Independent Feasibility Study and Expansion Case FOR Atlas Salt’S Great Atlantic Project
TSXV: SALT
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AtlasSalt.com
INDEPENDENT FEASIBILITY STUDY AND EXPANSION CASE
FOR ATLAS SALT’S GREAT ATLANTIC PROJECT
St. John’s, Newfoundland and Labrador, August 28, 2023 – Atlas Salt (the “Company” or “Atlas” – TSXV: SALT)
is pleased to announce the results of a Feasibility Study (FS) and updated Mineral Resource estimate prepared by
SLR Consulting (Canada) Ltd. (SLR) on its 100% -owned Great Atlantic Salt Project ( “Great Atlantic”, or the
“Project”) located in western Newfoundland, Canada. The FS represents a significant economic improvement over
the Preliminary Economic Assessment (PEA), also completed by SLR, released by Atlas January 30, 2023 (all figures
in Canadian dollars).
In addition, SLR 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. This 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.
FS Highlights
Robust economics based on 2.5 million tonnes-per-year production over a 34-year mine life:
Pre-Tax Economics
▪ Internal Rate of Return (IRR) of 23%.
▪ Net Present Value (NPV) at 8% of $1.017 billion (CDN).
▪ Payback in 4.2 years after commencement of operations.
▪ Low-cost production – utilizing a Q3 2023 cost basis of $22.70 per tonne FOB originating port.
Expansion of Indicated Mineral Resources, and first-time declaration of Mineral Reserves:
Updated Mineral Resource Estimate
▪ Indicated Mineral Resources totaling 383 Mt at 96.0 % NaCl.
▪ Inferred Mineral Resources totaling 868 Mt at 95.2 % NaCl.
▪ Probable Mineral Reserves totaling 88.1 Mt at 96% NaCl.
Note: The conversion of Inferred to Indicated Mineral Resources (and subsequent conversion to Probable Mineral Reserves)
has been limited by the target of an initial 34-year mine life. It is anticipated that further upgrading of Mineral Resources to
Mineral Reserves will be carried out from underground during the production phase.
▪ Key elements of the Project are designed to accommodate m ine and processing expansion of up to
4.0 Mtpa and to extend the mine life beyond 34 years.
▪ Great Atlantic would stand out as a low -cost producer and the first major underground salt mine in
North America designed to be accessible by declines as opposed to shafts.
▪ Designed to minimize environmental impact by utilizing electrified equipment.
Mr. Rick LaBelle, Atlas CEO, commented: “ I am thrilled to be joining the Company at this pivotal point in its
history. 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 21 st century in North America,
strategically located in the heart of a robust salt market serving Eastern Canada and the U.S. East Coast.”
Mr. LaBelle added, “ I’m excited to be working with President Rowland Howe, who played such an important
role in the devel opment of the world’s largest underground salt mine at Goderich, and we’re 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.”
Mr. LaBelle concluded, “I look forward to a very busy Q4 as we build momentum and accordingly I expect Atlas
Salt will have much more to announce.”
PRMediaNow Interview with CEO Rick LaBelle:
“I think until today, this project was a trailblazer. After today, it’s a game-changer.” - Atlas Salt CEO Rick LaBelle
discusses this news release with PRmediaNow’s Cyndi Edwards - click on the link below to view.
https://www.youtube.com/watch?v=SNOdVL4d-Nc
FS Technical Summary
Overview
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. Salt would be processed to a specific size and grade
using a crushing and screening plant located within the under ground 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.
Mineral Resources
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and
Mineral Reserves (CIM (2014) definitions) were used for Mineral Resource classification. The updated Mineral
Resource currently includes 383 Mt of Indicated Mineral Resources plus 868 Mt of Inferred Resources. Table 1
provides a summary of the Great Atlantic Mineral Resource estimate prepared by SLR, with an effective date of
May 11, 2023. The results from the January 30 PEA are shown for comparison.
Table 1: Summary of Great Atlantic Mineral Resources
Category Tonnage
(Mt)
Grade
(% NaCl)
Contained NaCl
(Mt)
Jan 30 PEA
Resource Tonnage
(Mt)
Jan 30 PEA
Resource Grade
(%NACL)
Indicated 383 96.0 368 187.2 96.4
Inferred 868 95.2 827 999.4 95.6
Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated without a reporting cut -off grade. Reasonable Prospects for Eventual
Economic Extraction were instead demonstrated by reporting within Mineable “Stope” Optimised (MSO)
shapes, with a minimum height of 5 m, minimum width of 20 m, length of 40 m, and minimum grade of 90%
NaCl, with a 5 m minimum pillar width between shapes.
