Okay, we're going to go ahead and get started. Good morning, everybody. Welcome to Sidoti's August conference. My name is Daniel Harriman, and I'm an Analyst here at Sidoti. This morning, we're going to get to hear from Atlas Salt. Company trades in Canada under the ticker SALT. We have with us today the company's Chief Executive Officer, Nolan Peterson. We're going to give Nolan about 20 minutes to go through his prepared deck, after which time I'm going to open it up for Q&A for about 10 minutes or however much time that we have. If you do have any questions at any time during the presentation, please feel free to type those into the Q&A box, and time permitting, we will get to as many as we can. Please join me in welcoming Nolan to our conference, and with that, I'll hand it over to you. Thank you for being here. Thanks, Daniel. Thanks for having me, and thank you everybody for attending. I am Nolan Peterson, CEO of Atlas Salt. We are developing the Great Atlantic Salt Project. It's on the west coast of Newfoundland. It's the same type of salt that you would put on your food, sodium chloride. Nothing more special or complicated than that. Our purposes of discussion and our usage of this salt is actually for the de-icing of roads. Very heavy users of de-icing road salt in the U.S. East Coast, the Midwest, Ontario, Quebec, the Atlantic provinces. The biggest buyers of de-icing road salt are cities, communities, municipalities, departments of transportation, and it's a road safety issue, and it's an infrastructure security issue. We depend on this commodity to keep the roads clear of snow in the winter, snow and ice in the winter, and it's a very good market for it. With that being said, North America has not built a new salt mine in nearly 30 years. The last new one was built in 2001, and this has created a situation where there are salt shortages in North America. For the most part, they are addressed by importing salt from foreign jurisdictions. We'll talk about all this in detail. We import about 30%-40% of our salt needs from foreign countries. I'm talking about Canada and the U.S. as one domestic market, because the salt trades across the border in both ways. This has created an opportunity for Atlas Salt to be the first new mine built in nearly three decades. Now, jumping ahead to slide four, which we will spend a fair bit of time on. People often ask me, "Okay, Nolan, sounds like from what you told me, the salt market is great. Shortages. Why is not everybody trying to build a new salt mine to address this shortage of salt?" There are a few salt mines that exist in North America, and you could probably build a new salt mine if you absolutely had to. But the existing mines in North America are very deep. They are about 600 m deep below the surface or deeper to start with, and they also sit under bodies of water. They are also, of course, very old, as we talked about. This creates a high-cost operating environment from the depth, from the age of the asset, the fact that they sit under a body of water, they have to deal with water issues, possibly permitting challenges. And this has created an environment where people look at the existing mines and they say, "I am not going to look for a new salt mine because it is just going to be a mine that I cannot actually develop." Right? It is too deep, too costly, too expensive, permitting will never happen, there will be too much resistance, et cetera. What makes Atlas Salt different? What makes us the only salt mine in North America that is trying to build and will build a new salt mine? Well, instead of being deep, we are shallow. We are shallow, high grade, homogenous and thick. We start at 200 m deep. That means instead of an expensive vertical shaft, which almost every mine in North America has to access their deep deposit, we are a horizontal drift access mine. It greatly reduces the capital cost and capital development time and operating costs as well. We also do not sit under a body of water. We are considered a dry mine. That greatly increases our odds of being permitted, and we will talk about that in a second. There are also safety and operational issues of being under a body of water. There was a mine in 2022 owned by Cargill in Louisiana that shut down because they had a breach of their lake, and it drained into the mine, and unfortunately, also led to loss of life from that. So that has created resistance in communities that have mines around them to expansion or new mines, as I talked about. We do not have to deal with those challenges. So when you start talking about a low-margin commodity like salt and the advantages you need to have a viable deposit, we start to stack up on those, as I mentioned. That is one half of the coin. I am going to jump ahead here for a sec. Salt is a bulk commodity. It is an expensive commodity to move. The final selling price for salt can be 60%-70% shipping and logistics. Our key markets, as I talked about a second ago, are on the East Coast of the U.S. and up and down the St. Lawrence in Canada, and the U.S. as well. And we are on the west coast of Newfoundland, so how do we get our salt to these markets inexpensively? That is the other side of the coin. Starting with the deposit, the shipping and logistics. We are 2 km away from a deep water port in Newfoundland that is open year-round, ice-free, fully permitted, and is in operations today, so we do not need to build a new port. We are going to connect this port to our site via a 2 km-long conveyor system, so we have minimal rehandling, no trucking. Nothing that can delay that, delay the shipping and increase costs. We also have in the region other key infrastructure that is critical to mining development that any other mine would kill to have one of these characteristics. We are 2 km away