$57M Market Cap vs an $80M Royalty + $46M of Stock. (that stock is a great setup of its own)
A better way to play Atlas Salt.
Updated August 9, 2026: market data as of August 7, balance sheet figures as of March 31, 2026. Originally published May 16, 2026.
I found a way to get exposure to the Atlas Salt opportunity with a better risk/reward ratio. Of course, I put my money where my mouth is on this thesis; it’s now about 10% of my portfolio (ex-Atlas Salt itself).
It’s just basic math drowned in obscurity. Almost nobody who knows Atlas Salt even knows this other company exists.
Of course, Great Atlantic Salt still has to be built.
If you have no idea what I am talking about, start with my full Atlas Salt deep dive. It is the foundation for everything that follows here.
It came to me just as I was falling asleep. The idea felt like a eureka moment. But it quickly felt so obvious that it became suspicious.
I spent half the night checking whether I was missing something. And no, I was not. I had found a better way to play the same setup.
This is the joy of microcaps. Alpha is common. It is just extremely well hidden.
This time, it will not take 40,000 words. Just 8,000. The setup rests on Atlas Salt, with one structural subtlety that changes everything.
The alpha here is Vulcan Minerals, listed as VUL on the TSX Venture Exchange and VULMF on the OTC market in the United States.
Yes, this is the company that owns a 3% net production royalty on Great Atlantic Salt.
The setup is simple.
Vulcan is a C$57M market cap company. The present value of its royalty is about C$80M under the UFS (Updated Feasibility Study) assumptions.
Not enough?
Vulcan has no debt and about C$4.09M of cash.
Still not enough?
Vulcan owns about 24% of Atlas Salt, worth C$46M at today’s market price.
The equation is almost offensive:
Vulcan’s C$57M market cap = C$46M Atlas stake + C$4.09M cash + a royalty worth about C$80M under UFS assumptions, and likely more if my Atlas thesis is right.
In situations like this, there is always noise. And in microcaps, noise has a habit of becoming the economics.
1. What Vulcan is
Since its first listing in 2001, Vulcan Minerals has never generated positive annual free cash flow, and it has reported positive net income only once. In 2021, when Atlas went public, Vulcan lost accounting control of Atlas and recognized a large non-cash gain on deconsolidation.
The accounting looks messy, but that’s baked into the business model.
If you read the annual financial statements, Vulcan Minerals is an exploration company “engaged in mineral exploration on properties in Newfoundland and Labrador.”
Its model is fairly simple: acquire and explore mineral ground, then try to move the asset forward through a partner, an option, a sale, or, in Atlas’s case, a dedicated vehicle in which it kept both equity and a royalty.
It is a prospect generator with a habit of leaving itself a back-end claim.
Atlas Salt is the only real success of that model. And to be fair, it is a good one. This type of serial explorer only needs one real success to compensate for decades of value destruction.
You can see it on the first real slide of Vulcan’s investor presentation. The company mentions its own name, then immediately Atlas Salt.
Atlas Salt is trying to build the first new salt mine in North America in a generation. Vulcan is the company that explored it, kept a large equity stake, and retained a 3% royalty on it. Simple, but not easy.
2. The Rest of the Box
Before getting to the two assets that actually matter, it is worth emptying the rest of the box.
As of March 31, 2026, Vulcan had C$41.51M of total assets. The Atlas Salt investment accounted for C$34.02M of that. Remove it, and the remaining balance sheet is C$7.49M:
C$4.09M of cash,
C$52k of receivables,
C$15k of prepaid expenses,
C$420k of investments,
C$2.9M of exploration and evaluation assets, and
C$20k of equipment.
Against that, Vulcan had C$107k of current liabilities and a C$2.47M deferred tax liability.
I keep it simple: cash gets full credit; non-cash current liabilities net of non-cash current assets are deducted; and every non-cash asset outside Atlas is assigned 0 value.
Some of these assets may be worth something. I simply do not want to stack assumptions for a few million dollars of possible Net Asset Value (NAV).
The Easy Part
Start with liabilities.
At March 31, 2026, Vulcan had no long-term debt and no off-balance-sheet arrangements. The only live operating liability was C$107k of accounts payable and accrued liabilities. Against that, Vulcan had C$52k of receivables and C$15k of prepaid expenses, leaving C$40k of negative non-cash working capital (the only advantage of having no revenue).
