Atlas Salt TSXV:SALT remains on our venture list, a TSXV listed small cap stock which still could have massive prospects if management plays its cards right. The company is developing a major Canadian salt resource in Newfoundland, which can deliver cheaper salt into the North American market.
The project moved forwards last month with the completion of detailed modelling and simulation of the gigantic mine’s equipment requirements. This stretched to more strategic issues like port capabilities. An independent verification process carried out by SRK Consulting has de-risked the project, confirming that existing equipment and material handling system can achieve sustained production rates.
The review has helped to support the projections which Atlas Salt made in its initial Feasibility Study. SRK used a discrete event simulation model for the Great Atlantic Salt Project using Arena software which has provided management with options for operational efficiency and reduced execution risks.
Management confirmed last month that “further work is ongoing” and said another update will be provided soon.
What we liked about Atlas Salt
Atlas Salt used to trade as Red Moon Resources. When we first spoke with the management team we were amazed to find out just how much salt for prosaic purposes like road gritting in Canada and the US actually gets shipped in from as far away as South America. We are not talking about artisanal salt here, but bulk, one time use salt.
North America continues to see a severe shortfall in road salt in the north-eastern regions, which are typically gripped by icy weather in the winter. Great Atlantic will represent the first new North American salt mine in more than 20 years and will be the only one that is electric-based and accessible via ramps, rather than vertical shafts.
Conservative assumptions made by Atlas Salt’s PEA provided evidence for a low cost producer of salt. It is sitting on potentially over a billion tonnes of salt.
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Generational investment for Newfoundland
An Economic Impact Report published by Jupia Consultants in July called the Great Atlantic Salt Project “a generational investment” for Newfoundland, which could bring in substantial economic benefits for the province, including sustaining literally hundreds of high-paying jobs. It is also expected to boost mining investment in both Newfoundland and Labrador.
Atlas Salt is also the largest investor in Triple Point Resources, which is a company formed from the spin out of Fischells Salt Dome from Atlas Salt. Triple Point is a potentially game changing strategic project to store hydrogen in salt domes. It is currently in the process of conducting geotechnical studies of the salt dome to assess its suitability for hydrogen storage.
Fischells Salt Dome looks increasingly like it can fit the bill for massive hydrogen storage. The stiffness and tensile strength results surpass typical salt formations, with an average tensile strength of 2.70 MPa. This is significantly higher than the tensile strength for Gulf Coast salts (1.4 MPa).
Management at Triple Point said the results were “a significant milestone” in the overall project development at Fischells Salt Dome, delivering important new insights into the characteristics of the salt caverns.
