In a ranch house on the Horseshoe Ranch near Beowawe, George Fennemore and Joel Donalson spread out a map showing many acres of ranch land as they talked about the Nevada Gold Mines ranches. Fennemore is Nevada Gold Mines’ head of permitting, land and ranches; and Donalson is Nevada Gold Mines’ ranch operations manager.
Barrick Gold and Newmont Goldcorp both had lots of ranch land in northeastern Nevada, and when the two companies joined their Nevada mining operations together into the Nevada Gold Mines joint venture that went into effect July 1, the ranching operations were also joined together. Barrick’s five ranches and Newmont’s five ranches are now Nevada Gold Mines’ 10 ranches.
Prior to the creation of the Nevada Gold Mines joint venture, Fennemore was a Barrick employee and Donalson was a Newmont employee. In January of this year Donalson, who started with Newmont in 2011, went from being the environmental manager at the Phoenix Mine to being the head of ranching operations for Newmont, and six months later he moved into the same role for Nevada Gold Mines.
A lot of people in the area have questions about what changes will take place with the management of the ranch land under the joint venture. Since the joint venture went into effect the land has all been brought together under one umbrella and there have been some changes in personnel, but the details of how each of the ranches will be run are still being worked out.
They don’t even have a map yet showing all of the Nevada Gold Mines ranch land. The map we were looking at only showed the ranches that were Newmont’s, and Fennemore and Donalson pointed out the areas where there are Nevada Gold Mines ranches that belonged to Barrick.
The Horseshoe Ranch is one of the big historic ranches in the region. It was started in 1872 by the Hinkley family. Newmont purchased Horseshoe’s 40,000 acres of deeded land, as well as water, grazing and mineral rights, from Zeda Inc. and J.B.B. Inc. in 2005. Newmont managed the ranch in conjunction with its 450,000 acre TS Ranch, which spans from Carlin almost all the way to Battle Mountain. The other Newmont ranches included IL, Palisade and Big Springs, which is between Wells and Wendover and includes the Long Canyon Mine property.
The Barrick ranches which are now Nevada Gold Mines ranches include Humboldt, 7H, Dean, Hay and JD.
The Newmont ranches were all managed by the Elko Land & Livestock Co. The subsidiary of Newmont Mining Corp. was formed in 1978.
When the joint venture was formed, each of the Newmont ranches was transferred individually into Nevada Gold Mines.
“It was decided that it was easier to bring the ranches into the Nevada joint venture as individual components rather than bring that parent subsidiary in,” Fennemore said. “We tied all the water rights and land property rights and grazing permits into a deed for each ranch, and then brought each ranch as a unit into the business.
“The reason why we did that is we really wanted to attach water rights to ranch properties, because a ranch without water is no good. Rather than have this kind of cloud of properties and water rights that all belong to the same entity, we wanted to tie the water rights to the land, and that way it was a tighter package, a more consolidated package.”
All of the Nevada Gold Mines ranches will keep their historic names, but as a group they may become the Au Ranch. Au is the symbol for gold on the periodic table.
Currently the Nevada Gold Mines ranches have 9,300 mother cows, 8,400 calves that will be sold in the fall, 1,300 first-year heifers, and almost 600 bulls. They also have some steers they provide to local fairs for rodeo roping.
We headed out onto the horseshoe ranch to have a look around, and the grasses were tall and green.
“It’s been one of the absolute best water years here that we’ve seen in a long time,” Fennemore said.
The Horseshoe ranch is irrigated by water pumped from the ground, along with water from the Humboldt River, using canals that were dug many years ago.
“The canals were put in back around the founding of the ranches,” Fennemore said. “Some fairly industrious folks set these things up 150 years ago.”
Some of the other ranches near mine property use water pulled from the mine site during dewatering.
“To the north, the TS ranch, it’s beneficial use of water from the mines, and it’s the same at the Dean Ranch just north of the Cortez Mine,” Donalson said. “We’re growing alfalfa and grass hay there, and it’s primarily beneficial use of water from the mine.”
Fennemore and Donalson said they spend a lot of time on the road visiting the ranches.