The only large liability is the C$2.47M deferred tax liability. That belongs in the NAV and realization math. The tax note points mainly to the accounting/tax gap on the Atlas associate investment, partly offset by tax attributes such as losses and exploration pools. The cash drag should mostly appear when Vulcan realizes value, especially through a sale of Atlas shares or other taxable income. Until then, it is a tax shadow over value realization.
One old overhang also disappeared. The Geophysical Service Incorporated claim, a legacy lawsuit started in 2014 over geophysical data, was discontinued in 2025. Vulcan had always said the case had no basis or merit. Whether or not the market ever assigned value to that risk, it is now gone. So the liability stack is basically payables + deferred tax.
Then there is cash.
Vulcan had C$4.09M of cash at March 31, 2026. That is the real asset outside Atlas. It reduces the probability that the parent company has to finance itself at a bad price while Atlas is still moving through financing and development.
Having no revenue creates a lot of problems, especially when it comes to funding the company itself (surprise, surprise), and Vulcan remains an exploration company with public-company costs. The C$4.09M of cash will be used to pay for all of that.
That is the clean part of the box. Cash is cash, payables are payables, and deferred tax is a future claim on realized value. You do not need much imagination to mark any of them.
The rest requires some.
The Harder Part
From here on, I assume everything is worth 0 (I have no imagination, or I'm just very conservative, your choice).
Investments
The investment line is small enough to ignore, but messy enough to mention.
At March 31, 2026, Vulcan carried C$420k of investments. Only C$28k was disclosed as public-company securities. The rest, C$392k, was Triple Point Resources, a private company that also sits in the Atlas family tree.
The Triple Point position is a private stake in Fischell's Brook, a salt dome that could be used for underground storage one day. That may become interesting if the storage market becomes financeable. But “may become interesting” is not a valuation method. Vulcan no longer accounts for Triple Point as an associate and concluded that it no longer had significant influence as of November 30, 2024.
The small securities bucket is not going to move the valuation either, but the Gander/Sassy arrangement shows how Vulcan tries to monetize ground outside Atlas: option the asset, take some cash or shares, keep a residual royalty where possible, and let someone else fund the work.
Vulcan optioned its Gander Belt Gold property to Sassy, which later assigned the option to Gander Gold. In 2025, the option payment was amended: instead of making part of the original cash-and-share payment, Gander Gold was supposed to issue Vulcan 1M shares by November 11, 2025. The August 2025 release said that, after receiving those shares, Vulcan would own 1.17M Gander Gold shares, plus 0.8M Sassy shares. As of today, Vulcan says the 2025 Gander Gold shares still have not been received, and discloses only 0.2M Sassy shares and 0.18M Gander Gold shares received under the option, plus another 0.6M Sassy shares from a separate purchase-and-sale agreement.1
This is exactly why I do not want to take any of these assets into account for the valuation. In microcap exploration partnerships, there are hidden “ifs” in every corner, ready to destroy value at the slightest opportunity.
The back-end economics matter, too. After Sassy earns 100% of the Gander property, Vulcan can retain a 3% NSR (Net Smelter Return), and Sassy has the right to buy back half of it for C$2M in cash and 0.5M shares within one year after delivering a feasibility report on any deposit advanced on the property.
Then there is the exploration portfolio.
Exploration Portfolio
The balance sheet carries C$2.90M of exploration and evaluation assets. It is just accounting value. Vulcan had 24 active mineral licenses in good standing at March 31, 2026, covering 973 claims, with 4 licenses and 165 claims optioned to Sassy / Gander Gold.
During 2025, Vulcan added C$255k to exploration and evaluation assets, received a C$137k Junior Exploration Assistance grant that was deducted from the relevant project’s carrying value, and wrote down C$40k of costs where management decided no further exploration would be undertaken.
There is real geological smoke in the portfolio (but I still give it 0 value):
Colchester/Springdale is the only non-Atlas exploration asset worth more than a footnote. It has old copper workings, a historical copper estimate that is not NI 43-101 compliant, and recent Vulcan drilling that returned real copper-gold intercepts at McNeilly.2 That is enough to keep it on the radar, and probably makes it the harshest 0 in the residual portfolio.
Red Cross Lake is earlier-stage. It is a nickel-copper-cobalt-gold target in central Newfoundland, built around an intrusive body that could, in theory, host sulphide mineralization.3 In 2025, the work was still preparatory: checking the ground, improving access, and cutting trails for a future drill program. In plain English: there are only targets.
