Petition for a Writ of Certiorari — Barton v. Morton

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SUP REN roy

e :

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1974

74-199

HAROLD E. L. BARTON,

Petitioner,

Vv.

ROGERS C. B. MORTON, Secretary of the

Department of the Interior of the

United States of America.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

William Braly Murray,

Attorney for Petitioner

1606 Standard Plaza

Portland, Oregon 97204

Telephone: (503) 226-3819

INDEX TO PETITION FOR CERTIORARI

Petition for Writ of Certiorari

Opinions Below

Jurisdiction

Question Presented

Constitution and Statutes

Statement of the Case

Reasons for Granting the Writ

After discovery under the "prudent

man rule" (reasonable prospect of

success in developing a valuable

mine), there is no room to require

that a mining claimant demonstrate

by demonstrative evidence the value

of the deposit by exploiting or

mining the deposit.

The demonstrative evidence test

presents a conflict with the

decisions of the Supreme Court

upholding the "prudent man rule".

The demonstrative evidence test is

a departure by agency action from

established practice which requires

Page

qj -& WwW SS Wow

correction by the courts on judicial

review.

Unpatented mining claims are property

in the highest sense of the term and

constitutionally protected. Agency

action which establishes a demonstra-

tive evidence by exploitation test

destroys title to many valid un-

patented mining claims.

Conclusion: If demonstrative evidence rule pre-

vails, it creates additional agency power where

three branches of government have been merged -

absolute discretionary power.

INDEX OF CASES

Cameron v. United States, 352 U.S. 450 (1920)

Castle v. Womble, 19 L.D. 455 (1894) 7,

Chrisman v. Miller, 197 U.S. 313 (1905)

Cole v. Ralph, 252 U.S. 286 (1920)

Best v. Humboldt Placer Mining Co., 371 U.S.

334 (1963)

Jefferson-Montana Copper Mines Co.,

41 L. D. 302 (1912)

U.S. v. Coleman 390 U.S. 599 (1968)

Wilbur v. United States ex rel. Krushmic,

320 U.S. 306 (1930)

Constitution and Statutes

Fifth Amendment to Constitution of the

United States

Minerals Policy Act of 1970, 84 Stat. 1876

28 USC 1254 (1) 62 Stat 928

30 USC 22

ee, ea” So”

30 USC 23

iii

Index of Authorities Cited (continued)

Page

30 USC 29 3

Periodicals - Treatises

Congressional Record Vol 120 No 18

§ 1911-S 1912 140

Utah Law Review, Vol 1968 No. 1 p. 114

"Government Initiated Contests Against

Mining Claims---a Continuing Conflict" 10

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1974

HAROLD E. L. BARTON, Petitioner,

ROGERS C. B. MORTON, Secretary of the

Department of the Interior of the

United States of America.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Harold E. L. Barton, your petitioner, prays

that a writ of certiorari issue to review the

judgment of the United States Court of Appeals

for the Ninth Circuit. The Court below affirmed

the decision of the United States District Court

for the District of Oregon. The District Court

affirmed the decision of the Secretary of the

Interior on judicial review of his administra-

‘tive action.

OPINIONS BELOW *

The 1974 opinion of the Court of Appeals

for the Ninth Circuit (Appendix , infra, pp. A 41

to A 47) is reported. Harold E.'L. Barton, v.

ers C. B. Morton, Secre of t rtment

of the Interior of t nitea States of America,

°. -l , ’ 4. :

The 1971 opinion of the United States

District Court for the District of Gregon (Appen-

dix infra, pp. A 38-A 40. is not reported.

The 1967 opinion for the United States :

Department of the Interior, Office of the Secre-

tary, by the Assistant Solicitor, Land Appeals,

(Appe-dix, infra , pp. A21 to A 37 A-30659 is

rep. .2d i

The 1962 opinion of the Assistant Director

Bureau of Land Management, reversing the Hearing

Examiner, (Appendix, infra, pp. A 1l to A20 is

unpublished.

The 1961 opinion of the Hearing Examiner

Bureau of Land Management (Appendix, infra

(Contest No. 05987 Oregon) is unpublished.

1/ Unpublished copy may be obtained from United

States Department of the Interior, Director,

Bureau of Land Management, Office of the Solicitor

Oregon 05987 Nov. 2, 1962.

2/ Unpublished copy may be obtained from United

States Department of the Interior, Contest No.

05987 Oregon October 26, 1961.

RRR RE TELESALES

The judgment of the United States Court of

Appeals for the Ninth Circuit to be revi-.wed is

dated and was entered May 30, 1974. Rehearing

was denied July 5, 1974.

JURISDICTION

Title 28 U.S.C. 1254 (1) as revised by the

Act of June 25, 1948, Chapter 646 (62 Stat. 928)

is believed to confer on tiie Supreme Court of the

United States jurisdiction, in its discretion, to

review this case by writ of certiorari.

;

QUESTION PRESENTED

Whether a mining claimant is required to

exploit his mineral deposit and mine it to demon-

strate certainty of its value by demonstrative

evidence in order to validate his claim.

CONSTITUTION AND STATUTES

The Fifth Amendment to the Constitution of

the United States, which protects property against

taking without compensation, is sufficiently

familiar to the Court as not to require quotation.

The pertinent portions of the applicable

statutes (Mining Law of 1872) are as follows:

41 Stat. 437 (30 U.S.C. 22)"...a11 valuable

mineral deposits in lands belonging to the United

States, ...chall be free and open to exploration

and purchase, and the lands in which they are found

to occupation and purchase..."

17 Siat. 91 (30 U.S.C. 23) "Mining claims

upon veins or lodes of quartz or other rock in

place bearing gold, silver,...or other valuable

deposits,..."

6, 17 Stat. 92 Act of May 10, 1872, (as

amended) (30 U.S.C.29 "A patent for any land

claimed and located for valuable deposits may

be obtained in the following manner:..."

STATEMENT OF THE CASE

Harold E. L. Barton, geologist, and

Kenneth 0. Watkins, mining engineer (deceased)

filed application for mineral patent Oregon

05987 for the Elephant Mountain Nos. 1 and 4;

Elephant No. 2 and Grub Stake lode mining claims

Mineral Survey No. 949.

The Government granted patents to Elephant

Mountain No. 4 and Grub Stake claims. The

patents contained a timber reservation in accor-

dance with the provisions of the 0 & C Act of

April 8, 1948 (62 Stat 152). Both contested and

uncontested claims form one economic group and

are served by common workings. The mine is in

parts of Sections 2,3,10 and 11, Township 22

South, Range 1, East W.M. in the Bohemia Mining

District, Umpqua National Forest, Lane County,

Oregon.

Claims to the north, east, south and west

of the contested claims have either been patented

or have been clearlisted for patent. The admin-

istrative law judge found that the Bohemia Mining

Disrrict. is one of the principal mineralized

areas on the West slope of the Cascade Range; that

witnesses for the mining claimants had (spent)

more time on the claims and had greater oppor-

tunity to observe the claims than the Government

witnesses, and that their testimony to the effect

that the veins on the two Elephant claims are

extensions of other veins on claims to the east

and west is more persuasive than the testimony

on the same subject offered by the Government

witnesses. (A 7, 8).

The parties are in general agreement re-

garding the general geology, occurrence of min-

eral and the historic background of the mining

district. (A 1). The testimony of the Govern-

ment engineers was not necessarily inconsistent

with that of the witnesses for the mining claim-

ants. (A 2,3,).

On Claim No. 1, a vein in an oxidized zone

is exposed in two adits near the east end line,

in an outcropping 300 feet to the west, and in

an adit 100 feet further west. On the No. 2 clain,

an adit along the lode line in the east half of

the claim exposes a vein structure which Mr.

Suchy, minerals examiner for the Government,

described as both strong and competent. (A 3).

The Government witnesses testified at the

first hearing before the administrative law judge

that they were unable to project the veins on the

adjoining claims into the two contested claims.

(A 4). However, Mr. Suchy, chief minerals exam-

iner for the Government, testified at the second

hearing that he had been on the claims again and

had traced the veins across Elephant No. 2 east-

erly into the Elephant Mountain No. 4. (Hearing

Examiner's second opinion of December 2, 1964

p. 2 ). ‘Elephant Mountain No. 4 is one of the

claims which was clearlisted and patent was

issued for it.

The Examiner agreed with the witnesses that

further work along the veins is warranted. But

he concluded that the claims were null and void

for lack of discovery of a valuable mineral

deposit. (A 8, 9).

The Assistant Director, Bureau of Land Man-

agement, reversed the administrative law judge

and held against the Bureau and for the mining

claimants. He found:

"After careful consideration of all

of the...testimony concerning the strength

of the structures or veins on the claims

and the assays of samples taken from the

exposure as well as the characteristics

of veins in the mining district, we are

persuaded that the record Supports a con-

clusion that a prudent man would be war-

ranted in expending his time and money

in sinking on, or tunneling into the

veins on these clains with a reasonable

TE of developing a paying mine."

A 20).

Mining claimants discovered an ore shoot with

two dimensions physically exposed. High grade ore

containing gold values as high as $72 an ounce, with

the price of gold at $35 per ounce, was sampled at

measured intervals. Channel samples were cut across

the width of the ore shoot for widths up to thirty

inches for a length of forty feet along the strike.

Tr 160, Exhibit 9, Exhibit S-1. The chief mineral

examiner for the Government agreed that the ore

shoot would extend for a depth of at least 150

feet. Tr 151.

The differences between the Government's

engineeers and the mining claimants about the veins

on the Elephant No. 4 being an extension of the

veins on adjoining claims at the first hearing

were resolved in favor of the mining claimants at

the second hearing, after the Government's engineer

had reexamined the property. The only rema

difference is not whether a valuable block of ore

exists, but how it should be mined. The Govern-

ment engineers would sink on the ore shoot. The

mining claimants would tunnel below the ore shoot

and stope the ore above. ,

The Circuit Court adopted the opinion of the

Assistant Solicitor written for the Secretary 1

1/ The Solicitor's Office was also counsel for the

Government at the administrative hearings.

that after mineral discovery has been made,

there is room to require proof by demonstrative

evidence through actual exploitation that the

deposit is valuable.

REASONS FOR GRANTING THE WRIT

A. After discovery under the "prudent man

rule" (reasonable prospect of success in develop-

ing a valuable mine", there is no room to require

that a mining claimant demonstrate by demonstra-

tive evidence the value of the deposit by exploit-

ing or mining the deposit. Castle v. Womble calls

for justification for further expenditure of time

and money to develop a mine. It does not call for

exploitation - mining to extract ore from a mine

in the operating stage.

