WINNEMUCCA — Representatives of Rye Patch Gold were recently in court to make their argument for a preliminary injunction against Coeur Rochester, Inc.
The companies are in a legal battle over mining claims in Pershing County. The dispute erupted after CRI neglected to pay their annual federal maintenance fees, making their claims null and void.
At that point any person or company could have paid the fees and taken the claims for themselves, which is what Rye Patch Gold did. CRI disputes Rye Patch has a legal right to the claims, which CRI has been working.
The legal possessor of those claims will be determined at trial in the 6th Judicial District Court in Pershing County in November.
In the meantime, Rye Patch Gold sought a preliminary injunction against CRI.
Arguments relating to the preliminary injunction were heard by Special Court Master Judge David Hagen, who was retained by the presiding judge, Michael Montero, to assist with limited pretrial matters.
Hagen does not have the authority to issue an order in connection to the preliminary injunction; instead, he will issue a recommendation to Judge Montero who will make the final decision as to whether the injunction is granted or not.
Arguments took place in Reno on June 27 and 28.
In order to obtain the preliminary injunction it was necessary for Rye Patch Gold to prove they would suffer irreparable harm if the injunction was not granted.
Testimony covered a lot of the same ground covered in previous hearings in the matter; specifically, that RPG obtained the LH claims after learning in October 2011 that CRI neglected to pay their federal maintenance fees and additionally failed to file their notice to hold to the Pershing County Recorder.
There was also testimony in connection to a December 2011 move by CRI who unsuccessfully sought a restraining order to keep RPG off the disputed claims – for safety reasons.
At that time, Judge Montero ruled CRI failed to meet the burden required of a temporary restraining order, but he also found there was some concern for the safety of personnel so close to an active mine site.
Balancing the interest of both, he delineated areas for RPG and CRI to go about their business while the matter was being resolved.
In seeking the preliminary injunction, representatives from RPG argued CRI was attempting to circumvent the rules.
The president of RPG, William Howald, explained while the company had traditionally been a resource and development company, they actually intended to mine the LH claims.
Going toward the issue of whether or not they were suffering irreparable harm, RPG entered into evidence photos of CRI drill rigs conducting angled drillings from the CRI property into the LH claims.
Howald explained to the court RPG is conducting extensive research on the property to determine the similarities in geology between the LH claims and other claims RPG holds in the area.
Where gold was found in certain geologic formations at the nearby claims, it may be found again on the LH claims.
When Howald was asked about the impacts of the angle drilling he said, “…they have taken away from me the ability to observe the geology, to collect samples, to work portions of the claims, and I’ll never get those samples that they have collected back. They have destroyed them. They have assayed them. They are gone forever.”
Howald and other RPG geologists reportedly asked the contract drillers to stop trespassing onto the LH claims. Allegedly, the chief mine geologist, Henry Follman, said the company had permits from the BLM to drill there.
Follman later took the stand and said angle drilling allows the company to drill from their own private property, which is an easier permitting process with the BLM.
Follman admitted the angled drilling, which was north-south, represented a change in the drilling pattern previously used by CRI.
CRI attempted several times to use the BLM as cover, but the BLM issued a letter curtailing their activities, which was entered into the record.
One of the activities undertaken by CRI was to construct berms and locked gates on public roads.
RPG Geologiest Ronaldo da Silva testified the end result of the gates and berms was RPG staff had to park their vehicles and walk long distances to the areas they were working, which significantly decreased their productivity.
When confronted, CRI said they had instructions from the BLM to keep the public out of active mining areas.
Answering questions to the issue was former general manager Cindy Jones.
She was shown a photo and asked about one of the locked gates. Jones denied the gates and berms were designed to interfere with RPG’s access to the LH claims. She said it was necessary to construct the gates because a turn off to the mine was down the road.
When asked just how many miles down the road, she was not able to say.
The gate, however, is no longer there and some of the berms were removed as well after CRI received a letter from the BLM instructing them to take down the gates and berms on public roads.
They complied. According to testimony the gates and berms went up on or about January 2 and came down in February.
A letter from Mike Truden, the Humboldt River Field Office Manager, to CRI was entered into evidence. Included in the letter was a reminder to CRI that the BLM records mining claims and accepts maintenance fees related to the claims, but the BLM does not adjudicate relative possessory rights between rival mine claimants.
Sometimes when confronted CRI employees allegedly used the BLM-approved Plan of Operations to justify their actions (as with the locked gate and angle drilling).
However, when Follman was on the stand he was presented with the Plan of Operations, which clearly states approval of the permit for reclamation was not certification of ownership to any person named in the document nor did it recognize the validity of mining claims.
RPG also presented aerial photos of the pit which purported to show CRI blasting and hauling ore from LH claims. The photos were taken from a helicopter flying over the pit.
Using a map, Howald alleged CRI was blasting material from the LH claims and hauling it away.
However, this was disputed by Casey Kiel, CRI’s technical superintendent, who explained the material on that wall was waste material from previous operations used to stabilize the wall.
Kiel explained it was necessary to remove the waste ore to expand the pit in order to dig deeper and/or to reach deposits behind it.
He also told the court he personally walked the area and alleged the map that delineated the LH claims was incorrect and the operations of the pit were not encroaching on the LH claims.
At the conclusion of the hearing each side was given ten days from the release of the official transcript to generate a ten-page summary of their legal arguments.
After Hagen reviews the transcript and summaries, he will issue a recommendation to Judge Montero.