Atlas Salt (TSXV: SALT) is reporting a net present value with an 8% discount of $1.017 billion for its Great Atlantic Salt project based on a feasibility study conducted by SLR Consulting. The figure is presented on a pre-tax basis.
The study, which predicts an internal rate of return of 23%, also on a pre-tax basis, is based on 2.5 million tonnes of production per year over a 34 year mine life, resulting in a payback period of 4.2 years. Production is stated to be “low-cost” with an estimated production cost of $22.70 per tonne FOB originating port.
These figures are based on a Q3 2023 base price of $72.74 per tonne, a year 1 sales price of $87.90 per tonne, and a life of mine sales price of $124.86 per tonne.
In conjunction with the feasibility study, the company has managed to upgrade its mineral resource estimate, which now stands at 88.1 million tonnes of probable mineral reserves at 96% NaCl, 383 million tonnes of indicated resources at 96.0% NaCl, and 868 million tonnes of inferred resources at 95.2% NaCl.
Capital costs for the project are estimated at $1.1 billion, of which $0.5 billion is allocated to initial capital costs.
READ: Atlas Salt Conducts 4 Hole Drill Program For Feasibility Study
The potential for expansion also exists, with the study based on accommodating a mining and processing expansion of up to 4.0 Mtpa, with an extension of the proposed 34 year mine life.
“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,” commented CEO Rick LaBelle.
The proposed expansion is presented as a preliminary economic assessment, which would see the mine life extended to 47.5 years, with the PEA based largely on the extraction of probable and inferred resources. The PEA suggests a $2.015 billion NPV(8%), and a pre-tax IRR of 28%.
The company has indicated it intends to ramp up the next phases of engineering and initiate formal environmental approvals as its next steps.
Atlas Salt last traded at $1.40 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