3. Bulk density is 2.16 t/m3.
4. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
5. Mineral Resources are inclusive of Mineral Reserves.
6. Salt prices are not directly incorporated into the Mineral Resource MSO min imum target grades, however, the
mean Mineral Resource grades exceed the 95.0% NaCl (± 0.5%) specification outlined in ASTM Designation
D632-12 (2012).
7. Numbers may not add due to rounding.
The QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political,
or other relevant factors that could materially affect the Mineral Reserve estimate.
Mining and Mineral Reserves
Mining designs, development plans, and schedules have been prepared for a fully electric, mechanized room and
pillar mining operation. It is envisaged that salt will be mined using continuous miners and hauled by truck to a
lump breaker and conveyor system to move material to a crushing and screening plant located underground. The
FS is based upon the initial production of 2.5 Mtpa of rock salt product with key mine infrastructure capacity to
expand to 4.0 Mtpa. A summary of Mineral Reserves, effective July 31, 2023, is shown in Table 2.
Table 2: Summary of Great Atlantic Mineral Reserves
Category Tonnage
(Mt)
Grade
(% NaCl)
Contained NaCl
(Mt)
Probable 88.1 96.0% 84.5
Notes:
1. CIM (2014) definitions were followed for Mineral Reserves.
2. All Mineral Reserves are classified as Probable Mineral Reserves, with extents limited to the Indicated Mineral
Resource wireframe.
3. Salt prices are not directly correlated into the Mineral Reserve estimate, however the mean Reserve grades
exceed the 95.0% NaCl (± 0.5%) specification outlined in ASTM Designation D632-12 (2012) and based on a
detailed salt market review to determine economic viability.
4. A minimum mining height of 5.0 m and width of 16.0 m were used for production rooms.
5. Sterilization zones 8.0 m below top of salt and 5.0 m above bottom of salt have been applied.
6. A mining extraction factor of 100% was applied to all excavations.
7. Bulk density is 2.16 t/m3.
8. Planned process recovery is 95%.
9. Numbers may not add due to rounding.
The QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political,
or other relevant factors that could materially affect the Mineral Reserve estimate.
The mine will be accessed through two declines driven to 240 Level (nominally 240 m below surface) where the
process plant and related infrastructure will be located. One decline will provide fresh air into the mine and be
used for vehicle access, while the other will exhaust air and contain an overhead conveyor to transport finished
rock salt product to surface. Twin declines will be extended from the 240 Level to the first production level at 320
Level, continuing deeper into the mine as each new production level gets established. The primary mine-related
infrastructure including maintenance shops, vehicle charging bays, and gear storages will be located on the 320
Level.
Internal declines will be developed as necessary to sustain the initial production rate of 2.5 Mtpa over an initial
34-year mine life. A total of seven production levels supported with internal declines and level -specific
infrastructure will be constructed to support mining activities on each level. Room and pillar production mining
will be executed in four cuts of five meters height, resulting in a maximum room height of 20 m. Rooms will be
16 m wide, separated by 25 m square pillars.
All major equipment used in the mine will be battery electric or plugged electric, with minimal diesel-powered
equipment in the mine.
Processing
Processing of the salt will take place at a crushing and screening plant located within the underground mine. The
rock salt produced will be suitable for use as a deicing product, conforming to specification ASTM-D632, with a
minimum NaCl grade of 95% and certain grading sizes. Excess fines produced during the crushing and screening
process will be used within the mine for haulage way surfacing. There are no chemical processes or reagents
involved in the production of rock salt, other than an anti-caking agent that is added to the product immediately
before shipping. After rock salt has been processed, it will be transported to the surface via conveyor belts. On
surface, a series of conveyor belts will transport the rock salt from the mine site to the port.
Infrastructure
The Great Atlantic operation will include both on and off -site infrastructure. On-site infrastructure has been
configured to minimize the mine site surface footprint. Components of the on-site infrastructure include:
• Site terrace
• Lined and covered temporary salt storage area used during initial excavations
• Boxcut and decline access area
• Surface buildings such as administration, warehouse, fuel bay, dry facility, maintenance shop
• Salt storage building and associated material handling system
• Electrical substation and distribution
• Surface water management system
• Gatehouse and fencing
Notably, a tailings management facility is not required for the Project, as all material that is processed will be sold
as rock salt or remain in the mine as fines.
Off-site infrastructure has been designed to take advantage of some of t he existing facilities available in the
immediate area, including the port, historical haul road, and a NL Power electrical substation. From PEA to FS,
the design of elements for the off-site infrastructure have been improved based on discussions with stakeholders.
