the mining laws, sufficient in

quantity, quality, and value to

constitute a discovery.

b. The land embraced within the

Claim or claims is nonmineral in

character.

c. With res=-ct to the public lands

in each and -il of the mining claims

identified in Paragraph III of this

A-14 IBLA 70-205

Second Amended Complaint, contest-

ant charges separately and collec-

ively that each 10-acre legal sub-

division or part thereof is non-

mineral in character and therefore

should be excluded from the respec-

tive alleged mining claims.

ad. The Cademartori placer claim, as

described in the location notice,

embraces incontiguous tracts of

land, and is therefore contrary to

law.

Contestees answered the second amended

complaint generally denying the allega-

tions contained therein, A hearing was

held on November 28, 29, 30, and Decem-

ber 1, 1967, and on January 8 and 9, 1968.

All parties were represented by counsel

at the hearing,

The contested claims are located on

the south side of Stuart Fork of the Trin-

ity River, in Trinity County, California,

upstream from the recently constructed

Trinity Dam, The most significant geo-

logical characteristic in the area is the

Weaverville Formation with a reported

depth where greatest of over 800 feet,

It is an old tertiary river channel which

has been bisected by streams and has been

preserved by the relative uplifting of

the older hard and resistant sediments

around it, The tertiary gravels are un-

consolidated, deeply weathered, red-col-

ored clay gravels resulting from volcanic

activity and reworking, and which are

estimated to be approximately 35 million

years old, The claims also expose some

recent and present stream gravel, and

some ultramafic and granitic intrusive

A-15 IBLA 70-205

rocks. The bedrock series in the area

are the Bragdon Formation (Mississippian),

Copley Greenstone (Devonian), and Salmon

Schist,.

The principal issue on this appeal is

whether the evidence presented at the

hearing established a discovery of a

valuable mineral deposit on any of the

claims within the meaning of 30 U.S.C.

§22 (1970). Appellants assert that the

evidence supports such a discovery with

respect to both gold and gravel on each

claim,

A discovery exists “where minerals have

been found and the evidence is of such a

character that a person of ordinary pru-

dence would be justified in the further

expenditure of his labor and means, with

a reasonable prospect of success in id

developing a valuable mine ***,” Castle

v. Womble, 19 L. D. 455, 457 (1894); see

n tates v. Coleman, 390 U.S. 599

(1968).

In applying this rule to the present

case, we are of the opinion that the pre-

ponderance of the credible evidence fails

to support a discovery on any of the claims,

Six qualified geologists and engineers

testified for appellee. None was called

by appellants, and only one geologist testi-

fied on behalf of Archibald,:a party per-

mitted to intervene in the hearing.2/

27 3. 0. Archibald was allowed to inter-

vene at the hearing and assert an interest

in some of the claims under a lease agree-

ment. However, he did not appeal and is no

longer a party to the proceedings

A-16 IBLA 70-205

The assay methods used for the geologist

called by Archibald were not explained.

GRAVEL

Common varieties of sand and gravel

were withdrawn from location under the

mining laws on July 23, 1955. See/30 U.

S.C. §611 (1970). Consequently, to satis-

fy the requirements for discovery on a

placer mining claim located for common

varieties of sand and gravel before July

23, 1955, it must be shown that the mater-

ials within the limits of the claim, by

reason of accessibility, bona fides in

development, proximity to market, exis-

tence of present demand, and other factors,

could have been extracted, removed, and

marketed at a profit as of that date.

United States v. Coleman, supra, Foster v.

Seaton, 271 F2d 836 (D.C. Cir. 1959);

Barrows v. Hickel, 447 F2d 80 (9th Cir.

1971); United States v. Isbell Construc-

tion Co., 4 IBLA 205, 79 I.D. 385 (1971).

e the record discloses that gravel

was an abundant commodity on the claims

(Tr. 250, 344, 957), there is no evidence

of any sales of gravel from the deposits.

George W. Nielsen, a mining engineer em-

ployed by the Bureau of Land Management

and called by appellee, testified that at

no time has the Weaverville Formation been

mined and processed for the production of

sand and gravel. (Tr 960). He further

testified that the Weaverville Formation,

because of weathering, is generally too

dirty and too soft to make concrete aggre-

gate, although it oculd be used for sub-

base and fill material (Tr 961). Robert

Middleton, a mining engineer called by

appellee, testified that he examined the

A-17 IBLA 70-205

Claims (Tr 292), and further testified

that no aggregate has been produced from

the claims, and that there was no evi-

are on the ground of any removal. (Tr

This evidence was sufficient to estab-

lish a prima facie case that the gravel on

the claims could not have been marketed at

a profit prior to July 23, 1955. As stated

in United States v. E. A. Barrows and

Ester Barrows, 76 I.D. 299, 306 (1969):

***(Wjhile the fact that no sale had

been made at the critical time is not

controlling in itself, the fact that

nothing is done toward the development

of a claim after its location may raise

a presumption that the market value of

the minerals found therein was not -

sufficient to justify the expenditure

required to extract and market them,

(Citing cases)

Where, as in the present case, the Govern-

ment has made a prima facie showing of a

lack of a discovery, the burden of produc-

ing preponderating evidence of the exis-

tence of a valuable mineral deposit suffi-

cient to support a discovery is upon claim-

ants. Foster v. Seaton, supra; United

States v. Wayne Winters ab fa Piedras Del

Sol wining ompany, ‘ I.D.

In an attempt to meet this burden, appel-

lants called James R, Miller, a marketing

consultant, to testify. He expressed an

opinion that gravel could have been mined

from the claims and removed and disposed of

at a profit prior to July 23, 1955 (Tr 721).

However, there is no evidence in the record

that Miller was in the Trinity County Area

in or prior to 1955); nor was his testimony

A-18 IBLA 70-205

based upon personal knowledge. Cf.

Verrue v. United States, 457 F2d 1202

)Sth Cir. 1972). He admitted that he

did not examine the sand and gravel on

the claims (Tr. 693, 734) and it is

apparent from the record that his opinion

was based upon conversations with other

persons who were not called upon to testi-

fy (Tr 694, 735) and literature which he

studied on the market potential of sand

and gravel generally in the State of Cali-

fornia and the United States. Moreover,

Miller qualified his opinion by condition-

ing it on the ability to commercially pro-

duce gold (Tr. 719, 721), and stated that

he was “not prepared to say whether the

amount of gold that"*s been evidenced would

be a commercial operation” (Tr 721).

In expressing his opinion, Miller

failed to articulate whether he was re-

ferring to gravels of the type which can

only be used for fill and similar uses, or

whether he was referring to gravels of the

type which could be used to make concrete

aggregate. The distinction is crucial,

In determining the marketability of mater-

ials on a mining claim, sand and gravel

which can only be used for fill purposes

or for other comparable purposes cannot

be considered since such materials have

never been locatable under the mining

laws. See United States v. E. A. Barrows

and Esther Barrows, supra, and cases

cited therein.

Appellants, in our view, failed to over-

come the prima facie case established by

the Government, Their evidence was too

vague and inconclusive to establish that

locatable gravels: from the claims in issue

could have been extracted and marketed at

a profit prior to July 23, 1955. More-

over, appellants have failed to establish

a

A-19 IBLA 70-205

by substantial and probative evidence

the existence of a demand for the gravel

as of that date from these claims. United

States v. William A. McCall, Sr., et al.,

GOLD

Mining engineers and geologists conducted

on behalf of the contestant, a comprehen-

sive mineral examination on the claims

from 1957 to 1961. Samples were taken in

accordance with accepted standard proced-

ures by excavating churn drill holes, auger

holes, surface channels, pits and trenches.

The samples were taken at points selected

by contestant's engineers and at points

which contestees had indicated in their

patent application the existence of signif-

icant mineral values, The samples were

assayed in accordance with accepted stan-

dard procedures, The record discloses the

following data with respect to each claim :

Ukiah Placer Mining Claim

ee of seven channel and trench sam-

ples taken from this claim contained no

gold values. (Contestant's Exhibit Q). The

remaining four samples contained gold val-

ues ranging from .076 to 5.65 cents per

cubic yard. An auger hole drilled to a

depth of 25 feet revealed gold values of

-142 cents per cubic yard,

Covelo Placer Mining Claim

ee of nine channel and trench samples

taken from this claim revealed no gold

values (Contestant’s Exhibit F). The re-

maining six samples contained gold values

ranging from .192 to 1.40 cents per cubic

yard. An auger hole 25 feet in depth re-

vealed gold values of.045 cents per cubic

yard,

A-20 IBLA 70-205

Humboldt Placer Mining Claim

- Three channel samples were taken from

this claim. Two of the samples contained

no gold (Contestant's Exhibit 0). The

third channel sample contained gold values

of .549 cents per cubic yard. An auger

hole drilled to a depth of 46 feet revealed

gold values of .071 cents per cubic yard.

