Mining co., Nev. ranch settle eminent domain suit

A state lawmaker said Friday she wants to repeal provisions of an 1875 state law that give mining companies essentially the same power of eminent domain as government.

Assemblywoman Sheila Leslie, D-Reno, announced her plans a day after a Canadian-based mining company and a Nevada ranch settled an eminent domain lawsuit over the company's attempt to seize part of the ranch for a gold mine.

Fronteer Gold Corp.'s tentative deal to purchase the entire Big Springs Ranch in Elko County for the Long Canyon mine was announced during a hearing in Elko District Court.

The sale price was not disclosed, and Judge Andrew Puccinelli instructed both sides not to talk about the settlement until it's final Aug. 1, the Elko Daily Free Press reported.

The case - which has divided miners and ranchers - puts the spotlight on an 1875 state law that says mining is of "paramount interest" to Nevada and essentially lets companies take land for mining the same way the government can for public use.

Leslie said she has requested the drafting of a bill that would eliminate the power of eminent domain for mining companies.

At least two other mining companies have tried to use eminent domain for northern Nevada projects in recent decades.

"It's one thing to use the power of eminent domain for roads," Leslie said. "It's a completely different thing for private business to use it to make a profit. I don't think that's right, and I don't think the Legislature will think that's right."

Former Nevada state Archivist Guy Rocha said the mining provision dates back to a time when Nevada's economy revolved around mining, and it's outdated.

"The law has been upheld in both state and federal courts, but mining isn't a paramount industry in Nevada anymore," he said. "Why this law is still on the books is questionable."

Tim Crowley, president of the Nevada Mining Association, said he hasn't polled his members on whether they support or oppose repeal of the mining provisions.

"If the Legislature wants to review this, we'll participate in those discussions in a meaningful way," he said. "We don't fault anyone for reviewing historical policies like that."

In its lawsuit, Vancouver, British Columbia-based Fronteer cites the law in seeking access to mineral rights and roads on the ranch property.

James Lincoln, president of Fronteer subsidiary Fronteer Development, was allowed to testify Thursday as part of the settlement in order to tell the company's side of the story.

He said his company initially offered $4.2 million for the ranch and later nearly tripled that amount. The ranch had been purchased for $2.8 million in 2003.

He called the gold prospect there the best he's seen in more than 30 years in the industry.

Lincoln accused the ranch owners of "meddling" in permit applications that Fronteer filed with various state and federal agencies.

"So we had no alternative but to bring litigation," Lincoln testified. "We felt our mineral rights and access to mineral rights were severely threatened."

Fronteer is 51 percent owner and operator of the Long Canyon project in the Pequop Mountains about 30 miles southeast of Wells, while Reno-based AuEx Ventures owns the remaining 49 percent.