Planned off-site infrastructure includes the following:
• Improved site access road alignment overland conveyor connecting the mine to the port
• Retrofitting of the existing port facilities to handle rock salt
• Addition of a new building and material handling system at the port to expand the capacity of covered
material storage
• High voltage transmission line connection to NL Power’s substation located in the town
• Sewer and water connection to town utilities
Environment and Community Engagement
Environmental base line studies of the project area have been completed by GEMTEC Consulting Engineers and
Scientists Limited (GEMTEC) throughout 2022 in prep aration for the registration of the project under the
environmental review process. Consultations with local community and affected groups are ongoing. Atlas has
retained the services of an experienced communications consultant to assist and facilitate informed community
input into the project development. With the FS now concluded, Atlas intends to launch into the formal
environmental assessment process.
Marketing and Logistics
As part of the FS, Atlas and SLR have commissioned multiple independent assessments of marketing and logistics.
These independent assessments have formed the basis of the assumptions used in the FS.
Rock salt produced from Great Atlantic will initially target the regional deicing markets in eastern Canada and the
US East Coast. It is estimated that this market requires between 11.0 Mtpa and 16.0 Mtpa of rock salt in any given
year, sourced from domestic and international suppliers, with the demand highly correlated to weather
conditions. The primary customers of rock salt are government entities which use a tender system for the annual
supply of deicing salt. Secondary customers include commercial deicing operators.
Government entities include municipalities, Departments of Transportation (DoT), counties, and other provincial
or state entities, while commercial operators may vary from distribution companies for retail purchase, or
contractors who purchase rock salt for de-icing commercial and private properties.
Cash Flow Model Basis
SLR has prepared a cash flow model that is based on a 34-year mine plan with a production rate of 2.5 Mtpa. It is
noted that the Mineral Resource base will allow for a much longer mine life. The mine schedule includes a three
year ramp up period, with year one production of 1.5 Mtpa, year two production of 2.0 Mtpa, and year three
reaching steady-state production of 2.5 Mtpa.
The cash flow model comprises estimates of capital costs, o perating costs, an assessment of revenue, and
estimate of project economic metrics such as net present value, internal rate of return, and payback period.
Economic metrics were assessed both on a pre- and post-tax basis.
SLR has assumed that pre-construction activities commence in 2024, construction of the mine would commence
in 2025, with salt production commencing in 2028. To bring salt prices to a 2028 base date, SLR has applied a
4.0% annual increase to the price of salt, which is consistent with other publicly available technical reports on
existing salt operations in North America. Beyond 2028, SLR has applied a 2.0% annual increase to the price of
salt. In terms of costs, SLR has applied 2.0% annual inflation to capital and operating costs. SLR has also applied
a 2% premium to prices every fifth year, to account for volatility in the rock salt markets due to weather events.
Capital Costs
Capital costs for the Project have been estimated based on first principles build ups, factored estimates, and
quotes for major equipment and supplies. The capital cost estimate conforms to an AACE Class 3 estimate, as
of the third quarter (Q3) of 2023. Capital costs are divided between pre -production capital (representing
years leading up to salt production) and sustaining capital. Costs are divided into areas including mining,
processing, infrastructure, off-site infrastructure, indirect costs, owner’s costs, and contingency. The capital
cost estimate is presented in Table 3.
Table 3: Capital Cost Estimate – Initial 34 Year Production Plan
Direct Cost Amount (C$ '000)
Mining 151,646
Processing 39,352
On-Site Infrastructure 46,437
Off-Site Infrastructure 64,522
Total Direct Cost 301,958
Other Costs
Indirect Cost 71,121
Owners Costs 34,154
Subtotal Costs 407,232
Contingency 72,898
Initial Capital Cost 480,130
Sustaining 599,930
Reclamation and closure 30,246
Total Capital Cost 1,107,222
Notes:
1. Capital costs include escalation.
Operating Costs
Operating costs for the Project have been estimated based on first principles build ups, estimations of labour
quantities and remuneration, productivity, and consumption assumptions. The operating cost estimate is as of
Q3 2023. Operating costs are divided into disciplines including mining, processing, general and administration,
and port operations. SLR has assumed that the port would be owned and operated by a third-party and accessible
based on commercial terms. The operating cost estimate is presented in Table 4.