The auger hole was put down on a deposi-

tional contact of the Weaverville Formation

on the Bragdon.

White Placer Mining Claim

“Three channel samples taken from present

stream gravels on this claim contained gold

values rangaing from .107 to .688 cents per

cubic yard (Contestant’s Exhibit R). Two

auger holes, drilled to depths of 17 and

57 feet, revealed respective gold values

of .049 and .095 cents per cubic yard,

Tanne Placer Mining Claim

e contestant tok Your samples from

this claim, (Contestant‘s Exhibit J.) A

channel sample taken from the exposed

Weaverville Formation contained .576 cents

gold per cubic yard. An auger hole, 21.8

feet deep, revealed no gold values. Two

churn drill holes, each 45 feet deep, re-

vealed gold values of1.13 cents and .157

cents per cubic yard.

Furnell Placer Mining Claim

Five of the sixteen samples taken from

this claim contained no gold. Six samples

ranged from .3 to 1.1 cents per cubic yard.

A sample from a channel cut on a slope along

a road had a value of 8.3 cents per cubic

yard, Four sample shafts were put down in

recent gravels along Slate Creek which runs

northeasterly through the claim. A sample

from a shaft 2.8 feet ot bedrock in sec. 3

Ae21 IBLA 70-205

showed a cubic yard value of 17.4 cents.

In sec, 2, a shaft showed the following

values per cubic yard: the top 3.2 feet,

1,4 cents; the next 4.7 feet, 42.8 cents;

and the last foot in cemented Weaverville

bedrock, 2.1 cents. In a third shaft the

values per cubic yard were: the first 6

feet, 0.5 cents, the next 1,2 feet 49

cents; and th last foot in cemented bed-

rock, 2.1 cents. The sample from the

fourth test shaft went down 3.4 feet through

to cemented bedrock and had a value of 67

cents per cubic yard. (Contestant's

Exhibits D<-D, EE),

Last Chance Placer Mining Claim

The contestant took of samples from

this claim (Contestant's Exhibit L), eight

surface samples, twelve from churn drill

holes ranging from 36 to 100 feet in depth,

and one from an auger hole 42 feet in depth.

the surface samples contained gold values

ranging from .224 to 3.30 cents per cubic

yard. The churn drill holes and auger hole

revealed gold values ranging from .034 to

1.22 cents per cubic yard. Drill hole

number 6 located between Humboldt holes

numbers 13 and 14, drill hole number 7

located on the other side of Humboldt hole

number 13, and drill hole number 8 located

on the other side of Humboldt hole number

14, revealed gold values rangaing from 0

to .156 cents per cubic yard. In each in-

stance, holes were put down within five

feet of the Humboldt hole.

Lewis Placer Mining Claim

Twelve channel samples taken from this

claim contained gold values ranging from

-02 to 14,48 cents per cubic yard (Contes-

tant's Exhibit N). The sample showing the

highest value and the second sample con-

A=-22 IBLA 70-205

taining 6.21 cents gold per cubic yard

were taken from limited occurrences of

present stream gravels. A sample of the

present Suart Fork gravels contained gold

values of 1.21 cents per cubic yard.

Enough Placer Mining Claim

"Eighteen surface samples taken from

this claim contained gold values ranging

from .052 to 90.58 cents per cubic yard.

(Contestant’s Exhibit M). The gold values

shown in nine of those samples was 1.64

cents, or less, per cubic yard. Sample

number 8-1 is composed of nine samples

taken from recent gravel, gully bottom,

The nine samples contained gold values

rangin from 6.71 cents to 90.58 cents

per cubic yard, with an average value of

33.93 cents per cutic yard. According

to the exhibit, “It would be a physical

impossibility to have more than 1,200

cubic yards at this value in this gully.

The gully is mined out from this point

downstream,” An auger hole 47 feet deep

revealed gold values of .362 cents per

cubic yard.

Faurell Placer Mining Claim

The Faurell claim enbraces two incon-

tiguous tracts, Two channel samples

taken from the east tract contained gold

values of 1.04 cents and 1.56 cents per

cubic yard, There was no evidence of

prospecting on the west tract. Three

channel samples cut from exposures on the

west tract contained no significant gold

values, (Contestant's Exhibit U). The

concentrates of a number of samples were

submitted for fire assay (Contestant's

Exhibit G). The sample showing the

greatest value, $683.20 per ton of con-

centrate, had a 15,900 to 1 ratio of con-

A-23 IBLA 70-205

centration. The value of the black sand

concentrate reflected the similar in-

consequential values when related back

to the value of the black sand per cubic

yard of gravel and clay.

Tanne No, 2 Placer Mining Claim

eantyciive channel and trench samples,

taken from present and recent stream

gravels, contained gold values ranging

from .132 cents to 22.82 cents per cubic

yard (Contestant's Exhibit F). A churn

drill hole, 35 feet in depth, revealed

gold values of 4,26 cents per cubic yard,

Two auger holes, 24 and 25 feet in depth,

revealed respective gold values of .076

and .308 cents per cubic yard.

Jackson Placer Mining Claim

~~ Bight samples taken from this claim

showed gold values ranging from 0.5 to

34.8 cents per cubic yard. The next

highest value was 8,5 cents per cubic

yard, The highest value cmae from a test

shaft put down by the mineral examiner in

recent gravels of Slate Creek (Contes-

tant*s Exhibit D<D, E-E),

Cademartori Placer Mining Claim

~ The Glaim embraced two incontiguous

tracts, One of the tracts was abandoned

by contestees at the hearing. In the re-

tained portion of the claim three samples

have been taken. A channel cut in an

eight-foot bank of weathered Weaverville

Formation contained gold values of .8

cents per cubic yard. A pit sample from

a gully in Irish Gulch revealed gold

values of 1.2 cents per cubic yard. A

channel sample along an old ditch showed

nil, (Contestant"s Exhibits D<D, E-E,

Tr 460-461 and 470-471).

oS.

A24 IBLA 70-205

The average gold values on the undis-

turbed Weaverville Formation which was

exposed on the claims was .276 cents per

cubic yard. The material exposed in the

slopes and washes had an average gold

value of 1.863 cents per cubic yard. The

gully samples averaged 2.56 cents per

cubic yard, and the recent stream gravels

averaged 8,72 cents per cubic yard.

The mining engineers and geologists

called by contestant testified to the

effect that as a result of their examina-

tions of the claims, they were of the

opinion that none could be developed as

valuable mines (Evans, Tr 177; Middleton,

Tr. 310; Scarfe, Gr. 478-480; Erich, Tr.

595, 640).

Inlight of this evidence, we conclude

that the contestant established a prima

facie case that no discovery existed on

any of the claims. After a careful con-

sideration of the record, we are of the

opinion that the contestees have failed

to meet their risk of non-persuasion in

establishing by a preponderance of evi-

dence that the claims are valid. Cf. Fos-

ter v. Seaton supra; United States v.

Neil Stewart, 5 TEtK 55. 79 I.D. 27 (1972).

Appellants have raised eighteen conten-

tions of error in their brief on appeal.

The principal claims of error raised by

appellants have been considered above.

The remaining claims of error, which

largely relate to alleged procedural ir-

regularities or criticism of the Govern-

ment's case in chief, will be considered

in their order of appearance in appel-

lants' brief.

I.

Appellants first argue that the second

amended complaint is defective because

A-25 IBLA 70-205

it fails to allege the critical date when

a discovery must be made and it fails to

allege a lack of market for gravel. It

should be noted that appellants made no

objection with respect to this issue prior

to or at the hearing.

The law is well settled that discovery

must be shown to have been made at the

latest as of the time a claim is challenged.

