SIS.254 - MINERAL ESTATE SUPPLEMENT.pdf

Mineral Estate Supplement

FOR

SIS#254, Little Chetco Acquisition Minerals Contributory Value, If Any

The subject property was originally acquired from the United States under the operation of the 1872 Mining Law. When the Kalmiopsis Wilderness was created in 1964, the subject’s three mining claims were supported by a “valid existing rights” determination. The claim holder was allowed to purchase the land encompassed by the claims in 1988. In 2017, the property was acquired, and improvements created to operate as a destination for recreational mining, known as “Emily Camp.” In 2017, the Chetco Bar fire destroyed the improvements and the recreational mining use apparently ceased.

The appraiser must evaluate the potential value influence due to mineral resources and provide credible support for a reported conclusion. Typically, this would be accomplished by hiring or subcontracting for a minerals specialist’s consultation report. Several elements of the governing Standards are relevant to this analysis, as described below.

UASFLA 1.13 States:

“Use of special consultant opinions and reports… require that the appraiser analyze and adopt these reports only if they are reasonable and adequately documented and supported.”

UASFLA 2.3.3.6 States:

“The appraiser is solely responsible for the final opinion of value. If that value opinion includes elements of value that were based on estimates developed by others (e.g., timber cruisers, mineral appraisers), the appraiser cannot merely assume their accuracy. The reasonableness of the subsidiary estimates must be confirmed in accordance with Section 1.13.”

If the appraiser hires a consulting geologist or other minerals expert, the appraiser must include a narrative in the appraisal report, describing that specialist's scope of work and the appraiser’s basis for relying upon the results.

UASFLA 4.12. Unit Rule Considerations.

“The results of subsidiary valuation reports, such as mineral…valuations, cannot simply be added to the value of the land to arrive at a value of the property as a whole without proper analysis by the appraiser. To do so would violate the unit rule (discussed in Section 4.2.2) and professional appraisal standards. These components are to be considered, but only in light of how they contribute to the market value of the property as a whole.”