Assume that the year is 1990 and you are a seeking to establish a business for yourself. Trained as a business person, you wish to become an entrepreneur

Question

You purchase a plot of 40 acres of land, declaring to the federal government that you intend to carry out hard rock mining on this 40 acres, since you believe there are valuable minerals underground on this land. After a couple of years of effort, you decide to pursue other business ventures and sell this land at $5,000 per acre to a person who wishes to establish a dude ranch resort.

Using the U.S. General Mining Law of 1872 as your reference, discuss your original financial investment and your ending financial situation. (Exclude the cost of buildings and equipment for this particular instance.)

What will be an ideal response

Answer 1

Answers to this question will vary, depending on how much detail is included in the answer. However, the answer should include the fact that land purchase for hard rock mining up until 1995 was sold by the government at $2.50 to $5.00 per acre. Thus, the price of the land was $100 to $200, and yet it was legal to sell that land at market prices. The sale of the land would bring in $200,000.