United States v, Margherita Logomarcini,

60 I.D. 371 (1949). Contestees were well

aware of the law in this regard. See

Best v. Humboldt Placer Mining Company,

supra, it is also well settled tet t

Srler to satisfy the requirements for dis-

covery of a mining claim located for com-

mon varieties of sand and gravel it must

be shown that prior to July 23, 1955, the

materials could have been extracted, re-

moved and marketed at a profit. Where a

mining claimant fails to prove by a pre-

ponderance of the evidence that the mater-

jials from his claim could have been extrac-

ted, removed and marketed at a profit prior

to that date, the claim is properly de-

Clared null and void for the lack of a

timely discovery of a valuable mineral

deposit. United States v. Neil Stewart,

supra. Inherent in the language of the

second amended complaint is the charge

that there had been no discovery of valu-

&Sble minerais subject to location. The

presentation of their case was in no way

prejudiced by the failure of the second

pone ee complaint to allege the critical

te.

Contestees' position that the complaint

should te dismissed for failing to allege

a lack of market for gravel is untenable.

In support of their position they rely

upon an instruction in the Bureau of Land

A-26 IBLA 70-205

Management Manual, 3/ It provides in

relevant part as follows:

1. Marketability of common place

minerals,

-23. For ciaims located before July

23, 1955, for common place minerals

where no actual market exists, the

proper charges are:

(2) no discovery of a valuable

mineral has been made within

the limits of the claim because

the mineral materials present

cannot be marketed at a profit

and it has not been shown that

there exist an actual market

for those ~. erials,

Manual instructions which are issued for

administrative purposes only, are neither

published nor binding upon the public,

and ordinarily, no one other than Bureau

employeess is expected to use the Manual .

Barbara Rubenstein, A-28508 (December 28,

° reover, a charge of lack of

discovery encompasses within its ambit a

lack of a market for the mineral,

The record discloses that the patent

applications did not specifically state

that location was for gravel, and while

it is not essential to identify each

specific mineral claimed to be valuable

in a patent application, the failure to

mention gravel or any other common place

materials in the patent application would

account for the absence of an allegation

regarding the lack of discovery by July

23, 1955, and the corollary market for

gravel in the instant case. In any event,

37 Bureau of Land Management Manual,

ol. VI, Part 5, Chapter 5.2 (August l,

1958).

COE eee aE

A-27 IBLA 70-205

it is apparent from the record that both

parties directed their proof to the issue

of marketability in connection with gravel.

The first witness called by contestees

was called as an expert to express an

opinion on the marketability of gravel.

Contestant also called an expert witness

to rebut the evidence regarding the market-

ability of gravel put on by the contestees.

Contestees, we conclude, were reason-

ably apprised of the issues in controversy

and there is no showing that they were mis-

led in any respect. Under such circum-

stances the notice provided by the complaint

is adequate. See United States v. Inde-

pendent Quick Silver Co., 72 I.D. 367 (1965),

snd authorities cited there.

II

Contestees next argue that the complaint

should be dismissed because contestant

failed to comply with an order for the

production of documents. While contestees

did not raise this argument in their appeal

to the Bureau, they did claim at the

hearing that contestant had not fully com-

plied with the order.

The same Judge who issued the order for

the production of documents ruled that con-

testant substantially complied with the

order, and we perceive no error in this

ruling. The record discloses that counsel

for contestees was given ample opportunity

to inspect documents which he claimed were

not produced (Tr.22). It is also apparent

from the record that some of the informa-

tion contained in documents which contestees

Claim were not produced was turned over to

counsel for contestees in what is referred

to as the “Frenzell Report” (Tr 19). Other

documents not produced did not relate to

the mineral examination made by the contest-

* i ein iin

A<28 IBLA 70-205

ant (Tr. 19020). Upon a review of the

record we are of the opinion that those

documents which were not produced prior

to the hearing were not necessary to the

preparation of contestees’ case, and under

such circumstances, failure to produce

does not constitute error. See Mrs. R. W.

Hooper, 3 IBLA 330 (1971). i}

IItl

Contestees next argue that the Director's

decision cannot stand because the record

fails to show that the Director ruled on

each assignment of error and failed to

adopt each requested finding presented.

In support of their petition, contestees

rely on the Administrative Procedure Act

§8; 5 U.S.C,§557 (1970). Section 557(c)

provides an opportunity for parties to

submit proposed findings and conclusions

for consideration before an initial decis-

ion is made. The record clearly shows

that this provision of the Act was complied

with in every respect. The Judge ruled

on each requested finding. He adopted 38

of those findings and rejected the remain-

der stating his reasons therefor in each

instance. It is implicit in the decision

of the Bureau that it agreed with the

Judge with respect to his findings and

conclusions, at least insofar as they

were material and relevant to decising the

ultimate issues in the case,

The assignments of error made by con-

testees on appeal from the decision of

the Judge related, almost entirely, to

asserted errors committed by the Judge in

making the findings and conclusions in the

case, or failing to make certain findings

or conclusions requested by contestees,

While the Bureau decision didnot consider

each assignment of error separately, it

A-29 IBLA 70-205

gave adequate consideration to the excep-

tions presented. The Act does not require

detailed or numbered findings on every

subsidiary evidentiary fact. See NLRB v.

Sharples Chemicals, Inc., 209 F2d 645 (6th

° . e re, a separate find-

ing need not be made on exception to a

Judge's report. See 2 K,. Davis, ADMIN-

ISTRATIVE’ LAW TREATISE §16.02 at 438 (1958);

cf. United States v. Chas. Pfizer & Co.,

Inc,, 76 1.D. 331, 352 (1969).

IV.

Contestees next argue that the ultimate

finding of nondiscovery with respect to

the mining claims is erroneous because

it is not supported by evidentiary facts.

Contestees cite several cases in support

of the proposition that evidentiary facts

are necessary to prove ultimate facts (a

proposition with which no one takes issue)

but refer to no evidentiary facts in the

record to support an ultimate conclusion

of discovery. We are of the opinion that

the ultimate fact of nondiscovery is

amply supported by the evidence, with

respect to each claim,

Vv.

Contestees next argue that it is error

to require more than one discovery to be

made in order to support an association

placer claim, They cite several cases in

support of the proposition that only one

discovery is required to support the valid-

ity of an association placer claim, again

a proposition with which no one takes

issue. In answer to the alleged error, we

only point out that no requirement beyond

the showing of “a discovery” with respect

to each of the association claims was

imposed on the contestees,.

| iat BS Ree ee es Pe ee MP” ge WS Se Sane Ty Pa Te

A-30 IBLA 70-205

VI.

Contestees next argue that the Govern-

ment's gold placer samples were invalid

because the samples were not taken to

the bedrock. We disagree.

Government mineral examiners have no

affirmative duty to search for indica-

tions of a discovery on a mining claim;

nor do they have a duty to go beyond

examining the discovery points of a

Claimant. Their function is to examine

the discovery points made available by

a claimant and to verify, if possible,

the Claimed discovery. United tates v.

Jimmie (Juanita) P, Laing, 3 IBLA 108

(i971); See United States v. Lawrence

W. Stevens, et al.,76 1.D. 56 (1969);

United States v. Coaton, A-30835 (Febru-

ary 23, 1968); United States v. B

Gold, A-30990 (May 7, 1569); United States

Vv. George C, Johnson, et al.,

tober " ).

In the instant case the samples taken

by the Government were as deep or deeper

than those of the contestees')Tr.221<223),

and several samples taken by the Govern-

ment did in fact reach bedrock. See

Contestant's Exhibits F. I, M, N, 0, T,

Q, R, and E-e, In any event, while a

person might predict that greater valves

of gold would be found at bedrock, such

a prediciton does not establish a "dis-

covery” in the absence of a showing of

the physical existence of such minerali-

zation. See Henault Mining C any v.

ak. 419 F2d 766 (Sth Cir. 1565) cert.

nied, 398 U.S. 950 (1970); United States

v7. Wa ayne Winters dba Piedras Del Sol

ning Co,, supra.

ee eee

oe eee

A- 31. IBLA 70-205

VII.

Contestees next argue that certain gold

asays of the Government's samples were not

made in accordance with standard procedures

and were, therefore, invalid. In support

of this argument the contestees point out

that several samples were panned and run

through a rocker or sluice box by James

Bassham, a man with no scientific back-

ground, rather than by the Government

mining engineers.

Counsel for contestees had no objection

to the admission of assay reports intro-

duced by the Government (Exhibit G, Tr 160).

Government mining engineers in several in-

stances personally performed the procedures

in question (Tr. 250, 470). While Bassham

may not have had formal scientific training,

the record reflects that eh was a profes-

sional panner (Tr 251) and there is no

evidence to indicate he lacked the requis-

ite experience and knowledge necessary to

perform the work in question, or that he

was incompetent in any respect,

Contestees also claim that the assaying

methods used by the Government did not

recover all of the gold from the sample,

However, the record shows that the recovery

of gold in the sampling methods used by

the Government were at least as accurate

as any possible placer mining method, (Tr.

