I do not have enough time to analyze gold producers which I leave to brokerage firm analysts commanding six figure salaries. My focus consists of discovery exploration juniors and those with ounces or pounds in the ground that have been the subject of an economic study during the past few years. Discovery exploration gold plays like Solitario Resources Corp and Arizona Gold & Silver Inc do not count on a higher metal price; it is all about delivering a discovery that could become a mine at prevailing metal prices. I like this type of junior because I only need to think about the geology, not how the unfolding universe will affect real metal prices. Such plays are at the mercy of mother nature, who has been known to be very cruel towards geologists and their models. The advanced ounce or pound in the ground plays interest me because I can quantify what they would be worth at various metal prices based on a lot of expensive work already done by the company which shows up in 43-101 technical reports. And while the companies are trapped by regulatory rules biased to the downside, such as using a 3 year trailing averages as base case prices when the metal is in an uptrend, but not when it is in a downtrend, I can do as I please.

I can also propose "big picture" stories that could dictate future metal prices. Currently I am arguing that the world increasingly believes Donald Trump's assertion that America is no longer great, and if this is not quite true yet, if he is elected he will do everything he can to make it so. This makes it prudent for nations to plan for a day when America stands alone, without any friends, sinking into an abyss of increasing irrelevance except for the capacity shared by Russia's leader Putin to unleash Armageddon just because he can. Given that the United States is the world's biggest economy despite having a fraction of the world's population, the notion that the "big cheese" will stand alone, not because it actually can, but because its arrogance impels it to do just that, has the rest of the world thinking of a future "Beyond America". And gold, not Bitcoin, is the bridge to that future. It does not matter what the outcome of the US election is; a Trump victory accelerates the descent from "greatness" while a Harris victory merely delays the decline in the face of the relentless rise of the Global East with the increasing allegiance of the Global South.

Bitcoin is Shitcoin because its essence is American masturbation, an ecstatic celebration of solipsism. Who cares if the price of Bitcoin ends up making all the Bitcoins worth $12 trillion on a par with the value of the above ground gold stock? Who but the dumbest of Americans will swap real assets for Bitcoin when the price has risen to that level? Gold is in a "stealth" bull market because members of the Global West really do not want to accept democracy is history, and members of the Global East and South really don't want to talk about their strategy for dealing with an America that is no longer great and wandering into the realm of the irrational. The response to gold's march into record price territory reflects this state of denial about what is unfolding.

In the KRO Slack Forum members have asked to what extent the gold producers have moved in response to gold's move. Gold bottomed at $1,985.10 on Feb 14, 2024 and as of Aug 22 at $2,483 it was up 25%. My 2020 Gold Producers Index (100,000+ annual gold production) shows that the producers as a group have tracked the gold uptrend since mid-February, but you can see that since May the market has been jittery, reacting with an over-proportionate decline to the couple of modest pullbacks gold underwent since its initial rise. But you can see that the KRO Producer Index rally has been sharper on the upside during the past few weeks. There is a change in sentiment afoot.

I have created two graphics depicting 7 year charts of companies from the gold producer index. The first is the "majors" producing 500,000 ounces or more annually. The second is the "intermediates" producing 100,000-500,000 ounces annually. I have added the percentage change from the price on Feb 14, 2024. These range from 15%-132%. All are up since mid February, except for Victoria Gold which the Yukon government has decided to destroy by putting it into receivership and dictating the "cost" of fixing an environmental problem that is largely invisible but whose very idea has First Nations grieving as if the end times have indeed arrived.

By assembling all these charts into one place it allows me to extract "impressionistic" observations of which two stand out.

The first is that the majority of producers have yet to reach the peaks achieved in 2020 when gold peaked at $2,067.15 on August 6, 2020.

The second is the conspicuous absence of a rise in trading volume since mid February 2024. In fact, volumes seem to be declining!

These observations indicate a secular equities gold bull market is not underway. Perhaps investors are shunning gold producers because of their legacy of disappointment, namely rarely outrunning cost inflation when it comes to CapEx and OpEx? Maybe they are buying gold directly? The SPDR GLD ETF, despite talk about attracting interest in the past month, is not registering an increase in traded volume. And while the gold holdings have been creeping up, it is still down 739,111 ounces from the start of the year.

The producers are tracking the rise in the gold price, but not in the leveraged manner one might expect. One reason is the optics of a 25% gold price gain. It just isn't the same as the 526% gain gold underwent from $300 in 2003 to $1,877 in August 2011. As my Gold in Perspective chart shows, gold didn't even catch up with inflation until 2009, assuming you take $400 in 1980 as the fair inflation adjusted price of gold after being fixed at $35 since the 1930s. But today the gold price reflects a 62% real price gain above its inflation-adjusted value which should be $1,554. How many similar graphics are out there on the web? This observation I am making is not what one might describe as "common currency". Yes it is clear to everybody that gold keeps making new record highs. But so what? Gold is in a stealth bull market because the optics so far are not emotional triggers.

