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Near-Term Catalysts & Top Dozen Reasons
Atlas Brings The Power of SALT to Investors!
President Rowland Howe is known as “Mr. Salt” for an illustrious three-decade salt sector career highlighted by many years of success at NYSE-listed Compass Minerals’ Goderich mine. In fact, it was during Howe’s tenure as mine manager that Goderich became the biggest and most profitable underground salt mine in the entire world. During that time, Compass’ stock (NYSE: CMP) soared to $100 a share. Howe is now President of Atlas Salt (OTCQB: REMRF; TSXV: SALT), overseeing a dramatic discovery of more than 1 billion tons of the shallowest high-grade salt resource in North America, located immediately beside a deep water port for easy access to key American markets. REMRF closed at 81 cents on the OTCQB March 24, 2023.
Salt Helped Build Texas!
The importance of salt is not lost on Texans. Two important facts: 1) Salt domes changed Texas history – the massive discovery of oil on top of one such dome at Spindletop, south of Beaumont, sparked last century’s great oil boom; 2) U.S. Strategic Petroleum Reserves are stored in underground salt caverns at two major oil storage sites in Texas (Bryan Mound and Big Hill). Salt caverns, given their unique characteristics, are expected to play a huge role in underground energy storage in the years ahead. Notably, Atlas gives investors a second major opportunity with its significant ownership of a world class salt dome 10 miles south of its Great Atlantic deposit.
Salt is a Hot sector
Unlike traditional commodity sectors, the salt industry is recession-resistant. It has also produced some exciting M&A activity in the last few years, with privately-held Stone Canyon Industries elbowing its way into the sector against the likes of Compass and Cargill (Koch Industries recently acquired nearly 20% of Compass) with over $5.2 billion in acquisitions. Efficient underground salt mines are known to produce low-beta cash flow for generations. Compass’ Goderich, serving the de-icing needs of much of America’s Great Lakes region, has been producing for over 60 years, and drove Compass’ salt segment revenue in the quarter ending Dec. 31, 2022, to $308.1 million (U.S.) with operating earnings increasing 20% year-over-year to $47.1 million. That’s after six decades of mining!
Salt Keeps Us Alive!
Salt has created fortunes, provoked revolutions, directed economies, and enlivened our recipes as outlined in Mark Kurlansky’s New York Times’ bestseller, “Salt: A World History.” Salt is a mineral composed primarily of sodium chloride (NaCl), and it’s used in many everyday products and sectors we take for granted (food, agriculture, water treatment, chemical, de-icing). Our bodies couldn’t survive without salt, but salt keeps us alive in more ways than one. The biggest single use of salt in the U.S. is for de-icing roads, highways, sidewalks and parking lots. It’s a large recession-proof market with decades of consistency throughout every economic cycle. Statistics show that road de-icing salt reduces collisions by up to 88%.
Security of Supply Problem
According to the U.S. Geological Survey, the amount of salt used on U.S. roads ballooned from 1 million tons in 1954, to 10 million tons in 1985, to around 24 million tons a year by 2019 (nearly 150 pounds per American) as drivers demanded increasing levels of safety and convenience. However, due to ageing mines (no new mines have been built in the U.S. in more than 25 years), we’re now actually facing a significant domestic production shortfall of high-grade rock salt! This has forced us to import millions of tons of this important commodity each year from Chile and North Africa (mostly into the Northeast). Supply chain issues, sharply higher shipping costs, and jurisdictional risks pose a threat to those overseas imports. And it’s not like there are multiple American or Canadian salt deposits that can be quickly developed and turned into mines – there’s only one, which makes it a prime acquisition target! In today’s world there is real demand for an asset that can literally produce decades of strong low beta cash flow.
America’s Rock Salt Solution – Great Atlantic
We shouldn’t have to rely on unstable regimes in far-flung places to help keep our roads and highways safe. Atlas Salt’s massive discovery of high-grade rock salt on the west coast of Newfoundland is in the heart of the North American road salt market, just a few days’ shipping distance from Boston, for example. Newfoundland is regarded as one of the friendliest mining jurisdictions in the world. It’s a safe place to invest and a highly reliable supplier of resources to the rest of Canada and the United States.