B. The demonstrative evidence test presents

a conflict with the decisions of the Supreme Court

upholding the "prudent man rule:" The "prudent

man rule", pronounced by the Land Office in Castle

v. Womble, 19 L.D. 455 (1894) and reaffirmed in

Jefferson-Montana Copper Mines Co., 41 L. D. 302

(1912) was upheld in ae v. Miller. 197 U.S.

313 (1905); Cameron v. United States, 352 U.S. 450

(1920); Cole v. Ralph, 252 U.S. 286 (1920); Best

v. Humboldt Placer Min Co., 371 U.S. 334 (1963);

U. S. v. Coleman. 390 U.S. 599 (1968).

The requirement that the mining claimant must

provide demonstrative evidence by exploitation of

the deposit, created here by the Department and

adopted by the Circuit Court, is a reversal of the

"prudent man doctrine" irreconcileable with the

long line of pronouncements by this Court applying

the "prudent man rule". Castle v. Womble states:

"After a careful consideration of the sub-

ject, it is my opinion that 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 ex-

penditure of his labor and means, with

‘ a reasonable prospect of success, in de-

veloping a valuable mine, the requirements

of the statute have been met. To hold

otherwise would tend to make of little

avail, if not entirely nugatory, that pro-

vision of the law whereby 'all valuable

mineral deposits in lands belonging to

the United States...are...declared to be

free and open to exploration and purchase.'

For, if as soon as minerals are shown to

exist, and at any time during exploration,

before the returns become remunerative, the

lands are subject to other disposition, few

would be found willing to risk time and

capital in the attempt to bring to light

and make available the mineral wealth,

which lies concealed in the bowels of the

earth, as Congress obviously must have

intended the explorers should have proper

opportunity to do. 19 L.D. 455.

C. The demonstrative evidence test presents

a conflict with the decisions of the Supreme Court

upholding the "prudent man rule". It is a de-

parture by agency action from established practice

which requires correction by the courts on judicial

review. Soe

It would be appropriate for the Court to take

judicial knowledge of the economics of gold. The

current price fluctuates around $150 per Troy ounce.

Gold is a commodity universally accepted as a

measure of the value of all other commodities.

There is no certainty that we can phase gold out

of the monetary picture. Once before, after the

War Between the States, this Government was on an

unredeemable paper money standard. Gold produced

from many small mines in the West enabled us to

make our currency the strongest in the world.

During World War I, men were taken from shipyards

to mine gold to fight inflation. Unredeemable

domestic paper money has value by force of law,

backed by governmental power over the citizens,

but internationally this does not follow.

The importance of gold and other metals to

our economy and to our national defense has

been recognized by Congress in the Mining

and Minerals Policy Act of 1970, 84 Stat.

1876:

"Sec. 2 The Congress declares that it

is the continuing policy of the Federal

Government in the national interest to

foster and encourage private enterprise

in (1) the development of economically

sound and stable domestic mining, minerals,

metal and mineral reclamation industries,

(2) the orderly and economic development

of domestic mineral resources, reserves,

and reclamation of metals and minerals to

help assure satisfaction of industrial,

security and environmental needs,..."

D. Unpatented mining claims are consti-

tutionally protected property in the highest

sense of the term. Wilbur v. United States

ex rel. Krushmic, 320 U.S. 306 (1930). Agency

action which establishes a demonstrative evi-

dence by exploitation test destroys title to

many valid unpatented mining claims.

CONCLUSION

Mr. Justice Douglas, speaking for the

Court, said:

"Unless we make the requirements for ad-

ministrative action strict and demanding,

expertise, the strength of modern govern-

ment, can become a monster which rules

with no practical limits on its discre-

tion. Absolute discretion, like corrup-

tion, marks the beginning of the end of

liberty." New York v. U.S., ICC et al.,

342 U.S.882.

PASE: TA

™

It is understandable that agencies which

have no responsibility for our national mineral

reserves appear to frustrate Congressional min-

eral policy. See Government Initiated Contests

Against Mining Claims--A Continuing Conflict,

Utah Law Review, Vol 1 HO. 1, p. 1A.

Agency rationalization of its own conclusions

of ultimate fact which contradict the specific

facts which should have been pant ag: the evi-

dence, has been the subject of recent discussion

by Congress. Congressional Record, Proceedings

and Debates of the 93rd Congress, Sesond Session

Vol. 120 No. 18, February 19, 1974 S1911-1912

reprinted in the Appendix A 48, 49.

The agency contest and order declaring the

petitioner's mining claims null and ee ont rgaae

be set aside. His title has been destroyed. a

ground may not be withdrawn from mineral é

immediately, but the Government may do so wig any

moment. So long as the ground is open, the peti-

tioner can have no better title than any adverse

claimant who may locate the ground.

We pray that the petition for writ of cer-

tiorari be allowed, that hearing be had, and that

the decision below be reversed and the case r@manded.

August 27, 1974.

Respeptfully submitted,

Attorney for Petitioner

1606 Standard Plaza

Portland, Oregon 97204

THE DECISION OF THE HEARING EXAMINER

BUREAU OF LAND MANAGEMENT

OF OCTOBER 26, 1961

CONTEST NO. 05987 (OREGON) Elephant No. 2 and Elephant

Mountain No. 1 Lode Mining

Claims.

n Claims Declared Null Void

On January 14, 1960, the Government initiated a contest proceeding

to secure the cancellation of the above identified mining claims by the

filing of a complaint in the Land Office at Portland, Oregon. The material

allegations in the complaint were that a valid discovery had not been demon-

strated within the boundaries of the claims and that the land within the

claims was nonmineral in character. The contestees filed a timely answer

in which these allegations were denied.

Thereafter, a hearing was held in Portland, Oregon on May 9, 1961 to

allow the parties an opportunity of presenting evidence and of examining and

cross~examining witnesses. At the hearing, the contestant was represented by

E. Kendall Clarke, Esq. Office of the General Counsel, United States Depart-

ment of Agriculture, Portland, Oregon. Kenneth 0. Watkins and Harold E. L.

Barton appeared in their own behalf.

Background Statement

The claims were located for gold, silver, copper, lead and zinc and

are within the Bohemia Mining District, Lane County, Oregon. The present

value of the timber on the two claims was estimated by the Government to be

approximately $23,550.

The parties were in substantial agreement regarding the general geol-

ogy, occurrence of minerals and the historical background of the mining dis-

PES ERE EB EB at

trict. Minerals were ¢irst found in the area prior to 1900 and sirce

that time between one and two million dollars of gold and ‘iver have been

removed. Some of the mines in the vicinity of the Elephant claims are the

Musick, Vesuvius, Sweepstake and Utopian (as shown on Exh. A). Other claims

in the district which have produced in the past are the Champion, Helena

and NoonDay. Claims on the North, East, South and West of the Elephant

claims have either been patented or been clear listed for patent.

The substrata of the claims and the district is basically rhyolite

with intrusions of dioritic dikes. Although mineralization has been found

in fractures within the rhyolite, the contact between the diorite and rhyo-

lite has proven to be the most favorable structural feature for the deposi-

tion of minerals. Although the veins or vein structures are continuous over

considerable distances, the valuable deposits are found intermittently along

the veins as ore chutes wherever there has been a concentration of minerals

and occurrences of residual or supergene enrichment.

The witnesses who testified at the hearing on behalf of the Govern-

ment were Milvoy M. Suchy and Lloyd E. Holmgren, both mining engineers em-

ployed by the Forest Service. The witnesses who testified on behalf of the

contestees were Ray E. Nelson, who has an interest in mining claims located

near the Elephant claims and who has been interested in the district for

more than 20 years, George S. Barton, a miner and former owner of the claims,

Kenneth 0. Watkins, a miner, and Harold E. L. Barton, a geologist. Mr.

Watkins and Mr. Harold E. L. Barton are the contestees.

After the hearing, the parties submitted extensive briefs to eid in

the determination of the issues. In the briefs, the testimony of the various

witnesses was set forth in considerable detail. Much of the factual testi-

mony given by the Government mining engineers was negative in nature and

although substantially different in part from the factual testimony of the

contestees’ witnesses, it was not necessarily inconsistent with the latter

testimony.

Summary of Testimony

The Government engineers were on the two claims with the contestees

and examined the available improvements. On Claim No. 1, a vein in an oxi-

dized zone is exposed in two adits near the east end line, in an outcropping

200 feet to the west and in an adit 100 feet further west. Six samples

were taken across this vein by the Government witnesses and assayed for gold,

silver, lead, copper and zinc. The indicated assay values ranged from $1.25

to $7.19 per ton (Ext. 2). The latter sample was taken at the face of the

adit below Utopian Road across 10 inches of vein material. Three other san-

ples taken along the vein and within 30 feet assayed $1.24, $2.97 and $1.64.

The major improvement on the No. 2 claim is an adit along the lode

line in the east half of the claim. This adit exposes a vein structure, the

mineralized portion of which varies in width from 16 inches to 24 inches.

Mr. Suchy stated that the vein material is quartz which is the cementing

material of the fault breccia within the fractural zone. The material ap-

pears vuggy and base metals or pyrite could have been leached from it. In

describing the vein, Mr. Suchy stated that it was both strong and competent.

Six samples were taken over a distance of approximately 40 feet in

the ceiling of the adit at points in which the contestees reported that an

ore chute had been encountered. Additional samples were taken fromthe same

vein south of the adit and from a dozen cuts at a higher elevation, north

of the adit. These samples assayed from $1.60 to $9.65 per ton. (Exh. 3).

- *

= _.

The Covernnent witnesses determined the strike and dip of the veins

on the two Elephant claims as well as the known veins on the adjoining claims. =

From the limited exposures, they were unable to project the veina an. tha

adjoining claims into ihe two claims in issue. They concluded from their

. @xamination of the claims that further exploration would be justified.

Ray E. Nelson, in testifying as @ contestee witness, stated that the

Bohemia Mining District has been his hobby for many years and that he has

an interest in the Sweepstakes claims which dre approximately 150 feet west

of the Elephant No. 2 claim. He has read most of the published literature

on the district and has talked to many of the old timers in the area. He

said that there ais three veins on the Sweepstakes claims, that he has traced

‘the central vein down through the No. 2 claim and that the southern vein on

the Sweepstakes has a trend which is generally in the direction of the No. 1

claim. He discussed the other veins in the area generally and stated that the

Lizzie Bullock claim, with production record of’ $200, embraced a portion of

claim No. 2. ;

George S. Barton first became interested in the Elephant claims in 1935

and at at later date acquired them. The title of the contestees devolved

through Mr. Barton. Mr. Barton and his associates constructed the main adit

on claim No. 2. He stated that a short distance inside the adit he secured

an $84 gold sample ac: ss a 4 foot vein in 1937. After a distance of 40 or

50 feet, the values were less. He traced the vein westerly across Claim No.

2 and on into the Sweepstakes claims. He stated that the ore in the vein

was spotty but that this is characteristic of the district. Mr. Barton is

familiar with other veins in the district and compared the vein on Claim No.