from a tie-in to the Newfoundland hydro grid. We are 10 km away from the Trans-Canada Highway. We are within the city limits of a town of 1,000 people called St. George's that is fully committed and supportive of this project. Within an hour's drive of this site, we have 50,000 people living. We have labor, we have power, we have access, and we have a port. All of these things help to lower the cost of production and make this a viable project, which we will talk about as well. While we are on the slide, because we are tied into hydro, this site will be 100% battery electric when it is in operations. This has two key advantages. First of all, we will have a essentially zero greenhouse gas footprint. The equivalent of four Newfoundland households of greenhouse gases will be emitted from this site per year. There is no diesel consumed, no drilling and blasting, and no chemical usage or water usage in the processing of the salt, production of the salt. That also means that it is easier to permit. Of course, it has less of an environmental impact on the environmental assessment side, and more importantly, dollars and cents. We will convert one of our largest, one of any mine's largest cost drivers, which is energy, diesel primarily, to hydroelectric power. In Newfoundland, that rate is CAD 0.05/kWh-CAD 0.06 /kWh for industrial users. It has a huge impact on our bottom line, while existing mines in North America, again, are using old diesel equipment primarily and have no margin ability. They are not generating enough cash to be able to switch over and make it make sense to go electric like we will out of the gate. Jumping back, we have got a great mine and a great location. Next step, studies in the mining industry. Good news, we have a completed definitive bankable feasibility study that was published last year in October. That work has already been done. The life of mine average annual free cash flow for that feasibility study was CAD 188 million a year, again, after tax and life of mine. The full life of mine in that feasibility study for our project was 25 years, not five years and high grading, not first 10 years, not looking for more, 25 years. Also, we have 50 years of additional material in resource already defined by drilling. This mine has a potential lifespan of 25-75 years with what has already been confirmed by drilling, and there is more to come as well, more salt available. We know that. If you were to take our resource and convert it into gold deposit at today's prices, it would be the equivalent of about a 20 million-ounce-25 million-ounce gold deposit. This is not small time. This is a very large resource project. Next stage after a feasibility study is the environmental assessment. This is where you are probably thinking, "Okay, Nolan's going to tell us now that they are working through the permits or whatnot." Not the case. We have a completed and released environmental assessment from the province of Newfoundland and Labrador that took 44 days to approve that project. 44 days, six weeks, not six years. We have full community and indigenous support in the region. They all wrote letters of support for this project. We are also in construction right now, active construction at site, acting on that EA and the permits we have received from that. It is a small program right now. We are doing site preparation, detailed engineering, and whatnot in advance of the main project phase. What is holding the main project phase? Nothing right now. We are actually ahead of schedule, but we do need to raise CAD 589 million over a four-year period, not all day one, but over a four-year build time to build this site. We have engaged a group called Endeavour Financial, they are a project finance specialist out of London, to arrange for 60%-70% of that financing to come from senior secured lenders. We already put out news a few weeks ago about the involvement of EDC Canada, Export Development Canada, for about CAD 150 million, and we expect to be able to announce in the near future further financing interest and commitments from other parties in advance of finalizing the financing by the end of this year. At that point, we will look at the remaining cash needs, putting together the plan for that. Sorry, we already have a plan, but starting to understand exactly what those are. There are possibilities for additional subordinate lending, government support, Build Communities Strong Fund, create Canadian jobs, et cetera, and of course, equity, but that will come in time. Let us jump ahead to the salt market, right? Maybe you are intrigued now. "Tell me about the salt market, Nolan." Salt is a global commodity. It trades everywhere on Earth. Every country uses it. Every person uses it daily, of course, in their food. There are many other uses for salt, including chemicals, de-icing, water treatment, but what people do not understand is that salt is not a global commodity in the sense that there is a global trade between all the regions, right? Because salt is so expensive to transport, it creates these small regional markets. North American salt will never trade with China. It simply does not make sense to do that. We instead are a net importer of salt, which I will show you in a second. But within the North American market, de-icing is the largest user of salt. About 30 million-36 million tons a year is used. At full production, we would aim to produce about 4 million tons, so a little over 10%. The salt price has gone up 4% per year-over-year on average for the last 30 + years, and this is expected to increase actually, or at least stay stable on that growth rate going forward. No price volatility like other commodities. The salt market is not going to collapse overnight simply because we cannot bring in enough salt to do so. North America