As I explained in my last blog entries of December 20 and 23, 2011 (sorry it’s been so long!!!) Comstock Mining Inc (CMI ) had applied to BLM for permission to cross BLM land on their proposed haul road from the Lucerne Pit in Gold Hill to their heap leach facility in American Flat. However, this application was apparently based on a previous “Notice” which was no longer valid due to a change in BLM regulations. The BLM apparently said that the application in this form was inadequate and suggested it would be better to start the permit process from scratch.

CMI then withdrew the application. Thus, as far as BLM was concerned, CMI did not have permission to cross BLM land on the haul road. CMI was considering several alternative routes, but apparently none of these would work.

In February, 2011, CMI issued another 13.5 million dollars worth of common stock (http://www.comstockresidents.org/dougthomasltr.html) to, among other things, finance the construction of a new heap leach pad in American Flat, and construction soon commenced, with trucks hauling soil from Mound House up State Rt. 342 to the public American Flat Road from Gold Hill that services residents in American Flat.

At about the same time, CMI began to use dump trucks and big mining Haulpaks (http://www.haulpak.com.au/) to construct and improve the haul road described in the withdrawn application. Several Comstock citizens brought this to the attention of the BLM and the Nevada Congressional delegation. 

In the map above (go to here for a larger copy), the haul road is shown in yellow and the American Flat Road is green. Red segments indicate BLM land crossings.

Last week, BLM managers and personnel from Lands, Minerals and Cultural Resources took a field trip to view CMI activity on the haul road and talk to CMI about their non-compliant use of BLM land, and then in a subsequent meeting, decided to issue a cease and desist order for further use of the haul road, as well as the American Flat Road. BLM also objected to the presence of a gate on the Haul road and Security points with guards on the American Flat Road.

It turns out that there is a right of way for the American Flat Road obtained from BLM, but it has history of being passed along from individual to individual, the last of whom was a deceased principal of Plumb Mining. However, CMI seems to be claiming that because the right of way was in the estate of this individual when he died, it must have belonged to Plumb Mining. Plumb was acquired by CMI, so now CMI owns it. I’m not sure what BLM is asking CMI to do in order for CMI to become compliant in the use of the American Flat Road. Perhaps the right of way ownership trail needs to be established and/or CMI needs to submit a permit application.

CMI has 30 days to apply for permits to use the haul road. I don’t know if this means they can continue to haul for 30 days with impunity. But so far, the cease and desist order has done nothing to stop the construction of the new heap leach pad in American Flat. Double dump trucks continue to rumble up and down State Route 342 and over American Flat Road.

CMI’s take on the cease and desist order can be seen here: http://www.comstockmining.com/corporate/ceo-blog. Be sure to download their letter of response to BLM, in which they deny any problem whatsoever. They are concerned to reassure stock holders - since monday, their stock (LODE) dropped from $1.84. to a low of $1.59 , although it was going back up by the end of  today.

Questions remain: What recourse does BLM have, how will they proceed, and when will they stop the non-compliant use of these roads? When I have answers, I’ll let you know! In the meantime, you can call (Office (775-885-6118) ) or email (ccfoweb@blm.gov) the Sierra Front Field Office, Carson City District and let them know what you think.

By the way, construction of the new heap leach pad may not be on the parcel described in CMI’s Special Use Permit (SUP) from Storey County. This, along with some other issues, could place CMI in non-compliance with the SUP, but what effect this would have would depend on how Storey County chose to act. I’ll keep you posted on this.