2 to some of the veins which contained ore chutes of great value. He

specifically referred to the vein on the Helena claim. On this claim the

vein contained ore of little value at the discovery cut but 50 feet away a

~vesuives Gupusit was Tound. Mr. Barton expressed confidence in the two

claims and stated that the claims would warrant further exploration.

Kenneth ©. Watkins, one of the contestees, testified that he has

been familiar with the Bohemia Mining for many years, that the two major

veins on the claims in issue are similar to the other veins in the district,

that both veins extend the length of the claims, and that althoush the vein

on Claim No. 2 is wider, he knows of no reason why the vein on Claim No. 1

would not have ore chutes either at depth or along its length similar to

other veins in the district. He stated that there has been substantial

leaching in the veins, particularly on Claim No. 1, and that some of the

remaining minerals are chalcopyrite and sphaierite. He expressed the opin-

ion that because of the leaching, the mineral values increase at depth.

Outside of the adit on Claim No. 2, there is an ore dump conteining

between 24 and 30 tons of material. After finding fragments of galena, Mr.

Watkins sampled the dump by chipping off small pieces "all the way around it

and across the top"(Tr. 117) until he had about a 20 1b. sample. This sample

assayed $71.33 per ton in gold and silver (Exh. D). Because of this value,

he sampled the vein in the adit on the floor, rather than on the ceiling, at

three locations shortly before the hearing. A fourth sample was taken on

the ceiling. These samples were across a width of from 17" to 19" and

assayed from $8.91 to #72.61 per ton on gold and silver. Mr. Watkins con-

cluded that a prudent person would be justified in spending further time

and money on the claims.

Also, Mr. Watkins stated that the mineralization in the veins is

not uniform, it is erratic,and that while his samples taken on the floor of m

the adit had much greater values than the samples taken by Mr. Suchy on the

ceiling 6 feet away, the values could have been reversed. It depends on we

whether the sample is taken in an ore chute or just outside of it. He said '

it is common for the veins to change that quick. Mr. Watkins intends to |

drive under the adit in the hope of finding a small rich ore body. Be

Mr. Harold E. L. Barton, a geologist and a contestee, testified that

he had been familiar with the District since 1935 and had traced the two main =

veins on the claims through outcropping, cuts, and other exposures to the |

adjoining claims on the east and on the west. On Claim No. 1 there is a a

smaller vein north of the main vein and this smaller vein trends toward the

main vein, and although there is no surface evidence, it very likely inter- =

sects the main vein near the center of the clain. The vein would then con-

tinue westerly roughly parallel to the vein on Claim No. 2. He said that

this is an extension which had not been proven from surface observations nae

but that the veins in the District were often continuous for two or three

claims. He has traced the main vein of Claim No. 1 easterly from the adit mw

to a point east of the end line and at that point the vein trends in the

direction of the Crystal Vein on the El Calado claim.

Mr. Barton described the vein on Claim NO. 1 as having pockets and

bunches of sulphides and stated that leaching took place within the brecciated

and quartz-cemented vein matter. The samples which Mr. Barton took along

this vein were similar to the samples secured by Mr. Suchy.

He stated that the District is a recognized producing area, that it

is one of the principal mineralized areas of the Western Cascades in terms of

SEESERRaER

gold, silver, copper, lead and zinc, that there have been profitable

operations in the past and that qualified authorities believe the ore

reserve in the District will assure profitable operations in the future.

Mr. Barton asbeiates that the veins on the two claims are persistent veins

containing mineveliastion characteristic of the District and warrant further

exploration witha reasonable expectation of developing a profitable opera-

tion.

Additional evidence was presented by Mr. Barton in the form of

excerpts from various published documents (Exh. G. H. and 1.). These excerpts

corroborate much of the background testimony given by the witnesses.

CONCLUSIONS OF FACT

From the evidence presented at the hearing, only a small portion

of which has been summarized herein, I find that the Bohemia Mining District

is one of the principal mineralized areas on the west Slope of the Cascade

Range, that the veins in the District are spotty with ore chutes of consider-

able value, that the veins are often coninuous for the length of several

claims, and that in this distance the veins can be erratic and can change

their strike and dip. The two claims in issue are within this mineralized

zone on land which is mineral in character and contain veins with similar

characteristics to the veins in the District along which ore chutes of value

have been found.

Also, I find that the contestees' witnesses have iad more time on

the claims and a greater opportunity to observe the veins than the Govern-

ment witnesses and that their testimony to the effect that the veins on the

two Elephant claims are extensions of other veins on claims to the east and

west, is more persuasive than the testimony on the same subject offered by

A8&

the Government witnesses. An ore chute containing sufficient quantity of

valuable ore to be mined profitably, has not yet been identified on either

claim, but I agree with the witnesses that further exploration along the

veins is warranted in an attempt to locate such an ore chute.

The real question which developed at the hearing was whether there

had been a discovery of a valuable mineral deposit on the claims even though

these conclusions can be assumed.

Conclusions of Law

The mining laws provide that public land | valuable for minerals shall

be reserved from sale except in conformance with the mining laws, that all

valuable mineral deposits in vacant public lands belonging to the United

States shall be open to exploration and purchase, but that no location of a

mining claim shall be made until the discovery of a vein or lode within the

limite of the claim (30 U.S.C. Sec. 21 et seq.). In the determination of

whether there has been a discovery of a valuable deposit, the Department has

followed the rule announced in tie v. Womble, 19 LD. 455 (1894) wherein

it was stated:

° “atk 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 developing a valuable mine, the require-

ments of the statute have been met."

The contestees contended in effect that the willingness of a prudent

man to continue exploring along a vein containing gold, silver, and other

minerals in a district in which exploration along similar veins often

resulted in the finding of valuable ore chutes satisfied the requirements

of the mining laws. There is no question that a vein containing some gold

and silver has been found on both of the claims and that the exploration of

some of the veins in the district has resulted in the finding of ore chutes

with a sufficient concentration of minerals to be profitably mined. This

suggests that a prudent person would be justified in continuing the explor-

ation of the claims in an attempt to locate an ore chute. But the contes-

tees have not yet found such an ore chute. There is no way of determining

from the evidence whether an ore chute can be found on one of the claims,

on both of the claims, or on neither of the claims.

The prudent man rule is not an alternative to the substantive pro-

vision of the mining laws requiring the discovery of a valuable mineral

deposit. The rule is applicable only in the determination of whether a par-

ticular deposit is valuable. In this case, the further expenditure of labor

and means would not be directed toward the development of a deposit which

has been found but would be directed toward the finding of a deposit which

the evidence indicates might be found and could be developed. Since « parti-

cular mineral deposit has not been found which would induce a prudent per-

son to expend further labor and means in its development, I must conclude

that there has not been a discovery of a valuable mineral deposit on -

either of the claims in issue.

Fi Conclusi

The Elephant Mountain No. 1 and the Elephant No. 2 mining claims

are declared null and void for the lack of a discovery of a valuable

mineral deposit.

ht o eal

This decision becomes final 30 days from its receipt unless an

appeal to the Director, Bureau of Land Management, is filed. If an appeal

is taken, there must be strict compliance with the regulations in 43 CFR,

Al0

Part 221. (See enclosed Form 4-1364). The amount of the filing fee

will be $5.00 for each mining claim, or $10.00 for the two claims adversely

affected. The adverse party to be served with a copy of the appeal is:

Office of the General Counsel, United States Department of Agriculture, 320

S. W. Stark Street, Portland 4, Oregon.

/s/ Graydon E. Holt

Graydon E. Holt

Hearing Examiner

All

ECISION 0 SIST DIRECTOR

BUREAU OF LAND MANAGEMENT

F_NO 2, 196

REVERSING THE HEAsING EXAMINER

The above named contestees have appealed from a decision of the

Hearing Examiner, dated October 26, 1961, declaring the Elephant Mount -

ain No. 1 and Elephant No. 2 Lode Mining Claims null and void for the

lack of a discovery of a valuable mineral deposit.

The complaint charged that a valid discovery had not been demon-

strated within the boundaries of the claims and that the land within

the claims is nonmineral in character.

The claims, located in 1940, are situated in the Umpqua National

Forest in the Bohemia Mining District, Lane County, Oregon.

The appellants contend that (1) to void the claims would de-

prive them of property rights in lands which are mineral in nature and

in which they have a substantial investment, (2) it was error to admit

evidence relating to the value of the timber on the claims, and (3) a

discovery of valuable minerals in the claims has been demonstrated and

the examiner's decision seems to require the present disclosure of ore

that can be mined profitably.

A mining claimant acquires no rights as against the United States

until he makes a discovery. Until that time, he is a mere licensee or

tenant at will. Upon discovery he acquires as against the United States

and all the world an exclusive right of possession to the claim which

is property in its fullest sense of the word. United States v. Carlisle,

67 I.D. 417 (1960). Where it is thought that a valid discovery has not

been made on a mining claim, the established procedure of the Department

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has been to institute adverse proceedings against rhe claim and to hold

a hearing for the purpose of receiving evidence on this issue. The

Dredge Corporation, 65 I1.D. 336 (1958).

The appellants’ possessary right might have continued in the

absence of any request for patent, but when they applied for a patent,

they voluntarily assumed the burden of demonstrating that a valid

discovery exists on each of the claims. United States v. Eric North,

A-27936 (July 1, 1959). A hearing on the validity of a mining claim

is a hearing on a claim to property. United States v. O'Leary et al.,

63 1.D. 341 (1956). Where in a contest against a mining claim it is

found that a valid discovery has not been made, the consequence is that

the claim is invalid or null and void. United States v. Carlisle, supra,

Further, substantial expenditures on a mining claim alone cannot serve

to validate it. :

With regard to the admission of sestimony as to timber values

on the mining claims, while the existence of valuable timber on a

mining claim, though in a national forest, does not qualify a mining

claimant's rights if he has a valid claim, it is a proper element for

consideration in determining the weight and creditability to be given

to the claimants’ testimony. Helen V. Wells, et al., 54 1.D. 306 (1933).

The Department has long required that the evidence sustaining the

validity of mining claim in a national forest must be clear and unequiv-

ocal. United States v. Langmade and Mistler, 52 1.D. 700 (1929); United

States v. Dawson, 58 I.D. 670 (1944); United States v. Duvall and

Russell, 65 1.D. 458 (1958). Also compare United States v. Woodard,

A-28051 (October 3, 1960).