507, 515). We conclude, therefore, that

the gold assays of the Government samples

were valid,

VIII,

Contestees next claim that several of

the Government samples on Tannery No, 2

were invalid, They assert that the

evaluation of certain of these samples

was erroneous because the samples did not

reach bedrock,

er eee

A-32 IBLA 70-205

Those samples which did not reach bed-

rock were valid for reasons previously

stated.

Contestees also assert that the evalua-

tion of the samples was erroneous because

overburden was included in the material

sampled. However, as noted in the Bureau

decisions

It is standard procedure in the

testing of a placer mining claim to

take channel samples from top to bot-

tom of a cut, trench or pit, and in

taking samples by churn or auger

drilling to include the overburden

in arriving at the mineral values

for the cost of removal including

the removal of the overburden is a

factor in determining whether a pru-

Gent man would be justified in the

further expenditure of his labor and

means, with a reasonable prospect of

success, in developing a valuable

mine. United States v. Robert W.

Carnes, A-28178 (May 23, 1960),

Ix,

Contestees next argue that it was error

to judge a gold discovery by computing

gold values averaged down by lithologic

units.

The only evidence in the record which

makes any reference to lithologic units

appears in the testimony of Robert K. Evans,

a geological engineer called by the Govern-

ment, On direct examination he was asked

whether he had reached any conclusions

concerning the mineral valuation of the

Claims as a result of his examination. He

stated: (Tr. 177);

A-33 IBLA 70-205

A. Yes. Consideraing them either

as a separate lithologic unit, think-

ing in terms of mining Weaverville or

mining Slate Creek, in none of those--

it wouldn't warrant a man spending his

time and money in the hope of develop-

ing a mine on any of them;and Tannery

Gulch,

Q. Either as a claim?

A. Either as a claim or as a rock

type unit.

The conclusion of the witness was the

same whether mineral valuation was con-

sidered on the basis of lithologic units

or on the basis of the mineral valuation

of each separate claim, In light of this

testimony we conclude that there is no

merit to contestees* argument,

xX.

Contestees next argue that the Judge

erred in giving less evidentiary weight

to the Yost report (Contestees* Exhibit

8) than he gave to the reports submitted

by contestants,

The Judge in his decision stated:

The evidence of high gold values

shown in the Yost report has been

refuted by the Contestant's evidence

relating to the results of sampling

conducted in the immediate vicinity

of the excavations and drill holes

put down by Yost. Since Yost was not

called as a witness to support the

findings related in his report, the

report is accorded much less eviden-

tiary weight than the reports and

opinions of the Contestant'’s witnes-

ses which were made subject to cross-

examination.

A-34 IBLA 70-205

We perceive no error on the part of

the Judge with respect to the consider.:-

tion he gave the Yost report. It is a

proper function of the Judge to assess

and weigh evidence in considering all of

the evidence eS .~ a hearing.

United peemene a Te Vv . Ki et al.,

A-30827 (July 15 s potter tates

Taylor T. Hicks, "ne30780 (October 24, ’

Tee7y- fact that the report was not

subject to cross-examination is certainly

a legitimate factor for consideration.

We disagree with contestees’ reasoning

that the Government waived cross-examina-

tion simply because it did not object to

the admission of the report into evidence

without requiring contestees to lay a

foundation. Nowhere in the record does

it appear that the Government stipulated

as to the truth of the contents of the

Yost report, and the Judge did not err,

under the circumstances in this case, in

giving the Yost report less evidentiary

weight than he did to similar reports

submitted by the Government which were

made subject to cross~-examination.

xI.

Contestees next argue that the Judge

did not give sufficient weight to the

reports of W. S. Lowden (Contestess’

Exhibit 11), John D, Hubbard (Contestees'

Exhibit 10), William D. Ball (Contestees'

Exhibit 9), and R. G. Percy (Contestees'

Exhibit 7). We disagree.

These reports contained some data

favorable to contestee, but for the most

part the reports failed to relate specific

information to any of the claims in ques-

tion, The examinations of the property

which were reported in these documents

—

A-35 IBLA 70-205

were conducted intermittently from 1901

to 1942. None of the reports purported

to discuss mineral values on specific

Claims as of the time contestees filed

their application for patent, and no evi-

dence was presented to show whether the

concitions on the property had remained

unchaned from the time that the reports

were prepared. See Adams v. United States,

318 F2d 861 (9th Cir. 1963); United States

v. Anton M, Ozanich, 7 IBLA 144 (1972);

United States v. Calla Mortensen, 7 IBLA

).

XII.

Contestees next argue that the Judge

erred in finding gold values reported by

the contestee J. 0. Archibald ynworthy

of belief. In the alternative, contes-

tees assert that these gold values cannot

be used to discredit Humboldt, which

neither offered nor vouched for this

evidence,

~ We are of the opinion that the Judge

properly rejected these gold values,

They were based on samples taken over a

five-hour period, assayed by the "Douglas"

process involving the use of two unidenti-

fied solutions, and averaged $100 per

cubic yard, and as high as $200 gold per

cubic yard in place. No evidence was

submitted regarding the nature of the

unidentified and “secret” solutions (Tr.

924-927, 945), or the process by which

the reported gold could be recovered.

There is nothing in the record to

compel the conclusion that the Archibald

data in any way controlled the Judge's

findings vis-a<«vis Humboldt. The weight

and credibility of evidence, in any event,

are matters properly considered by the

A-36 IBLA 70-205

Judge in the first instance. Cf, State

Director for Utah v. r pate, > TBLA

© ngs,

when in accord with the preponderance of

the substantial and probative evidence

adduced, will not be disturbed. Id.

XIII: 4/

XVII-XVIII

Contestees finall argue that the ad-

ministrative action taken by the Depart-

ment of the Interior in declaring the

mining claims invalid amounts to an un-

lawful exercise of plenary power, and a

taking of property without compensation,

all in violation of the Constitution and

laws of the United States.

Thig argument has no merit, The United

States Supreme Court in Best v. Humboldt

Placer Mining Co., supra, had stated

that “the Department Es been granted

plenary authority over the administration

of public land, including mineral lands***,"

The Court also clearly recognized that the

determination of the validity of the min-

ing claims was an issue to be resolved in

administrative proceedings before the

Department. We are of the opinion that

this issue has b een decided in accordance

with due process of law.

After due consideration we adopt as our

own the Judge’s rulings on each of the

47 This relates to parts XVII and XVIII

of appellants’ brief. All other Roman

numbers deal with identical designations

in appellants’ brief.

Paragraphs designated XII, XIV, XV,

and XVI of appellants’ brief were con-

sidered under the heading of "Gold" and

"Gravel".

A-3 7 IBLA 70-205

proposed findings of fact submitted by

appellants,

Therefore, pursuant to the authority

delegated to the Board of Land Appeals

by the Secretary of the Interior, 43 CFR

4.1, the decision appealed from is

affirmed,

/s/ Frederick Fishman

~ Frederick Fishman,Member

We concur:

/s/ Douglas E, Henriques

Douglas E. Henriques, Member

¢2/ Joseph W. Goss

osep . ss, Member

DECISION OF ACTING CHIEF

OFFICE OF APPEALS AND HEARINGS

Mining Claims; Discovery 3413

To constitute a valid discovery on a

placer mining claim it must be shown

that minerals have been found within

the limits of the claim in such quality

and of such quantity as to warrant a

man of ordinary prudence in the further

expenditure of his labor and means, with

a reasonable prospect of success, in

developing a valuable mine; where a

Claim contains deposits with negligible

gold values or deposits with somewhat

better gold values which are very

limited in quantity, there is no suffi-

cient prospect of success to warrant

expenditures to that end,

A-38 Office of Appeals

Alleged secret solutions permitting

greater extraction of gold from low-

value deposits, of which no evidence

was introduced by the mining claim-

ants showing the nature of the solu-

tions or that they have been actually

used in mining operations in recover-

ing greater values from low-grade

deposits than can be done by conven-

tional mining methods, are not suffi-

cient to show that expenditures would

be justified with the expectation of

developing a paying mine, especially

where no showing has been made that

minerals of such quality exist in

such quantities as to make a profitable

operation reasonably possible.