“We’re finding with the joint venture we do get a fair amount of windshield time,” Fennemore said, “because the geography of our business just increased pretty dramatically. And there really is no substitute for being out on the property for trying to do the work that we do. It’s pretty critical to get out and spend time where the work is actually getting done.”
Combining best practices
“There’s a lot that we’re doing to try to integrate these companies and the best practices, both on the mining side, and in ranching,” Donalson said. “We’re working on environmental mitigation and management of the rangeland resources, and the habitat that we have across the ranches. It’s quite the process, but we have really good teams, and over the next year I think we’ll definitely have a very solid program in all of those things. The integration I think will be pretty well entrenched by then.
“But it has been very interesting to see. There’s a lot of similarity between the way that we operated, and then there are some differences, and we’re trying to pick the best of both, and bring everything together.”
“Just like any other part of our business,” Fennemore said, “we need to take a look at this part of our business and figure out what were the best practices that both Newmont and Barrick were doing in ranch management, and also what are the new opportunities that arise.
“Because we’re combining our operations, we end up with a pretty big land package here. After the federal government, Nevada Gold Mines is the second biggest landholder here in northern Nevada now, with a pretty sizeable private land package that’s starting to approach a million acres. Then if you include all the federal grazing allotments around the private land sections, you’re up close to five million acres.
“That’s a pretty hefty land package,” Fennemore said. “The decisions that we make on that land package are material not just to our business, but to the area as a whole. So, we have to be very thoughtful and very deliberate in what we do out here because it’s going to affect more than just the company as we move forward. The things that we do on that large land package also affect the neighbors and the communities.”
A time of change
As the joint venture went into effect, there was some change in personnel at the management level at the mines. Fennemore said there has been a similar amount of personnel changes at the ranches, and for similar reasons.
“There are some functions that were redundant, you didn’t need two people,” Fennemore said. “Barrick had a head of ranches, Newmont had a head of ranches, you don’t need two.”
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“Change is always arduous, and some folks said, well, now is a good time to step away, let the change process go on. But most folks are sticking around, and most folks are interested to see how this is going to turn out, and are hopeful that what we come up with is going to be better than what we started with, and that we’ll continue to advance and grow and prosper, both on the mine side and on the ranching side.
“It’s one of those things that it’s a pretty heavy lift, to bring organizations together, so you have to have that commitment from pretty much everybody on your workforce in order to get it done.”
Fennemore talked about the different ranch management styles of Barrick and Newmont.
“The Newmont ranches were primarily owner operated,” Fennemore said. “Newmont owned the land, and it was Newmont employees that were running the ranching operations. So the cowboys, the folks running the water systems, the folks that were living on and working the ranches were doing so as Newmont employees.
“What Barrick had was sort of a mix. In some of the ranch properties that Barrick owned, you had Barrick employees who were living and working on the ranches. And on some of the ranches, Barrick leased them out to sole proprietors who were running their own independent business on land that was leased from Barrick.
“The question is always, what’s the correct mix, and what’s the correct way to manage properties? And really, it’s how do you get the best talent onto the ranches to do the work that needs to be done out there, and how do you get the most economic development out of those ranches, and how do you get the best result?
The best people for the job
“What we’re looking for on the ranches is water management, habitat uplift, mitigation of mining impact, and also economic development," Fennemore said. "So, how do you deliver the best talent to those areas to achieve those results?
“Sometimes, there are things you want to control as a company. For example, if you have an obligation to do a certain amount of habitat work, that’s perhaps some work that you want to self-perform, and you want to do that with your employees. But there are also times where you just want your best operator to give your ranch the chance of success, and sometimes that’s a sole proprietor who is a rancher, not a miner, who is going to be your absolute star operator, who is going to be the best at both getting economic value out of the ranch, but also the best at doing things in ways that gets that habitat uplift that we’re looking for.
“We’re striving to create a system where we put the best people on the ranches, whether they’re a lessee or an employee, to get the best results for what we’re trying to do. So we’re taking a look at what’s the purpose of each of the properties that we have, and who is going to be the best person on that land. Is it going to be somebody who wants to establish themselves as a good operator, a rancher here in the area, or is it somebody who perhaps needs to be biologist specialist who is really good at executing a habitat program?
