Investment Report Summary

The deposit contains an estimated 860 million tonnes of Rock Salt, with a high purity level of 95.2% NaCl (sodium chloride) in the Inferred category¹. Additionally, there are 383 million tonnes of Rock Salt with a high purity level of 96% NaCl in the Indicated category as quantified by an independent, regulatory-compliant feasibility study and resource assessment³.

Resource modeling also shows that the resource contains significant sodium chloride (NaCl) concentrations exceeding 98%. These concentrations are particularly situated around the “pillow” shape within the broader salt horizons, providing favorable conditions for extraction and processing.

Figure 1: Cross-Section of Great Atlantic Salt Deposit Illustrating Grade Variations

Eastern North America continues to rely heavily on overseas imports to meet annual road salt demand of approximately 25 million tonnes⁴. That’s why Atlas Salt’s Great Atlantic Salt Project looks destined to play a major part in ensuring that roads, highways and sidewalks are as accessible as possible during winter – saving lives and maintaining economic activity.

Envisioning the success of The Great Atlantic Salt Project is easy when considering its incredible combination of innovative mine design and compelling project economics. It’s also backed by a leadership team with proven success, presenting a very strong investment proposition.

Atlas has been substantially de-risked⁵ across multiple investing metrics – commodity type, location and jurisdiction, management, geology, mining approach, community engagement and environmental credentials.

Additionally, the expectation that The Great Atlantic Salt Project can displace foreign suppliers effectively, means it presents a compelling opportunity to investors looking for exciting growth prospects.

Figure 2: Main salt trade patterns globally. Source: https://imformed.com/salt-market-to-grow-as-new-sources-challenges-face-industry/

Strategic Salt Production Offtake and Canadian Joint Venture 

Atlas Salt has made a significant move by entering a non-binding Memorandum of Understanding (MOU) with Scotwood Industries to establish a strategic offtake and joint venture for the Canadian salt market¹³. Scotwood, the largest packaged retail de-icing distributor in the U.S., has a strong track record of working with major retailers and is highly selective in its partnerships.

The strategic offtake will source all salt from Atlas’s Great Atlantic Salt Project with its long life and low-cost production. This positions Atlas to leverage Scotwood’s established retail relationships and market expertise, ensuring reliable sales in a high-margin market. Rick LaBelle, Atlas Salt CEO, stated,

“Since I joined the Company, I’ve been focused on opportunities in the retail market, where supply is more predictable, and margins are generally higher. Atlas is excited to work with Scotwood Industries, the largest packaged retail de-icing business in the United States, on a mutually beneficial strategic offtake and joint venture to provide tailored packaged salt solutions for the Canadian marketplace, by leveraging Atlas Salt’s high-quality, made-in-Canada salt and Scotwood’s brand strategy, industry expertise and reputation for superior customer service.”

This development is crucial for retail investors considering Atlas Salt, as it underlines the company’s commitment to predictable revenue streams and long-term partnerships. By securing approximately 50% of its production for the Canadian market through a strategic offtake, Atlas minimizes risk and strengthens its financial outlook. 

For investors, this agreement highlights Atlas’s ability to capitalize on its strategic location and low-cost production, paving the way for substantial, long-term profitability in a stable, high-demand market.

Innovative Mine Design

Atlas Salt’s Great Atlantic mine is marching toward construction with plans for an innovative and environmentally friendly design. Using continuous miners and battery-electric truck haulage, the company is employing technological innovations with scalable production potential.

State-of-the-art mining equipment includes electric and battery-electric units ensuring high performance, low emissions, and reduced ventilation requirements. This forward-thinking approach to mine design is sure to enhance operational efficiency and align with energy-efficient practices in the mining industry.

Atlas has already selected Sandvik Mining and Rock Solutions as its preferred equipment supplier and integrated project delivery partner⁶. Their battery-electric fleet plans include continuous miners, haul trucks, scooptrams, and an AutoMine® system with tele-remote and autonomous operation¹.

Additionally, the mine’s adaptive infrastructure and modular expansion capability underscore its ability to grow, with minimal re-work required to achieve expansionary goals to 4.0 million metric tons per annum (Mtpa) of production¹.

Resource Quality And Continuity

Figure 3: High purity salt sample and schematic representation of Great Atlantic Salt Deposit. Source: Atlas Salt Corporate Presentation.

Atlas Salt is aiming for long-term success in the mining sector. The project’s extensive inferred resources total 868 Mt¹, and the leadership team has a realistic expectation of extending the life of the mine beyond 34 years¹.

Compelling Logistics

Great Atlantic is well positioned to become the new “Gold Standard” of salt mines in North America due to its shallowness, homogeneous nature and accessibility through inclined ramps vs. vertical shafts.

