Welcome to the latest edition of the Investing Intel podcast. Today, we have a sponsored deep dive on Atlas Salt, a Newfoundland-based Salt producer capturing market attention in a stable sector.
It’s November 2024 and today’s episode has been produced and disseminated on behalf of Atlas Salt Inc. The full disclosure for this episode can be found in the show notes or at https://valuethemarkets.com/disclosure/atlas-salt-inc.
As we always say, we encourage you to do your own research before making any investment decisions. The information provided is for informational purposes only and should not be considered financial advice.
While this is a sponsored episode, we do not cover companies we do not believe have a good story to tell investors.
Atlas Salt Inc. (TSXV: SALT) (OTCQB: REMRF) is a Canadian exploration company based in St. John’s, Newfoundland. Specializing in salt mining, it emphasizes responsible and sustainable practices. Its flagship project, the Great Atlantic Salt Project, is located in the Bay St. George Basin, strategically positioned within the North American road salt market. With access to essential infrastructure such as the Trans Canada Highway, a deep-water port, and hydroelectric power, the project is preparing to become North America’s first new underground salt mine in over 20 years. Atlas focuses on innovation and efficiency to impact the North American salt market.
Reasons to invest in Atlas Salt stock include:
Premier Asset and Infrastructure
Due to its shallowness, high grade, and location, The Great Atlantic Salt Project is positioning to become a low-cost, long-life producer and the first new underground salt mine in North America in more than 20 years1. Power, roads and a deep-water port surround the deposit, it is close to key markets, and the team will deploy advanced technology in construction and operation to ensure long life and minimal environmental impact.
Financing and Construction Ready
A feasibility study and greenhouse gas (GHG) emissions survey confirm The Great Atlantic Salt Project's viability. This Tier 1 asset focuses on sustainability with low GHG impact. It has passed its environmental assessment with conditions, lined up equipment financing, and started pre-construction. The project is expected to add $4.8 billion to regional GDP2.
Strong Market Potential
Salt demand and price are stable with diversified end markets. Competing mines have aging assets, and international suppliers can be displaced based on cost, significantly shorter shipping distance, greenhouse gas emissions, and security of supply. The company's recent announcement regarding an offtake agreement and JV with a key industry player underscores its ability to capitalize on these advantages.
Winning Team Assembled
Driven by accomplished leader Rick LaBelle, Atlas Salt is in great shape as it advances toward construction. CEO LaBelle has spent over 40 years in mining and was pivotal in establishing a major North American mining contractor as a global underground mine builder. Supporting the CEO is a team boasting extensive operational expertise in mining and a wealth of large-scale project construction experience.
Path to Revenue Fueled by Strategic Offtake
Atlas is on a path to sustainable revenue through a cornerstone strategic offtake with Scotwood Industries, allocating approximately 50% of its production for the Canadian retail market13. This partnership leverages Scotwood’s retail expertise and Atlas’s high-quality, made-in-Canada salt.
This partnership, along with Atlas’s low costs, robust NPV and IRR figures, strong cashflow potential, key partnerships, and green initiatives, positions the company to capitalize on its prime location and drive long-term revenue growth.
Valuation Upside and Growth Potential
SLR Consulting’s Feasibility Study valued the project at over $550 million (after-tax NPV at 8%) with an 18.5% after-tax IRR over a 34-year mine life. As the project progresses and is further derisked, using a 5% discount rate, the valuation jumps to $1.1 billion
Atlas Salt's prospects are strengthened by historical mining industry M&A activity and consolidation in the salt sector. De-risking strategies support an expansion case, offering the potential for increased production, project life and enhanced financial returns.
Once operating, robust economics, strong free cash flow conversion and infrastructure will support potential expansions.
For more information, visit Atlas Salt’s website: https://atlassalt.com/investors/
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