To satisfy the requirements of discovery

on placer mining claims located for

sand and gravel before July 23, 1955,

it must be shown that the deposits

within the limits of each claim could

have been extracted, removed and mar-

keted at a profit as of that date, and

where the evidence shows that the limit-

ed market in the area had been supplied

from existing sources and there is no

evidence that the claims were developed

for sand and gravel, the claims are

properly declared null and void.

A-39 Office of Appeals

June 9, 1970

UNITED STATES

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

Washington, D. C. 20240

DECISION

United States,

Contestant

) Contest No, 10-747

) (Sacramento)

V. ) Ukiah, Covelo, Humboldt,

Humboldt Placer ) White, Tannery, Tannery

Mining Company, a) No. 2, Jackson, Cademar-

corporation, and ) tori, Furnell, Last

Del de Rosier, ) Chance, Lewis. Enough

Contestees 1/) and Faurell placer

~ mining claims, situated

in secs. 5,6,and 7, T.

34 N., R. 8 W.; and

secs. 1, 2 and 3, T.34

N., R. 9 W.3 and-secs.

34 and 35, T. 35 N.,

R. 9 W.; all in M.D.M.,

Trinity County. Calif.

Decision Affirmed

The Humboldt Placer Mining Company and

Del de Rosier have appealed from a decis-

ion of a Hearing examiner dated March 6,

bl > al

} + alana

y J. O. Archibald, a sublessee of a

United States v. Humboldt Placer Mining Co. essee of certain of the mining claims

et al., Contest No, 10-747 (Sacramento involved, was allowed to intervene and

(June 9, 1970) was representated by separate counsel at

the hearing. Archibald has not filed an

appeal. Accordingly, whatever rights he

may have had have terminated and he is no

longer designated as a party to the pro-

ceeding.

ge a

oe oem

A-40 Office of Appeals

June 9. 1970

1969, which declared the above-identi-

fied placer mining claims null and void

for the lack of a discovery of a valuable

mineral deposit on any of the claims and

which rejected the mineral patent appli-

cation originally filed for the claims

on November 19, 1954.

The record shows that in June 1957

the United States filed a condemnation

action in the United States District

Court for the Northern District of Cali-

fornia to obtain possession of and title

to certain property, including the sub<-

ject placer claims, required for the con-

struction of the Trinity River Dam and

Reservoir in California. Thereafter,

on May 15, 1958, the State Supervisor,

Bureau of Land Management, filed a con-

test complaint against the subject claims.

The contestees contended that jurisdiction

to dtermine the validity of the claims was

in the courts, Ultimately this question

was resolved by the United States Supreme

Court which held that resort to condemna-

tion in order to obtain possession of the

mining claims did not preclude the United

States, as titleholder, from initial ad-

judication of their validity by administra-

tive procedures, Best vy. Humboldt Placer

: Mining Company, 371 U.S. 334 (1963). Mean-

e, the contestees appealed to the

Secretary of the Interior from a decision

rejecting their answer to an amended com-

plaint and denying their motion to dis-

miss the complaint, By decision of Decem-

b er 16, 1964, United States v, Humboldt

Placer Mining Co and Del de sier,

A<-30055 (Sipp.), the Secretary of the

Interior reinstated the contest proceedings.

A-41 Office of Appeals

June 9, 1970

A second amended complaint was filed

by the contestant on July 20, 1966, charg-

ing: (a) there is not disclosed within

the boundaries of the mining claims min-

eral materials af a variety subject to

the mining laws, sufficient in quantity,

quality, and value to constitute a dis-

covery; (b) the land embraced within the

claim or claims is nonmineral in charac-

ter; (c) with respect to the public lands

in each and all of the mining claims iden-

tified in Paragraph III of this Second

Amended Complaint, contestant charges

separately and collectively that each 10-

acre legal subdivision or part thereof

is nonmineral in character and therefore

should be excluded from the respective

alleged mining claims, and (d) the Cade-

martori placer claim, as described in: the

location notice, embraces incontiguous

tracts of land, and is therefore con-

trary to law.

Contestees filed a timely answer to

the second amended complaint. A hearing

was held on November 28, 29, 30, and De-

cember 1, 1967, and on January 8 and 9,

1968, All parties were represented by

counsel at the hearing,

The contested claims are on the south

side of Stuart Fork of the Trinity River,

in Trinity County, California, upstream

from the recently constructed Trinity

Dam, At the time of the hearing, por-

tions of some of the claims had been inun-

dated by water of Clair Engle Lake. The

Tannery No, 2 was located in 1901, the

Furnell was located in 1919, and the

other eleven named placer claims were lo-

cated in the 1890*s, Other physical

features frequently eeferred to are

Tannery Gulch, Slate Creek, and Smith

Gulch,

ieee ne ee te as ee oe eee ee ee

Nh en te npr ea ee eS eo

sarareetonessneyhany

A-42 Office of Appeals

June 9, 1970

The geology of the area is sketched on

Exhibit B in various colors. It is

based upon a geological reconnaissance

of the general area of the claims. The

most extensive geological feature is the

Weaverville formation with a reported

depth where greatest of over 800 feet.

It is an old Tertiary river channel which

has since been bisected by streams, and

has been preserved by the relative up-

lifting of the older hard and resistant

sediments around it. The Tertiary gravels

__ are unconsolidated, deeply weathered, red

colored clay gravels resulting from vol<-

canic activity and reworking. The claims

also expose some recent and present

stream gravels, and some ulta mafic and

granitic intrusive rocks. The bedrock

series ‘in the area are the Braqdon forma-

tion (Mississippian) , Copely Greenstone

(Devonian), and Salmon Schist,

There has been exploratory activity in

the area during the past 70 years directed

primarily toward the recovery of gold

from the Weaverville formation and more

recent stream gravels, The minerals most

frequently mentioned at the hearing were

gold, and sand and gravel,

The have reviewed carefully the entire

record made at the hearing, the Hearing

Examiner*s decision, and the appellants’

statement of reasons for their appeal.

The testimony will be summarized herein

only to the extent deemed necessary.

The Hearing Examiner's summarization

of the testimony pertaining to the exten-

sive testing of the contested claims by

the contestant's mineral examiners did

not mention specifically the sampling that

was performed on the Cademartori, Jackson

A-43 Office of Appeals

June 9, 1970

and Furnel’ claims, 2/ It is not to be

inferred that the Hearing Examiner did

not consider the testimony relating to

them.

The appellants contend that the Hear-

ing Examiner erred by failing to give

reasons for rejecting their affirmative

defenses, which were set forth in their

answer alleging essentially (1) that the

claims were taken without just compensa-

tion in violation of the Fifth Amend-

ment of the Constitution; (2) that the

contestees were denied trial by jury;

27 Cademartori Placer Mining Claim, The

Claim embraced two incontiguous tracts,

Contestees at the hearing abandoned one

of the tracts, claiming that portion which

comprises the N1/2NE1/4 sec. 3, and the

NW1/4NW1/4NW1/4 Sec. 1, T. 34 N., R. 9 W.,

M.D.M. (Tr. 153, 316-317). In the retained

portion of the claim three samples had been

taken. A channel cut in an 8 foot bank of

weathered Weaverville formation contained

gold values of .8 cents per cubic yard.

A pit sample from a gully in Irish Gulch

revealed gold values of 1.2 cents per

cubic yard. A channel sample along an

old ditch showed nil, (Exhs. D-D and E-E,

Tr. 460-461 and 470-471.) —

Jackson Placer Mining Claim, Eight

samples taken from this claim showed gold

values ranging from 0.5 to 34,8 cents per

cubic yard, The next highest value was

8.5 cents per cubic yard, The highest

came from a test shaft put down by the

mineral examiner in recent gravels in

Slate Creek. (Exhs. D-D. E<E, Tr, 464,

465, 467-468, 470.)

A-44 Office of Appeals

June 9, 1970

(3) that the Government should be es-

topped as a matter of equity from deny-

ing contestees and their predecessors

Footnote 2 continued--

Furnell Placer Mining Claim, Five of

the sixteen samples taken ion this claim

contained no gold, Six samples ranged

from .3 to 1.1 cents per cubic yard, A

sample from a channel cut on a slope along

a road had a value of 8.3 cents per cubic

yard, Four sample shafts were put down

in recent gravels along Slate Creek which

runs northeasterly through the claim. A

sample from a shaft 2,8 feet to bedrock

in sec. 3 showed a cubic yard value of

17.4 cents. In sec, 2, a shaft showed

the following values per cubic yard: the

top 3.2 feet, 1.4 cents; the next 4,7

feet, 42,8 cents: and the last foot in

cemented Weaverville bedrock, 2.1 cents.