Table 4: Operating Cost Estimate
Area
LOM – Initial 34
Year Plan
(C$ ‘000)
Unit Costs with Q3
2023 Basis
(C$/mt shipped)
LOM Unit Costs
(C$/mt shipped)
Mining 1,532,637 11.71 18.32
Processing and Material Handling 1,087,987 8.34 13.01
General and Administration 345,763 2.65 4.13
Total 2,966,386 22.70 35.46
Notes:
2. The columns LOM (life of mine) – Initial 34 Year Plan, and LOM Unit Costs include escalation.
Pricing and Revenue Assumptions
SLR has assumed a weighted average price of rock salt based on a market analysis review completed by a third-
party, as well as taking into consideration the shipping and logistics costs of getting the salt to destination ports.
SLR’s revenue analysis is based on pricing FOB Turf Point and is based on Q3 2023. The Project is subject to a
royalty payable to Vulcan Minerals Inc., in the amount of 3% of net production revenue. A summary of revenue
assumptions is presented in Table 5.
Table 5: Summary of Revenue Assumptions
Price Forecast (FOB Turf Point) Value Units
Q3 2023 Base Price 72.24 C$/mt
Year 1 Sales Price 87.90 C$/mt
LOM Sales Price 124.86 C$/mt
Economic Outcomes
The resulting economics of the Project including net present value (NPV) and internal rate of return (IRR) are
presented in Table 6. Results from the January 30 PEA are shown for comparison purposes.
Table 6: Summary of Economic Outcomes – Initial 34 Year Production Plan at 2.5 Mtpa
Metric Units Value January 30 PEA
Pre-Tax Payback Period yrs 4.2 4.2
Pre-Tax IRR % 23% 22.1%
Pre-tax NPV at 5% discounting C$ '000 1,900,081 1,627,736
Pre-tax NPV at 8% discounting C$ '000 1,017,038 909,338
Pre-tax NPV at 10% discounting C$ '000 681,292 620,247
Post-Tax Payback Period yrs 4.8 5.0
Post-tax IRR % 19% 17.3
Post-tax NPV at 5% discounting C$ '000 1,145,765 920,320
Post-tax NPV at 8% discounting C$ '000 599,926 481,900
Post-tax NPV at 10% discounting C$ '000 386,682 304,935
It is noted that all calculations of NPV and IRR assume an initial capital spending period of four years. The
payback period calculations have a base date of the commencement of operations.
Expansion Case To 4 Million Tonnes Per Year Production
In addition to the FS Case of 2.5 Mtpa, SLR has prepared a Preliminary Economic Assessment for a scenario
comprising expanded production at a rate of 4 Mtpa. The mine plan for the PEA is based upon extraction of
193 million tonnes, consisting of the Mineral Reserves defined in the FS plus Indicated and Inferred Mineral
Resources from 320 level to 530 level. The mine life is 47.5 years, with significant unmined Inferred Resources
remaining.
The mining designs contained in the PEA are based, in part, on Inferred Mineral Resources. Approximately
46% of the mine plan is based on Probable Mineral Reserves, with the remainder being Inferred Mineral
Resources. Inferred Mineral Resources are conside red 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 PEA is based will be realized.
The major differ ence from the FS case is the addition of three more continuous miners (total of five plus a
roadheader) and up to seven additional haul trucks. In the pre -production and early years of production,
development is accelerated in order to access more workplaces.
The results of the PEA economic analysis are shown in Table 7.
Table 7: Expansion Case Results Summary
Item Units Expansion Case
Reserve Tonnes Mined Mt 88
Inferred Tonnes Mined Mt 105
Total Tonnes Mined Mt 193
NaCl Grade % 95.5
Mine Life Years 47.5
Total Net Revenue1 C$ millions 24,754
Total LOM Operating Cost1 C$ millions 4,885
LOM Unit Operating Cost C$/tonne 34.45
Initial Capital Cost C$ millions 480
Expansion Capital Cost C$ millions 101
Sustaining Capital C$ millions 1,446
Reclamation and Closure C$ millions 39
Total Capital C$ millions 2,063
Pre-Tax Cashflow C$ millions 17,803
Payback Years 4.2
Pre-Tax IRR % 28
Pre-tax NPV at 5% C$ millions 4,095
Pretax NPV at 8% C$ millions 2,015
Pretax NPV at 10% C$ millions 1,320
1. All costs and revenue are escalated from Q3/2023. Revenue is escalated at 4% per year to 2028 and
2% per year thereafter. Operating costs are escalated at 2% per year.
Next Steps
Upon completion of the FS, Atlas intends to release a supporting NI 43-101 Technical Report filed on SEDAR within
45 days of this news release. Other ongoing work towards advancing the Project includes the following:
• Ramp up of owner’s team to advance the next phases of engineering
• Initiation of formal environmental approvals process
• Review of recommended field programs that could further de-risk the project
• Continued engagement with stakeholders and First Nations groups
• Ongoing discussions with potential vendors and suppliers