Posted: Tuesday, December 19, 2023
Author: Vinny Delgado, Partner, Ranch Sales | Licensed in MT
Dear Vinny,
I am currently looking at purchasing a property with mineral rights. I have never really given much thought to minerals on my land. What kind of due diligence should be done before purchasing land with mineral rights? What are the potential risks and benefits associated with owning land with mineral resources?
Dear Minerals,
Minerals are a due diligence item a buyer should look into. It is very uncommon for a ranch to have all its mineral rights intact. If you are purchasing in an area known for mineral extraction, I recommend hiring a third party to do a mineral remoteness study. This study will investigate mineral rights and inform you who owns them. The benefit of owning all of the mineral rights on your ranch is that you have total control in the future. The risks of owning only some mineral rights depend on the area you purchase in. If you are in an area not known for mineral extraction, the likelihood is low that your ranch will ever be impacted by anyone exercising their right to do so. If you are in an area known for mineral extraction, weigh your pros and cons before closing on the ranch.
