Exploration companies battle higher fees

The math, says Buster Hunsaker, is unshakable:

Mining exploration companies saddled with dramatically higher fees to hold mining claims in Nevada are almost certain to cut back on their investments in drilling, geophysical analysis and a multitude of other services.

And he cautions that's going to hit the economies of Elko County, the home of Hunsaker's consulting geology practice, as well as other communities across northern Nevada that depend on the minerals industry.

The higher fees were approved by the Legislature last winter during a special section to close an $887 million gap in the state budget.

Claremont Nevada Mines, a company owned by Hunsaker's family, now has filed a lawsuit in Elko County that claims the higher fees that begin to take effect this autumn are unconstitutional.

A group of companies that specialize in minerals exploration, meanwhile, has banded into a coalition that's sounding an alarm about the likelihood that exploration investment in Nevada will nosedive.

And the state's Division of Minerals is estimating that the number of active mining claims in the state about 190,000 at last count could decline by 25 percent as the higher fees settle in.

Mining claims typically aren't held by mining producers the often-large companies that mine and sell gold, silver and other metals from properties in the state.

Instead, the business of staking claims and undertaking early-stage exploration is the province of small companies sometimes even individuals who generally aren't well-capitalized but are driven by the hopes of selling a discovery to one of the industry's major players.

Thomas P. Erwin, a Reno attorney who specializes in mining issues, recently analyzed a Top 40 list of large claims-holders in the state.