South Voisey’s Bay is simpler from a cash-budget perspective. It is a nickel-copper-cobalt project in Labrador, across three licenses and 30 claims. No work was carried out in 2025. For now, it is inventory.
Carbonear is the project that eats cash. It is a sediment-hosted zinc-lead target with additional gold and metallic geochemical anomalies. Vulcan completed a soil program in 2023, a gravity survey over the Gull Pond area in 2024, and field work in 2025. In early 2026, the company completed one hole of a planned 6-hole drill program before deferring the rest because of weather-related access issues. Drilling resumed in June and the remaining five holes were completed in July, 1,087m in total (visual mineralization in every hole, assays pending). That makes Carbonear relevant for cash burn, even if it remains irrelevant to NAV for now.
These assets come with required work obligations, but the amounts remain modest. The latest MD&A estimates C$490k of required expenditures over the next nine years to maintain the current licenses, including C$152k in 2026 and C$133k in 2027. That is manageable against C$4.09M of cash.
Then comes the spending that management actually controls. Here, the numbers start to become more meaningful. The entire expense side of the thesis will be built from small cost lines like this, which eventually translate into the microcap investor’s best friend: dilution.
So this is the rest of the box. It is not worthless, but it is easier to treat it as if it were.
Beyond that, I am happy to be surprised.
Until then, the cost of carrying that optionality is the price of admission.
3. The Cost of the Wrapper
The residual assets can be valued at 0 in the NAV, but they still sit inside a public exploration company.
Vulcan pays people, keeps claims alive, attends conferences, files financial statements, pays auditors and lawyers, carries an office, markets the story (or tries to), and grants options.
Once every non-cash asset outside Atlas is marked at 0, the analysis becomes simpler: Vulcan is a cash bridge.
Two questions matter before getting to the Atlas stake and the royalty.
First, how much cash does Vulcan need before the Atlas bet can start paying?
Second, how does it fund that gap, and at what cost to shareholders?
From there, we can move directly to its Atlas exposure, and then to Vulcan’s valuation.
The Cash Cost of Survival
With basically no revenue, the P&L is a bad place to stop, but a useful one to start.
Vulcan reported a C$2.57M net loss in 2025, but that number included a C$1.29M dilution loss on Atlas and a C$1.00M equity-accounted loss from Atlas. This is the accounting cost of Vulcan’s Atlas exposure outside the royalty.
It is useful, but it does not answer the question I care about here: how much money leaves Vulcan before the royalty starts paying?
Here's the cash spend by the management since 2023.
Excluding Atlas share purchases, Vulcan’s actual cash cost of staying alive has been about C$0.8M to C$1.0M per year.
The 2025 improvement came mostly from lower exploration spending, but it was partly offset by a higher cost base. G&A and directors’ fees rose from C$601k in 2024 to C$791k in 2025, before C$180k of expensed share-based compensation. Salaries and cost recoveries, professional fees, travel, marketing, and directors’ fees all moved higher.
Then 2026 came. In the first quarter alone, Vulcan's cash balance fell C$416k. Strip out the C$43k of option proceeds and the cash cost was C$459k, already net of a C$48k grant. Exploration took C$252k of it. Exploration costs have historically been very lumpy within a given fiscal year, and a single quarter will typically carry the bulk of the year's drilling costs. Not this time. That C$252k was one hole. Vulcan drilled the first one at Carbonear over the winter, stopped when the access road closed, and went back in June for the remaining five: 1,087m, finished July 21. Those bills land in Q2 and Q3. At the C$295/m4 McNeilly ran in December 2024, Carbonear’s remaining 1,087m put 2026 at C$1.2M to C$1.5M with overhead, half again to double 2025.
For a C$57M market cap company without revenue, this is not small. This brings us to the main problem with this setup: this is not a shareholder-friendly wrapper.
Beyond his salary and share-based compensation, Patrick Laracy, Vulcan’s President and CEO, is paid by the company in two ways:
First, his services are provided through Triassic Properties Ltd., a corporation he controls, under a management consulting agreement at C$165k per year. The older employment agreement also contains a C$330k termination or change-of-control payment.
Second, Vulcan pays rent to a corporation controlled by the CEO. That rent rose from C$36k in 2024 to C$48k in 2025.