In a thir shaft the values per cubic

yard were: the first 6 feet, 0,5 cents:

the next 1,2 feet, 49 cents; and the last

foot in cemented bedrock, 2.1 cents. The

sample from the fourth test shaft which

went down 3.4 feet through to cemented

bedrock had a value of 67 cents per cubic

yard, (Exhs. D-D, E-E, Tr. 457-469,)

George O, Scarfe, Jr., who examined

these three claims. was of the opinion

that the mineralization on the Cademartori

Claim was of such low grade, and that there

was such an insufficient quantity of

gravels carrying gold on the Jackson and

Furnell claims that each of the claims

does not warrant any further expenditures

with the hope of developing a paying

mine on any of them, (Tr. 478-480.)

A-45 Office of Appeals

June 9, 1970

in interest uninterrupted and undisturbed

possession of the mining claims for some

70 years; and (4) that the Department of

the Interior has no right to determine

that the contestees have no rights and

that their rights have no value.

Although the Hearing Examiner's de-

cision discloses these allegations no

express ruling was made on them. We

find, however, that the Supreme Court in

Best v. Humboldt Placer Mining Co.,supra,

explicitly or implicitly struck down

the alleged affirmative defenses when it

found that the “Congress had entrusted

the Department of the Interior with the

management of the public domain and pre-

scribed the process by which claims

against the public domain may be per-

fected, The United States, which holds

legal title to the lands, plainly can

prescribe the procedure which a claimant

must follow to acquire rights in the

public sector," The court concluded

"That the institution of the [condemna-

tion] suit in the District Court was an

appropriate way of obtaining immediate

possession, that it was not inconsistent

with the administrative remedy for deter-

mining the validity of the mining claims,

and the District Court acted properly in

holding its hand until the issue of val-

idity of the claims has been resolved by

the agency entrusted by Congress with

the task,” Where a mining claim in-

volved in a condemnation suit is admin-

istratively determined to be valid,

thereafter the value of such claim for

condemnation purposes is within the juris-

diction of the court, This is what

Justice Douglas was talking about when

he said that the District Court acted

. “<a

re Pte Senter

A-46 Office of Appeals

June 9, 1970

properly in holding its hand, supra.

The Hearing Examiner emmneinl found

that the testimony of the contestant's

expert witnesses is based upon unusually

extended and comprehensive exploratory

examination conducted in accordance

with accepted standard procedures and

upon the assay results of the samples

taken which assays were also conducted

in accordance with accepted procedures.

He pointed out that the testimony shows

that the Weaverville formation exposed

on the claims bears average gold values |

of .276 cents per cubic yard; that the

material exposed in the slopes and

washes bears average gold valves of less

than three cents per cubic yard; that

the recent stream gravels bear average

gold values of less than nine cents per

cubic yard; and that the portions of the

deposits of the recent stream gravels

which bear greater than average gold

values are extremely limited in extent.

He properly found that deposits bearing

such negligible gold values. or deposits

with somewhat better gold values which

are limited in volume, are not worthy

of development since the mining costs

would exceed the value of the gold which

could be recovered.

The Hearing Examiner next found, and

we agree, that the contestant established

rima facie, that the deposits exposed

on the claims do not bear sufficient min-

eralization to warrant development there-

of, and hence do not constitute valuable

mineral deposits within the meaning of

the mining laws.

A-47 Office of Appeals

June 9, 1970

The Examiner pointed out that the

documentary evidence submitted by Hum-

boldt consists of the material sub-

mitted with its application for patent,

including the Yost report, and other

reports made prior to 1942,

The decision appealed from properly

found that the evidence of high gold

values shown in the Yost report has

been refuted by the contestant's evi-

dence relating to the results of sam-

pling conducted in the immediate vicin-

ity of the excavations and drill holes

put down by Yost, Further, since Yost

was not called as a witness to support.

the findings related to his report, the

report is properly accorded less evi-

dentiary weight than the reports and

opinions of the contestant's witnesses

which were made subject to cross-exam-

ination,

The Hearing Examiner noted that the

other reports submitted by the contestees

as business records of the Humboldt

Placer Mining Company were all prepared

at least twenty-five years ago, He

added that these old reports, while re-

. flecting some significant gold values,

appear to be very general in nature and

were made without benefit of informa-

tion which resulted from the auger and

churn drilling performed on the claims

by Yost and the contestant's engineers

in 1959, The Examiner then found, and

we concur, that, since the reports and

opinions of the contestant's witnesses

are based on more extensive and more

recent exploratory information, those

reports are accorded much greater weight

than the opinions and old reports sube<«

mitted by the contestees.

Stet if

— oe - e) Eee eee Oe ee

oe . "aS SS ee ee ee eres ae ee eee

1

A-48 Office of Appeals

June 9, 1970

The Hearing Examiner stated that

the fantastic gold values reported by

Gibson were based on surface samples

taken over a five hour period, as con-

trasted with the extensive exploration

program conducted by the contestant in-

volving several man-years, The samples

were assayed by the so-called Douglas

process involving the use of unidentified

solutions. He rightfully pointed out

that there is no supporting evidence of

the nature of the unidentified solutions

or positive evidence of the process by

which the gold could be recovered, and

that gold values averaging one hundred

dollars per cubic yard, consisting of

either coarse or microscopic particles,

would surely be identified by normal

fire assay. It as his opinion that the

Douglas tests reflecting average gold

values of one hundred dollars per cubic

yard, and as high as two hundred dollars

in gold per cubic yard of material in

place, are simply unworthy of belief.

The decision below pointed out that

a considerable portion of the contestees'

evidence was devoted to the contention

that valuable deposits of sand and gravel

occur on the claims, and properly found

that substantial deposits of material

suitable for fill and subbase in high-

way construction and more limited depos-

its of recent stream gravels suitable

for use as concrete aggregage occur on

the claims. The decision appropriately

stated that these deposits do not consti-

tute valuable mineral deposits unless

they are shown to be marketable, The

Hearing Examiner correctly found that

there is no evidence in the record that

A-49 Office of Appeals

June 9, 1970

there has ever been any demand for the

subject sand and gravel deposits, or

that any portion thereof has ever been

removed from the claims for use in con-

crete aggregate or for any other pur-

pose, He added that the fact that there

is a limited annual market in small towns

in Northern California which have other

existing sources of supply, and the pos-

sibility of the future construction of

highways and dams in the area, do not

constitute evidence of a demand for

these particular deposits, He concluded,

and we concur, that in the absence of

more specific evidence that these par-

ticular sand and gravel deposits could

have been removed and disposed of at a

profit on or before July 23, 1955, it

must be concluded that the same do not

constitute valuable mineral deposits

within the meaning of the mining laws,

The Hearing Examiner properly ex-

plained that an applicant for a mineral

patent has the burden of proving a valid

discovery at the time his application is

filed, citing Cole v. Ralph, 252 U.S.

286 (1920); Best v. Humboldt Placer

Mining Co., Supra, and he found that

the contestees ve failed to sustain

that burden, He also found, and we

agree, that:

The contestant has established by

an overwhelming preponderance of

the more credible evidence ad-

duced at the hearing that valuable

minerals have not been found on any

of the claims of such character

that a person of ordinary prudence

would be justified in the further

expenditure of his labor and means

~ OT eee 4.445 eee a

A-50 Office of Appeals

June 9, 1970

with a reasonable prospect of suc-

cess in developing a valuable mine.

The Examiner than concluded that no

valuable mineral deposits have been ex-

posed within the limits of any of the

contested claims and declared each of

them invalid. He made no ruling on the

other charges.

Appellants allude to their having a

possessory right, In that regard, under

the mining laws one may take possession

of vacant public land open to location

under those laws and, after filing no-

tice of location, retain that possession

against all except the Government while

he is in diligent prosecution of his

efforts to discover valuable minerals

therein, While he is in possession of

the land, he is not regarded as a tres-

passer because he is on the land with

the tacit consent of the Government.

However, when the Government withdraws

that consent, either by withdrawing the

land from the operation of the mining

laws or by the institution of adverse

proceedings against the claim, the

Claimant must show that he has made a

discovery of valuable mineral deposits

within the limits of his claim in order

to retain that posssession. United States

v. Everett Foster et al,. 65 I.D,

Appellants maintain that the Depart-

ment of Agriculture is not a proper

party to this contest. The contested

claims embrace public lands some of

which are administered by the Department

of Agriculture by reason of being situ<

ated in a national forest, and the re<

mainder are administered by the Depart-

A-51 Office of Appeals

June 9, 1970

ment of the Interior, In these circum-

stances, it is proper for both depart-

ments to join in the prosecution of the

contest. United States v, San Juan Ex-

loration Co., A-30965 (March 27, 1969).

