Disseminated on behalf of: Atlas Salt Inc.
Nolan K. Peterson, CEO and Director of Atlas Salt Inc. (TSXV: SALT | OTCQX: SALQF | FSE: 9D00), discusses construction of the Great Atlantic Salt Project, a salt mine being built on the west coast of Newfoundland to supply de-icing road salt to the North American market. In a market that has always relied on imports, Atlas Salt is building domestic supply at a lower cost, with more reliability, and employing Canadians.
Shallow Newfoundland salt mine sits two kilometres from a deepwater port
Unlike most North American salt mines, Atlas Salt is building on a shallow deposit under land rather than water, two kilometres from a deepwater port. Peterson says existing mines are commonly 500 or 600 metres deep, more expensive to develop, and beneath bodies of water that bring permitting and environmental challenges. “That’s one thing no other mine in North America has: the ability to move the product to key markets as easily as we will,” Peterson says. The company describes an all-electric room-and-pillar mine at roughly 180 metres, worked with continuous miners and accessed by decline rather than shaft, with conventional crushing and screening, an enclosed conveyor to port, and no chemical processing, tailings, or waste rock management. The feasibility study outlines approximately four million tonnes per year over a multi-decade mine life, with resource upside beyond the current reserve base. Hatch and Sandvik are engaged on engineering and equipment.
North American de-icing salt market still depends on imports
North America consumes roughly 30 to 40 million tonnes of salt a year and imports eight to 10 million tonnes of it. Peterson says the shortfall has not eased. “Over 30 to 60 years now, or longer, we have always imported salt. We’ve never made enough salt in the North American market,” he says, adding that domestic mines have come offline since the last new mine was built 25 years ago in New York State. Peterson describes the import trade as “essentially moving a bulk commodity like sand or gravel halfway around the world,” where margins are thin. The company characterizes de-icing salt as an essential public safety product, with weather-driven demand and no realistic substitute at comparable cost. The site has existing power and road access, and the deepwater port at Turf Point gives direct marine access to Atlantic Canada, Québec, and the northeastern United States.
Construction underway as financing letters of interest exceed $300 million
Feasibility work, environmental assessments, permits, and community and government engagement are complete, and permanent construction has begun. Contractors are mobilized on site, and site preparation, early works, and infrastructure installation are underway, funded from capital raised over the past year. Financing letters of interest now exceed $300 million of the $589 million in total capital, and the company is in discussions with a commercial bank to complete the syndicate. “The LOIs established the pillars, as I like to call them,” Peterson says. Ahead are collaring the portal, mine drift development, the underground crushing plant, surface infrastructure, and port upgrades, which Peterson calls “key construction milestones over the next three to four years as we advance to operations.”
A long-life operating business on the other side of construction
With construction underway and financing past the halfway mark, Atlas Salt stands at the intersection of domestic supply security and a de-icing market that has never made enough salt for itself. The mine is the means; the long-life operating business on the other side of construction is what the company points investors toward.
Transcript
Transcript lightly edited for clarity
Jim Gordon: Hi, I’m Jim Gordon, and you’re watching Market One Minute. Joining us is Nolan Peterson. He is the CEO and Director of Atlas Salt. Nolan, welcome.
Nolan K. Peterson: Thanks for having me, Jim.
Jim Gordon: It’s a great pleasure to have you. Okay, tell our viewers about Atlas Salt.
Nolan K. Peterson: We are Atlas Salt. We trade on the TSX Venture. We’re developing the Great Atlantic Salt Project. It’s on the west coast of Newfoundland, near a town called St. George’s. We aim to provide de-icing road salt to the North American de-icing road salt market.
Jim Gordon: And Nolan, tell us about the Great Atlantic Salt Project and what makes Newfoundland’s deposit different from other North American salt mines?
Nolan K. Peterson: There are few salt mines in North America that are in production right now. Actually, the last new one that was built was 25 years ago. It was built in New York State. And before that, it was a couple of decades. So there haven’t been a lot of new mines built in North America.
What sets us apart are the key differences between them, as you alluded to. We are a shallow deposit. We don’t sit under any body of water. These are very common traits for existing mines: to be quite deep, 500, 600 metres deep. And, of course, when you’re developing an underground mine, that’s more expensive. They also sit under bodies of water and deal with water permitting issues and environmental challenges.