There is no hidden accusation here. The arrangements are disclosed, and they may be perfectly normal for a microcap explorer. The issue is more basic: the President and CEO of the company whose shares I may own for years, perhaps decades, has both the incentives and the ability to capture some shareholder value along the way. Some through cash, some through dilution, as we will see just below. Either way, it belongs in the valuation.
Two small cash offsets soften the burn.
The first is interest income. Vulcan earned C$275k of interest in 2024 and C$127k in 2025. That is not trivial, but it is self-liquidating. As the cash is spent, used to defend the Atlas stake, or reinvested in exploration, the subsidy fades. Rates can change the picture, of course, in both directions.
The second is the small non-Atlas income bucket. Vulcan recorded C$64.8k of option-payment income in 2024, 0 in 2025, and C$3.2k of royalty income in 2025. There are also potential back-end royalties on assets like Gander, including a possible 3% NSR if the option conditions are eventually met. For now, this category is trivial.
Vulcan needs between C$0.8M-C$1.6M per year to stay alive. With no operating business, every funding source ultimately comes from the same place: shareholder value.
The Shareholder Cost of Survival
Vulcan’s share count tells the usual junior-explorer story, at least until 2021.
Sep. 30, 2019: 61.4M basic shares outstanding.
July 2021: 105.6M.
The dilution mostly came from the way Vulcan had to stay funded: repeated low-priced treasury issuances, then the 2021 Sprott financing, which added 10.0M shares at C$0.20 for C$2.0M (with C$0.30 warrants attached).Oct. 31, 2025: 129.3M.
April 2026: 129.9M.
Yes, Vulcan diluted shareholders. At a C$57M market cap, that is usually the business model.
As of the April 2026 MD&A, Vulcan had 129.9M voting shares outstanding, 7.45M options outstanding, 6.175M options already vested and exercisable, and no warrants. The current options represent about 5.7% of the basic share count. Full exercise would bring in roughly C$1.6M before costs, enough to fund maybe 1-2 years of survival under the current burn profile.
That cash arrives in the winning case, but so does the economic cost.
Vulcan’s option plan is a rolling 10% plan: at any grant date, the option reserve cannot exceed 10% of the issued and outstanding share count.5 It allows terms of up to ten years, and management has used that full duration before. Director options issued in January 2022 at C$0.30 expire in January 2032. The April 2026 grant follows the same logic: 2.55M options at C$0.23, again with a 10-year term. That ties up “scarce” option capacity for longer. Management still chose the 10-year claim: fewer future grants available, but today’s strike locked across Atlas financing, construction, ramp-up, and the first royalty window.6
In plain English, management seems to expect Atlas to reprice Vulcan, and chose to lock in part of its option capacity now, before that repricing happens.
If management is right about Atlas, and I think they are, those options could become very valuable. Good for them. But what about shareholders?
Options can be fine when they buy competence. A charitable reading is that Vulcan’s option grants can be seen as payment for past exploration work, the original Atlas spin-out, and the fact that management did leave Vulcan with both a large Atlas stake and a royalty. That work created value.
The less charitable version is uglier. Management is reserving a larger claim on the future Vulcan value before minority shareholders get paid. This is another friction between shareholders and insiders.
The last problem is when Vulcan tries to do more than survive.
The Shareholder Cost of Doing More Than Surviving
At the start of 2021, Vulcan owned 31.891M Red Moon shares, or 63.03% of what later became Atlas. It then sold 3.0M Red Moon shares at C$0.12 for C$360k, reducing its stake to 57.1% (it needed cash to bridge the gap until a likely dilutive financing). By the end of 2021, after Atlas equity financings, Vulcan still owned 28.891M Atlas shares, but only 36.80% of the company. As of today, it is 23.6%.
In 2025, Vulcan spent C$331.6k buying Atlas shares, including a C$300k participation in Atlas’s LIFE financing. Atlas issued 10.9M shares at C$0.80. Vulcan bought 375k of them.
Here, management learned a lesson. The 3.0M shares sold in early 2021 would have been worth 10x as much six months later, 37x as much two and a half years later, and still around 13x as much today. All because they failed to optimize Vulcan’s cash position and had to raise liquidity before the financing that closed a few months later. I imagine management had some long nights with that one.
