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Kevin Leonard, project manager for Mineral Mountain Resources, walks toward a drilling rig in the Black Hills near Rochford, where Mineral Mountain is conducting exploratory drilling for gold.

A Canadian company that is exploring for gold in the Black Hills recently tried to assert ownership of a water right that dates to 1898.

Unfortunately for Mineral Mountain Resources, state regulators found no evidence of the water right and directed the company to refrain from pulling water out of Rapid Creek.

Mineral Mountain needs water to lubricate the drill it is using to search for gold among the rocky, forested, mountainous terrain near Rochford. Recently, according to a company representative, Mineral Mountain has been purchasing water from the city of Lead and hauling it about 20 miles to the drilling sites.

On July 24, attorney Talbot Wieczorek, of Gunderson, Palmer, Nelson & Ashmore in Rapid City, wrote the state Department of Environment and Natural Resources on Mineral Mountain’s behalf to assert the company's ownership of a water right from 1898. He said the right was associated with a historical structure known as the Standby Mill.

“Mineral Mountain has entered into an agreement and option with the owners of the Standby Mill site,” Wieczorek wrote. “As the water right for the mill is appurtenant to the Mill site property, Mineral Mountain is currently the appropriate holder of this water right.”

With his three-page letter, Wieczorek included copies of handwritten deeds from 1898 and 1899. He said in the letter that Mineral Mountain intended to begin diverting water from Rapid Creek in about three weeks.

Jeanne Goodman, chief engineer of the DENR’s Water Rights Program, responded with a letter to Wieczorek on Aug. 9. Goodman said the department conducted an investigation and determined that “the claimed water right has not been filed.”

“There is reason to believe this claim has been abandoned or forfeited by not being in use for several decades,” Goodman wrote.

She informed Wieczorek that Mineral Mountain could file a claim within 90 days and seek validation by the Water Management Board, which is a seven-member panel appointed by the governor. But even if validation occurred, Goodman wrote, the water right would be junior to several others and “would be subject to shutoff at times during a majority of the years based on available stream flow records.”

“Therefore,” Goodman wrote, “to protect senior water rights, and until such time as your ownership is determined, and the claim is found valid by the Water Management Board, you are directed to not put water from Rapid Creek to use.”

Wieczorek said in an email response to the Rapid City Journal that Mineral Mountain is obeying the DENR's directive, but he did not say whether Mineral Mountain will seek to have its claim validated by the Water Management Board.

"Even though the gauging stations along Rapid Creek show abundant water sufficient to serve this historic right, Mineral Mountain Resources has honored the Department of Natural Resources’ request to currently forgo exercising this right and is not currently taking water from Rapid Creek," Wieczorek wrote. "As to future use, Mineral Mountain Resources continues to review its rights."

When Mineral Mountain began its exploratory drilling project last year, it had a temporary permit from the DENR to withdraw free water from Rapid Creek. By the time of that permit’s expiration May 1, the company had drilled and plugged three holes.

Meanwhile, activists including some Rochford-area landowners, environmentalists and others mobilized against the drilling project. Mineral Mountain had applied in April to renew its temporary water permit, but the DENR, citing input from opponents, deferred consideration of the renewal application to the Water Management Board.

Mineral Mountain subsequently withdrew its application and suspended drilling.

In June, a company representative told the Rapid City Journal that water would be purchased from the city of Lead and drilling would resume. At least four more holes have been drilled and plugged since then, according to the DENR. Data from the city of Lead shows that Mineral Mountain has so far purchased 116,000 gallons of water for a total of $238.45.

While Mineral Mountain had its temporary permit to use water from Rapid Creek, the company withdrew 462,504 gallons from the creek, according to the DENR.

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Contact Seth Tupper at seth.tupper@rapidcityjournal.com

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