---->Speculative element: mineral rights could
possibly represent substantial future wealth of currently indeterminate
character; the unknown aspect creates a speculative value in and to the
mineral right. Such speculative values are amenable to geologic comment, but
seldom to ultimate economic resolution. To the contrary, creative geologic
investigative often creates prospective mineral targets and potentials, thus,
actually increases speculative value.
Certain deposits of natural resources have
been delineated over the years on NZ's mineral rights including in order of
their discovery: petrified wood, coal, potash, industrial clay, uranium,
travertine, and oil. Beyond the possible future values from exploitation of
these discovered resources, the mineral rights per sec also remain
intrinsically valuable because of their potential for future mineral
discovery. Given the amount of research and exploration to date, the potential
for new discovery is more constrained than wide open. Geologic data is
relatively sparse and, hence, the potentials for discovery less constrained on
the blocks of Indian Reservation minerals. Economically, the more important
issue is likely to remain the exploitation of the known resources on NZ's
mineral rights.
Uranium has the potential to be the most
economically important natural resource on NZ's fee mineral lands. In the
Crownpoint-Hosta Butte vicinity of New Mexico, uranium reserves are now
calculated at 38 million pounds. This uranium occurs in two well defined
deposits amendable to in-situ leach mining methods at costs in the $20+ per
pound range. Historically, this uranium deposit has yielded NZ one million dollars
in leasehold payments.
Travertine limestone having a calcium
carbonate content of over 95% crops out astride NZ's checkerboard fee lands on
Mesa del Oro, which is located some 40 miles west of Albuquerque. The overall
deposit, including that on intervening BLM lands, contains over 1 billion tons
and is well defined by drilling. The potential uses include: flue gas
scrubbant, the manufacture of cement or lime, use as dimension stone, as
ballast or rip-rap, or as aggregate either for concrete or road metal. NZ
retains six sections in fee (surface and minerals) in support of this highly
tangible deposit. There is little doubt that it will be developed for one or
more of the above uses in the future.
Petrified wood resources remain only on
the Milky Ranch. The Frisco Railroad, NZ's parent company, lost most of its
petrified wood when the Petrified Forest National Park was established in
1906. Petrified wood is a semi-precious gemstone widely used in lapidary
products. NZ's fee lands bordering the PFNP once contained world's largest
commercial supply of this lapidary product. Petrified wood has been widely
stolen from NZ's lands and other wise marketed by NZ's lessees since the
1930s. Something more than $300,000 was generated from royalties paid to NZ
prior to 1998. More recently, the bulk of NZ's petrified wood resources were
sold for $500,000. The value of the remaining resource on the Milky Ranch is
put at $350,000.
Oil on NZ's lands was widely rumored as
early as 1912, but was not produced until 1986, and then as a follow up to a
random oil show found in a uranium research core hole drilled for the
Department of Energy back in 1982. The resulting "Nose Rock oil Pool" produced
about 60,000 barrels of light, sweet crude before its depletion. Geologically
similar small oil pools are possible in the same general vicinity but
exploration costs are difficult to justify for such small oil pools.
Elsewhere, all of NZ's other potential petroleum prospects must be classified
as rank new basin wildcat. In Cibola County, New Mexico previous wildcat wells
contained prolific porosity or permeability. The best follow-up to these trace
finds would be to drill on the Acoma Reservation where NZ has mineral rights,
but that has never been politically acceptable to the Acomas. NZ's large
mineral holdings in Northeastern Arizona have shown little petroleum promise
to date, albeit, based upon rather sparse drilling and that done without the
benefit of even two dimensional seismic. Overall, the prospects for new
petroleum discovery on NZ's lands is considered difficult at best.
Coal resources were readily identified in
the first reconnaissance geological surveys of NZ's mineral rights in McKinley
County, New Mexico. Estimated reserves were maximally estimated in 1962 from
outcrop studies at 160 million tons. The coal occurrences were better defined
by drilling in the frantic exploration days of Jimmy Carter's "Energy Crisis".
One isolated coal deposit of only 2 million tons of strippable coal was
actually permitted but never mined. The remaining coal is not likely to become
economic under any predictable future economic conditions.
Potash was the first mineral to be
discovered on NZ's mineral rights by drilling; however, the discovery came at
about the time the rich and logistically favored Saskatchewan deposits were
being developed. No value is placed on NZ's remaining potash resources.
Klannerite is the trade name for a deposit
of highly altered bedrock ("clay") on 80 acres of NZ's mineral estate in
Mohave County. It may have some industrial value, but given the small size of
undemonstrated continuity of the material, development is highly dubious.
Reference memos by J.D. Sphar:
-
NZ Railroad Title, 1992
-
Chronicle of New Mexico and Arizona
Land Company, 11-15-91
-
Historic Land Grant Assets, 6-1-99
-
Liquidation Values "Historic Assets",
1998