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“he discovery of a vein or lode bearing valuable mineral

deposits.is a prerequisite to the issuance of a patent for any lode

mining claim (30 U.S.C. secs. 22 and 23). "To constitute a valid

discovery upon a claim for which patenc is sought, there must be

actually and physically exposed within the limite thereof a vein or

lode of al-bearing rock in place, possessing in and of itself a

present or prospective value for mining purposes .. ."East Tintic

Consolidated Mining Claim, 40 L.D. 271 (1911). It is not until min-

erals have been es and the evidence is of such a character that a

person of ordinary prudence would be justified in the further expend-

iture of his laboX.and means, with a reasonable prospect of success

in developing a valuable mine, that the requirements of the law have

been met. tle v. Womble, 19 L.D. 455 (1894).

The department in Jefferson ~-_Montana Copper Mines Co., 41 L.D.

320 (1912), outlined the requirements necessary to establish a valid

discovery on a lode mining claim as follows: (1) There must be a vein

or lode of quartz or other rock in place; (2) The quartz or other rock

in place must carry gold or some other valuable mineral deposit; and

(3) the two preceding elements, when taken together, must be such as

to warrant a prudent man in the expenditure of his time and money in

an effort to develop a valuable mine.

The Hearing Examiner by his statement that "An ore chute con-

taining sufficient quantity of valuable ore to be mined profitably, has

mot yet been identified on either claim. . ." apparently required the

existence of a sufficient quantity of valuable ore that can be presently

Al4

profitably mined. This is not our understanding of the prudent man

rule. An actual discovery of profitable ore is not essential to a

sufficient and adequate discovery under the prudent man test. A

valuable mine need not be a profitable mine, but the evidence of value

which sustains a discovery must be such that with actual mining oper-

ations under propertmanagement, a profitable venture may reasonably be

expected to eesult. United States v. Santiam Copper Mines, Inc.,

A-28272 (June 27, 1960); United States v. Fullinghim and Tinkle, A-28850

(September 18, 1962). Thus, as stated above, a valid discovery ‘s

made where there is discovered a mineral bearing vein possessing in and

of itself 2 ptesent or prospective value for mining purposes.

Veins of mineral bearing rock have been shown to exist on both

of the claims; accordingly, the primary question is the sufficiency of

the mineral discovery. Assays of samples have only limited value as

evidence without knowledge of the extent or strength of the veins or

structures exposed on the claims. See United States v. Northern Pacific

Railway Company, 1 F.2d 53, 57 (1954).

An analysis of the testimony relating to the Elephant Mountain

No. 1 and Elephant No. 2 claims discloses the following: On the

Elephant Mountain No. 1 claim is a vein 10 to 26 inches in width in

an oxidized zone exposed in two adits near the east end line, in a

cut 300 feet to the west and in an adit 100 feet further west, (Tr. 16-

22). Improvement No. 3 (Exh. 1 and 2), a cut and adit east of Utopian

Road, displays a badly oxidized fractured zone containing some quartz

bands, nodules of quartz considerable staining by iron oxide, a little

AlS

galena, chalcopyrite and sphalerite. Mr. Milvoy M. Suchy, a Forest

Service mineral examiner, took a sample outside the portal at the edge

of the road across 26 inches of oxidized vein material, which assayed

at $2.97 a ton. At the portal another sample was taken with an in-

dicated value of $1.24 per ton. Mz. Suchy testified that because of

the badly oxidized condition near the surface and what sulphides were

present have all leached away, it is hard to say how much of them were

iron pyrite and how much were base metal. (Tr. 16-17, 44.)

A sample was taken below Utopian Road by Mr. Suchy in what wes

then the face of a out driven on the same structure that was exposed

in Improvement No.3. It was badly oxidized, appearing to be a shear

zone, and the rock wall was breccia on the north side and rhyolite on

the south side. The sample across a 13-inch width yielded an indicated

value of $1.64 a ton (Tr. 18.) Later he found the cut had advanced

12 feet and went underground 15 feet and displayed some pyrite, which

it had not previously, and some base metals. His sample from the adit,

cut across 10 inches of oxidized material in a country rock of rhyolite,

containing disseminated pyrite and base metal sulphides assayed at

$7.19 a ton. (Tr. 19-20.)

Mr. Suchy then testified that the cut, 300 feet to the west

of the working referred to above, displays a rhyolite tuff which carries

a band of sulphide about an inch wide and a few spots of sulphides

scattered through the area. He found that the rholite is silicified,

the silicified zone carrying pyrites and base metal sulphides is about

10 to 16 inches wide, and that the two samples, one 16 inches and the

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other 10 inches wide, which he took, assayed at $2.70 and $1.93 a

ton, respectively.

This witness further stated that the projection of this same

vein was followed into Improvement No. 4, which is 100 feet to the

west of the above-mentioned cut, where tt is exposed just outside the

portal of the tunnel, within the cut, where it appears to have broken

into several narrow quartz bands from 1 to 1-1/2 inches wide. (Tr. 21-

22.)

In regard to the structure or vein, which is the basis of

location of this claim, he stated that it is exposed almost entirely

within the oxidized zone, that it has not widened appreciably between

Improvement No. 3 and the exposure 100 feet east of Improvement No. 4,

and that, at the latter working, it has broken into narrow bands (Tr.

21-22.)

_ Tt was Mr. Suchy's opinion as to Elephant No. 1 claim, that

the structure did not impress him because a strong well defined min-

eralized vein had not been exposed, and that in view of the limited

width, it is not favorable for development of a paying mine (Tr. 22,

31-32.)

Mr. Kenneth 0. Watkins, one of the contestees, testified

that the vein on Elephant Mountain No. 1 cleim is pretty definite

for a long distance, almost the entire length of the claim, that the

vein is tighter and the mineralized part is not as wide as the vein

on Elephant No. 2 claim, but both are basically the same type of vein.

(Tr. 113.) He stated that where there has been leaching the residue

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was largely chalcopyrite, a copper mineral, with some sphalerite;

that in the places worked the last two yeas, the short tunnel towards

the west end below the road and in some surface cuts toward the west

end, some sulphides were found in each Piace and some evidence of leach-

ing. (Tr. 115-116.) He believed that a prudent man would be jedi

fied in spending time and money on this claim with the expectation of

developing a paying mine. (Tr. 123.)

Mr. Harold E. L. Barton, a geologist and a contestee, testi- |

fied that basically the mineralization indicated by Mr. Suchy's

. Sampling on the Elephant Mountain No. 1 claim was representative and

the presence of heavy lead, zinc, and copper sulphides indicates

leaching at that point (Tr. 144-145.) He believes that the contestant

is in error in stating a discovery does not exist. On cross exemin-

ation, he stated that future work on the eastern end of the claim

should be to tunnel under the area of principal mineralization. (Tr.

151-152.)

As to the Elephant No. 2 claim, the major improvement or

working is an adit near the east end of the claim which exposes a

vein 11 to 24 inches in width. The vein material is quartz which is

the cementing material for the fault breccia within the fractured

zone. It is quite vuggy and base metals or pyrite have been leached

from it. (Tr. 23-24.) Mr. Suchy, Government Mineral Examiner, testi-

fied that sampling was confined to a particular zone in the tunnel

as the claimants stated it was the point where an oweshoot at one

time had been encountered; that a Structure, quite strong and quite

Als -

competent, was encountered 50 feet from the portal. Then it was

followed for 40 feet to where it leaves the adit by going into the

left fib.| (Tr. 24-251.) Another vein was r4ightly exposed at the

3 breast of the adit, which approximately pai‘allels the other vein. The

fracturing is along side of what appears to be a dark dike coming in

on the right rib, (Tr. 25; Exh. 3.) :

Mr. Suchy took 7 samples on the more exposed vein in the adit

where they had the widest and most competent structure. The samples

varying in width from 11 to 24 inches, assayed from $3.07 to $9.65 a ton

in gold and silver. (Tr. 25-26, 32; Exh. 3, 5, and 6.) A dozer cut,,

‘above the adit to the east, on the same wie was sampled across 20 inches

by Lloyd E. Holmgren, a mineral examiner for the Forest Service. (Tr. .

60-61.), The vein structure outside the working, above the portal to the

south was sampled across 15 inches, by Mr. Suchy. These assayed at an

indicated value of $1.95 and $1.60 a ton, respectively, in gold and

silver (Tz. 26, and 60-61, Exh. 3, and 6.)

Mr. Suchy, when asked for his opinion on the probability of

developing a paying mine on this claim, answered that he was skeptical

of the structure and values present and believes that the values were

due to supergene enrichment, which he stated does not represent the

values originally sheeas in the vein. He further stated that he did not

know the extent of the enrichment; the working is so close to the

surface, 10 to 15 feet, he had no way of evaluating the showings of gold

except to believe, because of the oxidized zone and the appearance of

the vein, it represents enrichment within the vein structure. Mr. Suchy '

‘

Alg

also was of the opinion that to be comparable to the gold values which

accounted for the large amount of the production in the mining district,

one would have to have an extensive zone of this supergene enrichment

with assays of $50 a ton and upward. (Tr. 29, 30.)

Mr. Kenneth 0. Watkins, a contestee, testified that the major

vein on No. 2, like the major vein on Elephant No. 1, is similar to

the common run of veins in the mining district. As far as Elephant No.

2 claim is concerned, it is almost completely oxidized and is a strong

structure. In the main tunnel there is substantial leaching. (Tr. 115.)

Because of an extremely high assay of a selected sample from the dump at

the portal of the adit, he further sampled the tunnel a few days before

the hearing. Three samples from the floor of the adit cut across 17, 18

and 19 inches assayed at $8.91, $10.30 and $72.61 per ton, respectively.

A fourth sample from the roof toward the breast of the adit cut across

10 inches had an indicated value of $24.84 a ton. (Tr. 118-119; Exh. 3,

Eand D.) Mr. Watkins concluded that a prudent man would be justified

in spending further time and money on the claim with the expectation

of developing a paying mine (Tr.123.); and stated that he would drive a

tunnel underneath the oreshoot. (Tr. 127.)

Mr. Harold E. Barton, geologist and a contestee, testified that

he believes a discovery had been made on the Elephant No. 2 under the

prudent man test and stated that now the logical thing to do is bring

anocher crosscut tunnel under the area of principal mineralization, at

the portal of the adit, which he refers to as an oreshoot. (Tr. 151-152.)

Mr. Suchy, on rebuttal stated, as to the high value of the

A20

samples obtained by Mr. Watkins in the adit on Elephant No. 2, that if

there was continuity of the values over a reasonably length he would

conclude that there was a valuable deposit. He also replied that 40

feet would be a reasonable length. When asked whether the Elephant No.

2 meets the prudent man test, he stated that high values in oxidized

zones and other places may or may not lead to a valuable deposit,

neither does it mean you have an oreshoot and the extent of the en-

richment is unknown until you do exploratory work. (Tr. 160, 163, 164.)

He would recommend sinking at the point of mineralization. (Tr. 173.)

