WINNEMUCCA — The judge presiding over the hearing to determine whether or not a temporary restraining order in a mining claims dispute would stand or be dissolved found Coeur Rochester failed to meet the burden required of a permanent injunction.

However, Judge Michael Montero also expressed concern for the general safety of both Coeur’s employees and those of Rye Patch Gold; therefore, he granted the injunction sought by Coeur – in part.

Montero granted the injunction that will prevent RPG from working on the portion of the mine property where there is active mining, to include the heap leach pad area, the haul roads, the open pit, etc.

It should be noted RPG does not have claims in the areas of active operation, such as the open pit. However, the 100-foot and 50-foot cushion around the active mine site does encroach onto some of RPG's claims.

Montero’s ruling represented balance in a contentious dispute.  It was designed to protect the safety of employees while allowing both sides to continue their mining and/or mining exploration operations.

CASE HISTORY:  Coeur sought a temporary restraining order in the 6th Judicial District Court to prevent RPG employees or contractors from entering the mine site.  The TRO was scheduled to expire on Thursday (Dec. 15) at which time Coeur hoped to have a permanent injunction in place.

For their part, Rye Patch sought to have the TRO dissolved so they could work mining claims they insist are their own.

The dispute between Coeur Rochester and Rye Patch Gold erupted when the latter filed mining claims on property currently being mined by Coeur.  The move by Rye Patch was made possible due to the failure by Coeur Rochester to pay $75,000 in federal maintenance fees on its claims, which were due on or before August 31.

On September 1 the claims were closed and the mineral rights became available for any member of the public to claim.

The hearing in 6th JDC only concerns the TRO.  The actual lawsuit filed by RPG against Coeur Rochester was filed in the 2nd JDC in Washoe County.

TESTIMONY – THE SAFETY ISSUE: Both sides were admonished by the court on day one to stick to the issue of safety.

Coeur Rochester, represented in court by Rew Goodenow, of Parsons Behle & Latimer, put multiple witnesses on the stand to testify to the obligations the company had under their Plan of Operations to control the mine site.

There was one issue, however, Coeur Rochester could not get around:  Rye Patch Gold employees had been on the property for weeks staking claims, collecting mineral samples, and mapping.

How was it no one from Coeur noticed?  True, it’s a large property. But, as was testified to by Rye Patch Gold employees and contractors, it was primarily because they stayed out of the active mining areas.

In addition to the testimony of the contractors who placed the claim stakes, the court heard testimony from four of RPG’s geologists.

From November 19 to December 5, when the TRO went into effect, RPG’s geologist walked the LH claims line.

Geologist Steve Brown, a consultant, told the court he didn’t see any facilities up close, accessed the property from public roads, and denied cutting fences to access to the property, as had been alleged.

Brown and three other geologists walked the LH line from claim post to claim post gathering samples and mapping. He said the only sign he saw was so defaced it could not be read.

RPG Geologist Rob Ghiglieri testified they did encounter chain-link fences, which they went around and neither cut through nor climbed.  He saw the heap leach pads from about 500-600 yards away and saw the waste rock dump from about 100 feet away.

As had the previous witnesses, geologists Eric Kiefer and Ronaldo da Silva denied cutting fences to enter the property, and said they always worked in daylight.

CRI previously testified RPG employees accessed the property at night and worked under cover of darkness.

Kiefer was involved in a confrontation with Coeur Rochester employees on December 1.  He said CRI safety personnel wanted him to leave the property because he was not site trained.  Kiefer alleged from the stand when he asked to be site trained, CRI personnel refused to provide the training.

Although Ghiglieri and Kiefer are recent graduates from UNR with degrees in geology, da Silva is an experienced geologists who has worked in both operations and exploration over many years.

He told the court the geologists took the appropriate safety precautions to include safety glasses, steel-toe boots, hard hats, and high-visibility clothing.

TESTIMONY – ACQUIRING THE CLAIMS:  Many have wondered how it was Rye Patch Gold was able to acquire the mineral rights to so much of the property being mined by Coeur Rochester.

Taking the stand was William Howald, geologist and president of Rye Patch Gold.

According to Howald, events began during an October 22 field trip of the Coeur property by the Geological Society of Nevada, of which he is president.

Howald told the court Coeur provided an information packet to those on the trip, which included a map of the operation.  In looking at the map, Howald noticed Coeur had indicated a portion of property that was actually claimed by Rye Patch.

Concerned there might be a problem with their claims, he had a contractor look into the issue.  Mike Perry, a lands-use issue consultant with RPG, came back with the news that it didn’t matter because CRI had neglected to pay their federal claim maintenance fees – for the entire Coeur Rochester and Packard Mine claims.

As claiming mineral rights is serious business, Howald said he began investigating the matter, even asking BLM to take a second look, but there appeared to be no evidence of payment.

He also sent Perry to Pershing County to investigate if there was evidence of payment there, but the Pershing County Recorder indicated Coeur had also failed to file the yearly notice of intent to hold the property and make payment on same.

At that point, RPG moved to claim the mineral rights left open to any person, business, or corporation to claim.

When asked if he had concerns about the claim-staking contractor working so close to an operating mine, Howald replied, “Their claims were invalid.  They had no right to mine.”

He later added, “They forfeited their mineral title.”

