Red Moon Resources – Salt Update
333 Duckworth Street, St. John's, NL, A1C 1G9
Telephone: (709) 754-3186 Fax: (709) 754-3946 Email: [email protected]
www.redmoonresources.com
News Release
November 13, 2019
Stock Symbol: TSX.V: RMK
Red Moon Resources – Salt Update
St. John’s, Newfoundland and Labrador: Red Moon Resources Inc. (“the Company” - “Red
Moon” TSX-V:RMK) provides, in response to recent market activity, a recap and update on its
Captain Cook Salt project in Western Newfoundland. The Company acquired a 100% interest in
certain mineral licences covering a portion of the northern Bay St. George Basin in western
Newfoundland in August 2012, as a result of a corporate re-organization of Vulcan Minerals Inc.
(parent company that owns 63% of the outstanding shares in Red Moon). Vulcan retains a 3%
royalty on the lands. The licences included the mineral rights to lands that have potential for
salt, gypsum, potash and other mineral deposits. The Company pursued the exploration for salt
and potash since 2013 through drilling and the utilization of various geologic and geophysical
datasets culminating in the definition of a significant salt resource known as the Captain Cook
salt deposit. In January 2016 Apex Geoscience Ltd. of Edmonton, Alberta completed an
independent National Instrument 43-101 compliant Mineral Resource Assessment report on
the Captain Cook deposit. This is the first mineral resource assessment of the salt deposit. The
report concluded that within a larger salt formation containing in excess of 1 billion tonnes of
rock salt there is estimated to be an Inferred Resource of 908 million tonnes of high purity rock
salt (96.9% salt, using a 95.0% lower base cut-off for sodium chloride which is the common base
level specification for road de-icing salt). A copy of the Report is found on SEDAR
here_https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00033480 .
Having answered the geologic question as to whether an adequate salt resource and grade
existed, the Company undertook research and analysis to fully understand the implications of
having such a salt resource in Atlantic Canada and its prospects for commercial viability. Given
the availability of existing port, road, and energy infrastructure at the Captain Cook site the
question of viability became one of accessing the salt market. The road de-icing market consists
of both a “tendering ” market and a “contract” market . These types o f markets do present the
opportunity for new entrants on a cost competitive basis. Whether a project will be competitive
will depend on, amongst other things, access to the salt distribution system (shipping, ports,
transportation and storage areas etc) to get the salt to the customer. The Captain Cook deposit
333 Duckworth Street, St. John's, NL, A1C 1G9
Telephone: (709) 754-3186 Fax: (709) 754-3946 Email: [email protected]
www.redmoonresources.com
does have close access to existing shipping and port infrastructure in western Newfoundland
which the Company currently utilizes with its production and shipment of 150,000 tonnes of
gypsum in 2019. The location is central to the largest de -icing market in the world with a
consumption of up to 40,000,000 tonnes per year. The North American de -icing market is
dominated by three large producer- shippers but the market is increasingly being serviced by
smaller distributors who are sourcing salt from Africa and other sources. Recent production from
mines in the Great Lakes area has been disrupted due to labour, technical and mine integrity
issues which has allowed more foreign sources of salt to enter the market. This has also been
facilitated by low international bulk carrier shipping rates. As these rates normalize, Captain
Cook’s proximity to market will become a greater competitive advantage. As well, more stringent
environmental emission standards for commercial shipping are coming into effect which will
generally increase shipping costs, again providing an advantage to Captain Cook’s proximity to
market.
After significant research and the consideration of many other factors, the Company concluded
that the potential for market penetration does exist and that the project requires a feasibility
level evaluation to define the most responsible, efficient and cost effective mining method and
production process. Because the salt formation is relatively shallo w with initial mining possible
at depths of 250 to 400 meters, the mine may be accessible by decline ramps instead of vertical
shafts which would provide significant capital and operating cost s savings. The Company
anticipates a budget of $3 million dollar s to undertake that evaluation as additional drill holes
will be required for geotechnical and resource reasons. This budget may be spent in stages to
complete all aspects of the feasibility analysis. As such the Company has been soliciting various
financing sources to obtain that funding. The project has been featured at several international
salt conferences where a key network of contacts in the industry was generated. Significant
progress has been made but that solicitation process continues.
The construction of a salt mine is rare in North America because additional salt demand has been
supplied by foreign sources. The Company considers the investment in a new salt mine to be
attractive for several reasons. The geologic risks related to proving the existence of the ore are
relatively low compared to other typical metal mines. In the case of Captain Cook, salt mines
currently produce from similar rock formations in Nova Scotia and the Magdalene Islands in the
Gulf of St. Lawrence. A salt mine is essentially an underground quarry. No chemical processing is
required and as such there is no resultant toxic tailings. The rock is effectively 100% direct
shipping ore and requires only physical extraction, crushing, screening and loading to a ship. As
well, salt mining is “recession proof” because highways must be d e-iced for safety reasons
regardless of economic conditions. Salt mines can stay in production for a very long time (often
exceeding 50 years) compared to metal mines and thus can provide long term revenue streams
from a commodity that has relative price s tability. Salt prices vary depending on a variety of
factors, location, time of delivery, supply shortages etc. The United States Geological Survey
indicates the value of rock salt to be generally in excess of $ US 50 per ton https://prd-wret.s3-
us-west-2.amazonaws.com/assets/palladium/production/atoms/files/mcs-2019-salt.pdf Based
on the Company’s internal evaluation and given the perceive d market opportunity, the Captain
Cook deposit has the potential to produce two million tonnes per year . No independent
333 Duckworth Street, St. John's, NL, A1C 1G9
Telephone: (709) 754-3186 Fax: (709) 754-3946 Email: [email protected]
www.redmoonresources.com
economic evaluation of the project has been prepared. It would be a critical component of the
feasibility study.
Given this context, the Company continues to seek funding to carry out a feasibility level
evaluation of the Captain Cook project. The evaluation is anticipated to take one year to
complete. Because the Company owns 100% of the project, it has complete flexibility in
structuring a funding arrangement. A recent story regarding the Captain Cook salt deposit was
carried by CBC news at https://www.cbc.ca/news/canada/newfoundland-labrador/newfoundland-salt-
company-fish-1.5351249?__vfz=medium%3Dsharebar
Further information regarding the Company is available at www.redmoonresources.com .
Patrick J. Laracy, PGeo, President is the qualified person responsible for the contents of this
news release as defined in National Instrument 43-101.
Red Moon is an industrial minera ls company developing the Ace Gypsum deposit, the Captain
Cook Salt deposit and the Black Bay Nepheline deposit in Newfoundland and Labrador. Vulcan
Minerals Inc. (TSX.V: VUL) owns approximately 63% of the common shares of Red Moon.
We seek Safe Harbor.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or
accuracy of this release. This release may contain certain forward -looking statements. Actual events or
results may differ from the Company’s expectati ons. Certain risk factors beyond the Company’s control
may affect the actual results achieved. Accordingly, readers are advised not to place undue reliance on
forward-looking information. Except by law, the Company undertakes no obligation to publicly update or
revise forward-looking information.
For information please contact:
Patrick J. Laracy, President
(709) 754-3186
www.redmoonresources.com