After careful consideration of all the foregoing testimony con-

cer@ing the strength of the structures or veins on the claims and the

assays of samples taken from the exposure as well as the character-

istics of veins in the mining district, we are persuaded that the

record supports a conclusion that a prudent man would be warranted in

expending his time and money in sinking on, or tunneling into the veins

on these claims with a reasonable prospect of developing a pgying mine.

Accordingly, the Hearing Examiner's decision declaring the

Elephant Mountain No. 1 and Elephant No. 2 lode mining claims null and

void is reversed.

The United States, through the Department of Agriculture, is

allowed the right of appeal to the Secretary of the Interior in accor-

dance with the regulations in 43 CFR Part 221 as amended. See enclosed

form 4-1365. In taking an appeal there must be strict compliance with

the regulations.

/s/ L. Hoffman

Assistant Director

A21

DECI

SOLICITOR, LAND APPEALS

UNITED STATES

DEPARTMENT OF THE INTERIOR

OFFICE OF THE SECRETARY

Washington, D. C. 20240

A-30659 October 19, 1967 Oregon Contest No. 05987

United States

Mining claims declared

Kenneth 0. Watkins and null and void

Harold E. L. Barton Affirmed

APPEAL FROM THE BUREAU OF LAND MANAGEMENT

Harold E. L. Barton 1/ has appealed to the Secretary of the Interior

from a decision dated May 2, 1966, whereby the Office of Appeals and Hearings,

Bureau of Land Management, affirmed a decision of a hearing examiner declar-

ing null and void the Elephant Mountain No. 1 and Elephant No. 2 lode mining

claims in secs. 2,3,10 and 1l, T. 23 8., R. 1 B., W. Mer., Oregon. The clains

are situated in the Umpqua National Forest in the Bohemia Mining District,

Lane County, Oregon, and were located on July 1, 1940, by George Barton,

Albert Andersonand N. M. Anderson.

On January 20, 1958, mining claimants Watkins and Barton applied for

patent to the Elephant Mountein group of lode mining claims, consisting of

the Elephant Mountain No. 1, Elephant No. 2, Elephant No. 4, and Grubstake

lode claims. The claims were alleged to contain gold, silver, lead, zinc

ame copper. On January 14, 1960, the Bureau of Land Management, upon the

recommendation of the United States Forest Service, filed a

contest complaint

alleging therein that a valid discovery had not been demonstrated within the

during the period in which the matter has been before the Depart-

1/ Kenneth O. Watkins, an original party to this proceeding, died

ment, and the current appeal is prosecuted by Barton.

A22

boundaries of the claims and that the lend is nonminera! in character.

Following a hearing at Portland, Oregon, on May 9, 1961, the hearing examine

determined that the claims are within the mineralized zone of land which is

mineral in character and contain veins with Similar characteristics to the

veins in the district along which ore shoots of value have been found but

that the claimants had not made a valid discovery on either of the claizs,

and he declared both claims null and void. On appeal to the Director of the

Bureau of Land Management, the Assistant Director found, in a decision dated

Novembar 2, 1962, that a discovery had been made and, accordingly, held the

claims to be valid. By a decision dated April 24, 1964, (Uni es Vv.

Kenneth 0. Watkins and Harold E. L. Barton, A-29862, the Department set

aside the Bureau's decision and remanded the case for further hearing.

At the initial hearing, witnesses for the Government introduced in

evidence the assay results of six ore samples from Elephant Mountain No. 1

claim and nine samples from Elephant No. 2. The indicated assay values

ranged from $1.24 to $7.19 per ton on claim No. 1 and from $1.60 to $9.65

per ton on claim No. 2. Witnesses for the mining claimants introduced the

results of seven ore samples with indicated values ranging from $2.91 to

$72.61 per ton.

The ordering of a new hearing was predicated upon the fact that

both parties to the contest, subsequent to the original hearing, submitted

additional evidence bearing upon the question of the validity of the claims.

The mining claimants submitted an assay report of a sample of ore taken

after the hearing from the Elephant Mountain No. 1 claim which showed a

value of $9.95 at a point where, purportedly, a Forest Service sample had

shown a value of $2.70. The claimants also submitted an affidavit of

A23

William E. Caldwell, Professor in Chemical Engineering, Oregon State College,

and @ graduate of the Montana School of Mines, giving his evaluation of the

contes:ed claims. The Forest Service submitted an afficavit of Lloyd E. Holm-

gren, one of the mining engineers who testified at the hearing, in which he

described a re-examination of the Elephant No. 2 claim made after the Bureau'

decision of November 2, 1962.

Holmgren stated that he took samples from the

floor of the adit in the area in which one of the contestees' witnesses had

obtained a sample with an indicated value of $72.61 per ton. ‘Holmgren's

samples, cut from veins from 17" to 18" wide, were valued at from $10.05

to $16.51 per ton.

Subsequent to the Department's decision of April 24, 1964, the

mining claims were re-examined by Milvoy M. Suchy, a mining engineer employed

by the Forest Service who also testified at the initial hearing, in the conm-

pany of appellant Barton and others. The findings of this re-examination,

together with other evidentiary matter obtained by the parties to the contest,

were presented by witnesses for the respective parties at a hearing held at

Eugene, Oregon, on July 21, 1964,

The testimony given at the second hearing has been summarized in the

decisions of the hearing examiner and of the Office of Appeals and Hearings,

and it is unnecessary here to repeat in detail that which has already been

reported in those decisions. Stated summarily, the pertinent factual evid-

ence presented at the second hearing consisted chiefly of assay reports of

additional ore samples taken by both parties from the claims. The Forest

Service submitted in addition to the findings attested to by witness Hola-

gten subsequent to the initial hearing, the assay results of

six ore samples

taken from the Elephant No. 2 claim shortly before the second hearing, five

A24

of which showed values ranging from $.35 to $1.05 per ton and the

sixth of which, a grab sample taken from material which had been sacked,

had an indicated value ot $28.50 per ton. Appellants submitted the results

of four additional samples taken in 1964, showing values between $6.52 and

$11.21 per ton, and the assay report of a sample taken in 1937, and testi-

fied to at the first hearing by George Barton, which indicated a value of

$84.46 per ton. Testimony was also given as to the nature, course, and prob

able extent of the mineral veins found on the claims, the history of mining

activity in the district and the prospects for further development, and the

similarities and dissimilarities between the claims in question and other

claims in the district upon which producing mines have existed. The second

hearing also resulted in a revision in the evaluation of timber on the con-

tested lands downward from $23,550 to $13,114, re-examination having dis-

closed that parts of the claims were on revested Oregon and California Rail-

roed grant lands which should not have been included in computation of the

timber values on national forest land.

After summarizing the evidence and the applicable principles of

law, the hearing examiner concluded that:

“ake Minerals have been found in the oxidized portion

of veins and the values of the minerals are sufficient to

to induce further exploration. But the minerals found

have no present or prospective value for mining purposes.

Mr. George Banton [sic] secured an $84.46 gold sample in

1937 and a few feet away the values disappeared. Mr.

Watkins secured a $72.61 gold sample in 1962 and again

this value was substantially reduced a few inches away

according to the Holmgren samples. What the contestees

are looking for on the claims is either pockets of

precious metals in the oxidized zone of the vein or

shoots of base metals below the oxidized zone with

sufficient quality and quantity of minerals to have

s some potential value. This is the very thing that

has not been found.

A25

” ” *

"For the Elephant claims in issue an accessible mill

less than two miles away would be an additionsl in-

dvcement to explore both along the veins for secondary

gold deposits and at depth below the oxidized zone

for base metals. But at this time there is insufficient

evidence to support a finding that a particular deposit

has been found which would induce development by a

prudent person with a reasonable prospect of success."

The conclusions thus arrived at were virtually the same as those

which the hearing examiner reached after the first hearing. The Office of

Appeals and Hearings, upon reconsideration of the evidence, concurred with

the hearing examiner in his finding that a discovery had not been shown

and stated that:

“aek The testimony is conclusive that further exploration

of the claims is indicated, but that is not sufficient to

constitute a discovery. Even if there was a showing that

veins in nearby claims with the same geologic structure

as those here had produced in the past, it would not be

sufficient to constitute a discovery. There is no showing

that the values exposed and the quantity thereof on these

claims, on the basis of all the testimony now in the record,

are sufficient to constitute a discovery under the prudent

man standard."

Appellants contend in the present appeal to the Secretary that

none of the evidence submitted at the second hearing by the contestant

has in any way weakened the fact of discovery which was recognized by the

Director in his first decision. They base their contention on the

assertions that

(1)All of the new samples introduced by the Government except

one were of the surficial outcrop zone on a vein in which supergenous

solution was believed to have occured and therefore in a zone where

characteristically little or no values would remain at the surface;

(2) The one sample in the upper adit on Elephant No. 2 was

mot cut on the principal mineralized band but, rather, in relatively

waste material on the footwall side of the vein which at this point

-had entered the right rib of the tunnel;

iniatai

VRBO ED Lis SESS LOOSE ERLE IRE NG EE)

A26

(3) The dump Sampling taken showed mill-grade ore;

(4) Testimony at the hearing shows that Government witness

Holmgren erred in his point of reference in attempting to verify the

high-value Sample of $72 6] reported by appeliant Watkins at the first hear ng

(5) Where Holmgren's Samples coincided with those taken by Watkins

and Barton, the results were comparable, ie , Holmgren's $10.05 sample

coincided with Watkins’ $10.35 sample, his $10.95 sample with Watkins’

$8.91 sample, his $14 93 sample with Barton's $11 21 Sample, and his

$16.51 sample with Barton's $8.80 saupie;

(6) The demonstrated values of the samples, considered with

the respective points from which they were taken, clearly support

appellants’ testimony concerning the certainty of generally increasing

values with depth.

Since, appellants contend, the evidence produced at the second hear-

ing did not weaken thac produced at the firsc hearing but reinforced it,

there is no basis for reversing the Director's first decision finding a

discovery. The appellants, however, assert that the Director erred in

his construction of the law in his second decision.

The critical issue here, in our view, is not so much what the facts

are but, rather, the Significance of the established facts as they relate

to the ultimate question of discovery. There @ppears to be basically a

lack of a common understanding 4s to what constitutes @ discovery of «

valuable deposit of minerals. Indicative of this is the testimony of

expert witnesses for the Cpposing parties with respect to the further

steps which should be taken in attempting to determine the mining potential

of the claim in question. The following is illustrative:

"Q [by Mr. Cievke, attorney for the Forest Service] What

would you recommend to a miner claimant to be done on

Elephant No. 2 now if you were in 4 position to make

that type of recommendation?

A [by Government witness Suchy] Basically exploratory work.

There were high grade pockets taken out in other clains

from producers in the district, near-surface production

A27

or at surface production. I don't think this has been

investigated enough to know whether that is true here or

mot. There are values. If there are values, there should

be enough interest, at least, to explor® them and see if

it's going to lead to any appreciable deposit. We have

nothing to go by here really." Tr. 28, 2nd hearing.

