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Independent Feasibility Study and Expansion Case FOR Atlas Salt’S Great Atlantic Project

Economic Studies

TSXV: SALT

333 Duckworth Street, St. John's

NL, A1C 1G9

Telephone: (709) 754-3186

Fax: (709) 754-3946

AtlasSalt.com

[email protected]

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