The lesson is clear. Atlas Salt is the crown jewel. Even more so now that site work has started. They cannot sell it unless valuations become absurd.
That is one reason the 2025 purchase matters in my opinion. Vulcan put approximately the same amount of cash back into Atlas shares as it had raised by selling them in 2021, only at a much higher share price and therefore for 1/8 as many shares. Even at that price, management apparently thought the shares were worth owning.
But the repurchase also shows something else. Even when Vulcan spends cash, Atlas issues shares faster than Vulcan can follow. And that becomes more true as Atlas moves from study-stage capital to construction-stage capital.
Atlas shares are the crown jewel, but can Vulcan defend its stake?
At 23.6%, a C$100M Atlas equity raise would require Vulcan to invest about C$24M to hold its percentage. A C$200M raise would require C$48M. Vulcan has C$4.09M of cash, and that cash already has a job: keeping the wrapper alive until Atlas can pay the royalty. With the balance sheet it has today, Vulcan cannot defend 23.6% through a serious Atlas construction financing.
Vulcan could raise money.
Of course, but a large Vulcan equity raise to defend the Atlas stake would dilute every Vulcan shareholder’s claim on the royalty. The only way that makes sense is if Atlas is clearly mispriced after accounting for the dilution of Vulcan’s royalty exposure per share, and if the Vulcan raise itself is not too punitive. That is a high and very uncertain bar.
My take is that, if Vulcan wants to create more per-share value, it should let its Atlas percentage fall. That is literally “sit on your ass” investing. Carry the royalty, spend little outside Atlas, and avoid doing something clever with cheap paper.
I do not think the 2025 Atlas purchase contradicts that. C$300k in a C$8.7M Atlas financing is not an attempt to defend control. It looks more like a participation designed to signal continued support for the project at an attractive price. Vulcan’s decision not to participate in Atlas's recent financings is an additional clear sign of that.
So I model Vulcan with a fixed Atlas share position. The underlying assumption is simple: management remembers the lesson, stays relatively disciplined, does not overfund non-Atlas exploration (Q1-26 isn't cut from that cloth), does not issue cheap Vulcan equity to protect a headline stake, and lets the royalty do most of the work.
That may be too charitable, but it is the message management has been sending since 2021.
To assess the likelihood of this outcome, the right place to look is the incentive structure.
4. Who Controls the Wrapper
Let’s summarize the situation simply.
The good version of Vulcan requires doing nothing. Junior explorers exist to explore. Management teams are human. Humans find it hard to do nothing. Are insiders really paid to wait?
This is mostly a Patrick Laracy question. He beneficially owns or controls 11.69M Vulcan shares, including 515,984 through Triassic Properties, against 129.9M shares outstanding. Call it 9% of the company. At a C$57M market cap, that is approximately C$5.1M of stock. A C$0.10 move in Vulcan is about C$1.1M for him.
The check matters, as discussed above, but the stock matters more. This is the first useful fact.
The second one is less clean: no person or company controls 10% or more of the votes. Board ownership is limited: Fraser Edison disclosed 1.2M shares, Carson Noel 275k, and Peter Mercer nil. In a scenario where management simply waits, this is not really a problem. But it also means that there is no obvious outside shareholder with enough voting power to force the company into the boring version of the thesis.
In practice, Vulcan is controlled less by formal ownership than by habit, history, and management inertia. That is often how it works in microcaps led by the same CEO for thirty years. That is why the company is still behaving like a prospect generator.
For the options, fine. Management is trying to maximize its own economic interest. But the rest does not really make much economic sense.
Vulcan diluted heavily in the 2019-2021 window. The share count went from 61.4M at September 30, 2019 to 105.6M by July 2021. The denominator was reset before Atlas became the asset that matters. Since then, I do not see the same pattern of repeated outside equity issuance at the Vulcan level. The company has mostly lived off the cash raised in that earlier period, helped by interest income, small option payments, government grants, and occasional warrant or option exercises.
Most of the dilution between 2021 and 2025 came from the exercise of warrants issued in 2021 or earlier. The remaining dilution during that period was much smaller and came from SBC.
There are currently no warrants outstanding; the last remaining warrants were exercised in 2025.
Since 2021, management has shown little appetite for keeping the wrapper alive through cheap external equity. My read is that they are waiting for Great Atlantic to be built with at least as much impatience as I am, and that they will try to preserve the parent without issuing too much stock at the wrong price.