As the first new salt mine in eastern North America in more than 20 years, the Great Atlantic should also benefit immensely from new technology and its close proximity to a deep-water port.

There are multiple logistical advantages to this opportunity:

• Nearby deep water port (Turf Point) immediately next to the deposit along a straight conveyor route.

• Automated conveyance to the port.

• Next to Trans Canada Highway: the project connects to existing roads and the main highway.

• High voltage power near the site.

• Stephenville Airport is just a 20-minute drive from Great Atlantic.

• Mining-friendly jurisdiction.

• Straightforward mining and processing.

• History of mining in the area with nearby existing gypsum mining operations.

Great Atlantic is in a PRIME position featuring top-notch infrastructure. Power, roads and a deep-water port surround this magnificent deposit in an area where communities support industrial development¹.

Additionally, its proximity to the Trans Canada Highway, with existing roads connecting to the project, further facilitates convenient access. 

Logistics are key to a low-cost mine, and all the logistics are in Great Atlantic’s favor.

Figure 4: Birds Eye Representation of The Great Atlantic Salt Project. Source: Atlas Salt Corporate Presentation.

Figure 5: Atlas Salt. Logistics are everything. Source: Atlas Salt Corporate Presentation.

Project Progress

Operational Status and Timeline

Atlas Salt already completed its Great Atlantic Feasibility Study, carried out by SLR Consulting (Canada) Ltd., a global leader in mining and minerals advisory services³. This study is accompanied by a Greenhouse Gas (GHG) emissions study from Stantec Consulting Ltd⁷.

According to SLR’s feasibility study, the underground salt mine is planned to start producing 2.5 million tonnes of rock salt each year with the potential to increase to 4 million tonnes. The salt will be used for road de-icing and shipped to the high-potential markets of the US East Coast, Québec, New England, and the Maritime Provinces from a dedicated port facility.

The company’s plan for the project assumes construction will start in 2025 and the mine is planned to be operational in 2029/2030.

Atlas Salt plans to develop the Great Atlantic deposit to produce 2.5 Mtpa of saleable product, capturing market share¹ by displacing rock salt imported from overseas.

At the end of July 2024, a detailed simulation and modeling verification for the Great Atlantic Salt Project was completed by SRK Consulting¹². This confirmed the feasibility of equipment selection, material handling systems, and port capabilities. It also proved the scalability potential of planned infrastructure.

Figure 6: Atlas Salt. Potential Incline Access Ramp. Source: https://atlassalt.com/

Inside the Great Atlantic Salt Project, continuous miners will cut the salt (no drilling or blasting). A processing plant will be located underground to minimize surface impact, featuring multi-stage crushing and screening to get the salt to the right particle size before being dropped onto a conveyor belt that will bring it to the surface. Sorted salt will then be delivered to the port just a few kilometers away by an overland conveyor system.

Figure 5: Continuous Miners. Source: Atlas Salt Corporate Presentation.

This means the mine is:

• Free from the metallurgical issues and uncertainties common to metal mines.

• Has no need for any time-consuming or costly chemical processing.

• No tailings, which are the sometimes toxic waste products left behind by the metal ore extraction process.

• Effectively an underground quarry.

That’s about as straightforward as it gets in the mining industry!

Business Model

At first glance, salt may not seem as exciting an investment as gold, copper, or some of the world’s more sought-after resources. But in times of uncertainty, its dependability adds to its appeal.

Over the decades, salt has shown price stability and resilience in the face of changing economic conditions.

Salt is a non-cyclical and truly defensive investment, and an efficient salt mine drives incredible long-term free cash flow.

Salt is extracted in a relatively straightforward mine-crush-screen fashion and then transported to market - essentially all the “ore” goes directly to market. And if a deep-water port is available right next to your deposit, it’s even better. The material goes straight from the mine to the port, in this case by a fully automated conveyor system, all at a low cost.

The fact is, this is a business that can continue producing for many decades and Atlas Salt intends to seize this opportunity.

The company’s operational project management plan breaks down mine development into a hierarchical structure of programs, projects, and tasks, increasing efficiency while conducting a robust risk analysis.

Lean construction principles guide task management, integrating field-level and master scheduling across five levels for efficient coordination. Continuous improvement will be pursued by tracking task commitments and analyzing the root causes of missed deadlines. Additionally, digital tools will facilitate real-time collaboration between surface and underground teams, offering tailored schedule access to ensure smooth project progression and minimized risk.

Capitalizing on its prime asset, Atlas intends to finance and build North America’s lowest greenhouse gas (GHG) emission mining project. That’s why Atlas Salt’s stock represents a niche investment in the salt industry.