Under the mining laws of the United

States, 30 U.S.C.§21 et seq. (1964), a

discovery of a “valuable mineral deposit"

within the limts of a mining claim is

essential to its validity. The mining

statutes do not specifically define a

"discovery," but it has been held that

one exists

{[W]here 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 suc-.

cess, in developing a valuable mine.

* * *. Castle v. Womble,19 L.D. 455,

457 (1894); Chrisman v. Milier,197

U.S. 313, 322 (1905). <2

This has come to be known as the "“pru-

dent man test." Only when this test is

satisfied can it be said that a discovery

has been shown. The Supreme Court in

Chrisman v. Miller, supra, in further

describing what constitutes an adequate

or valid discovery under the mining laws,

quoted an earlier statement of Justice

Filed that:

The mere indication or presence of

gold or silver is not sufficient***.

The mineral must exist in such quan-

tities as to justify expenditure of

money for the development of the mine

and the extraction of the mineral.

197 U.S. at 322 (Emphasis added).

A-52 Office of Appeals

June 9, 1970

It is obvious that the finding of

just some mineral will not do. Further,

if the quality and quantity of the min-

eral found would justify further ex-

ploration but not development, then the

test has not been met and a discovery

has not been shown. Converse v. Udall,

399 F2d 616, 620 (9th Cir. 1968), cert.

denied, 393 U.S. 1025 (1969).

When the Government contests a mining

Claim on public lands, it bears only the

burden of going forward with sufficient

evidence to establish a prima facie

case; the burden then shifts to the min-

ing claimant to show by a preponderance

of the evidence that his claim is valid.

Foster v. Seaton, 271 F2d 836 (D.C.Cir.

1955).

The courts recently have made it

abundantly clear that the test of what

is a “valuable mineral deposit" involves

consideration of economic values. In

discussing the ‘prudent man test" and

the phrase "valuable mineral deposits”

as it appears in the mining statues, the

Supreme Court said:

Under the mining laws Congress had

made public lands available to

people for the purose of mining

valuable mineral deposits and not

for other purposes. (Footnote omit-

ted.) The obvious intent was to

reward and encourage the discovery

of minerals that are valuable in an-

economic sense. Minerals which no

prudent man will extract because

there is no demand for them at a

price higher than the cost of ex-

traction and transportation are

hardly economically valuable. Thus.

ee

A-53 Office of Appeals

June 9, 1970

prositapi lity is an important con-

sideration in applying the prudent

man test***." United States v. Cole-

man, 390 U.S. 599, 602 (1968). (Em-

phasis added).

More recently the U. S. Court of Appeals

for the Ninth Circuit in the Converse

case, supra, a case involving gold, held

that the prudent man test, complemented

by the marketability test, judicially

approved in Coleman, supra, is applicable

to all mining claims.

It is not required of a mining claim-

ant to prove a discovery to show that he

has actually engaged in profitable min-

ing operations or even that profitable

operations are assured, but it is re-

quired that there be a showing of a pros-

pect of profit which is sufficient to

invite reasonable men to expend their

means in attempting to reap that profit

by extracting and marketing the mineral,

as distinguished from evidence of value

which will entice men to invest their.

money only to gain control over land

and hold it in the hope or expectation

that at a future date the land may be

found to be valuable for the minerals

which it contains. United States v.

Bryan Gould, A-30990 (May 7, 1969),

and case cited therein.

The present marketability test, which

is a refinement of the prudent man test,

requires a showing that the mineral in

question can be extracted, removed and

prsently marketed at a profit. This

present marketability, as to materials

a awe

Pera Pe ee

A-54 Office of Appeals

June 9, 1970

of widespread occurrence, can be dem-

onstrated by a favorable showing as to

such factors as the accessibility of

the deposit, bona fides in development,

proximity to market, and the existence

of a present demand. Foster v. Seaton,

271 F2d 836 (D.C. Cir. 1959). Further-

more, since Congress withdrew common

varieties of sand and gravel from loca-

tion under the mining laws on July 23,

1955, 30 U.S.C.§611(1964), it is incum-

bent upon one who located a claim prior

to that date for a common variety of

sand and gravel to show that all the re-

quirements for a discovery, including

a showing that the materials could be

extracted, removed, and marketed at a

a had —— met by that date.

a rv. Dr e -gyrporation., 398 F2d

791 (Sth Cir. ‘

The Government when it contests a

mining claim undertakes only to show

that the discernible evidence of miner-

alization is insufficinet to constitute

a discovery. The Government is not

obligated to provide affirmative proof

either that the land embraced in a

mining claim is nonmineral in charac-

ter or that no discovery has been made.

A Government mineral examiner is under

no obligation to make such an exhaustive

search of the land and test of the

minerals as would normally be done by

a prospector. Rather, his function is

one of verifying, if possible, the

Claimed discovery. poste States v.

Frank Coston, A-3083

cases cited; United States Vv.

Bryan ‘Gould, supra.

A-55 Office of Appeals

June 9, 1970

Appellants contend that the Govern-

ment's samples were not taken in accor-

dance with accepted standards in that

they were not drilled or otherwise

taken down to bedrock. There is no merit

to this contention. Many of the Govern-

ment samples did go down to bedrock. In

those instances where bedrock was not

reached, the Government mineral examiners

went as deep or deeper than the contes-

tees or their lessees did in their sam-

pling. Nothing more was required, as

the purpose of the Government's examina-

tion of a mining claim is to verify what

the mineral claimant has exposed. We

agree that the proper procedure for a

prospector or claimant in order to best

evaluate his claim, is to go down to

bedrock, but even that in some instan-

ces may not be economically feasible

for him. In any event, we concur with

the Hearing Examiner's finding in that

the mining engineers and geologists who

testified for the Government had compre-

hensively tested the claims for the pur-

poses of verification in accordance

with acceptable procedures. We add that

each fulfilled his function of attempt-

ing to verify the claimed discoveries,

and their testimony established a prima

facie case for the Government,

It is urged by appellants that the

sampling procedures of the Government

were incorrect as they included the silt

and topsoil and as a result the values

were diluted. It is standard procedure

in the testing of a placer mining claim

to take channel samples from top to

bottom of a cut, trench or pit, and in

A-56 Office of Appeals

June 9, 1970

taking samples by churn or auger dril-

ling to include the overburden in ar-

riving at the mineral values for the

cost of memoval including the removal

of the overburden is a factor in deter-

mining whether a prudent man would be

justified in the further expenditure of

his labor and means, with a reasonable

prospect of success, in developing a

valuable mine. United States v. Robert

W. Carnes, A-28178 (May 23, 1960). it

is not unlike the adjustment of values

in lode claims to a minable width in

order to obtain realistic values,

United States v. Jes

se ,W. Crawford

A-30820 (January 29, 25, 1968). f1 j

A-57 Office of Appeals

June 9, 1970

350 F2d 949 (9th Cir, 1965), cert. den.

380 U.S. 940 (1966).

Appellants maintain that the Hearing

Examiner rejected contestees' Exhibits

7, 8, 10 and 11, the reports of Percy,

Yost, Hubbard and Lowden, respectively.

The Hearing Examiner did' not reject

them, He explained that he gave little

weight to the Yost report because Yost

was living at the time of the hearing

in Sacramento and was not called upon

to testify as to his examination and

report on the claim. As to the other

reports, submitted as business reports

of Humboldt, prepared more than 25 years

—_ eS Oe ee

ht i i

ago without benefit of the results of the

more recent auger and churn drilling per-

formed in 1959, the Examiner pointed out

that since the reports and opinions of

the contestant's witnesses are based

upon more extensive and more recent ex-

ploratory information, they are accorded

greater weight than the opinions and

older reports submitted by the contestees.

It is a proper function of a Hearing

Examiner, the finder or trier of fact,

to assess the weight of evidence in con-

sidering the whole of the evidence pre-

sented at the hearing. United States v.