They will use whatever cash sources are available. Option exercises are part of that bridge, with one specific point worth spelling out. Vulcan pays salaries and fees to management and directors. Management and directors receive options. When those options are exercised, cash goes back into the company. For Vulcan, it is a form of cash recycling. For management, it increases ownership at a “low” cost.
Yes, it is value leakage, but I can live with that. Option dilution has been modest, and the current cash balance, plus whatever future inflows the company can generate, should help limit external financings at stupid prices until Great Atlantic produces its first cash flow.
The cleanest outcome would be an activist with a few tens of millions.
The job would be simple enough: use the fragmented shareholder base to build a position slowly (for months if necessary), force the corporate structure to match the math, and turn Vulcan into the holdco it already wants to be on paper.
Cut the unnecessary spend: consulting fees, expensive office space, exploration budgets that no longer deserve priority. Sell or option the exploration portfolio. Keep the Atlas shares. Keep the royalty. Then sit there for decades, collecting royalty cash and Vulcan’s look-through share of Atlas cash flows once Great Atlantic is in production. It does not even need an office. A registered address, basic corporate services, and the occasional rented meeting room would probably be enough.
(If only I had the few tens of millions lying around and the desire to pick a fight…)
For now, shareholders are stuck on a boat that has been sailing in the same direction for five years:
slow dilution helping fund expenses that are mostly unnecessary;
a CEO who owns enough stock for the share price to matter, and who has created real value before (Atlas did not appear by accident, and neither did the royalty);
a very low probability that the situation changes.
This is obviously not the most minority-shareholder-friendly setup. But it could be much worse.
In short, the asset creation deserves credit, but the wrapper deserves a discount.
Before applying that discount, let’s look at the assets in detail.
5. The Atlas Stake
Atlas owns a feasibility-stage salt project with a 2025 Updated Feasibility Study showing a C$920M after-tax NPV at an 8% discount rate, based on a 4.0 Mtpa operation and a 24.25-year initial mine life.
At C$1.58 per Atlas share, Vulcan’s 29.4M-share stake is worth about C$46.4M. But that is the market price of the exposure; it is not my estimate of value.
If you remember the Atlas deep dive, you know where my shareholder view diverges from the UFS. It left out, or did not fully capture, several costs and risks that matter to equity holders: financing, working capital, residual corporate overhead, dilution, and the friction of getting from feasibility study to operating mine.
If I use the assumptions from my Atlas DCF, which I am reproducing here, Vulcan’s look-through PV of the Atlas stake would be:
Bull case: C$311.5M.
Base case: C$96.7M.
Bear case: C$17.6M.
These are September 2025 present values, discounted at 8%. Their value today is slightly higher, all else equal, because time has passed and the discount period has shortened.
These numbers already include the dilution I expect Atlas to take in order to finance Great Atlantic. In my Atlas model, the dilution scenarios were not gentle. On a fully diluted basis, the bull case assumed approximately 50% additional dilution. The base case assumed more than a 2x in the share count. The bear case assumed more than a 4x increase.
If Atlas works, Vulcan still owns meaningful upside through the equity stake, even after a harsh financing path. But it also owns the royalty, and the royalty is a very different animal: it is indifferent to many of the things that can hurt Atlas shareholders along the way.
6. Royalty
This is the reason the setup exists.
Vulcan owns a 3% net production royalty on the Great Atlantic Salt mineral licenses.
A small disclaimer before the fun part: I have not found the full original royalty agreement. Vulcan and Atlas disclose the royalty repeatedly, and the UFS “relied on royalty and title information disclosed by Atlas in its public filings and has not independently verified the underlying royalty agreements or title instruments.”
The 2025 UFS models Vulcan’s royalty as 3% of gross revenue after deducting port charges, processing costs, and the Newfoundland and Labrador Mining Tax.7
On paper, that is clear enough, but in practice, it is always messier.
The Uncertainties
Take the Scotwood MOU.
Atlas has a non-binding MOU for a 50/50 joint venture with Scotwood. The structure, as disclosed, would have Atlas sell salt to the JV, while the JV would use Scotwood’s Canadian retail distribution network and split profits between the two partners.
