Top 6 Things to Know Before Buying a Gold Mining ClaimGold, silver, copper, platinum and gemstones worth billions are still buried in the ground waiting to be found by those who know where to look. A mining claim provides the rights to all of these metals and gemstones to the holder of the claim. However finding old mines is easy and there are plenty of people who will sell you a “mining claim”, but how do you find a legitimate mining claim that still holds potential?
Just like buying a car, you need to know what you are getting into and what you can expect in return. There are good claims, and bad claims. There are many reasons for claims to be good and bad. The more you know the less likely you are to avoid common mistakes when buying a claim. So here are some key elements to look for in finding your ideal mining claim.
1. History of the Mine
In most cases, if a mine has any value and has produced anything at all, it will have an established name and some documented history. The United States Geological Society has taken over the records and record keeping for the now defunct US Bureau of Mines (Disbanded in 1994). Their website (http://www.usgs.gov/) has a plethora of information. Some relevant some not.
Once you have established a name on the mine, you can now start researching the district in which that mine lies. The District information will give you an idea of what was being produced in the area, from what mines, and in what quantities. A lot of this information can be found online, but if not, you may have to revert to old US Bureau of Mines books and Annual Reports. These can be found on rare book sites and sometimes even on Amazon.com.
All of this information should help you start to get an idea of the historical production and value of the mine. Information such as; the type and amount of ore the previous miners were pulling out, how rich the ore was, and when it was last mined.
With all this in mind, there is a caveat to remember. Miners were people just like you and I. They enjoyed their privacy and they didn’t like to pay taxes. In many cases there will be vague information on a mine, followed by a statement of “no documented production”. This means one of two things; 1. The writer could find no documented production, or 2. The production was not disclosed.
Many miners would crush and smelt their own ores in an effort to not be taxed on their workings. This allowed for them to take gold and silver bars and trade them for goods or services with no taxable trail. This was a very fine line to walk, if you gave no documented production, there was no chance that you would ever be able to patent your site. But if you are making money from your mine, do you care to share any of that? Do you care to pay hundreds or thousands of dollars to patent your site? Most miners didn’t, which is why there are still so many valuable mines out there today.
What you need to use is logic. Look at what is on the ground and what story it tells. A 40 foot hole in the mountain with nothing around it, likely produced nothing. However, a 1000′ adit or shaft with nothing around it tells a different story. It says that someone found enough to make it economically viable to keep digging.
In some cases there will be a good bit of infrastructure around the mine. Blacksmith shops, barracks and such all show that work was being done and something was paying for it. People were not stupid back in the day and they weren’t just throwing their money away at nothing.
Tailings can tell a story as well. Finding gold and silver in discarded tailings tells you that the minerals taken from the mine were abundant enough that they felt safe discarding some “smaller” bits of ore.
If you can find a mill on site, you are really hitting paydirt. Mills aren’t cheap, and a mill on a mine says that there was enough rich ore found to necessitate the expenditure of building a mill. Additionally, there was significant mineral found that would keep a mill running. You don’t build a mill because you have a small vein that might pay out. You build a mill when you have a massive lode that is going to be paying out for quite a while.
Another good thing to look for is what minerals were produced. In the 1940’s-1960’s miners could apply for federal assistance for mining, especially for strategic minerals like Tungsten. Many miners would get grants of $30,000.00, $40,000.00, even $100,000.00. In these cases there is good documentation of the mines, the mapping, and what they expected to extract. If you can track down these grants on mines, you will be rewarded with some very detailed information!
Back in the day location could make or break a mining operation. A miner might be bringing out gold that is 20 ounces to the ton, but if it can’t be hauled off and processed at a profit, it might as well be dirt. Hauling ore by wagon from the middle of nowhere could really eat into the profits. However there were ores that were rich enough to warrant these trips. Mines in Montana shipped their ores through Utah, out to San Francisco and then out to Swansea, Wales, to be processed.
Today we are lucky enough to have paved roads leading throughout the West, but location is still a key element. If you plan on doing some major production and extract a lot of ores, you should find a claim that will allow you to drive a dump truck up to it. It will cost a lot to permit a road and that may just kill all your profits.
On the other hand, if you plan on doing most of the work yourself, the farther away from civilization, the better. A productive claim in a beautiful isolated setting might just be what you are looking for.
Resources will define what you can do on your claim. A claim without water will require you to pack that water in. A claim in the desert will be ideal to work in the fall through the spring, but can be too hot to work in the summer, especially if you don’t have the ability to get out of the sun and the elements. What about resources for building and working your mine – trees and timber on the claim can be used for mining operations and are an invaluable asset.
Many claimants will park a 5th Wheel, or travel trailer on their claim to stay at while working. A good, safe, place to get a good nights sleep can be invaluable. In some cases there are buildings on the claims that can be included in your notice of operations and used in support of your mining operation.
The more resources, the better the claim. This is why valid claims in Colorado, Montana and Oregon command top dollar. Trees, timber, water and shelter are plentiful. These make mining much easier and allow for a lot more to get done. The deserts may hold vast amounts of gold and untold treasure, but you need to be prepared to endure the heat in the summer, and the exposure and elemental fury that comes with that desert climate.
Weather is an important factors in your decision to purchase a claim. We have seen claimants give up sites purely because the weather and temperature was so hostile that they couldn’t get any work done. Look at seasonal weather reports for the area you are considering purchasing a claim. Ask questions like: How hot does it get? how cold does it get? How many months out of the year will I be able to access my claim?
Find a site that speaks to you and your abilities. Mining is a lot of hard work. It’s not for the weak of heart or the timid. So, if you hate to be hot and sweaty you might not want to get a mine in the middle of the desert.