imports about 30%-40% of our salt, as I mentioned, from Chile and Egypt primarily, as well as Mexico, but not into the East Coast that we are talking about. Domestic producers make salt. It is very expensive to produce. Foreign producers make salt. It is very cheap to produce, as you would expect. But the foreign producers have to put that salt onto a boat, and at that point, they are paying global shipping rates. People ask me this all the time, and I simply say, if foreign production was giving their salt away for free, $0, the minute they put it onto a boat, they are still paying more to get it to our shores than Atlas Salt will to get it to those same destinations. That is our structural advantage built by shipping and logistics that we will be exploiting. We are a low-cost producer compared to domestic producers, but we are a low cost of distribution, and it will give us some of the most impressive margins in the industry, which I will show you in a second as well. These are some headlines that show how bad the shortages got in North America over the last winter. The spot price in Ontario tripled overnight. 100 empty trucks sitting outside the largest salt mine in the world, underground salt mine in the world, empty, nothing left to ship. When you rely on a product for public safety, it is one of the worst things. This is what happened and will happen, continue to happen going forward as long as we have a salt shortage. I am going to jump ahead here to the real meat of the argument or the thesis for us. How do you value a company like Atlas Salt? We are the only publicly traded salt development company advancing a salt project in North America. Our market cap or enterprise value is about CAD 200 million, and these are our feasibility study numbers here on the left-- sorry, on the right, but converted into U.S. dollars. The left column there, you will see Compass Minerals. They are the only publicly traded salt-producing company in North America. They trade on the New York Stock Exchange. Their enterprise value is close to $2 billion, and they own the largest underground salt mine in the world in Goderich, Ontario, in Canada. They trade at an enterprise value of 8x EV to EBITDA. Eight, and that is a depressed valuation. If we were in operations today, our EBITDA and free cash flow would be greater than the entirety of Compass Minerals. They observed this year, and they publish their salt prices every year, or every quarter, they observed an 8% year-over-year increase in salt from last year. Normally, as I showed you earlier, the industry gets about 2%-4%, and they exhibited 8%. That has already outpaced our feasibility study number assumption, which was 4%. In the middle there, a private equity group in 2022 purchased the salt-producing assets of a German conglomerate for $3.2 billion, and they paid 13x EBITDA. 13x EBITDA for us would make Atlas Salt a $4 billion enterprise value company, and we are currently trading at CAD 200 million. In December of last year, another private equity group paid $900 million and 17x EBITDA for salt. People should be intrigued by this. Why is private equity, smart money, paying double-digit EV to EBITDA valuations for these assets? Cash flow. It is strong, steady, stable. It's a market that's never going anywhere. You're selling to cities, governments, and municipalities. It's recession-proof, and it's just a fantastic investment if you're focusing on life, long-lived cash-producing assets with very low risk. Now, obviously, we're forward-looking. We need to build it, but that's where we are, and that's the goal that we're chasing. I want to jump ahead here to start talking about the corporate stuff. I joined in June of last year, June of this company, joined this company. In 2019, Atlas Salt made its market debut. It was CAD 0.05. It was public before that, but that's when they got serious about marketing it. The nature of SALT plus COVID, exuberance in the market, it just caught fire. It went to over CAD 4. So gave a lot of people, made a lot of people a lot of money. Fantastic, right? Next stage, building it and advancing it. Unfortunately, they hired a CEO, again, not me, who had never run a public company before. Didn't understand the need to market, didn't understand the need to talk to shareholders, and unfortunately, the share price suffered for that. When I joined, the share price was CAD 0.36, and the day before I joined, 973,000 shares traded total on the TSX Venture Exchange. 973, not 973,000. Yesterday or today, we're at CAD 1.65-ish, so up over 300%, and volumes are about 300,000-400,000 shares a day. Some days, we've hit over 1 million shares. We're just getting started, though. I can't emphasize that enough. Remember, we're working on securing the financing by the end of the year. We have other news sources coming in the next few weeks. We're also in construction right now. It's a very active company, constantly in discussions, and catalysts are coming down the pipe. When a project is financed following the Lassonde curve, it's maybe a familiar concept for those who invest in mining, but it shows the pattern of mining companies. When a project is financed, it can get to 0.3-0.4 P/NAV. Our NAV based on a DCF basis is close to CAD 1 billion, so we're looking at targeting that in the near future when we secure financing. Other things I'll hit quickly, we have 124 million shares outstanding. Currently, total cash in the till, about CAD 17 million, net cash 24. That includes options exercised. We have no warrants overhanging the company. No warrants, only insider options and whatnot. We keep our financings clean, and we have a clean balance sheet. We only have one institutional analyst covering us right now, though we expect that to grow in the near future as well. In the last year, I've