Anyone in the mining industry understands the value of procuring and maintaining their claims. Today, we’re going to look back at a well-publicized case to understand the importance of proper upkeep and having strong representation.
In 2013, Coeur d’Alene Mines Corp. lost $10 million in cash as part of a settlement with another mining company. The primary reason for that loss? “An administrative oversight.”
How does an administrative oversight cost $10 Million?
In the business of mining precious metals, small mistakes can lead to big liabilities. Simply the price of the materials mined and sold make it extremely costly if the production ever comes into question.
In late 2011, Coeur d’Alene Mines Corp. mined and sold silver after another company had staked a claim on the site of their mine. The other company, Rye Patch Gold Corp, could do this because Coeur missed a series of maintenance payments on their Rochester Mine, near Loveless, Nevada.
Mining for precious metals is a competitive business, and rivals will take every single opportunity to get an edge. Those missed payments created an opportunity and Rye Patch pounced on it to get a piece of Coeur’s productive mine. In response to Rye Patch, Coeur staked new claims and the firms were on a path to court until they settled.
Recourses and results
Mine claims are valuable assets. For Coeur, it was silver. For you, it could be lithium, tungsten, gold or even copper. Unlike most other commercial assets, like an office building or vehicles, a competitor can lay a legitimate claim to them with just a properly timed petition.
In the end, Coeur kept the mining rights, and while the result was still a significant loss, it could have been so much worse. Sometimes costly mistakes happen. When stakes are high, ensuring that your business is protected by robust and respected representation is the best possible way to keep a little mistake from becoming a massive problem.