“We’ve had good success in our past at leasing out ranches to operators who are proven operators, are responsible operators, who have done an excellent job of running those ranches as a business and accomplishing those habitat programs. And certainly, if we can find those people, they do an excellent job of getting the benefits out of the ranches that we’re looking for.”
“As we go through these changes we need to make sure that everybody is comfortable with how things are progressing. I’d say that right now we’re in the phase where we’ve sort of figured out what we want to do as a company, but we’re also now out talking to the folks in the communities and the folks at the agencies, saying, before we take our first steps down this road, let’s think this through. How is it going to affect everybody, and what’s going to work, and what are some things that we need to make sure we do correctly as we move along this path?”
Some mining/ranching history
Fennemore talked about the history of mining and ranching in Nevada, saying that the businesses were often coupled in the past, and today there are again a lot of benefits to having the two different types of businesses work together.
Mining and ranching really got rolling in Nevada in the Civil War era, when the Union states pushed the development of Nevada as a way to strengthen the coalition of northern states.
“There was a lot of push to move miners and ranchers out here into Nevada, to basically get it going as a revenue source, and also to get it as another state into the union,” Fennemore said. “So a lot of the early ranch development and the early mine development kind of went hand in hand. A lot of the ranches that sprung up in the area were actually initially owned by the mining companies. They would bring in settlers to work the ranches and then deed the ranches over to the ranchers as payment in lieu of wages. Then you would have the ranchers generating food for the mining camps out here in the district. A lot of these ranches were twinned with some of the old mining districts here in the area.”
As time went by, and food produced on ranches was no longer primarily for local consumption, mines and ranches became decoupled and were operated independently. In more recent years, however, as people involved in mining saw new benefits to having ranch land, mining and ranching again joined together as mining companies bought ranches.
Today’s mine/ranch symbiosis
Fennemore said three of the important ways mines and ranches work together are in water management, grazing mitigation and habitat uplift.
Ranches can provide mines with water rights. Also, as mines got deeper and went below the water table and dewatering became necessary, ranches became a way to use that water.
There is no grazing on a mine site, which is a problem if someone else has the grazing rights to that land. A mine can either own the land, or can own other ranch land to compensate someone who has the grazing rights to the mine site.
Habitat uplift is the newest way that mines and ranches work together, Fennemore said. Mine sites disturb the landscape and animal habitat, but on their ranch land the mines work on a lot of projects to improve the landscape and animal habitat, which offsets the disturbance on the mine site. Some of the projects Fennemore mentioned include bringing areas closer to their early habitat state, sometimes by removing invasive trees; rehabilitating areas damaged by fire, with seeding and weed control to accelerate the recovery process; fire damage prevention, including fire breaks; and targeted grazing and outcome-based grazing.
Fennemore said that a traditional grazing permit specifies certain numbers of cattle in certain areas, but outcome-based grazing focuses on the effects of grazing on ground conditions.
“We’re working on outcome-based grazing in collaboration with the Bureau of Land Management,” Donalson said. “The focus is to try to combat fire, invasive grasses, to try to graze the cheatgrass selectively and shift the range back toward perennial grasses and shrubs and the native species. There are several programs the BLM has: targeted grazing, which is about reducing fuels, mostly cheatgrass; and outcome-based grazing, which is about shifting the range conditions back toward the perennial grasses and shrubs, things that were here before the cheatgrass.”
Fennemore said the mining companies have the resources to make improvements to the ranch properties, and to do pilot projects and programs, which can create better opportunities for those who run the ranches.
“We have to take a look at how this land package promotes economic development not only for the company but for the whole area, and how can we leverage this land package so that we develop this area and this economic base,” Fennemore said. “It certainly helps with the mining, but how can it also help with the agricultural industry, the grazing industry, and what can we do to leverage it for the whole area?
“Really that means providing some opportunities for folks to come in and try things, and come in and operate their own business. Certainly you can do that as an employee, but also you can do that through a lease arrangement. People can utilize some of these land packages to try to grow their own ideas and grow their own business.”