A Top Tier Deposit
No deposit among the 15 or so operating salt mines in the eastern half of North America is as shallow as Great Atlantic, which starts at a depth of just 623 feet. In fact, a recently released Preliminary Economic Assessment (PEA) projects that Great Atlantic can become the first major salt deposit in North America accessed through inclined ramps vs. more expensive vertical shafts. The thickness of the salt bed at Great Atlantic is also remarkable compared to Goderich and others. The last drill hole at Great Atlantic, reported March 23, 2023, returned just over 1,100 feet of net massive salt grading an average of 95.6% NaCl. According to a Goderich technical report in an SEC filing, the best drill hole from surface into the A2 salt bed at that deposit returned 87 feet of massive high-grade salt. Great Atlantic has given every indication that it will become the new low-cost producer of high-grade rock salt in North America – just $17.25 (U.S.) per tonne FOB (free on board) utilizing a Q4 2022 cost basis, according to an independent Preliminary Economic Assessment (PEA).
Substantially De-Risked Across Multiple Metrics
Salt mines are vastly different than traditional metal mines – they are predictable and can produce for generations through relatively straightforward, environmentally friendly mining. The risks of execution are far lower with a salt project vs. a regular type of mine. Salt itself is recession resistant while Atlas has also been substantially de-risked across very key metric imaginable. SLR, a global leader in environmental and advisory services, conducted a rigorous independent review of the Great Atlantic Project leading to a NI-43-101 resource update and a PEA to be followed in 2023 by a Feasibility Study.
Great Atlantic would feature environmentally friendly straightforward processing, operating very much like a “Salt Factory” with the potential to be carbon net-neutral. Unlike traditional metal deposits, no chemical processing is involved with an underground salt mine and practically all “ore” is shipped directly to market. New technology such as “continuous miners” cut the salt underground (no drilling or blasting). It is then screened to get it to the right particle size before being dropped onto a conveyor belt that brings it to surface. Processed salt is then delivered to the nearby port by conveyor. Replacing overseas imports with Great Atlantic production aids in the battle to reduce global carbon emissions.
Triple Point/Fischell’s Spinout
To unlock the value of Atlas’ Fischell’s Salt Dome, and its potential to help drive the recently signed Canada-Germany Hydrogen Accord for the west coast of Newfoundland, Atlas in 2022 spun out Fischell’s into Triple Point Resources which plans to list on a North American stock exchange. Atlas is Triple Point’s largest single investor with 27.5 million shares. Salt domes have multiple uses and are now being increasingly targeted for storing hydrogen safely and efficiently underground.
Atlas is in a strong financial position with approximately $12 million USD in cash and no debt, thanks to a series of increasingly higher-priced private placements with strategic investors since 2021 and the exercise of almost all of the company’s warrants. In January 2023, Atlas raised approximately $7.25 million USD at approximately $1.45 USD. This kind of financial strength will help ensure steady news flow with the company also embarking on a global awareness campaign to highlight the uniqueness of North America’s premier undeveloped salt project.
Atlas Salt has only 93 million shares outstanding, dominated by strong retail investors, management and close associates, while strategic long-term investor Vulcan Minerals (TSXV: VUL) owns about 31% of the company. A warrant overhang in Atlas was removed during 2022. Atlas, which trades under the symbol “REMRF” on the OTCQB and “SALT” on the TSX Venture Exchange, has been one of the top performing resource stocks over the past two years. The company was also selected as a 2022 Venture 50™ winner.
In its January 2023 Independent Preliminary Economic Assessment, SLR Consulting Canada (Ltd.) updated the Great Atlantic mineral resource estimate based on Atlas drilling excluding recently completed drill hole CC-9b. The resource estimate is in accordance with National Instrument 43-101 and is dated January 6, 2023. Inferred resources total 999.4 million tonnes grading 95.6% NaCl (salt), while Indicated resources total 187.2 million tonnes grading 96.4% NaCl.
- CIM (2014) definitions were followed for Mineral Resources.
- Bulk density is 2.16 t/m3.
- Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
- Reasonable prospects for eventual economic extraction were demonstrated by reporting within mineable shapes at a cut-off grade of 90% NaCl resulting in composite resource grades exceeding 95%.
The technical information above has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 and reviewed on behalf of the company by Patrick J. Laracy, P.Geo., CEO of Atlas Salt and a qualified person.