Suction Dredge Case Law

Placer Examination Techniques

Suction dredging,methods of sampling and theeconomic analyses have been the subject of several IBLA decisions. The decisions have addressed the need for mineral examiners to sample claims with a suction dredge if the claimants are suction dredging; if dredging is a reasonable method to sample the claim; and the need to include cost for labor and other operating and capital in the economic analysis.

U.S. v Williams, 65 IBLA 346 (1982)

The claimant overcame the government’s prima facie case since the government did not sample the claim using a dredge. The Forest Service tried to argue on reconsideration that the gold in the stream bed was not a deposit, and since there was no deposit, there could not be a mining claim. The government also tried to argue that suction dredging was not a form of legitimate mining. IBLA found that the material laid down by the stream was a deposit and that suction dredging, if it could be done economically, was a legitimate form of mining. The Board stated that it may be necessary for the Government to use a suction dredge to sample mining claims.

U.S. v. Arbo, 70 IBLA 244 (1983)

The mineral examiner refused to take samples using the claimant’s suction dredge. In the concurring opinion, Judge Harris found that it was a clear error for the mineral examiner to refuse to sample using the claimant’s dredge.

U.S. v. Anderson, 83 IBLA 170 (1984)

The mineral examiner took pan samples when the claimant was working the claim with a suction dredge. Although the claimant did not want the mineral examiner sampling with the claimants dredge, the pan sampling by the Government was questionable and the lack of suction dredge samples could have subjected the Government’s case to dismissal.

U.S. v. Laczkowski, 111 IBLA 165 (1989)

Depreciation of the dredge and expenses for wetsuits and facemasks, set up time, break down time, maintenance and significant repair costs should be included in the mining costs. Judge Hughes acknowledged that the manufacturer’s rated capacity of a dredge in cubic yards per hour probably assumes optimum conditions and continuous processing of material, and conditions that would stop or slow down suction dredging activity would decrease the actual capacity of the dredge. These conditions would include the presence of oversize rock (larger than the diameter of the intake hose), discontinuous gravel beds, and moving the dredge and he concluded that these conditions generally exist in streams. Judge Hughes also provided a basis for comparing production rates between dredges of various sizes.In his concurring opinion, Judge Mullen felt that stream gravel reserve estimates should be based on quantitative measurements.

U.S. v. Pierre J. Ott, 125 IBLA 250 (1993)

A suction dredge is a piece of “mechanized earth moving equipment”. This primarily relates to determining thresholds for when a plan of operations may be required in surface management activities.

U.S. v. Waters, 146 IBLA 188 (1998)

The value of the claimant’s labor must be included in analyzing the mining costs for a suction dredge operation and costs to the employer should be included in the labor costs. The cost of labor for dredging should be higher than minimum wage, but less than a heavy equipment operator. The Board also averaged the results in the sampling to arrive at an average grade or value for the claim. Judge Grant agreed that measuring the productivity of the gold recovered per hour of dredging was more reasonable than measuring the volume of material dredged due to the difficulty of accurately measuring the volume of material dredged. In addition, Judge Grant included “downtime” or non-dredging time in the economic analysis and included the cost for replacing wet suits, tools, hoses and other items in the hourly dredging cost. The capital cost of the dredge amortized over a 2,000 hour period was added to the hourly cost and accepted by the Judge.

The Judge discarded the value of one of the Government mineral examiner’s dredge samples since evidence supported the claimant’s contention that the mineral examiner was not proficient at suction dredging.

The dredging time per sample in this case ranged from 1.5 to four hours per sample and was acceptable to the court.

U.S. v. Waters (On Reconsideration), 159 IBLA 248 (2003)

Judge Harris discusses the issue charging a 25% labor overhead (cost to employer) or a self-employment tax for an owner-operator operation. Judges Grant and Mullen in their dissenting opinions felt that the 25% labor overhead was not appropriate for an owner-operator (“mom and pop”) operation such as many suction dredge operations.