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SOMBA K'E/YELLOWKNIFE - A heated staking rush for rights over prospective rare metal-rich land, just northwest of Avalon Rare Metals Inc.'s Thor Lake Project, has resulted in the first disputed land claim in recent mine recorder history.

A claims map of the Blachford heavy rare earth property, 100 km southeast of Yellowknife. The claim called "Angela 4," submitted by Avalon site supervisor Randy O'Keefe is currently under dispute; mineral exploration company Solace Resources Corp., which has optioned "Blat 1," "Blat 2," and "Blat 4," hopes to develop a rare earths project overlapping O'Keefe's claim. - photo courtesy of Solace Resources Corp.

As soon as the land - within 1,000 metres of Avalon's "pretty spectacular" rare earth deposits - opened up for staking, geologist Jody Dahrouge of Edmonton-based Dahrouge Geological Consulting Ltd. had his team and their prospecting partners at Vancouver-based Zimtu Capital Corp. stake the area, within the north-central part of the Blachford Lake Intrusive Complex, Dahrouge said.

Dahrouge and company staked three claims, totalling about 12 square km, located about 1,500 metres northwest of Avalon's Nechalacho rare earth element deposit.

When they arrived at the Aboriginal Affairs and Northern Development Canada mining recorder's office on Jan. 25 to submit their claim, they were surprised to find that stakers out of the Avalon camp had beat them to the punch, with a claim overlapping a large portion in the centre of the Dahrouge claims, already submitted by Avalon site supervisor Randy O'Keefe. He declined Yellowknifer's request for comment.

"Whenever there is valuable ground like that, claims overlap," Zimtu director Ryan Fletcher said. "It was an old-fashioned staking rush for a good piece of property."

According to the mining recorder records, O'Keefe's claim was submitted Jan. 14, but is still pending because Dahrouge has filed a protest to claim priority, arguing that the claim was not walked according to staking regulations.

Before a claim is valid, a company is required to walk the perimeter of their claim clockwise, placing corner posts at the boundaries, Dahrouge said, adding it is common practise in the North for companies to fly helicopters above their claims and drop corner posts, instead of walking the boundaries.

"It's a complicated situation and I don't envy anyone who has to make a decision," Dahrouge said. "But I know they'll do the right thing."

Supporting documentation for the disputed claim is accepted from both sides, said mining recorder Rose Greening, and, if necessary, the office will dispatch a claim inspector to the field to investigate. A final decision can take more than a year, depending on the situation, but the office is hoping to resolve the dispute within the next few months. Anyone who has reason to protest the way a claim is staked can file a priority claim up to 60 days after a claim is submitted, according to Greening, and overlapping claims are a very rare occurrence.

The office has not dealt with a claim dispute for more than four years, and the talk in the office then was about how they had made it through the diamond staking rush of the 1990s with no staking disputes, according to Greening.

Dahrouge, who has worked in the territory, and in the mineral exploration business, for more than 30 years, said hundreds of exploration companies have cropped up on the rare earths scene within the last two years. He described the Thor Lake deposits as spectacular because of the size and distribution of Avalon's Nechalacho project, which is said to be host to 64.2 million tonnes of rare earth elements.

"These are very strategic, very high-in-demand commodities," Dahrouge said, noting any business involving solar power, electric cars, hybrid vehicles, and smart bombs relies on the rare earths.

Avalon's project is of national importance, Dahrouge said, because well over 90 per cent of the world's rare earth elements supply comes from China, and only a handful of exploration companies outside China have reached Nechalacho's stage of advancement.

Solace Resources Corp., the Vancouver-based mineral exploration company that has optioned the land from Zimtu and Dahrouge, plans to go ahead with development in the areas outside the claims overlaying O'Keefe's claims, president Kyle Stevenson said.

"When the dispute resolution process is completed, we plan to re-access our land holdings and plan our exploration programs accordingly," Stevenson said. The company is developing an "extensive exploration program" for the undisputed land, with plans to spend in excess of $5 million, Stevenson said.

Avalon has spent roughly $35 million on its Thor Lake project to date, president Don Bubar said.

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