Investing Deep Dive: Atlas Salt Inc (SALT)
Considerable demand lies in de-icing, where salt is essential for maintaining safe, ice-free roads in winter. Atlas’ Great Atlantic Salt Project is situated right where it’s needed most.
Disseminated on behalf of Atlas Salt Inc. ValueTheMarkets, a trading name of Digitonic Ltd., was compensated by Atlas Salt Inc two hundred and sixty thousand US dollars starting 4th November 2024 for a period of 4 weeks until 30th November 2024 to produce and disseminate this content. Digitonic Ltd. does not own a position in Atlas Salt Inc.
We continue our Investing Deep Dive series with the spotlight on Atlas Salt Inc. (TSXV: SALT) (OTCQB: REMRF), which targets North America’s road de-icing market and plans to leverage modern, green technology to outpace aging competitors.
Salt demand and price are stable with diversified end markets, and Atlas Salt's flagship venture, the Great Atlantic Salt Project, is strategically located right in the heart of the North American road salt market.
About Atlas Salt
Atlas Salt Inc. (TSXV: SALT) (OTCQB: REMRF) is a Canadian exploration company with its head office in St. John’s, Newfoundland.
Atlas Salt’s Great Atlantic Salt Project stands out for multiple reasons:
A product with stable prices and increasing market demand.
The first new underground salt mine in North America in over 20 years.
A world-class resource set in a strategic location close to key markets.
An innovative design that will use the latest, state-of-the-art mining technology.
A focus on sustainability, with extremely low greenhouse gas emissions.
50% of its production is already allocated to a strategic offtake agreement.
The potential to provide a $4.8 billion boost to regional GDP.
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.
Resource Quality And Continuity
Figure 1: High purity salt sample and schematic representation of Great Atlantic Salt Deposit. Source: Atlas Salt Corporate Presentation
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.
Why You Should Consider Investing
Premier Asset and Infrastructure
The Great Atlantic Salt Project is positioning itself to become a low-cost, long-life producer and the first new underground salt mine in North America in more than 20 years. Power, roads and a deep-water port surround the deposit.
Financing and Construction Ready
A feasibility study and greenhouse gas (GHG) emissions survey confirm The Great Atlantic Salt Project's viability. It has passed its environmental assessment, lined up equipment financing, and started pre-construction. The project is expected to add $4.8 billion to regional GDP.
Strong Market Potential
Salt demand and price are stable with diversified end markets. Competing mines have aging assets, and international suppliers can be displaced based on cost, significantly shorter shipping distance, greenhouse gas emissions, and security of supply.
Winning Team Assembled
Driven by accomplished leader Rick LaBelle, Atlas Salt is in great shape as it advances toward construction. Supporting the CEO is a team boasting extensive operational expertise in mining and a wealth of large-scale project construction experience.
Path to Revenue Fueled by Strategic Offtake
Atlas is on a path to sustainable revenue through a strategic offtake with Scotwood Industries, allocating 50% of production to the Canadian retail market. This partnership and Atlas's low costs, cash flow potential, and green initiatives position it to drive long-term growth.
Valuation Upside and Growth Potential
A Feasibility Study valued the project at over $550 million (after-tax NPV at 8%) with a projected 34-year mine life. De-risking strategies support an expansion case.
Competitive Advantage
The Great Atlantic Salt Project claims a prime location at the heart of North America’s road de-icing market. This is one unchanging competitive advantage (an economic moat) that Atlas Salt asserts because it can count on enduring access to domestic markets versus overseas suppliers. Their foreign counterparts are subject to more complex supply chain challenges, long-distance shipping logistics, higher shipping costs and increased environmental emissions.
In 2022, the global trade of salt amounted to approximately $4.44 billion2. North America's reliance on imported salt is starkly evident, with substantial imports to meet various industrial, commercial, and residential needs. Approximately 25 million tonnes of de-icing salt is used annually on U.S. roads3, with much of this demand being met through imports from regions like Chile, Egypt, and Mexico. This high dependency on foreign salt is driven by the lack of economically viable alternatives for rock salt, which remains indispensable for road safety during winter months.
Concerning the mine itself, Atlas Salt has a winning model. The salt deposit is large, has a consistent quality and is a high-grade resource. The shallowness of its depth allows it to be accessed via inclined ramps versus vertical shafts, providing a tactical advantage compared to its peers. For instance, the Goderich mine in Ontario – the world’s largest underground salt mine – where salt has been mined since the 1960s, is accessed from three vertical shafts to a depth of about 1,800 feet.
Ramps are not only a time and money saver, but they offer much greater flexibility in operation, are simple to construct and maintain, adaptable to varying geological conditions throughout the deposit, are safer, and are ultimately scalable. Indeed, the use of inclined ramps, along with continuous miners, and battery-electric truck haulage, provides Atlas Salt with a significant advantage over aging competitor mines.
Figure 2: Atlas Salt. Potential Incline Access Ramp.
Since Great Atlantic will be the first new salt mine in more than two decades in North America, technological advances combined with its deposit shallowness and easy port access make it an extremely competitive low-cost producer.
Better still, Great Atlantic will have an edge over existing mines battling substantial “legacy” costs, which have been made worse by the recent inflationary dynamic and pressures to decarbonize.
Attractive Valuation & Development Opportunity
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.
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.
Environmentally Conscious
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.”
Leadership Team
Atlas Salt’s management team boasts a highly experienced group of industry professionals. Their familiarity with project construction, management, and regulatory approvals forms a solid foundation to secure trust from investors.
Seasoned experts like Rick LaBelle, Patrick Laracy, Rowland Howe, Bob Booth, and Alasdair Federico each bring a wealth of experience from the mining sector. Their skills and expertise are particularly focused on underground project construction and management, so the team is well-equipped to advance the company’s objectives.
This collective experience spans the mine owner’s and the contractor’s perspectives, ensuring they employ a comprehensive approach to mine construction and operational management every step of the way.
Download the Full report to see detailed bios for the leadership team
“This elite core team will have tremendous synergy and possesses all the combined skill sets to bring North America’s premier undeveloped salt project to the production stage on time and on budget. The build team allows Atlas Salt to set the goal for a new standard for economic, environmental and social mining development.”
- Rick LaBelle, CEO & Director, Atlas Salt Inc.
Investment Summary
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.
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.
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.
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Sources:
Atlas Salt. Corporate Presentation: A unique & differentiated story. September 2024. Retrieved from https://atlassalt.com/
Observatory of Economic Complexity. Salt, Sodium Chloride (Including Solution Salt Water), 2023. https://oec.world/en/profile/hs/salt-sodium-chloride-including-solution-salt-water
Atlas Salt. Market Opportunity. https://atlassalt.com/market/
Image Sources:
Figure 1: Atlas Salt. Corporate Presentation: High purity salt sample and schematic representation of Great Atlantic Salt Deposit. Retrieved from https://atlassalt.com/
Figure 2: Atlas Salt. Potential Incline Access Ramp. Retrieved from https://atlassalt.com/