Q [By Mr. Barton) From your hearing of the additional testi-

mony introduced by the Forest Service today with regard

to Elephant No. 1 and Elephant No. 2 claims, does this

change in any vay your evaluation of the worth of the

deposit shown on Elephant No. 2 claim?

A [by contestees' witness Caldwell] I have al thought

that Elephant No. 2 outcrop was similar to that of the

Musick and Champion, and that it is a vein that should be

prospected at depth for probably sulfide mineral value.

Q And is it your opinion that a prudent man would be justi-

fied in expending further time and effort with a reasonable

prospect to develop a paying mine? :

A Very definitely, and that is furthered by the fact that the

Government has spent thousands of dollars in the_last couple

of years at depth on the nearby Musick mine, and that there

is a company going up there this summer. They have already

been up there on preliminary surveys in which they are to

spend some seventy some thousand dollars in diamond dril-

ling to ascertain values at depth. I see no possibility,

in my mind, where any engineer could list the Elephant

No. 2 as a nonmineral area." Tr. 50-51, 2nd hearing. 3/

The essence of appellants’ basis for claiming a discovery was

set forth by Professor Caldwell in his affidavit of June 14, 1962,

previously referred to, in which he stated, speaking of the Elephant

Mountain No. 1 and Elephant No. 2 claims, respectively, that"

"The vein is definite in strike and dip, but does not show ~

economic mineral value in the shallow depth of its exposure.

In keeping with geological inference to other outcrops in the

Bohemia mining district, it is more than probable that greater

quantity of the already proven valuable metal minerals can be-~

found in depth and extension of this vein. Z

3/ The testimony of other witnesses is to a similar effect. See, e.g.,

testimony of George S. Barton (Tr. 98, lst hearing) and of Harold E.

L. Barton (Tr. 146, lst hearing). Appellants’ concept of a ‘discovery"

was clearly manifested by the former in the following exchange:

A28

"The vein fillings of the Musick outcrop and Elephant No. 2

vein are of identical minerals, brown oxidized quartz, some

brecciated and weathered country rock agglomerate, and spall

amounts of zinc, lead, iron and copper sulfides. Bug holes,

partly filled by hydrated brown iron oxides, denote oxidation

and dissolving from the rock of metal sulfide minerals that

had been present. At depth in the sulfide zone of this Ele-

phant No. 2 vein as with the Musick vein (and in general all

major fissures of the Bohemia district) the percentage of

metal minerals will be found considerably higher than in the

upper or oxidized gosson zone.

* * ”

"A typical Bohemia district vein has been exposed by con-

siderable work extending over 700 feet in length (and a few

hundred feet in elevational difference) on the Elephant No. 2

claim. This writer has no assay results for gold and silver

content of the oxide stained quartz vein rock. He has been

informed high, medium and low values are reported according

to place. Even the femous Musick vein has been stoped for

economic ore in only about 30% of its tunnel length at the

recently viewed 700 foot level. Valuable metal minerals

have been viewed in the Elephant No. 2 vein rock, and evi-

dence of leaching of additional metal minerals from the rock

Footnote 3 Continued:

"Q [By Mr. (Harold) Barton] Do you feel from your

knowledge of that claim and the testimony that

you have heard here today that a valid discovery

exists on that claim of minerals?

A [by George S. Barton] Yes, in several places and--

MR. CLARKE: I object to the answer, Mr. Hearing Examiner,

as calling for an ultimate conclusion.

HEARING EXAMINER HOLT: Well, I think that you should

qualify your word ‘discovery’ or describe what it

is that you mean by ‘discovery’,

MR. BARTON: Well, I'm intending to use the term as defined

1: the law, that a mineral claim is deemed to have a

discovery when sufficient evidence of mineralization

is found to justify an ordinarily prudent man to continue

exploration with the probability that he would develop

a@ paying mine." Tr. 98, lst hearing.

A29

near surface seen. If this claim were mine, I would

certainly dig, or expend for digging, in or toward areas

whence good assays of over two foot seazs have been displayed."

The substance of the view which governed the treatment of this

case by the Bureau was stated by the hearing examiner in his initial

decision of October 26, 1961, in the following manner:

“# * * There is no question that a vein containing some gold

and silver has been found on both >t the claims and that the

exploration of some of the veins in the district has resulted

in the finding of ore chutes with @ sufficient concentration

of minerals to be profitably mined. This suggests that a pru-

dent person would be justified in continuing the exploration

of the claims in an attempt to locate an ore chute. But the

contestees have not yet found such an ore chute. There is no

way of determining from the evidence whether an ore chute can

found on one of the claims, on both of the claims, or on

neither of the claims

"The prudent man rule is not an alterntive to the substantive

Provision of the mining laws requiring the discovery of a

valuable mineral deposit. The tule is applicable only in

the determination of whether a particular deposit is valuable.

In this case, the further expenditure of labor and means

would not be directed toward the development of a deposit

which has been found but would be directed toward the finding

of a deposit which the evidence indicates might be found and

could be developed.* * « "

In short, the view of the appellants is that the test of a

discovery is satisfied if the evidence of

claim is

mineralization on a mining

such that a prudent man would be justified in the expenditure

of money and effort in exploring the mineral potential with a reasonable

expectation that such exploration would lead to the development of a

profitable mine. Under the concept employed by the Bureau, the test

of what @ prudent man would of would not be justified in doing cannot

be applied until « mineral deposit has been found the development of

which may be contemplated. The distinction is significent.

The test of « discovery of a valuable mineral deposit is quite s

A 30

stated and has been frequently repeated since it was enunciated, first by

Department and subsequently by the courts.

"/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 success, in develop-

ing a valuable mine, the requirements of the statute have

been met." Castle vy. Womble, 19 L.D. 455, 457 (1894);

v-_Miller, 197 U.S. 313, 322 (1905); Best v.

Humboldt _Placer Mining Co., 371 U.S. 334, 335 (1963).

Where the location is of minerals in a lode or vein,

"1. There must be a vein or lode of quartz or other

rock in place.

2. The quartz or other rock in place must carry gold

or some other valuable mineral deposit.

3. The two preceding elements, when taken together,

must be such as to warrant a prudent man in the

expenditure of his time and money in the effort

to develop a valuable mine."

Jefferson-Montana Copper Mines Co., 41 L.D. 320, 323 (1912).

In a long line of decisions the Department has distinguished between

“exploration” and "development" as they relate to "discovery" under the

mining laws. The Department has held that the showing of mineralization

which will justify further exploration may not be adequate to warrant

development of a mining claim and that it is only when it can be said tha

@ prudent man would be justified in expending his means in the develop

of a mineral deposit that a discovery has been made. See

laura Duvall and Clifford F. Russell, 65 I.D. 458 (1958); United State:

Sivde B. Altman and Charles M. Russell, 68 I.D. 235 (1961); Ur

Edgecumbe Exploration Company, Inc., A-29908 (May 25, 1964); Un }

Ford M. Converse, 72 I. D. 141 (1965), sustained in Converse v. Udall, C

No. 65-581, in the United States District Court for the District of Oregon

A3jl

(September 14, 1966), appeal pending; United States v.Stephen B.

Millisich, A-30720 (April 13, 1967); Uni States v.Lucille Lundy

A-30724 (June 30, 1967). As we stated in the Lundy decision:

"There is a clear distinction between ‘exploration’ and

‘development’ as they relate to discovery under the mining

laws. The separate Stages of mining activity serve as a

basis for determining what further mining activity a prudent

man would be justified in undertaking. Exploration work,

includes such activities as geophysical or geochemical pros-

pecting, diamond drilling, sinking an exploratory shaft or

driving an exploratory adit. It is that work which is done

prior to a discovery in an effort to determine whether the

land is valuable for' minerals. When inherently valuable

minerals are found, it is often necessary to do further

exploratory work to determine whether a valuable mineral

deposit exists, i.e., whether the minerals exist in such

quality and quantity that there is a reasonable prospect

of success in developing a paying mine."

The recognition of this distinction is not new.’ As early

as 1894, the Supreme Court, after reviewing the basis for the claim

of a discovery in Chrisman v. Miller, supra, stated that:

"e * * [The testimony] does not establish a discovery. It

only suggests a possibility of mineral of sufficient amount

and value to justify further exploration." 197 U.S. at 320.

The Court then proceeded to quote with approval from Justice

Field's dissenting opinion in Iron Silver Mining Company v. Mike and

s 1 Silver Mini » 143 U.S. 394, 412 (1892), that:

"& * * /T/he mere indication or presence of gold or silver is

not sufficient to establish the existence of a lode. The

mineral must exist in such quantities as to justify expen-

diture of money for the development of the mine

tion of t ral. * * *" (Emphasis added).

The Department has also refused to accept as the equivalent of

discovery deductions or opinions with respect to the existence of valuable

mineral deposits which are based upon findings of substantially worthless

surface indications of minerals within the limits of a claim or upon the

A32

discovery of valuable mineral deposits outside the claim, or which are

based upon known geological facts, regardless of the strength of infer

that may arise from the established facts, where the actual body of ore

supposed to exist has not been exposed. See East Tintic Consolidated

Mining Cleim, 40 L.D. 271 (1911); East Tintic Consolidated Mining Co.,

_(08 Fehearing), 41 LD, 255 (1912); Rough Rider and Other Lode Cleins,

41 L. D. 242 (1911); 2, Gonzales v. Stewart, 46 L.D. 85 (1917); United

States v. Bunker Hill and Su: im Mining and Conce ng Compar

48 L.D. 598 (1922); United States v. Arizons Manganese Corporatior

57 1. D. 558 (1942).

A factual distinction must be reqognized, of ‘course, between the

cases just cited and the present situation. Whereas in the former the

was no exposure of a mineral-bearing vein or lode within the limits of

cleim, in the latter it is not disputed that « vein containing some va

able minerals has been exposed. The question in the former was wheth

evidence of mineralization was sufficient to establish, by inference, the

existence of valuable mineral deposits within the limits of the clains

though such deposits had not been physically located, and the Department bh

that the inferred existence of a valuable mineral deposit was not the

alent of a discovery of such a deposit. Here the question is whether the

evidence of mineralization in_an exposed vein is sufficient to establi

2/ The East Tintic decision of 1912 was subsequently vacated upon a

ifferent factual finding 4 +, 43 L.D.

79 (1914), and the Rough Rider decision was vacated upon a determination

that the rule enunciated thereinshould not be given retroactive effect

42.L.D. 584(1913). However

the principles of law set forth in the vacated decisions have been cor

sistently adhered to by the Department in subsequent cases.