When asked by Goodinow why he didn’t give Coeur a call and let them know they had missed their payments, an incredulous Howald reminded the attorney mining is a competitive industry.

Indeed it is.  According to testimony, while representatives from Coeur d’Alene, Coeur Rochester’s parent company, appeared to be making offers to settle the matter with a purchase of RPG, Nevada representatives of Coeur Rochester were going about the business of preventing RPG employees and contractors from entering the property.

Howald said he had a conversation with Coeur Rochester’s general manager and vice president Cindy Jones.  He alleges in the conversation he told her he was aware Coeur Rochester was staking claims on top of the claims staked by RPG, no small matter in mining law, but Jones allegedly said she was unaware of RPG claims.

Howald accused Coeur of claim jumping on RPG’s senior claims.

At times the testimony became brutal.  Getting back to the issue of safety, Goodenow questioned Howald about the death of a driller that occurred in 2001 at the Placer Dome mine when Howald was then the Exploration Manager. The attorney said the investigating agency, MSHA, accused management of not implementing safety procedures that could have prevented the death of the driller.

Howald admitted that was true, but he insisted the management in questioned was the contract drilling company.  Goodenow countered that Howald had been in charge of the contractors and broadly suggested the death of the driller was the fault of Howald, which he denied.

CLOSING STATEMENTS – COUER ROCHESTER: During closing statements Goodenow said the case wasn’t about claims but the safety of the 300 people who work at the mine, and the safety of the public. He accused RPG of trespassing on an active mine site without training or authority to be there – thereby jeopardizing the safety of their own employees and contract employees.

Goodenow argued it was Coeur Rochester who was obligated for the safety of people at the site under the Plan of Operations in which agencies of the federal government charged the company with protecting the public and environment.

What would happen if something at the site went wrong because of actions taken by RPG? the attorney asked.  It would be Coeur Rochester’s financial responsibility.

He alleged RPG had repeatedly ignored safety regulations and practices and there was no reason to think they’d act any different in the future.

He also questioned the $140,000 bond RPG has for their eight properties in Pershing County and suggested it would not be enough to cover a serious incident.

He said, “That’s not enough to satisfy the type of harm that could be caused if their conduct continues along in the same fashion.”

Coeur Rochester has a $5 million dollar bond for the mine site.  It should be noted RPG is primarily an exploration/development company, as opposed to an operations company, and therefore is not required to carry the same amount of bonds as a company who was actively mining.

Goodenow had four requests for the court:  1) RPG be prevented from entering the land covered by the Plan of Operations (about 1800 acres), 2) that RPG be prevented from entering upon/crossing lands owned or controlled by CRI adjacent to the LH claims (this primarily concerned the Packard Mine), that RPG be prevented from interfering with mining operations including the exploration on public lands outside the Plan of Operation boundary (this primarily concerned the Mystic area, which Coeur Rochester claimed was their right to drill and exclude all others due to discoveries they made on the property), and 4) That RPG be prevented from conducting mining operations or mineral explorations within the LH claims outside of the Plan of Operation boundary without first complying with health and safety regulations.

CLOSING ARGUMENTS – RPG:  Representing Rye Patch Gold on the last day of testimony was Frank Thompson of Erwin & Thompson.

Thompson argued to the court it was an undisputed fact RPG did not act in violation of any right of Coeur Rochester, who failed to pay federal maintenance fees on 541 unpatented mining claims, making them  void.

He commented, “What right Coeur had in the mineral estate disappeared at one minute after midnight on September 1.”

Coeur has acknowledged they forgot to pay the fees. What they did not acknowledge, Thompson argued, is that failure comes with legal consequences. The primary consequence was any right to the mineral estate, he said.

Thompson carefully explained the difference between the mineral estate and the surface estate.  The Plan of Operations primarily concerns surface disturbance and commits the company to clean up whatever mess they make, he said.  He continued and alleged CRI was using the surface estate and their Plan of Operations to permanently claim the mineral estate and exclude all others.

He said, “MSHA regulations do not have anything to do with whether a US citizen can locate valid claims on open ground … RPG did not interfere with any right in minerals that CRI had because whatever right they had to those minerals were forfeited as a matter of law.”

He pointed out that Coeur was unaware of the failure to pay maintenance fees for months and casually referred to it later as a “clerical error.”

Thompson commented, “They think they own this public land.  They think it’s there’s.”

He went on to question Coeur’s safety claims considering representatives of RPG worked the LH claims for weeks – without anyone from CRI noticing.

He alleged when the company found out about the failure to pay federal maintenance fees, they responded by acting in bad faith.

He accused CRI of pretending to negotiate with RPG for the purchase of the company  – all the while what they were doing was preparing to jump the claims staked by RPG.

Addressing the safety issue, Thompson referred to CRI’s position as “exaggerated speculation.”

There was simply no evidence to suggest RPG employees cut fences or wandered into areas where there was active mining.

Thompson said, “It’s clear and the evidence shows CRI has greatly exaggerated the safety issue for one purpose:  to exclude RPG from the premises.”

Previous Posts:

TRO hearing in mining claims dispute will go into third day ]

TRO hearing in mining claims dispute goes into second day 

Coeur d’Alene receives temporary restraining order against Rye Patch Gold in mining claims dispute