Is it just a matter of time before gold lurches back onto the radar of the irrational mindset which then takes gold equities to the moon? Or was 2020 the last gasp of magical thinking for gold, a period when we saw more money pour into TSXV resource juniors on a monthly basis, led by Eric Sprott, than traded value during those months when gold soared past $2,000? Why is Eric Sprott such a wet noodle in this market, somebody whose "early warning" news releases mostly state that his "fully diluted" net position has declined because warrants expired worthless? I suspect gold will need to move past $3,000 before it lurches onto the radar of the market. For those who believe gold is in a real price uptrend reflecting anxiety about how a renewed "great power" game will unfold, and who appreciate that the masses are not conducting the math as I have done in the case of Vista Gold Corp and West Vault Mining Inc, both KRO favorites whose arguments for 5-10 fold price increases jare ust based on accepting the current $2,511 gold price is the new base from which the future gold price will be established, the current situation is a gift. Given that the market is still largely ignoring these juniors with shovel-ready, permitted projects, though that could change in a heartbeat, we at KRO are now looking upstream at juniors with existing gold deposits for which economic studies have been done, though they are dated in light of inflation during the past few years, and which are still flat-lining as classic bottom-fish.

Nevada Organic Phosphate Inc is not currently a KRO Favorite because it is still Bottom-Fish Spec Value rated due to five key missing pieces to this story. However, I have talked about it on Kaiser Watch because it is a potentially very interesting story and the company was part of my May 2024 Vancouver Metals Investor Forum session. The company is so optimistic about clearing the first missing piece hurdle that it has signed up to be part of my MIF Vancouver September 2024 session. I introduced the story in KW Episode May 8, 2024 and provided an update in KW Episode July 5, 2024 when the junior announced that the BLM had published an Environmental Assessment and opened a 30 day comment period on July 5 that closed on August 4.

NOP is not for risk adverse investors, but for those who like to bet on "high risk high reward" plays that make sense, it is an ideal bet. The first missing piece is to get title to land covering the outcropping phosphate beds at Murdock Mountain in northeastern Nevada near the town of Montello. In the United States, unlike for metallic minerals where you secure title by staking and then apply for a drill permit, which can take several years given the "go slow" mandate from Washington for anything involving hard rock extraction, phosphate is treated the same as potash, coal, oil and natural leases. You submit a lease application first which includes a proposed exploration plan, and then you must fund an Environmental Assessment managed by the BLM which sets the stage for it to issue a FONSI, a "finding of no significant impact". This is the first hurdle because the BLM could reject the lease application if it deems exploration will have significant impacts. But even the BLM is subject to scrutiny. Once a FONSI is issued the EA is published and the public has 30 days to file comments about the FONSI which the BLM is required to address. Sometimes people submit comments pumping approval, but most of the time the comments reflect disapproval. It is not the applicant which is on trial, but rather the government agency which dared to conclude that something rather than nothing be allowed on BLM land. The purpose of the comment period is to allow third parties to object that the BLM missed something important in arriving at a FONSI.

The comment period is a nerve-wracking one for the applicant because after spending lots of money to fund the EA run by the BLM, it may turn out that the BLM failed to address an important issue which, if a solution cannot be easily developed, would result in a denial of the lease. The Murdock Mountain project vendor started this process over a decade ago. The lease application was first held up when a giant sage grouse wilderness study area was created in this remote corner of Nevada. Once it was figured out where the most sensitive sage grouse habitats were located, Covid came along in 2020 during which nothing happened. In 2022 the application was resubmitted and the junior has been funding the EA costs ever since without any guarantee that it will receive title and permission to drill.

From what I have seen there were two comments from government agencies, five from individuals submitted online, though one of these was a duplicate submission, and a handwritten note from an individual who is simply opposed to mining in America. The individual comments were submitted during the final days of the comment period.

Among the government agencies the EPA expressed concern that existing roads to the drill targets pass through the sage grouse wilderness study area, and that no provision has been made for sound baffles to be erected at the drill sites to prevent noise from disturbing mating or nesting sage grouse. This apparently is not an issue because the company does not plan to drill during the spring breeding season. I have assembled some graphics to show what sort of landscape the drillers will need to drive through from the main highway that passes through Montello, which also passes through the study area.

The second government agency to comment was the Nevada Division of Forestry which effectively sent a boiler plate letter describing all the water related rules that apply to a mining operation. This illustrated two issues, one important, the other a confusion about the lease application. The important issue brought up by two online submitters is that the area around Montello relies on a single spring for water and has been the subject of water restrictions imposed by Elko County since the 2000s. The monthly residential allotment is 7,000 gallons, but a drilling program could use that much in a single day. Montello has only 22 residents according to the 2022 census, so clearly this is a water-starved area whose condition will only worsen as climate change continues. NOP management acknowledges this issue and will not draw water from the local Montello spring but will have to secure it from areas like the Ruby Range to the west where there is plenty of water to which rights can be secured. Trucking it to the Murdock Mountain leases will be an extra expense. But that extra cost is small relative to the potential size of the prize.