Economic Analysis

Jupia Consultants Inc. recently conducted an economic impact assessment on behalf of Atlas Salt². Their findings show that the Great Atlantic Salt Project will provide substantial economic advantages to Newfoundland and Labrador with a $4.8 billion boost to regional GDP and long-term job creation contributing $2.5 billion in employment income to the province. This project establishes Atlas Salt as a major private-sector investment in southwestern Newfoundland.

Sector Background

Road salt is the biggest single individual market for salt in North America. With an estimated 25 million tonnes⁴ of salt applied to roads in eastern Canada and the U.S. annually, North America doesn’t produce enough road salt to cover its needs. That’s why millions of tonnes are imported each year.

Figure 11: Salt imports

Importing is not only costly and inefficient it incurs a weighty carbon footprint and runs the risk of supply chain issues and geopolitical risks.

Volatility in overseas shipping rates has further complicated the picture in terms of importing salt. What worked for many years in an environment of low inflation and trouble-free supply chains isn’t likely to work so well going forward. In addition, North America is burdened with mines that are past their prime. This is not a recipe for providing a steady supply of high-grade rock salt. As a result, a security of supply issue has emerged in this relatively tight market.

Road salting became popular after World War II¹⁴. The arrival of salt was hugely critical to the economic progress of Canada and the US, enabling commuters and truckers to move freely across the continent during snowy and icy conditions.

Today, road salting with high-grade rock salt remains the cheapest, easiest and most effective way to keep roads, highways, sidewalks and parking lots safe for vehicles and people¹⁵.

Target Markets

As Atlas develops the potential markets for its new salt mining operation, it becomes helpful to highlight the wide-ranging applications of salt that span commercial, chemical, food, and notably, road de-icing sectors, which stands as its primary market focus.

Quite simply, once operational, Atlas’s management team believes the Great Atlantic deposit is perfectly positioned to capture a major market share in a road salt sector heavily reliant on overseas imports.

Figure 9: Salt Consumption. Source: Atlas Salt Presentation

Competitors

Competing salt mines in North America are aging and face higher costs. Atlas Salt’s modern, low-cost operation gives it a significant advantage over competitors.

Three major companies currently dominate the North American road salt market – NYSE-listed Compass Minerals and private companies Stone Canyon Industries and Cargill. They also sell into other verticals in the broader salt market. 

Atlas possesses the only new North American salt deposit slated for production within five years.

The company aims to construct and operate a vast underground salt mine based on a widespread, basin-wide salt deposit. The deposit resides in rock layers that formed during the Carboniferous periods dating back around 350 million years ago.

The salt deposit has been identified across nine drill holes at depths ranging from about 180 meters to 395 meters, with thicknesses up to 340 meters. Resource modeling indicates “tremendous continuity”1 with an overall average thickness of about 200 meters. Additionally, geophysical data suggest the deposit extends beyond the currently classified Mineral Resources, indicating potential for further expansion.

Atlas Salt released its inaugural ESG report in August 2024. Titled The Path to a Sustainable Legacy, it provides a comprehensive overview of the company's performance in 2023 in health, safety, social, and environmental areas. The report emphasizes the company’s dedication to environmental responsibility, community involvement, and sustainable mining practices.

Key highlights include:

• Sustainability Commitment: Atlas focuses on building long-term, mutually beneficial relationships with stakeholders from the project planning phase, ensuring it builds a social license to operate.

• The market for Clean Salt: Recognizing that domestic demand for de-icing salt exceeds supply, the company aims to serve bulk and packaged clients interested in clean, low-carbon salt and who support sustainable mining.

• Greenhouse Gas Reduction: Atlas Salt plans to minimize GHG emissions by using electric mining equipment powered by the provincial grid, while operating within a small surface footprint compared to other mining operations.

Atlas Salt’s vision to build an environmentally friendly and sustainable mining company is best illustrated by CEO, Rick LaBelle:

“My vision for Atlas Salt is to create an industry-leading example in sustainable underground mining. We have the potential to build the greenest, cleanest, and safest underground mine in the world.  The findings from Stantec and BWB’s endorsement confirm that we are making real strides towards this objective.  Our team at Atlas Salt is not just building a salt mine, we’re building it responsibly for future generations. The project’s low GHG emissions is our commitment to environmental stewardship and our focus on innovation. It’s a proud moment for us as we set out to lead the way in sustainable mining practices globally, ensuring a lasting positive impact on our local communities and society at large, while providing shareholders with a healthy projected platform for financial growth.”

In early 2024, Atlas Salt engaged Stantec Consulting Ltd. (Stantec) to complete a study of greenhouse gas (GHG) emissions⁷. The results highlight that once in operation, The Great Atlantic Salt Project will be one of the world’s lowest GHG emission mining projects.