It is asserted that the Hearing

Examiner erred in failing to condider

the volume of gravel over the entire

length of Tannery Gulch. This assertion

is without merit. Each mining claim

stands by itself with regard to the

demonstration of a discovery. Tannery

Gulch extends for a considerable dis-

tance in its northeast-southwest trend

and is covered by many mining claims,

most of which are not involved in this

contest. Therefore, the Hearing Exam-

iner properly did not consider the vol-

ume of mineral bearing gravel over the Evel 9 t al. ,A-30827 (Jul

Se ee = the Sagem Valuable i; t5c8t, agus United States Vv. es

nera sposits must be found within F ‘1 -30780 (

the limits of each mining claim, 30 Taylor. Hicks = eae

U.S.C.§23, 35 (1964). A discovery on

one claim does not inure to the benefit

of another. United States v. Charles H. Appellants aver that the Government

presented no evidence concerning the

Henrikson et al., 70 I.D. 212, 215 Faurell claim. This averment has no

nrikson v. Udall, 229 merit. The Hearing Examiner's decisior:

F. Supp. 510 (D. Cal. 1964), aff'd at page 8 refers to the fact that this

- eS eS ero

A-58 Office of Appeals

June 9, 1970

claim embraces two incontiguous tracts

and sets out the results of the sam-

pling conducted on the claim by the

Government which are shown in Exhibits

U and G, respectively. The testimony

of Mining Engineer Middleton, who ex-

amined the claim, appears in the trans-

cript at pages 299-304, 330, 333, 336

and 340.

Appellants take issue with the Hear-

ing Examiner characterizing as fantastic

the reported values in Gibson's samples,

which were assayed by the so-called

Douglas process involving the use of

unidentified solutions, We note the

contrast between the values reported in

Gibson's samples and those in the Gov-

ernment’s samples, which differences

apparently prompted the Hearing Exam-

iner’s statement. This novel "assay"

process allegedly recovers invisible

gold values presumed lost by standard

assaying methods, This new process is

in its experimental stage as shown by

Gibson's testimony and requires further

refinement. There has been no compar-

ison by the contestees using portions

of the same samples to show the results

obtained by the novel process and the

results that could be obtained by stan-

dard fire assay. Neither has it been

demonstrated that this laboratory-type

extraction technology is economically

feasible in a commercial operation.

The cost estimates of such an opera-

tion are all hypothetical as there has

never been such an operation upon which

to base testimony of actual costs, and

the cost of the secret solution is

A-59 Office of Appeals

June 9, 1970

based solely on hearsay. Moreover,

there has been no showing that there

is a sufficient quantity of material

within the limits of any claim con-

taining these alleged high invisible

gold values which would support such

an operation. As a consequence, the

Claimants have not established that

the novel extraction process when

applied to the material on these lands

would justify a person of ordinary

prudence in risking his labor and means

with a reasonable expectation of devel-

oping a valuable mine, United States

v. New Jersey Zinc Co., 74 1I.D. 191

T1967)

With regard to the claimants' con-

tention that valuable deposits of sand

and gravel occur on the claims, it is

asserted on appeal that marketability

was not presented as an issue in the

second amended complaint. Appellants

cannot claim surprise. The record in-

dicates that the claimants at a prehear-

ing conference a day prior to the hear-

ing asserted that there are valuable

deposits of sand and gravel on the

claims. The record also shows that

appellants were aware that the market-

ability of the sand and gravel would be

an issue in the case. as one of their

witnesses, James R, Miller, was a mar-

keting consultant, who testified that

he made a study of the market potential

of sand and gravel. (Tr. 690-749.) In

any event, as was stated in Coleman,

supra, the marketability test is a

Iogical complement to the prudent man

rule in determining whether the require-

ments of a discovery have been met.

A-60 Office of Appeals

June 9, 1970

Mr. Nielson, a Government mining

engineer, testified that he studied

the sand and gravel situation in Trinity

County, where the subject claims are lo-

cated. (Tr, 957). He testified that

sand and gravel in Trinity County is

quite an abundant commodity, They have

a very fine quality of gravel, the pri-

mary source lying along the Trinity

River and its tributaries. Much gravel

has been drived from old hydraulic mines

that were worked. These mines added the

quality of upgrading to it. Also gravel

along the banks and bars of the Trinity

River is of rather good qualty, by

reason of having traveled many miles most

of the softer constituents are missing.

(Tr, 958.) He mentioned that in this

general area a sand and gravel plant

capable of supplying specification con-

crete aggregate is operating at Douglas

ity and supplying the needs of the area.

Farther to the north is a small plant

which operated intermittently supplying

local demand, but the plant is not ade-

quate for the production of héehway spe-

cification concrete aggregate. With re-

gard to gravel from the Weaverville for-

mation, he stated that as a general rule

the Weaverville formation is both too

dirty and too soft due to weathering to

make concrete aggregate, although it

could be used for sub-base and fill mater-

ial. He also testified that the market

is so limited that the two producers

mentioned adequately supply it. He poin-

ted out that the biggest handicap is the

remoteness of some of the market requir-

ing a long haul, as the places are so

remote and small that they cannot support

a plant of their own. (Tr. 959-962).

A-61 Office of Appeals

June 9. 1970

Mr. Miller, testifying for the con-

testees, stated that he did not examine

the sand and gravel on the contested

claims, but made a study of the market

potential for sand and gravel in the State

of California and in the United States,

that he had talked with one sand and gra-

vel producer in the area of the claim,

and that he had studied all the available

literature on the subject. He testified

that there has been a market for sand

and gravel in Trinity County since 1850,

that there was a pronounced increase in

that market in the last two decades, and

that a peak year was 1957. He added that

the increase was due to the development

of highways and roads, He expressed the

opinion that there was an existing market

for gravel in July 1955, and there is a

market at the present time, (Tr. 702).

He explained that the existing market

would involve primarily road use and then

in the future at intermittent times a

large temporary demand for other types

of public works, construction, primarily

dams, paving areas, improved Forest Ser-

vice camps and this type of thing, in-

cluding general construction use. (Tr.

707 a )

The issue is whether the sand and

gravel on the subject claims could be

extracted, removed and marketed at a pro-

fit on or before July 23, 1955, the date

on which Congress withdrew common varie-

ties of sand and gravel from location

under the mining laws, supra, The re-

cord contains no evidence that there was

as of the critical date or since, a de-

mand for the sand and gravel deposits on

A-62 Office of Appeais

June 9, 1970

the subject claims, The fact that there

was general limited market for sand and

gravel in the area which was supplied

from existing sources does not constitute

evidence of a demand for these particular

deposits, Furthermore, the record is

barren of any evidence that these claims

were ever developed for sand and gravel.

The lack of proof of sales of sand and

gravel from the claims as of July 23,

1955, or since, although not decisive of

the issue of marketability, suggests that

certain factors must have been involved

that prevented the sale; i.e., it is in-

dicative that the materials on the claims

could not have been extracted, removed,

and marketed at a profit as of that date

or since, United States v. Alfred N.

Verrue, 75 1.D. 300 (1968).

It is argued on appeal that the con-

tested claims contain impervious fill

material which is suitable for earth dam

construction purposes and therefore, the

fill material “has some property giving

it distinct and special value,” There

was general testimony to the effect that

the Bureau of Reclamation had tested many

places in the vicinity of Trinity River

for impervious fill material, including

some of the subject claims, for use in

the construction of Trinity Dam, It was

disclosed that fill material from sources

closer than these claims was used in the

construction of that dam, Materials used

for fill purposes are not subject to lo-

cation under the miing laws, United States

v. William M, Hinde et-.al., A-30634 (July

, and cases cited, the fact that

there may have been temporary local demand

for fill material with the property of

A-63 Office of Appeals

July 9, 1970

being impervious, does not make it lo-

catable (Holman v. Utah, 41 L. D. 314

(1912) or make it other than a common

variety of material, Evyen if such

' material was locatable, or is considered

to be an uncommon variety, the require-

ments for a discovery have not been met

in view of the lack of demand and lack

of bona fides in development, as stated

above,

We conclude, as did the Hearing Exam-

iner, that the contestees have failed to

meet the burden of proof upon them to

show by a preponderance of the evidence

that a valid discovery has been made on

each and any of their claims,

Accordingly, the d cision appealed from

is affirmed. 3/

{Information concerning right of appeal

is omitted.].

/s/ Frances A Patton

Acting Chief, Office of

Appeals and Hearings

37 Patent application Sacramento 049136,

which included the subject claims, was

closed out by a Bureau decision dated

August 18, 1969, dismissing an apeal for

failure to file a statement of reasons

for the appeal within the extended period

allowed for filing. As no appeal was

taken from that decision, it has become

final,