When he died in 2005, his wife, Ellen Clements, who knew nothing about mining, took over his company, New Nadina Explorations Ltd. (TSX-V:NNA).
“I could not quit without at least trying to prove whether his belief that there was a big ore body there was right or wrong,” she said. “He believed that there was a large bulk tonnage deposit that was the feeder for all the veins. He said, ‘With all that juice, there’s got to be a big feeder coming from somewhere.’
“I got really good people to work for me. We did the geophysics, and it appeared to be there.”
In 2011, drilling results indicated the company might have found what Stewart had been looking for on his Silver Queen tenure: a copper-molybdenum-gold porphyry. And that’s when the problems started with the American landowner, Charles Donald Christmann.
Christmann owns the 3,000-acre Mission Outpost Ranch 45 kilometres south of Houston. It overlaps some of the New Nadina Explorations mineral claims.
That’s not usually a problem. When it comes to the rights of landowners over subsurface rights, the law is clear: they generally don’t have any – except in special circumstances.
“There’s rules and regulations of where we, as exploration people and miners, can work, and he is challenging every aspect of that,” Clements said.
Subsurface rights to minerals, oil and gas belong to the Crown. A landowner can obtain mineral rights to his or her property, but only for mineral exploration purposes.
There are exceptions, however. Mining companies can’t do exploration work (drilling, for example) on land occupied by a building or home or land that is under cultivation.
Christmann launched his challenge on that basis, arguing that some of the land has been mown for hay.
Clements said New Nadina’s predecessor companies have owned the mineral claims overlapping Christmann’s ranch since 1915. Christmann acquired 2,000 acres of ranchland in 2001 and later added another 1,000 acres to the ranch.
Christmann could not be reached for comment, but, according to court documents, he lives on the ranch most of the year and spends his winters in Arizona. Initially, he allowed New Nadina to drill on his property, but after a 2011 drilling program that turned up what New Nadina believes indicates a significant deposit, the co-operation stopped.
The porphyry that Clements believes her geologists have discovered is about two kilometres from the land Christmann owns. But the company needs to do a lot more drilling before it can build an economic case for a mine. To do that, it needs access to Christmann’s land.
In 2012, Christmann objected to any more drilling on his land and the matter went to the B.C. Surface Rights Board. In September 2013, the board ruled against Christmann, who then launched a judicial review and lost. He then appealed to the B.C. Court of Appeal. The case is set to be heard on May 5.
“Even if he loses, he could still make application to the Supreme Court of Canada,” Clements said.
“There’s no doubt in my mind that they will refuse it. But my understanding is that, once he makes application and serves us notice, we can’t do anything; our hands are tied.”
Clements said there is not enough information yet on the ore grades or locations to determine if there is an economic case for a mine or, if there is, whether it would be an underground mine or open pit.
Should a mine be built, and if it were to encroach on Christmann’s land, the company would have to compensate him. But the company is now at a standstill.
“I can’t even get a partner in there because big companies are scared of lawsuits, and I can’t even go raise money because they just look at it and say, ‘How are you going to get access? This guy’s going to hold you up forever.’”
Clements believes there’s more to it than just a landowner standing his ground against a mine. She points to a similar incident in Wyoming, in which an oil well owned in part by Christmann appeared to have become a legal roadblock to American coal giant Peabody Energy Corp. (NYSE:BTU) and its plans to expand its North Antelope Rochelle coal mine in Wyoming.
A June 27, 2011, story in the Casper Star-Tribune reported that a subsidiary of Peabody sued one of the owners of an oil well on the basis that the owner was unreasonably blocking the company’s attempts to expand its mine.
According to the Star-Tribune, the well was owned by Wild Hare Limited Partnership, whose registered agent is Don Christmann.
Christmann’s lawyer, Jeff Frame, admits it is an unusual case.
“Over 95% of our province is owned by the province,” he said. “So there isn’t a lot of privately held land for this to happen.”
He said the case centres on an important landowners’ rights question.
“Do you think that if you went home tonight you should find a mining company drilling in your backyard?” Frame asked.
