From My files:
"The finding of gold within your location is enough for you to make a mining claim location that will defend the claim against subsequent prospectors and locators. This is known as having a "possessory interest" in minerals within your location. At that point your claim is adequate for you to exclude others from exploring or mining your claim for minerals."
"A valid discovery is another matter entirely. Your "discovery" is not adequate to defend your claim against the interests of the United States. For a claim to have a valid discovery you will need to be able to prove that your unmined deposit meets the "prudent man rule" and the "marketability test". Those are all about proving that the valuable minerals that are still in the ground could be expected by a prudent man to be mined at a profit. Without proof of the quantity, quality and expense of mining, processing and marketing those valuable minerals you can not establish a valid discovery. Gold in the pan does not prove the quality or extent of your find is worth mining. Only gold established to be still in the ground to be mined can lead you to that conclusion."
"Your finds are sufficient to make a valid mining claim to further explore for a valuable mineral deposit. Your finds do not constitute a valid discovery but they are sufficient to reserve your location for your own prospecting and exploration purposes until you do make a valid discovery."
Here are a few important Supreme Court cases to show you the distinction.
Cameron v. United States
A mining claim on public lands is a possessory interest in land that is "mineral in character" and as respects which discovery "within the limits of the claim" has been made. The discovery must be of such a character that "a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine." United States v. Coleman
Minerals which no prudent man will extract because there is no demand for them at a price higher than the cost of extraction and transportation are hardly economically valuable. Thus, profitability is an important consideration in applying the prudent man test, and the marketability test which the Secretary has used here merely recognizes this fact. The word "discovery" is often bantered around on these forums as if the mere finding of gold suffices to prove a discovery of valuable minerals. It's often been misunderstood that the right to locate a mining claim is dependent on making a valid discovery first. That's simply not true. The discovery validates the claim as required by law but lack of a valid discovery does not prevent one from locating a claim. Here's how the courts have dealt with that all too common misunderstanding:
C. A. Davis et al., Appellants, v. Neal Nelson, State Director, Bureau of Land Management
A common practice in the western states among prospectors who intend more than a casual exploration of an area thought to contain mineral is first to locate, mark and record the boundaries of the claim, and then to expend time, labor, money and energy on the prospect. Such occupation and working of the claim, even before discovery, gives the locator a limited defendable right of possession and a right which is, in some respects, alienable. The right of pedis possessio is one which may be transferred by transfer of possession because it rests on actual possession, accompanied by deed, lease or assignment of the color of title represented by the local location and recording of the claim.
"In advance of discovery an explorer in actual occupation and diligently searching for mineral is treated as a licensee or tenant at will, and no right can be initiated or acquired through a forcible, fraudulent or clandestine intrusion upon his possession. But if his occupancy be relaxed, or be merely incidental to something other than a diligent search for mineral, and another enters peaceably, and not fraudulently or clandestinely, and makes a mineral discovery and location, the location so made is valid and must be respected accordingly.'"
"Whatever may be the rights acquired by a prospector, who locates a mining claim prematurely and before actual discovery of valuable mineral, in the defense of his actual possession against third persons, it is clear under both the mining law and the regulations that a discovery of valuable mineral is the sine qua non of an entry to initiate vested rights against the United States. The premature location of such a claim and the recordation of certificates or notices of location cast a cloud upon the title of the United States to the lands, as the law contemplates that discovery must coincide with the physical location of the claims."
"This is not to say that citizens, and those who have declared their intention to become such, do not also have and enjoy a statutory right to prospect and explore the public domain. Nor do we imply that it is an actionable wrong for a good faith prospector to locate a claim in furtherance and in protection of the right of pedis possessio while pursuing his more thorough exploration. But the validity of his title, claimed and asserted by the location of the claim and the recordation of notices, depends upon the resolution of a question of fact, that is, has there been a discovery of valuable mineral within the limits of the claim? I've given you a lot to read here but my intent is to guide you to the actual facts about discovery and mining claim validity. Read the court decisions instead of relying on the unjustified simplification that a valid discovery is mandatory before making a claim. Neither the law nor the customs of miners demand that you establish a valid valuable mineral discovery before making a claim. On the other hand finding some gold does not establish a valid valuable mineral discovery."
"Mining claims are a part of the prospect - locate - explore - discover - mine/patent process. They are not the end result but just a way of securing the minerals against other prospectors so you can complete the required steps to establish a valid valuable mineral discovery."
Bejay