A33

by inference, the existence of a valuable deposit of mineral which is

expected to be revealed upon further exploraticn of the vein. Thus the

question now hefore the Nenactment .1+ whether theres .too* uli f crente>vb-

tween the use of inference to establish the existence of a mineral-bearing

vein where the vein itself has not been found and the use of inference to

establish the existence of a valuable mineral d2posit within a vein where

the vein itself has been found but the mineral deposit which it is supposed

to contain has not. We think that there is not.

Appellants contend that the witnesses’ unanimous recommendations

of further exploration show that the claimants have satisfied the require-

ments set forth in Jefferson-Montana Copper Mines Co., supra, where it was

stated:

"It is clear that many factors may enter into the third

element; the size of the vein, as far as disclosed, the

quality and quantity of mineral it carries, its proximity

to working mines and location in an established mining

district, the geological conditions, the fact that similar

veins in the particular locality have been explored with

success, and other like facts, would all be considered by

a prudent man in determining whether the vein or lode he as

discovered warrants a further expenditure or not.” 41 L.D. 323.

But what is the real significance of the evidence of minerrlization

that has been found here? It is nowhere suggested that any quantity of

material of the quality of the vein matter thus far disclosed would

constitute a mineable body of ore. The evidence does not, in fact,

establish any mineral quality of any consistent extent. Although appel-

lants have found ore samples with indicated values exceeding $70 per

ton, the record does not support a finding that they have found a deposit

yielding ore of that quality, or of any other quality, the exploitation

of which may be contemplated. The evidence of record indicates that the

A34

values thus far found are spotty, and appellants do not argue otherwise.

Nor does the evidence relating to the geology of the area establish

a basis for concluding that there has been a discovery. While it is true

that the fact that similar veins in the particular locality have been ex-

plored with success is an element to be considered in evaluating the

mineral potential of a vein, yet it is only one of a number of elements

to be considered, and, in this instance, it seems clear that it is far

from a conclusive factor. Appellant Barton, for example, stated at the

first hearing that:

"aek I believe we agree that mineralization in the District

occurs in most any of the rocks, that it occurs both in

direct relationship to dikes and away from dikes, that

there are a variety of structural features that do tend to

favor ore deposition particularly in the proximity of

dikes or with brecciated areas in the veins, or intersections

of the veins. * * *" Tr. 130, lst hearing.

A similar effect is language cited by the appellants from the

Bureau of Mines Information Circular No. 7512 (August 1949) that:

The Bohemia miaiag district is a small but intensely

mineralized area in western Oregon. For its size, it

has made a substantial although somewhat sporadic pro-

duction of gold throughout a long period of years.* * *

"The ore shoots are comparatively narrow, tabular bodies

occupying fissures in both the diorite and the volcanic

rocks. Exploration has not been extensive enough to as-

certain whetheror not there is any particular affinity

of ore shoots to either of the two distinct types of

country rock. None is indicated in the veins now developed.

"Although weak ore mineralization may often be traced

continuously throughout the veins, the minable ore bodies

are in definite shoots. These are usually distinctly

apart, but in a few cases there is a suggestion of a

train of linked ore shoots. Contestees' Exhibit No. 1.

The most that can be said from this evidence, and all that the

A35

appellants have asserted, is, as observed by the hearing examiner, that

the values of the minerals which have been found are sufficient to in-

duce further exploration. Thus, when appellants assert that "a prudent

man would be justified in expending further time and effort with a

reasonable prospect to develop a paying mine," it is clear that they

. mean that a prudent man would be justified in expending further time and

effort in exploring for minerals with a reasonable prospect of finding

a mineral deposit which could be expected to lead to the development of

a@ paying mine.

As indicated earlier, we 8€@, in principle, no difference between

the showing of isolated mineral values, not occurring in a vein, which

only suggests the existence of a valuable mineral deposit within the

limits of the claim and the showing of eae 1 valueg occ srring ina »

vein which only suggests the possible existence of a valuable mineral

deposit in the course of the vein. That which is called for in either

case is further exploration to find the deposit supposed to exist.

Here it remains undetermined whether or not minerals exist in

such quality or quantity as to justify the expenditure of money for the

development of a mine and the extraction of the mineral. There is, to

be sure, unrefuted testimony as to the similarities between the mineral

showings observed on the claims under consideration and the mineral

showings on nearby mining claims which led to the development of produc-

tive mines. It is equally clear, however, that something more was found

on each of those productive claims than has been found here which led in

each instance to the development of a mine. It is that "something more"

A36

that the claimants are still looking for which is essential to a dis-

covery, for it is the finding of, rather than the undisclosed existence

of, a mineral deposit which constitutes its discovery.

This is not to say that in order to show a discovery a mining

claimant must prove conclusively that « particular mineral deposit is

valuable for mining. Where ore has been found, the likelihood that ore

of the quality found, or of any mineable quality, will continue remains

@ matter for speculation, and, until a mineral deposit has been exploited

through actual mining operations, its true value will remain < matter of

uncertainty. Thus, the opinions of experts, based upon knowledge of the

geology of the area, the successful development of similar deposits on

adjacent mining claims, deductions from established facts--in short, all

of the factors which the Department has refused to accept singly or in

combination as constituting the equivalent of a discovery--may be, and

as a practical matter must be, accepted in determining whether or not a

prudent man would be justified in the expenditure of his means with a

reasonable anticipation of developing a valuable mine. However, while

inference may be relied upon to establish the extent of a particular

mineral deposit, it may not be relied upon co establish the existence of

that deposit. The showing thus far made with respect to the claims in

question, allowing maximum credibility to appellants’ factual allegations,

would require reliance upon inference to establish the existence of an

ore body as well as its quantity and quality, and all that appellants

have shown is a possibility that valuable mineral deposits may exist

within the limits of the claims. Accordingly, we concur in the hearing

examiner's conclusion that appellants have not shown the discovery of «

A37

mineral deposit which would induce the expenditure of means by a prudent man

with « reasonable prospect of success in developing a valuable mine.

One other point merits some comment. Since the decision in United

States v. Kenneth F. and George A. Carlile, 67 I.D. 417 (1960), the Depart-

ment has consistently held that the rejection of an application for patent

to a mining claim is necessarily a determination that the claim is invalid.

This does not necessarily limit a mining claimant in his right to continue to

explore for minerals. If the land is still open to mining entry, as it

appears to be here, the claimant is free to relocate his claims and proceed

with his efforts to find a valuable mineral deposit. The determination that

appellants’ claims are invalid is simply a finding that no rights have been

initiated against the United States by virtue of the appellants’ location of

the claims and that, if any rights are to be obtained, they must be obtained

through a discovery made subsequent to the determination that the existing

claims are not valid. Such rights,of course, must be initiated in accordance

with the terms and limitations now governing the location of mining claims.

Therefore, pursuant to the authority delegated to the Solicitor by

the Secretary of the Interior (210 DM2.2A(4)(a); 24 F.R. 1348), the decision

appealed from is affirmed.

/a/ Ernest F. Hom

Ernest F. Hom

Assistant Solicitor

Land Appeals

OF MARCH 17, 1971

GOODWIN, Judge:

Plaintiffs seek io set aside « decision of the Secretary of

Interior denying patents for two mining cleims located on National

Forest Land.

This controversy began when Harold Barton, Jr., and Kenneth 0.

Watkins (now deceased), applied for four patents in January of 1958. A

mining engineer from the Forest Service examined the claims and approved

two and disapproved two.

The Forest Service initiated psoceedings to invalidate cleins

known as Elephant No. 1 and No. 2. A hearing examiner in October 1961

invalidated Elephant No. 1 and No. 2 for lack of a valid discovery of

valuable mineral deposits.

Plaintiff appealed to the Director of the Bureau of Land Manage-

ment, and in November 1962 the Director reversed the hearing examiner.

The Forest Service appealed to the Secretary of Interior and a new hear-

ing was ordered. The new hearing, July 1964, resulted once dgeia in 0

finding against the plaintiff. This decision was affirmed on appeal to

the Bureau and again by the Secretary of the Interior. Plaintiff seeks

review of the Secretary's final decision. The case is before this court

on @ substantial record made in the earlier proceedings.

The test whether valuable mineral deposits have been discovered

is whether « person of ordinary prudence would expend further labor and

money with a reasonable prospect of developing « valuable mine. Chrisman

Ys Miller, 197 U.S. 313, 322 (1905), quoting from Castle v. Womble, 19

A39

L.D. 455, 457 (1894). A patent cannot be granted where che evidence

shows that further expenditures would be required to Lscate rather than

to develop a mine. Henauit Mining Company v. Tysk, 419 F. 2d 766, 768

(9th Cir. 1969), cert. den. 398 U.S. 950 (1970): Converse v. il,

399 F. 2d 616 (9th Cir. 1968), cert. den. 393 U.S. 1025 (1969).

Plaintiff contends that the Secretary failed to apply the

prudent-man test and erroneously applied a test of profitable operation.

Profitability is an important consideration in applying the prudent-man

test. United States v. Coleman, 390 U.S. 599 (1968). But the record

shows that the Secretary understood and followed the prudent-man test.

I have examined the administrative record, and I find that the

hearing examiner's findings are supported by evidence. It is not the

function of this court to review the weight and the credibility of the

evidence nor to draw inferences from evidence that supports conflicting

inferences. It is immaterial whether this court would necessarily draw

from the evidence the same inferences as those that were drawn by the

hearing examiner. The Secretary can be sustained if the record as a

whole contains substantial evidence in support of the examiner's findings.

The record in this case reveals that the two rejected claims,

like the two claims for which patents were granted, are located in the

Bohemia mining district of southeastern Lane County, Oregon. Valuable

minerals were discovered in this mining district. in the 1860's, and

mining activity has continued in the general area more or less sporadi-

cally since that time. Most of the area in the immediate vicinity of

the two contested claims has been covered by mining claims. Sone of

the claims have been patented and others have not. Minerals have been

A4O

found on many of the claims, and in a few cases producing mines have been

developed.

The hearing examiner heard testimony from lay and expert wit-

nesses on both sides of che question, and concluded that further explor-

ation was necessary to determine whether a valuable mine could be dis-

covered on the questioned claims.

The evidence was such that reasonable minds could differ. The

Secretary has found that « reasonable man would not be justified in

expending further sums in an attempt to find a valuable mineral deposit

on either of the contested claims. Based upon the evidence in support

of the Secretary's finding, it is my conclusion that the action should

be dismissed.

This opinion shall constitute findings of fact and conclusions

of law pursuant to Fed. R. Civ. P. 52 (a).

/s/ ALFRED T. GOODWIN

United States District Judge

A 4l

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Haron E. L. Barton, )

Plaintiff-Appellant,

ve. No. 71-1991

Rocers C. B. Morton, Secretary of the De- oe ON

partment of the Interior of the United States

of America,

Defendant-A ppellee. j

[May 30, 1974]

Appeal from the United States District Court

for the District of Oregon

Before: CHAMBERS, BROWNING, and ELY, Circuit Judges.

