http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=142014&sn=Detail&pid=102055

Court awards Coeur Rochester some protection against Rye Patch exploration

A Nevada judge has ruled Rye Patch geologists must steer clear of Coeur Rochester mining operations for now. However, Rye Patch can continue to explore several former Coeur Rochester claims.

LOVELOCK, NV -

Sixth Judicial District Court Judge Michael Montero issued a preliminary restraining order Tuesday night which allows Rye Patch Gold to continue exploring some claims around the Coeur Rochester silver mine outside of Lovelock Nevada.

The decision came after three days of hearings in which Coeur d'Alene Mines admitted that the company failed to pay $75,740 in fees to hold 541 surface, surface and minerals, and minerals only claims surrounding and near the Coeur Rochester mine.

However, Judge Montero refused to allow Rye Patch Gold access to a number of claims next to or near the mine that could potentially impact the safety of employees of both companies.

Incredibly, the discovery of a clerical mistake which accidentally left 541 unpatented former Coeur mining claims up for grabs began with a field trip to the mine sponsored by the Geological Society of Nevada. Rye Patch CEO William Howald, the president of GSN, participated in the field trip which included a trip to Rochester. Howald was reading through the GSN field trip guidebook on Oct. 22 when he noticed a map of Coeur Rochester's claim holdings, were on top of Rye Patch's Lincoln Property claim holdings.

During testimony Tuesday, Howald said he and his landman Mike Perry accessed the Bureau of Land Management data base and learned than Coeur had not paid its 2012 claim maintenance fees which were due on September 1. The men also found no evidence that payment had been made to the Pershing County recorder.

Coeur, which previously had a several-year history of paying its claim maintenance fees on Coeur Rochester by mid-August, had not filed a notice of intent that it was going to hold on to its claims.

Rye Patch, which has been trying to acquire all available claims in the Oreana Trend for several years, sent out geologists from October 27 through November 21 to stake the former Coeur unpatented claims. Rye Patch completed the monumentation of the mining claims in November 2011.

By November 28, Howald contacted Coeur d'Alene headquarters to let their officials know that Rye Patch would diligently pursue the claims that Coeur had accidentally failed to renew.

Coeur CEO Mitchell Krebs reportedly called Howald and admitted that Coeur had not paid its claim filing fees and would investigate what had happened. Meanwhile, an e-mail from Krebs to Howald was read aloud in court Tuesday in which Krebs said he would seek a commercial solution to the problem.

That commercial solution turned out to be Coeur Mines offering Coeur shares for the 100% acquisition of Rye Patch Gold, Howald told the court. Howald dismissed it as a "really low ball offer".

As Krebs was negotiating a buy-out of Rye Patch, Howald said Coeur sent its geologists to restake the claims that Rye Patch had staked. "He was trying to negotiate with me on one hand and he was overstaking in the other," Howald testified. "CRI was claim-jumping me and I wanted them to know it was unfair."

On December 5, Rye Patch issued a news release announcing its apparent coup of acquiring 400 unpatented mining claims covering 30.3 square kilometers on the former Coeur concessions. The company now claimed it held a total of 1,182,780 ounces of gold and gold equivalent in the measured and indicated category as well as at least 50 million ounces of silver on the Oreana Trend.

Both Rye Patch and Coeur Mines sued each other, accusing one another of claim jumping.

During arguments Tuesday, attorney Rew Goodenow, representing Coeur, said Coeur is more concerned about mine safety than the claims it holds. Coeur claims RPG geologists trespassed on the silver miner's active minesite without notice or training, reportedly ignored fences and posted warning signs, and failed to provide any evidence to the court that Rye Patch had actually made a new discovery.

However, Rye Patch's attorneys asserted that Coeur officials had never even mentioned any safety concerns to Howland during e-mails or conversations.

The safety issued appeared to sway the court somewhat as Montero said, that at this time, the key issue was the safety of both companies, adding a section that Rye Patch has tried to claim as its own is actually an active mine, Coeur Rochester.

Therefore, the judge issued some partial injunctive relief to Coeur Rochester and highlighted areas in and around mine facilities which can no longer be accessed by Rye Patch geologists. These pre-empted areas include a heap leach pad, a haul road, a cyanide pipeline, and private lands belonging to Coeur Rochester.

However, Montero refuses to protect claims in the Packard Mine area from Rye Patch explorations due to a lack of sufficient mining activity.

Montero declined to debate other issues surrounding the claims, explaining, "This is not the time to try this case."