raised CAD 25 million for the company. In the 2 5 Years before I joined, the company did not raise a single dollar, and the prospects looked grim for being able to raise any more. In the last year, I've raised CAD 25 million, and more importantly, added institutional support. That's that blue section on these circles here. Last deal was at CAD 1.22 months ago, and we're already up 30 something percent. That was a no warrant deal. So yeah, I would encourage you to take a look at Atlas Salt, understand and get comfortable with us, and diversify your portfolio a bit because I'm pretty sure you probably don't have much SALT in your portfolio right now. Thank you. Happy to take questions now. Thank you, Nolan. I really appreciate that, and we enjoyed the presentation. As a reminder, we do have a little bit of time here, so if there are any questions, please feel free to type those into the Q&A box. Nolan, I want to take a step back if that's okay. I think in the beginning of the presentation, you called out that there hadn't been a new salt mine in North America in about 30 years, maybe. Obviously, we have a lot of investors that may be new to the story here that joined us on the presentation today. Can you just give us a review as to why this deposit makes sense and why you think this deposit will work, when there really hasn't been a whole lot of action in this space in the past 30 years? Yeah. That's a very good question. It's very complicated, but what it comes down to is, if you're a landlocked mine in North America, you're going to want to have a customer base that's close to you. Right? The people who will use your salt are people, and that means you're going to want to be beside a city. Most cities in North America or anywhere in the world are beside bodies of water. Right? Lakes, rivers, or the ocean. In this case, they're beside a body of water, so your mine is going to have to be near that city. There are mines in North America. There's a mine in Cleveland that's actually within the city limits, as an example of this. You just can't build a mine like that anymore in North America or really in a lot of places. People don't want mines near them. That's going to exclude probably around your customers, your ability to build a mine. Now you've got to find a deposit that's outside of that range that can still make money, and if it's deep, that's going to be a challenge. If it's far away, you have to ship it to them. That's expensive. It just reduces the willingness or the desire of people to be looking for these deposits. People don't put on their hard hat, raise CAD 10 million, and say, "I'm going to go look for a salt deposit." They're going to look for gold. They're going to look for silver, something that excites the world and the masses, right? This deposit was found by accident. As you would expect, many industrial minerals are found by accident for the same reason I mentioned. Someone who was looking for oil and gas here. Our chairman and founder, in fact, was looking for oil and gas in the same sedimentary basins, and he found a shallow, high-grade, homogenous, and thick deposit that happened to be beside a port. If it was 10 km away from the port, we do not have this discussion because you cannot get that salt to your end market. Really, when you line it up, a lot of things had to tick every different box, right? It has to be electrified, it has to be close to a port, it has to have a labor force nearby, it has to be shallow, it cannot be underwater. All of these things have to align for this to be a viable mine because if one or two of those are missing in North America, you just cannot make enough money doing it, and there is just not enough or you are going to face too much resistance to trying to make something happen. I often just put it clearly. You could have the biggest, best, most profitable to produce salt mine, like a low-cost producer, but if it is in the middle of Iowa or Nebraska, you do not have a salt mine because you are not going to be able to sell enough of it at any reasonable cost. That is the challenge. That is really helpful. No, that is really helpful. Again, just taking big picture here. I think you are obviously doing some site work now, and would be curious to know what ground conditions are telling you right now, and what are the technical risk that you are watching between now and first production? Yeah. That is actually a very, very insightful question, Daniel Harriman, because a lot of people assume we are an underground mine. They assume hard rock mining, right? Drilling and blasting into granite. Yeah. You will notice here, sandstone conglomerate. This is sedimentary basin, the same type of thing you find oil and gas in. It is soft, it does not have a lot of support. That is the risk that we are looking at the most, but we have designed our access drift to account for that. Instead of this being a drilled and blasted deep hard rock mine, like going into a gold deposit, think of it more like a civil subway construction, encased concrete cylinder that drives down to the deposit, keeps any groundwater out, but also provides stability and support and structure for all the mine workings. When you are in the salt itself, salt supports itself very well. You do not need additional ground support or anything like that. You just need to make sure that the rooms and the pillars are properly designed. But that is what we are seeing right now. Those risks have already been incorporated into our feasibility study. We are not assuming we have competent hard rock ground. We have built that design element in to build that subway tunnel, as I mentioned. Talking about valuation, you spent a little bit of time there on the end on that slide talking about some comparables in the space, and obviously your