The confusion that characterized several of the comments was that the Murdock Mountain lease should be the subject of a full blown Environmental Impact Statement instead of an EA which would be a legitimate objection if the BLM were approving a mining operation. These objections are misplaced because if this lease is granted by the BLM it only gives NOP permission to prove through exploration drilling that there is something at Murdock Mountain worth mining and requiring an EIS. If drilling establishes 25 million plus tonnes of organic phosphate ore which by its nature will have to be underground mined like a seam of coal, whoever plans to develop a mine will need to do an EIS that deals with the potential impact on the regional sage grouse habitat and the supply of process water for the mining operation. This will involve a cost-benefits analysis of the positive impact of farmers having a commercial scale supply of an organic phosphate fertilizer that doesn't consist of manure and the extent the local sage grouse population would be affected. A proposed mine will require purchasing water rights and figuring out a cost effective way of delivering it to the mine. It may prove convenient that the town of Montello is basically a stop along the Union Pacific Railway.

Based on the nature of the public comments I am optimistic that by early September the BLM will grant NOP the Murdock Mountain phosphate lease. The market has steered clear of the junior because we are in a glass 90% empty bear market and the assumption is that the BLM will not give the junior the chance to prove there is nothing worth developing. To be a true bottom-fisher you do need to be a true contrarian who can handle a knotted up stomach.

Once NOP has the lease it needs to deliver on four more missing pieces, which may mean the stock will not rocket if a lease is granted. The first is establishing the geometry of the phosphorite beds that dip into Murdock Mountain. This includes the thickness and its consistency, lateral continuity and a dip suitable for low cost underground mining. The company proposes to drill a series of shallow core holes and, once drilling has begun, should end up with a good idea within six weeks about the geometry. Well before NOP has assays it could publish enough information to allow the market to do a back of the envelope calculation of the emerging tonnage footprint. This story is to a large degree about scale, so positive news on this front will attract sophisticated investors.

The second missing piece is the grade of the phosphorite bed, not just in terms of P2O5 which we hope to see in the 5%-10% range but also the grade of everything else in the phosphorite bed. In fact the grades of the non-phosphate elements are more important than the phosphate grade because we already know that the Murdock Mountain phosphate grade will be far below that of the phosphate beds in Idaho which run 25% plus. What makes this phosphate play interesting is that past surface sampling indicates that the heavy metals are well below the Heavy Metal limits set by the government for fertilizers. The high grade phosphate in Idaho is well above these limits and has to be chemically processed into MAP and DAP for use as a fertilizer, which disqualifies it as an organic fertilizer. The drilling program will establish whether or not the low Heavy Metal Index observed in outcrop persists throughout the bed so that the entire resource will qualify as organic. Assuming drilling gets underway by mid September we could have answers to these two missing pieces by December. How often do you encounter a play where good news is low grades in certain elements?

The third missing piece is getting the phosphorite certified as organic. The company's commercial strategy is to grind up the phosphate ore and sell it as a whole rock organic fertilizer that can be applied directly to fields. The drilling will be done with 2.5 inch HQ core. After the core has been sawn in half, one half will be ground up and submitted to the assay lab which will extract a spoonful to generate the assay. The remainder of the sample bag will be sent back to NOP which will be able to submit it to an organic certification lab because that is in effect what the commercial product will be like.

The fourth missing piece will be confirmation that the product is indeed effective as a phosphate fertilizer and quantification of how much would have to be applied to an acre to be effective. This will require agronomic studies with various crops where the Murdock Mountain phosphate product is compared to control plots. This will be a story familiar to those who followed Verde Agritech Inc and its "verdete slate" project in Brazil which turned into a whole rock organic potassium fertilizer that competes with conventional potassium chloride (KCl). The potential scale of the Murdock Mountain phosphorite beds exceeds 100 million tonnes and NOP has already submitted lease applications for other parts of the Leach Mountain Range where the beds potentially outcrop. If NOP eliminates the first missing piece in the form of a BLM lease, delivers on these other 4 missing pieces, and the BLM delivers FONSIs on the other applications, the project would become of great interest to one of the fertilizer giants eager to supply a simple phosphate fertilizer to the organic market. It is thus conceivable that this $3 million company could be swallowed at a $100 million valuation within a year, which, if you assume funding dilution to 100 million fully diluted, would represent a future $1 stock price. That does not sound very glamorous, but then bottom-fishers think in mathematical terms where a 2,000% gain from current levels, based on a series of milestone, is quite satisfying.