Armchair Trader pick Atlas Salt [TSXV: SALT] has announced the results of a Feasibility Study and updated Mineral Resource estimate on its 100%-owned Great Atlantic Salt Project, located in western Newfoundland, Canada. Atlas said the FS represents a significant economic improvement over the Preliminary Economic Assessment, released by the company in January of this year.
In addition, SLR Consulting in Canada has also provided an expansion case to 4.0 million tonnes per year (Mtpa) of road deicing salt over a 47.5-year mine life presented at a Preliminary Economic Assessment (PEA) level analysis. Atlas Salt is already recognised as one of, if not THE premier cheap salt resource for eastern Canada and the NE United States.
The FS demonstrates a robust upside production scenario with a pre-tax net present value (NPV) at 8% of $2.015 billion (CDN) and a pre-tax IRR of 28%.
The expansion case is based on Probable Mineral Reserves, with the remainder being Inferred Mineral Resources. Inferred Mineral Resources are considered too geologically speculative to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the production forecasts on which the expansion case is based will be realized.
“The Independent Feasibility Study is a major milestone on the path to the development of the massive high-grade Great Atlantic deposit which will stand out as the salt mine of the 21st century in North America, strategically located in the heart of a robust salt market serving Eastern Canada and the U.S. East Coast,” explained Rick LaBelle, the new CEO of Atlas Salt.
LaBelle said the company is in the midst of assembling a top-notch team to get the job done at Great Atlantic. The expansion scenario underscores how there is substantial additional room to optimize an already strong Feasibility Study. “We have de-risked this project and we will maximize the value of this unique, transformative asset for shareholders in an investor-friendly way,” he said.
How is Atlas going to mine salt at Great Atlantic?
The FS considers developing Great Atlantic into an underground operating mine capable of producing 2.5 Mtpa of rock salt with key mine access and plant infrastructure designed for 4.0 Mtpa. Construction of the mine would occur over three years, with access to the deposit via twin declines. Extraction of rock salt would occur using the room and pillar method, with continuous mining equipment.
Great Atlantic would be the first underground salt mine in North America accessed through declines as opposed to vertical shafts which greatly reduces capital cost and maximizes flexibility in ramping up production. It is environmentally friendly, and will be the most state-of-the-art underground salt mine in North America and one of the few that is electric-based.
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Salt would be processed to a specific size and grade using a crushing and screening plant located within the underground mine, and then brought to surface via conveyor belts. An overland conveyor would transport the rock salt from the mine area to the existing Turf Point port for loading onto ships destined for Canadian and American markets.
The FS builds upon the January 30, 2023 PEA and will form the basis for environmental licensing and permitting and the next phase of engineering design.