enterprise value, despite what you have been able to accomplish since coming on as CEO, still remains a very small fraction of the project's NAV. I am just curious, for investors new to this story, what are the milestones that we should really be monitoring to help determine if that gap is able to be filled? Yeah, of course. Well, with any project that you invest in, you are going to want to think about what is standing between today and me getting, me or who I am going to sell my shares to in the future, getting those cash flows, and that is risk, for lack of a better term. Now with many other mining projects, there is permitting risk, there is jurisdictional risk, there is political risk, there is metallurgical risk, there is drilling risk, there is geotechnical risk, et cetera. Funding risk, every project has that. You could have the greatest project in the world, but if you cannot fund it to build it, then you are never going to get the cash flows that are on the other end of that. That is the one that everybody understands the most. For Atlas Salt, that is really the only major risk that is remaining for us. We do not have metallurgical risk. We don't have permitting risk. We don't have jurisdictional risk. We don't have indigenous risk, et cetera. That is the biggest catalyst, right? Because ultimately, as with other projects, any one of those risks could make this a non-viable project. Financing is, of course, what's on the minds of the market. I don't think it's tremendously risky. It's a process that we're working through. This project is eminently financeable. The cash flows are very strong, can support significant amounts of debt, and it's a market where debt is given to these types of assets, right? I talked about the EV to EBITDA multipliers there, and that's how lenders view it as well. Every time you see a double-digit EV to EBITDA, that means the underlying cash flows are also viewed as very stable for lenders as well as investors. I would say that that's probably what the market's looking for the most. I just have to deliver on that and demonstrate to the market that we will achieve that financing, and that's probably the biggest one by the end of the year. If somebody on the call today wanted to finance the whole thing, certainly that would be the only thing that's stopping us from being in full construction right now. How many other projects can you talk to that say that, right? I know many projects that got CAD 100 million-CAD 200 million in the bank, but they've got to get five indigenous groups on board, or they need a government signature on a permit. We have all of that behind us. So it's a little bit different, but that's probably the biggest one. Okay. We got time for one more question, and I'll just follow up to that one. Obviously, I think one of the last slides was talking about how you have a really clean balance sheet, no warrant overhang currently. Then you just discussed the financing, and as that continues to come together, can you just update us on how much equity you think you may still need, and how should investors think about dilution as that financing comes to fruition? Yeah, it's a very good question. We obviously are always cognizant about dilution, always want to be raising any necessary funding along the way, at higher prices. We are targeting 60%-70% of our capital needs, as I mentioned, from senior secured lending. Then there's the opportunity to lay. So that takes us to about, say, CAD 400 million. We already have about, I'd say, commitments, LOIs, for at least CAD 200 million- CAD 300 million of that. Some of it we'll be announcing in the near future as we coalesce to the final number. But let's say we get to about CAD 400 million. So that leaves CAD 200 million left. Again, not all day one, though. We can load up additional subordinate debt, possibly, maybe another CAD 50 million to CAD 100 million. Maybe we get some government funding. We're working on those avenues as well. There are many government sources in the federal and provincial governments in Canada that are looking to support these types of projects. There are royalty opportunities as well that you can monetize. Everything we can, at the end of the day, we might get away with 10%-20%, so CAD 60 million-CAD 100 million or less of equity. The later we can do it at the higher valuations, once we have continued to de-risk the project, dilution can be kept lower and lower. I will say, though, big picture, the cash flows, again, I cannot emphasize how strong they are. I would encourage your viewers to, if they are interested, to check out slide eight off our website and our corporate deck. This gives a projection for the possibility of worst-case scenarios or different scenarios of issuing shares at various prices. It shows even if issuing the most shares possible, once this site is at full production and the debt has been paid off, this supports a CAD 20-CAD 25 share price based on dividend ratios. That is at max dilution that we could conceivably do with a debt package. Anything less than that is a win and a very strong indicator of where this company could go in the future. Wonderful. We have come up on time, but Nolan, on behalf of everybody at Sidoti, thank you so much for taking the time to walk through your presentation today. It is really interesting, and it seems like you guys have a long runway ahead. For those of you in the audience, thank you for joining the presentation. We were not able to get to all the questions in the queue, but we did tick off as many as we could. Nolan, again, just thank you so much for your time today and that information you were able to share. We hope to see you back soon at our next conference. Thank you, Daniel. Thank you, everyone. Enjoy the rest of your day and the conference. Bye, everyone.