http://www.mineweb.com/mineweb/view/mineweb/en/...41072&sn=Detail
Rye Patch seizes golden opportunity on Coeur d'Alene's claim snafu
Coeur d'Alene Mines, a major silver miner in the U.S., said it had failed to pay maintenance fees on claims covering part of its Rochester silver-gold property, which Rye Patch Gold now says it controls.
Author: Kip Keen
Posted: Tuesday , 06 Dec 2011
HALIFAX, NS -
In what may turn out to be a shocking failure on the part of Coeur d'Alene Mines (TSX: CDM) to not pay federal claim maintenance fees on land comprising a swath of its Rochester mine and Nevada Packard property, junior-explorer Rye Patch Gold (TSX-V: RPM) said it swooped in and picked up control over part of one of Coeur d'Alene's chief mining assets in Nevada.
At first, in the hours after Rye Patch announced its apparent coup on the Coeur concessions, it was not clear just how much land and resources were at stake or, indeed, if Coeur d'Alene had made an error at all. Then near the end of the trading day on Monday Coeur d'Alene broke its silence with the message: the land is still ours, but yes, we forgot to pay certain claim maintenance fees.
The first part of the message came in a press release in which Coeur d'Alene said it was suing Rye Patch over what it still considered its own land. But then Coeur d'Alene also corroborated Rye Patch's contention that it had not paid claim maintenance payments on time for key Coeur d'Alene land claims at Rochester, an active silver-gold mine, and Nevada Packard.
In an interview with Mineweb Coeur d'Alene spokesperson Stefany Bales acknowledged that the silver miner had erroneously not made payments on a group of unpatented mining claims covering parts of the Rochester mine and Nevada Packard property. Bales, speaking over the telephone, confirmed that the company had "failed to pay certain claim maintenance fees" on a "substantial" amount of property.
Nonetheless Bales suggested the non-payment did not undermine Coeur d'Alene's rights to the land, despite what Rye Patch contended. In a press release Coeur d'Alene stated "its unpatented claims are valid" and to push its position Coeur d'Alene said it had filed suit against Rye Patch to assert the validity of its claims, to sue for damages and to get "an injunction preventing Rye Patch Gold from interfering with its claims."
Bales, however, would not go into detail as to what grounds Coeur d'Alene may have against Rye Patch. She said Coeur d'Alene was reviewing the matter and that "We can't predict the outcome here."
Aggressive stance though it took, Coeur d'Alene also issued a stark warning that confirmed the stunning amount of reserves and resources in question: as much as 20 percent of its Rochester reserves and other mineralized material could be affected, it said.
If Coeur d'Alene lost that 20 percent it would be a huge blow to the miner, dissolving a significant amount of its reserves and resources following what plausibly may boil down to a silly clerical error. At Rochester, Coeur d'Alene reports some 27.6 million ounces silver and 247,000 ounces gold in proven and probable reserves along with 94.4 million ounces silver and 708,000 ounces gold in measured and indicated resources.
And then there was this: Rye Patch President and CEO William Howald told Mineweb that the claims he said the junior controlled cover active parts of Coeur d'Alene's mining operations included a northern portion of the Rochester open-pit and part of one leach pad.
"Part of the pit that they're mining is on our land," Howald said.
When specifically questioned about whether the unpatented claims comprised a slice of the open pit or leach pad, Bales could not confirm nor deny Howald's claim. Bales responded saying she did not know about those details, though she repeated that "a substantial portion of the unpatented claims" was involved.
Bales also stressed it was mining as usual at Rochester. She did not know, however, if Coeur d'Alene's mine plan would have to change in light of Rye Patch's claims on parts of the Rochester concessions. Coeur d'Alene has said it plans to mine 2.4 million ounces silver and 35,000 ounces gold each year for the next eight years at Rochester.
Howald, however, who spoke with Mineweb over the telephone on Monday before Coeur d'Alene had released its press release announcing it was suing Rye Patch, made it clear the issue came down to a Coeur d'Alene miss step.
"It's a faux pas on their part," he said. The claims came to Rye Patch's attention after it reviewed Unite States Bureau of Land Management records on staked claims on public land, he said.
In a prepared statement Howald laid out Rye Patch's claim for incontrovertible control of the Rochester and Nevada Packard land.
"The process of maintaining unpatented mining claims in the United States of America is clear and unambiguous. If a claim owner does not pay the fee on time, the claim is forfeited and void. The effect of the law's forfeiture provisions is well-established.
"Coeur d'Alene Mines failed to pay the annual mining claim maintenance fee on time and the ground became open for mineral location. Rye Patch investors now have under their control mining claims located on additional gold and silver resources and a portion of the lands formerly part of an active mine."
Howald also said he had spoken with Coeur d'Alene but that the discussion was limited to informing them of Rye Patch's claims to the Rochester property and that Coeur d'Alene was not to trespass on what it now considered Rye Patch land.
"Obviously they're not happy about this," Howald said.
Though the fight over Rochester appears just begun, investors, clearly hoping that Rye Patch is now the owner of valuable reserves and resources at Rochester, stampeded to its stock. Rye Patch's shareprice closed up 84 percent to C$0.71. Coeur d'Alene's shareprice fell one percent to C$28.85.
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