The ownership of land and mineral rights and the leasing of mineral rights along the Interstate 80 corridor of northern Nevada are so complex the issue confuses many Nevadans including this reporter.
Through the years, the checkerboard pattern of the railroad land grants system that granted the Central Pacific Railroad right-of-way plus 10 square miles for every mile of track built by the railroad in Nevada in the 1860s would eventually become the property of the Santa Fe Pacific Land Company, who would lease the mineral rights for those millions of acres to its sister company, Santa Fe Pacific Gold.
Although Santa Fe Pacific Gold was subsequently acquired by Newmont Mining, Newmont did not actually acquire ownership of the land belonging to the Santa Fe Pacific Land Company, as was incorrectly stated by this reporter in a story published in Mineweb’s Monday newsletter. Newmont actually would inherit from Santa Fe Pacific Gold the mineral leases on hundreds of thousands of acres in the Interstate 80 Corridor.
Longtime Nevada geologist Don Pattalock participated in mineral exploration programs along several of the renowned Nevada mining districts found along the corridor. The trends include Battle Mountain, Carlin, Getchell, Humboldt-Austin and Oreana.
In an interview with Mineweb Monday, Pattalock observed that Santa Fe Pacific Gold did not have the opportunity to conduct mature exploration on a substantial portion of mineral rights along the corridor because its geologists were kept busy conducting near-mine exploration on the gold mines along the corridor.
In 1995, the Atchison, Topeka and Santa Fe sold hundreds of thousands of acres of Nevada checkerboard railroad land, along with minerals rights. By 1997 La Jolla, California-based Pico Holdings held the acreage and the mineral rights. The company separated the acquisition into five operating segments including a real estate division, which specialized in selling and leasing land and mineral rights for development.
More than a decade ago, Pattalock would join Pico as the manager determining the extent of and the ownership of land and minerals rights holdings that had become a complex maze of ownership. The Nevada Land group would examine minerals and geothermal potential on the checkerboard acreage on and off for a number of years. Among those companies which leased mineral rights was Newmont Mining, which still retains a number of minerals leases on those lands, Pattalock said.
Meanwhile, Pico Holdings has investments in water resources and water storage, insurance, corporate and agribusiness. Its companies sold land and water rights, developed water rights, and developed geothermal rights. Eventually the company realized that a substantial exploration program–simply to prove or disprove real minerals potential of its checkerboard lands–would cost multiples of what Pico originally paid for the properties.
Even if discoveries were made on those mineral rights, Pico Holdings’ insurance company investors would not be able to wait out the seven to ten years it normally requires to permit and take a mining project into production in Nevada.
Meanwhile, since major power transmission lines are scarce in north-central Nevada, development renewable energy applications on some properties in the area are currently challenging in terms of delivering the produced power to a major utility company. However, discussions of future major north-south utility lines could benefit future geothermal projects, Pattalock suggested.
Earlier this year, Pico Holdings announced it would sell 483,000 acres or 750 square miles of free simple lands which offered all available rights including mineral rights to the buyer, along with mineral rights for 800,000 acres. The result is one of the largest U.S. land sales ever, which Pattalock said, offers a sizable mineral estate of 1.2 million acres of northern Nevada.
Fountain Investments, a small privately owned investment company based in Miramar Beach, Florida, bought the land and the mineral rights for $31 million. Among Fountain’s specialties are land sales and leases involving timber and oil and gas interests, which Pico Holdings felt were particularly relevant to the Nevada checkerboard lands and mineral rights. The Florida company is used to conducting lengthy negotiations for properties and mineral rights that, in a number of cases, can take years to develop.
Pattalock estimated that Pico earned from $5 million to a peak of $20 million annually from the leases and land sales from its properties and mining rights.
Among those companies currently involved in negotiations with Pico and its successor is Newmont Mining, which has several leases including some about to expire, according to Pattalock. Newmont is among a dozen companies now conducting exploration programs on the checkerboard lands now owned by Fountain subsidiaries.
Fountain’s owners have assigned their rights to Conduit LLC, with New Nevada Land and New Nevada Resources as Conduit’s wholly owned subsidiaries. Pattalock is the new CEO for both companies.
Pattalock told Mineweb that Fountain and New Nevada Land and New Nevada Resources have no intention of becoming a mining operator. Instead, New Nevada hopes to develop into a combination of land, mineral rights, and mining royalty company that hopes to help the lands and mining rights achieve their highest and best use.
Several companies serve as potential role models for the development of New Nevada Resources, Pattalock observed, including Franco-Nevada, which originally owned resources and then sold those lands, while retaining the mining royalties.
Basically, New Nevada is a privately owned company, which offers mineral rights on private lands; no SEC rules and regulations come into play, nor does the lengthy bureaucracy of exploration and mining on public lands. The thousands of acres of privately owned land belonging to New Nevada along the I-80 corridor also can provide easier access to mineral leases.
Pattalock believes the acreage is wide open for mineral exploration and development because most of it has never been opened up to any development. As he recently told an Associated Press reporter, “We see a fairly bright future as to the development of those minerals” in a state internationally renowned for both its precious metals and copper operations.
While this Mineweb reporter apologizes for the confusion her previously published story may have created in terms of the actual ownership of New Nevada Resources property, it did open up an in-depth opportunity to tell New Nevada’s story.
The bottom line: a huge swath of privately owned land and mineral rights along the main highway corridor serving Nevada’s major mining districts is now being marketed to both major and junior mining companies, by a single landowner, focused on mining and geothermal leases and development. A huge portion of privately-owned land in the nation’s number one gold mining state is about to open its doors to new mineral exploration if Pattalock is successful in implementing the New Nevada Land and New Nevada Resources strategic plans.