Atlas Salt Enters MOU For Salt Production Offtake And Joint Venture
Atlas Salt (TSXV: SALT) has taken a major step forward in the development of its Great Atlantic Salt Project. The company has entered into a non-binding memorandum of understanding for a salt production offtake agreement as well as for a joint venture for the distribution and sale of packaged salt and related products in Canada.
The MOU was entered into with Scotwood Industries, the largest packaged retail de-icing distributor in the United States. Scotwood is said to have a customer base that including leading big box mass merchandisers, as well as retail chains in the farm and home, grocery, hardware, and automotive industries.
“Since I joined the Company, I’ve been focused on opportunities in the retail market, where supply is more predictable, and margins are generally higher. Atlas is excited to work with Scotwood Industries, the largest packaged retail de-icing business in the United States, on a mutually beneficial strategic offtake and joint venture to provide tailored packaged salt solutions for the Canadian marketplace, by leveraging Atlas Salt’s high-quality, made-in-Canada salt and Scotwood’s brand strategy, industry expertise and reputation for superior customer service,” commented Rick LaBelle, CEO of Atlas Salt.
The MOU, which does not include the sale of bulk road de-icing salt, excludes the provinces of Newfoundland & Labrador, Nova Scotia, New Brunswick, and Prince Edward Island, except for retailers that Scotwood has existing relationships with and certain national accounts.
READ: Atlas Salt Reports Pre-Tax $1.0 Billion NPV(8%) For Great Atlantic Salt Project In Feasibility Study
The arrangement is said to target annual sales volumes of salt in the range of 1.25 to 1.30 million tonnes per year, with all such salt to be sourced from Atlas Salt’s project. The associated joint venture is expected to see the sharing of management and profits equally after the recovery of reasonable costs.
Both Atlas Salt and Scotwood are expected to work exclusively together to now negotiate binding agreements to establish the strategic offtake and joint venture agreements.
Atlas Salt last traded at $0.65 on the TSX Venture.
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