BROWNING, Circuit Judge:

Appellant and another! applied to the Department of the

Interior for patents to two lode mining claims. The applications

were denied and the claims held void on the ground that appli-

eants had not shown discovery of a valuable mineral deposit as

required by the applicable statutes. 30 U.S.C. §§ 22, 23, 29, 35.

Appellant filed this action to obtain judicial review of the

Department’s ruling. The district court gave judgment for the

government. We affirm.

The general legal standards to be applied are well established.

“[T]he only statutory standard has been and still is the ‘dis-

covery’ of ‘veins or lodes’ containing ‘valuable deposits’ of the

named metals or others.” Converse v. Udall, 399 F.2d 616, 619

(9th Cir. 1968). Appellant relies upon recognized glosses upon

this statutory standard. Thus, the cases have held that whether a

1Kenneth O. Watkins, since deceased.

ia te ph

2 Harold E. L. Barton vs.

valuable deposit has been discovered is a factual question to be

resolved by asking whether “a person of ordinary prudence would

be justified in the further expenditure of his labor and means,

mine... .” Castle v. Womble, 19 Interior Dec. 455, 457 (1894),

Appellant emphasizes that under this “prudent man” test, “proved

ability to mine the deposit at a profit need not be shown.” Adams

v. United States, 318 F.2d 861, 870 (9th Cir. 1963). The ques-

tion is not “whether assured profits were presently demonstrated,

but whether, under the circumstances, a person of ordinary pru-

dence would expend substantial sums in the expectation that a

profitable mine might be developed.” Id. See also Barrows v.

There is no dispute as to the material facts. Veins have been

exposed on both of the claims at issue. They contain some gold

and silver, together with base metals, The mineralization is spotty

and uneyen. The vein material thus far exposed is not of suffi-

@o=

cient value to be mined economically. However, along some veins

of this Kind on nearliy claims, chutes or pockets have been found

containing ore of sufficient quality and quantity to be profitably

mined. Expert witnesses testified that a prudent man would be

justified in tunneling into or along the veins on the claims in

search of similar chutes or pockets. This testimony was not

controverted.

Appellant contends that this showing precisely meets the

“prudent man” test. As appellant puts it, he and his predecessors

“have exposed veins which carry so much mineral values that all

parties agree that further work is justified and should be carried

on to pursue further these same veins with a reasonable expecta-

tion that a profitably mineable quantity of such ore will be

reached. The basis for the reasonable expectation is that similar

veins in nearby mines have yielded profitable ore shoots under

comparable geologic conditions.”

*This “prudent man” test is complemented by a “marketability test,”

requiring that it “be shown that the mineral ean be ‘extracted, removed

and marketed at profit... .’” United States v. Coleman, 390 U.S.

599, 600 (1968).

Rogers C. B. Morton 3

The Department’s position is that appellant has not yet dis-

covered a mineral deposit, but is only searching for one, albcit

with good prospects for success, No matter how bright those

prospects may be, the Department argues, they are not a substi-

tute for actual diseovery of the deposit itself. In the Department’s

view, the “prudent man” test comes into play only after a mineral

deposit has been discovered, not before; and it is then applied

to determine whether the diseovered deposit is “valuable.”? The

Department held that while the evidence shows that further ex-

penditures are justified in exploration for a mineral deposit, what

is required is discovery of a mineral deposit of such quality and

quantity that further expenditures are justified in the develop-

ment of a profitable mince.‘

We drew the same distinction in Henault Mining Co. v. Tysk,

419 F.2d 766 (9th Cir. 1969). In that case the claim was adjacent

to property on which the Homestake formation had been exten-

sively mined for gold. The Homestake formation dipped toward

3The Hearing Examiner wrote:

The prudent man rule is not an alternative to the substantive pro-

vision of the mining laws requiring the discovery of a valuable

mineral deposit. The rule is applicable only in the determination of

whether a particular deposit is valuable. In this ease, the further

expenditure of labor and means would not be directed toward the

development of a deposit which has been found but would be

directed toward the finding of a deposit which the evidence indicates

might be found and could be developed. '

*On appeal the Assistant Solicitor wrote:

The most that can be said from this evidence, and all that the

appellants have asserted, is, as observed hy the hearing examiner,

that the values of the minerals which have been found are sufficient

to induce further exploration. Thus, when appellants assert that

“a prudent man would be justified in expending further time and

with a reasonable prospect to develop a paying mince,” it is

lear that they mean that a prudent man would be justified in

pending further time and effort in exploring for minerals with a

prospect of finding a mineral deposit which could be

to lead to the development of a paying mine (emphasis in

original).

Appellant points out that the Department’s finding is misstated in a

concluding paragraph of the district court’s opinion. It is evident from

the opinion as a whole, however, that the district court understood the

distinction drawn by the Department and approved it.

PLE LL ETAL AOE NINES OIL N8 AKG IN

4 Harold E. L. Barton vs.

the claim for which a patent was sought, and outcropped beyond

tradicted testimony satisfied the “prudent man” test. We rejected

the argument (419 F.2d at 768-69) :

No vein or lode containing valuable mineral deposits as

yet been discovered. The dikes that have been discovered

through outcroppings simply constitute an indication that a

vein or lode, yet unexposed, may exist at depth. A reasonable

prediction that valuable minerals exist at depth will not

suffice as a “discovery” where the existence of these minerals

has not been physically established.

The further exploration by drilling as recommended by

Henault’s expert is not then in the nature of development of

a discovered lode. It is a search for values not yei discovered,

the discovery of which would justify development.

Henault’s “prudent man,” then, is not a prudent mine

developer but a prudent prospector (footnote omitted).°

Appellant seeks to distinguish Henault on the ground that

while no veins had been discovered in Henault, veins have been

discovered here. Appellant contends that these veins, admittedly

containing some gold and silver, constitute the required mineral

deposit. Appellant argues that he is now “searching for ore shoots,

zones of enrichment, within the mineral deposits (veins) which

have already been discovered,” whereas in Henault, “the target

was not [a] deeper enriched zone in an already exposed structure

but a different . . . mineral deposit altogether, which had not

yet been physically encountered on the claims.” Appellant con-

®See also Chrisman v. Miller, 197 U.S. 313, 320, 323 (1905); Converse

v. Udall, 399 F.2d 616, 623 (9th Cir. 1968). :

Rogers C. B. Morton 5

tends that tunneling or sinking into the veins on these claims, as

uniformly recommended by the witnesses, would not be “explora-

tion” to “discover” a “valuable mincral deposit,” but would be

“development” of an already discovered deposit into a paying

mine.

But a mineralized vein is not the equivalent of a deposit of

mincable ore. Such a vein may not contain material of substan-

tial value. In this ease, as the Department pointed out, “{i]t is

nowhere suggested that any quantity of material of the quality

of the vein matter thus far disclosed w constitute a mineable

body of ore. The evidence does not, in fact, establish any mineral

quality of any consistent extent. Although appellants have found

ore samples with indicated values excecding $70 per ton, the

record does not support a finding that they have found a

deposit yieiding ore or that quality, or of any other quality, the

exploitation of which may be contemplaied. The evidence of record

indicates th-t the values thus far, found are spotty, and appel-

lants do not argue otherwise” (emphasis in original).

The Department held, and we agree, that there is “no differ-

ence between the showing of isolated mineral values, not occur-

ring ina vein, which only suggests the existence of a valuable

mineral deposit within the limits of the claim and the showing

of isolated values occurring in a vein which only suggests the

possible existence of a valuable mineral deposit in the course of

the vein. That which is called for in either case is further ex-

Ploration to find the deposit supposed to exist.” See also Converse

v. Udall, supra, 399 F.2d at 619, 622.

Appellant argues that in practical effect this approach nullifies

the “reasonable anticipation” aspect of the “prudent man” test,

and is inconsistent with the rule that “proved ability to mine the

deposit at a profit need not be shown.” Adams v. United States,

supra, 318 F.2d at 870. We do not agree. Room remains after

discovery of the mineral deposit for application of the principle

that, the claimant need only show a reasonable prospect that a

profitable mine will be developed. The margin between a valuable

mineral deposit and a profitable mine may be ‘substantial. As the

Department said, “Where ore has been found, the likelihood that

ore of the quality found, or of any mineable quality, will continue

remains a matter for speculation, and, until a mineral deposit

A 46

Harold E. L, Barton vs.

A47

Rogers C. B. Morton 7

Denial of a patent does not bar a claimant from continuing the

search for a valuable mineral deposit; it only withholds passage

of title until that discovery is made.*

Affirmed.

*In closing the opinion for the Department on appeal, the Assistant

Solicitor stated :

PERNAU-WALSH PRINTING CO., SAN FRANCISCO 6-4-74 480

Mr. HANSEN. gt President, I note

t measure i

that this é@ sO many others unfair decision, How does he really

his day in court, as we

does? .

judicial review of the final

tive decision in the Federal courts.

US. District Courts are given j

tion to review and to set aside agency

tio:

8 +H

tial right, he would be given due notice

of the charge brought by the enforcing

agency’ and given a hearing in an ad-

ministrative court.

Mr. HANSEN. Administrative trial is

meaningless to an owner or operator.

He thinks ‘he is being denied his day in

court. The judge is an employee of the

agency. If he is bold enough to make a

decision favorable to an.owner or oper-

ator, he can be, and usually is, re-

versed by higher administrative author-

ity. The lawyer who handles the case for

the complaining agency is often an as-

sistant to the lawyer for the appellate

administrative agency to whom the Sec-

retary delegates the final decision. The

administrative court system has aroused

& great deal of resentment among per-.

sons affected by displaying more inter-

est in carrying out administrative policy

dictated by department heads than they

show for the rights of citizens. .

{i we go on record here as to what Con-

sress intended to accomplish by writing

into the Administrative Procedure Act

the provision for judicial review of ad-

ministrative action. The courts should

mot be rudberstamps; it is their duty

to protect the citizens against bureau-

cratic injustice. Congress intended that

the courts should review administrative

decisions critically. If the decision be-

low was wro:ts, if it was contrary to the

evidence in the record, the court should

trative decisions from other depart-

i | !

We ee

[

‘fe

stances of bureaucratic injustice, th

Constitution becomes only 2 scrap- 0

paper,

Mr. HANSEN. I thank my colleague

This will be most reassuring to those

have expressed concern over administra

tive tribunals and the courts.

Mr. HRUSKA. Our form of govern

ment must necessarily make use of ad-

ministrative agencies, and the course o ‘

history has shown many times and in

" - task of

examining the record to evaluate the

findings made below..The Administra-

- teat wah

of the reviewing court to review

-Or. suck portions

as may be cited by any party.

and to take cue account of the rule

prejudicial error. . ‘

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.