Look for a claim that you can see yourself being comfortable and working at. Some might want a place where they could enjoy prospecting for a weekend. Some will want a place that they could make a living and enjoy it as well.
5. Integrity of the Seller
Mark Twain said, “A gold mine is a hole in the ground with a liar on top”. The statement was made at a time when many men would sell any hole in the ground as a mine. Its also said that the more things change, the more they stay the same. This is the case with “claim sellers”. Since GRE started selling claims, we have seen many unscrupulous sellers come and go, and some sellers that are still out there.
While we strongly suggest that you research the history of the mine you are buying, we also suggest that you have some sense of the sellers integrity. We hear every year from miners who have purchased claims from other sellers that are either improperly written, not executed (staked and marked) or in some cases, completely non-existent.
We can help with fixing these issues in most cases, however, we would rather you never had to call us to fix someone else’s negligence. You’ve already paid enough and you should get what you paid for! It is your job to do you homework on the seller. Read and completely understand all documentation that is presented. Your seller is your link to everything about the claim until you get out there to see it yourself, so make sure you have confidence in your seller. Call them, discuss the claim with them. Ask questions. Follow your gut.
Research is the key, anyone can say something good or bad about someone online. GRE has been ruffling feathers for years, and as such, we have a few interesting exposes. Some of the more interesting videos can be viewed here.
Look for the following in a Good Seller. A good seller will have some longevity. A good seller will have a solid reputation. They will be knowledgeable in what they are selling. They will have intimate knowledge of the mines and the claims they are selling and be willing and able to relay that to you. Be wary of sellers that change names often, or who use aliases and not their actual company name. A good company will be proud of their work and their claims. These companies may not be the cheapest, but as with anything, you get what you pay for.
6. Validity of the Claim
This runs with the integrity of the seller. There are a few things to check to verify that a claim is valid. Number one is the claim on locatable land? That means is it on wilderness, or private land, or is it on locatable land – land that can be claimed. The second thing to check is if the claim is in the seller’s name and if it has been staked. If you want to check the validity of any claim sold by us or anyone else, just let us know and we can provide reports for you. There are a few quick and easy ways to verify most any claim, they are as follows:
A. Mining Claim Number (MC#)
For a claim to be valid, one of the most basic elements is for a Mining Claim number or MC# to be issued. These are issued by the BLM of each state once paperwork has been received and the basic elements have been verified. An MC# DOES NOT guarantee a valid claim, it only assures you that the seller has filed the paperwork. Claim numbers are usually tied to the state, IE, NMC would be a Nevada Mining Claim, NMMC would be a New Mexico Mining Claim. Ask for this number from the seller. Then head on over to the BLMs website (LR2000) and verify 3 things.
- The mining claim is valid
- The mining claim is in the sellers name
- There are no outstanding issues on the claim
The BLM reviews all mining claims against public land records. The BLM can invalidate a claim based on these records. For instance, if “Steve” files a claim on a private section of land, the BLM will accept his claim and money. However, once the claim is reviewed, the land surveyors would note that the land was private and not open to “location” or “claim”. It can take up to 12 months to be notified, one more reason to make sure you trust your seller.
Ask the seller what documentation you can expect. Are you expected to file documents with the county and BLM? What are they handling in respect to the paperwork and who is responsible for any errors or omissions? A claim transfer life cycle is as follows:
- Quit Claim is written. This document will have all of the relevant information including a detailed description of the claim, boundaries, state, county, etc… It will also dictate who the claim is being transferred to. Make sure that this information is exactly how you want it, including name, address and phone number.
- Quit Claim transfer is notarized. Herein the seller will sign their interest in the claim over to you. This should be 100% interest and it should be a notarized signature.
- Next the Claim goes to the County Recorder where it will be added to County records and then returned with a County stamp or embossing.
- Once the Quit Claim has been returned from the County, it will need to go to the BLM for recording. The BLM will give receipt of the documentation, but you will likely not receive any further information from the BLM.
If any of these items are not in place, or the seller is unsure about them, you may want to look elsewhere for your claim. These steps are the most basic of basic elements.
C. Claim Accurately Written
It’s easy for someone to write a claim anywhere. So, verify the location. Look it up on a map and make sure it’s where it should be. Some claims advertised for sale are nowhere near where they purport to be, or some have so many errors that the claim is written on land that just doesn’t exist.
D. What is your recourse?
It’s always good to verify that you can locate the seller if you need to, and determine how they stand behind the claim. Validate the following:
- Address – Is this a physical address that you can go kick down the door if you need to? Be wary of buying anything from someone without a physical address. PO boxes and Mail only addresses are common. Put the address in Google Earth and verify it!
- Phone number – Can you get a hold of the seller? Will they speak to you and discuss your claim? If not, you might be getting scammed.
- Are they a legitimate business? A business will have more accountability than a guy in his basement. The guy that is selling only one claim, or has no accountability is more likely to not care about your claim as soon as he has your money. Check the BBB and do some web searching. Research who you are buying from.
E. Beware of instant Quit Claim documentation
One last thing. If a seller promises instant Quit Claim documentation, that should raise a red flag. Correct documentation requires that the Quit Claim be recorded with the County and the BLM. This requires notarization, and stamps in most cases. If someone gives you documentation immediately, it has not been recorded properly. This leaves the proper execution of documentation to be done by you. If you know what you are doing it’s relatively easy. If not, it can be a never-ending nightmare.
It’s ideal to have documentation of your ownership of the claim before you start taking minerals from the claim, though you can be given permission to work a claim before you have the paperwork, if a proper Notice of Operations is given by the claim owner.
The seller can provide documentation with copies of the Quit Claim and Bill of Sale, or you can wait for the BLM to update their records on the LR2000 to show you as the new owner. This often takes 3-5 weeks to update.