We are also close to a deepwater port, only two kilometres away. That’s one thing no other mine in North America has: the ability to move the product to key markets as easily as we will.
Jim Gordon: I’m curious about the answer to this next question. I was a little surprised by this stat, but North America still imports millions of tonnes of de-icing salt. I’m curious to hear where we’re getting it from. You’re going to tell me. But where does Great Atlantic fit into that market?
Nolan K. Peterson: It’s interesting you say still, as if it was a situation that could change. But it’s actually gotten worse. Over 30 to 60 years now, or longer, we have always imported salt. We’ve never made enough salt in the North American market. Remember, the last new mine was built 25 years ago. And mines have actually come offline since then domestically, which has increased the need for imports.
And, of course, it’s very expensive to move products into North America. You’re essentially moving a bulk commodity like sand or gravel halfway around the world. The margins just aren’t there for it, right? What we aim to do is come online with some of the traits that I mentioned earlier: proximity to the port, shallow deposit, not underwater, new. We come in with a low-cost, high-margin operation, easy to access into those key markets, the same markets that imported salt is being imported into, at a lower cost, with more reliability, employing Canadians. I mean, that’s where we aim to fit in.
Jim Gordon: And you’re into early works. Talk to our viewers about what’s happening at the site at the present time, and what you’re looking at in the future with milestones you’d like to achieve.
Nolan K. Peterson: Rome wasn’t built in a day, and neither was a salt mine, or any mine. For those that follow the mining industry, there are a lot of steps that need to be hit along the way: feasibility studies, environmental assessments, permits, community relations, government. All of that, I am happy to report, is behind us, which has allowed us to actually start permanent construction operations.
But that starts with site preparation, right? Clearing the trees, clearing the land, levelling, putting in the ditching that will ultimately protect and define the ultimate footprint. So that’s in progress right now. It’s a great season to be doing it in the summer. We’re doing it with some of the money that we raised in the last year, working capital.
Going forward, there’ll be collaring the portal, starting development of the mine drift, and then underground construction of the crushing plant, the surface infrastructure, and port upgrades. All of those will be key construction milestones over the next three to four years as we advance to operations.
Jim Gordon: And with all these plans, financing, of course, is part of the equation. You’ve got financing letters of interest for Great Atlantic now exceeding $300 million. What does that tell investors about the project, that counterparties of this calibre are coming to the table?
Nolan K. Peterson: That’s right. Total capital is $589 million. That’s out of our bankable feasibility study. We’re over halfway there in amassing the support that’s necessary. For a small project, small company like us, although we have grown significantly in the last year, it’s very important to show that this is a project that can be de-risked, can attract that interest, can receive those letters of interest, and then ultimately coalesce it into a final financing package.
The pieces that we put in place right now are, let’s say, the starting points for the bulk financing. And then we go to the banks and other lenders, and they come in and fill in the rest that we’re targeting.
Jim Gordon: Last question for you, Nolan. Between committed financing being finalized, what are the major catalysts moving forward?
Nolan K. Peterson: So the LOIs established the pillars, as I like to call them. You go to the market, and you show this is where the bulk is going to come from. And then you go and you fill in the capstone of that financing, which is to say you go to a commercial bank, which we have. We’re in discussions with them right now, and we say, “Listen, there’s $300 million plus already interested. You’re the last remaining piece. Do you want a piece of this syndicate or not?” And then we finalize it from there. That’s what’s going to be happening over the next few months.
Jim Gordon: Congratulations on the success so far, Nolan. Thank you for joining us.
Nolan K. Peterson: Thank you.
The scientific and technical information contained within this article has been reviewed and approved by Andrew Smith, P.Eng., Atlas Salt Inc.’s Project Director and General Manager for the Great Atlantic Salt Project, who is a Qualified Person, as defined under the terms in National Instrument 43-101.
About Atlas Salt Inc.
Atlas Salt (TSXV: SALT | OTCQX: SALQF | FSE: 9D00) is developing the Great Atlantic Salt Project, a wholly owned, high-purity rock salt project on the west coast of Newfoundland, Canada, uniquely positioned to become North America’s first new salt mine in nearly three decades. The project is expected to produce 4.0 million tonnes of road salt annually for the import-dependent Eastern Canadian and U.S. Northeast markets.
Learn more at atlassalt.com.
