Nevada Organic Phosphate Inc, although Bottom-Fish Spec Value rated thanks to its weak treasury and cheap price helped out by the plodding BLM permitting cycle and obsession with sage grouse habitat, was made a 2025 Favorite because of its fascinating story, namely demonstrating the existence of a large, scalable supply of organic phosphate. The junior has spent $1 million funding studies required by the BLM to approve a phosphate lease application for its Murdock Mountain project in northeastern Nevada. Unlike metal claims where one stakes first and then applies to the BLM for drill permits, phosphate is treated like coal, oil and potash. One submits a lease application to the BLM which requires the applicant to fund a variety of environmental studies before accepting the application, which then gives the applicant two years to demonstrate that a resource exists that justifies granting title through a lease. The Murdock Mtn application covers the southern end of the Leach Mountain range where outcropping phosphate beds have been known about since the 1960s. They are at the southwestern periphery the Western Phosphate Field which straddles six states and was once an inland sea. These phosphate beds grade 3%-15% P2O5, are only 2-4 metres thick, and have never been mined because they cannot compete with the much thicker phosphate beds in Idaho that grade 25%-35% P2O5.
Back in the 1960s there was not much interest in organic food, but today there is intense interest, especially in California which has nearly 40 million people and whose GDP would rank fifth among nations. The problem with the Idaho phosphate beds is that they have a heavy metal content well above the maximum limit of the Heavy Metal Index the USFDA insists all agricultural inputs must be below. These heavy metals include nasties such as uranium and thorium. The big fertilizer companies reduce the heavy metal content below the HMI limit by chemically processing the high grade phosphate to produce the MAP and DAP products. But once that is done the phosphate no longer qualifies as organic, which does not matter because it is destined for the soybean, corn and grain crops of America's breadbasket about whose organic status few care. California's agricultural crops, however, are fruit, nuts and vegetables about whose organic status it is much easier to care.
The problem for organic farmers is that manure and bone-meal are the primary sources of organic phosphate whose supply cannot be scaled and which has transportation issues. The Murdock Mountain phosphate beds are unusual in that the outcrop has a heavy metal content that is 10% of the HMI maximum. It would thus be possible to mine the beds, grind up the phosphate ore, blend it to create a consistent P2O5 grade, and ship it to organic farmers as a whole rock product that can be applied directly to their fields. The grinding and bagging facility would be at Montello which is just to the east of the Leach Mountain Range and is a stop for the Union Pacific Railway which travels south through Las Vegas to end up in the Los Angeles area and counterclockwise via northern Nevada through Reno to end up in the San Francisco area. The railway would allow cheap delivery of organic phosphate to the northern and southern ends of the Central Valley.
NOP finally got a green light from the BLM in mid September 2024 but final approval had to move up through six levels of a bureaucracy whose culture seems to be the deny and delay one of the health insurance sector. When final approval and request for a reclamation bond arrived in late October, it coincided with the start of a six month restricted activity period to protect nesting sage grouse. The Murdock Mtn play was started a decade ago and stalled when the entire area became part of a sage grouse study area, and then further delayed by the covid pandemic. Ironically there is little evidence of sage grouse in the Leach Mountain Range but in a range farther to the west there are so many sage grouse hunting is allowed. As one of its last demonstrations of NIMBY exceptionalism the Department of Interior declared over 30 million acres in western United States as sage grouse habitat (only 250,000 are believed to remain from a former population in the millions) in an apparent effort to sterilize this region for future mining.
Nevada Organic Phosphate must overcome the following challenges. First it must raise over $1 million to fund a drilling program and the subsequent organic certification process. The second is to demonstrate that the beds are reasonably consistent and continuous to support low cost underground mining in the manner that coal seams are mined. The target that is the focus of the BLM drilling permit has a footprint of about 40 million tonnes. The third is to demonstrate that the P2O5 grade is within the expected range. The fourth is perhaps the most important milestone, namely demonstrating that the low heavy metal content in the weathered outcrop is similarly low in the down-dip fresh rock. This milestone is critical because if the Murdock Mountain phosphate beds do not qualify as "organic" they are worthless. On the plus side, because of the large scale precipitation nature of these beds in a marine setting the geochemical makeup is likely to be similar laterally over a large area. NOP has already identified multiple other locations within the Leach Mountain Range where phosphate beds appear to be present and has filed lease applications to cover what amounts to a footprint in the 100-200 million tonne range. It will not start doing the BLM studies until it has confirmed that the Murdock Mtn phosphate is certifiable as organic, but it has set itself up to have an effective monopoly on this potential source of organic phosphate. The goal of the company is to deliver proof of concept, secure the Murdock Mtn lease, and initiate the approval process for the other lease applications. If NOP is successful it will attract the buyout attention of one of the big fertilizer companies which can see a scalable supply of organic phosphate for California's agricultural sector serving the biggest market for organic food in the world. |