Indeed, the operational GHG emissions of 79 tonnes annually is comparable to the emissions of the annual carbon footprint expected from just four Newfoundland families of four¹⁷.

BWB Consulting Services Inc. conducted a peer review of the Project’s feasibility study for Atlas Salt and its President, Brian W. Buss, commented: 

“We were highly impressed by the strategic and engineering efforts made by Atlas Salt’s management, their approach has culminated in an operation with attractive economics, and minimal environmental impact, boasting GHG emission rates that will be significantly lower than typical mining operations. The GAS project, with estimated emissions under 1,000 tonnes of carbon dioxide equivalent per million tonnes (t CO2e/Mt) of product, sets a benchmark in sustainability for underground mines globally.”

Figure 15: Benchmarking GHG Intensity of Scope 1 (Direct) & Scope 2 (Indirect) emissions of GAS Project. Source: press release: Greenhouse Emissions Study Validates Low Carbon Great Atlantic Salt Project

Atlas Salt is further improving its green credentials by utilizing Newfoundland and Labrador’s low GHG intensity hydroelectricity. At just 17 grams of CO2e per kilowatt-hour (kWh), this is far below the Canadian average of 110 g CO2e/kWh. The company also intends to integrate cutting-edge battery electric technologies to substantially cut diesel use, further reducing emissions across the board.

With a feasibility plan suggesting a 34-year life span, which is potentially extendable beyond 50 years, the company’s salt assets appear extremely promising. The extent of the ore body has not been fully defined, implying expansion possibilities as mining progresses. Plus, the use of inclined ramps makes this project cost-effective and easily scalable.

The mine's operational phase is expected to generate consistent cash flow, as salt assets are known for reliable production. This is supported by the established nearby infrastructure, including access to a deep-water port and high-voltage hydroelectric power, which is a crucial element in the mining industry. Salt mines are particularly infrastructure-intensive, relying on the efficient transport of bulk commodities.

Figure 16: Atlas Salt. Corporate Presentation: A vision of the Great Atlantic Project's future site footprint. Source: Atlas Salt Corporate Presentation

The Great Atlantic Salt Project’s advantageous setting further enhances its valuation prospects. Proximity to end markets is a key factor as it significantly reduces logistics challenges and costs, ensuring the smooth delivery of salt to where it’s needed most. 

Comparatively, Stone Canyon purchased K+S in 2021 at a multiple of 13.4 times the EBITDA of $239 million it reported in 2020. This is a very attractive multiple for any sector and highlights the potential for valuations in the salt industry.

There’s a good chance you’ve never considered investing in salt. Yet, as this opportunity demonstrates, there’s a lot to like about a salt investment, not least of which is its de-risked and defensive nature in the face of inflation, general economic and market uncertainty and shipping volatility. 

Investing in a salt stock provides exposure to a fundamental industry commodity, while salt stock investments diversify portfolios with essential minerals exposure.

The commodity is in reliable seasonal demand and sees its price stay relatively steady even in times of economic turmoil. From extraction to sales to long-term predictability, the salt business has many advantages over the traditional mining sector.

There’s no doubt Atlas Salt has a remarkable asset in its Great Atlantic deposit. The resource’s unusually shallow depth, grade, size and outstanding setting all add up to massive potential. As North America’s first new salt mine in 20 years, Great Atlantic has the potential to out-compete overseas imports.

CEO Rick LaBelle has four decades of experience to draw from, he is excited to lead the build team through the construction phase.

And of course, Bob Booth, Alasdair Federico, and Andrew Smith bolster the gravity of this team with their extensive knowledge and experience of the mining industry and underground construction projects in particular.

Then there’s Atlas Director, Rowland Howe, with an unparalleled background in salt mining, including outstanding success at NYSE-listed Compass Minerals, turning Goderich into the world’s largest underground salt mine.

Newfoundland-based Atlas Salt is a pure salt play on a North American stock exchange and there is no deposit other than Atlas’ Great Atlantic that could soon bring much-needed new domestic road salt supply to North America.

Notably, Great Atlantic is a massive homogeneous high-grade deposit with limited geological risks.

Unlike conventional mining, salt requires no grade control, chemical processing, or tailings disposal. It is very simple indeed and provides the potential for multi-generational cash flow.

Some existing aging salt operations are grappling with higher costs in these inflationary times, and of course, there’s a security of supply issue with exports out of Chile and North Africa.  

This is why the prospect of a long-life, low-cost, state-of-the-art new mine is so compelling. It’s not just about meeting rising demand – it’s essential to ensure the security of North American supply.

With the feasibility study, GHG emissions survey, and environmental assessment under its belt, plus offtake agreements underway, Atlas Salt is embarking on a new and productive chapter. With a focus on green, low-carbon practices and capitalizing on its prime location, this company presents a captivating investment proposition.