Geomet Exploration, Ltd. v. Lucky Mc Uranium Corp., 1

• Decision Date: 12 June 1979
• Docket Number: CA-CIV,No. 1,1
• Citation: 124 Ariz. 60,601 P.2d 1344
• Parties: GEOMET EXPLORATION, LTD., a corporation, Appellant, v. LUCKY Mc URANIUM CORPORATION, a corporation, Appellee. 4125.
• Court: Arizona Court of Appeals

Page 1344

601 P.2d 1344

124 Ariz. 60

GEOMET EXPLORATION, LTD., a corporation, Appellant, v. LUCKY Mc URANIUM CORPORATION, a corporation, Appellee.

No. 1 CA-CIV 4125.

Court of Appeals of Arizona, Division 1, Department B.

June 12, 1979.

Rehearing Denied July 10, 1979.

Review Granted Sept. 6, 1979.

[124 Ariz. 61] W. T. Elsing, Phoenix, Thomas R. Young, Lakewood, Colo., for appellant.

DeConcini, McDonald, Brammer & Yetwin, P.C. by John C. Lacy and Law Offices of Kenneth L. Allen by Kenneth L. Allen, Tucson, for appellee.

OPINION

OGG, Chief Judge.

In this case we have two competing uranium mining companies claiming mining rights to the same land in the public domain. We must determine which company has the superior right of possession.

The plaintiff/appellee, Lucky Mc Uranium Corporation, brought an action against the defendant/appellant, Geomet Exploration, Ltd., seeking exclusive possession of certain unpatented lode mining claims in Yuma County, and an order restraining Geomet from trespassing upon them. Geomet answered and counterclaimed contending it was entitled to exclusive possession. After a trial to the court, judgment was entered for Lucky and Geomet appealed.

There is little dispute on the facts but a wide divergence of opinion on their legal significance. The geology of the area consists of an upper formation of an alluvial fan. There are fifty feet of gravel with a basaltic flow from about 50 to 75 feet in depth. Below that are sandstones and shales, interspersed with more basaltic flows. Indications of mineralization are found from 500 feet to 1400 feet deep.

In August and September of 1976, Lucky, by the use of sophisticated scintillation equipment, operated from an airplane and from the ground, found anomalies that were indicative of a uranium deposit. On approximately November 3, 1976, after extensive investigation and reconnaissance activity, Lucky moved onto the disputed property and located 200 mining claims. The claims were monumented by a team of surveyors with 2 X 2 wooden posts four to five feet in height with tags indicating the corner and name of each claim. Lucky drilled ten foot holes on each claim which were one and three-quarters to two inches in diameter. Lucky also, in compliance with Arizona mining statutes, recorded notices of the unpatented claims. ¹

After extensive reconnaissance in the area, Geomet, on December 14, 1976, started a drilling operation on one of the Lucky claims. Thereafter Geomet located seven claims on a portion of the two hundred Lucky claims. Employees of Geomet were aware of the prior claims of Lucky, but took the position that Lucky had made no discovery of minerals in place and therefore none of the Lucky claims were valid under state or federal mining law. The pertinent part of 30 U.S.C. § 23 reads:

(B)ut no location of a mining claim shall be made until the discovery of the vein or lode within the limits of the claim located.

A.R.S. § 27-201 reads:

Upon discovery of mineral in place on the public domain of the United States the mineral may be located as a lode mining claim by the discoverer for himself, or for himself and others, or for others.

Geomet claims it discovered mineral in place on all seven claims by drilling and detecting signs of mineralization from 500 feet to 1420 feet in depth. This was accomplished by running a scintillation probe down the drilled hole which detected an anomaly on the gamma ray log. Jerry H. Jackson, the district geologist for Lucky, testified that in his opinion Geomet had only found indications of a valuable mineral deposit, and that a gamma ray blip indicating an anomaly does not constitute a discovery. It was his opinion that an assay was the only sure method to determine the discovery of a valuable mineral. Loren Smith, the Geomet geologist, testified Geomet did not run any assays for uranium because the samples were too diluted by the deep drilling operation.

From the testimony of the experts and a reading of the mining articles and cases cited to us, it appears the search for uranium is a search for "anomalies". "Anomaly" is a term used to describe a physical difference between rock types or discontinuities in geologic formations. Indications found by locating anomalies are merely the prelude to the vital discovery eventually made by drilling or shaft sinking to reveal an actual deposit of uranium. See Ladendorff, Enlarging Prediscovery Rights of Mineral Locators, 6 Rocky Mtn.Min.L.Inst. 1 (1961). We point out this rather technical material to emphasize that the search for uranium is a far cry from the old prospector on a burro searching with pick and shovel for an outcrop of valuable mineral. Some of the mining practices formulated under the General Mining Law of 1872 have little practical validity when applied to the modern search for uranium. From a reading of the conflicting testimony of the mining experts in this case, the trial court could make the determination that both parties had found indications of a valuable deposit of uranium, but as of the date of trial, neither party had made a valid discovery of valuable mineral in place.

This brings us to the determinative issue in the case. Was Lucky as the first prospector on the land entitled to retain exclusive possession as against Geomet under the mining doctrine of pedis possessio?

The...