Does Vulcan’s royalty stop at the price at which Atlas sells salt into the JV, or does it also capture Atlas’s share of the downstream JV profit? I do not know. The royalty documents I have are not precise enough to answer that. My strong guess is no, but I have no proof.8
If the answer is yes, great. Vulcan would also capture part of the product-mix upside generated through the Scotwood JV. If the answer is no, the royalty would stop earlier in the chain and would not fully participate in some additional margin Atlas may generate downstream.
There is also a third possibility: the original royalty agreement may already deal with this type of structure and use a different method to calculate the royalty when salt is sold to an affiliate, joint venture, or downstream vehicle. But again, that is a maybe.
In any case, the impact should still be limited. Vulcan should still benefit from higher realized pricing on the volumes Atlas sells directly, locally, or on the spot market, to the extent those sales sit inside the royalty base. And if some of the downstream margin is captured outside the royalty base, Vulcan still has 29M Atlas shares to participate in it.
What is clear, and probably most important, is that the royalty remains exposed to the salt price itself. And that is still the largest source of upside versus the UFS.
As discussed in the Atlas deep dive, the UFS assumes 2% annual price growth after construction, while deicing salt prices have compounded at approximately 4% over the last four decades. It also leaves out the catalysts currently pushing pricing above its historical path: more volatile winters as climate patterns become less predictable, tighter local supply, higher oil prices reducing the economic trucking radius, etc.
This makes the royalty a valuable asset.
It gives Vulcan exposure to many of the same upside drivers as Atlas: higher salt prices, better realized pricing, faster production, mine-life extensions, and the conversion of resources not included in the initial reserve case.
It is also less exposed to some of the frictions that sit in Atlas equity: future equity dilution, expensive project financing, construction budget overruns, and so on, at Atlas.
But how valuable?
How Much Is the Royalty Worth?
Under the UFS assumptions, this royalty would transfer about C$266M from Atlas to Vulcan over the life of mine, before Vulcan-level tax. Discounted at 8%, I get a present value of about C$80M.9
But I just spent 40,000 words challenging the UFS assumptions and adding the risks the study could not, or did not fully, capture.
The advantage here is simplicity.
The UFS gives the annual revenue stream. It also gives the deductions that matter for the formula: processing and material handling, which include port costs, and the NL Mining Tax. Great, I do not need to rebuild the full mine equity case to value Vulcan’s royalty.
The formula is: 3% of gross revenue, less port charges, processing costs, and the NL Mining Tax.
Using the UFS numbers, the “royaltyable” base is approximately 82.7% of gross revenue.10
That becomes my base factor. I keep it constant across scenarios.
From there, only three assumptions really matter for Vulcan: delay, salt price, and the part of the sales mix that actually flows through the royalty.
For the delay and the salt price, I simply reuse my Atlas assumptions. For the mix, I had to adjust.
In the Atlas DCF, I gave credit for a modest improvement in realized price because the UFS compresses geography, channel, contract structure, and product format into a single C$81.67/t FOB Turf Point price.11 That was already a restrained way to model a much larger possible upside.
For Vulcan, I apply a 50% haircut to that upside.
If Atlas sells salt at a better mine-level / FOB-equivalent price, the royalty should benefit. If the extra economics are captured downstream in a JV, I should not give the royalty that profit. So for the base and bull cases, I take the incremental price/mix uplift from my Atlas DCF and cut it in half for the royalty (there is none in the bear case to begin with). It is a blunt haircut, but one that keeps me from building a fake channel model from documents I do not have.
Given the impact of mix on revenues, this is probably a pretty conservative choice.
Under those assumptions, the royalty has the following present values:
Bull case: C$126.9M.
Base case: C$97.1M.
Bear case: C$83.9M.
Great: at least 47% above the market cap. Long live microcaps.
True, in a tax-free world. In the real one, Newfoundland and Labrador and the federal government both take their cut before Vulcan shareholders see the value.12
Tax
In Newfoundland and Labrador, there is a Mineral Rights Tax equal to 20% of royalty receipts above C$200k, after certain deductions.
After that, there is Canadian corporate income tax on profits, at 30% all-in.
So, in the rough version, each C$1.00 of royalty revenue becomes:
C$1.00 x 0.80 x 0.70 = C$0.56 of after-tax profit.
From there, two things complicate the calculation:
the deductibility of expenses;
the tax shields Vulcan will have accumulated by the time the royalty starts generating revenue.
Not all expenses have the same tax treatment, and I cannot know what Vulcan’s future tax shields will be when the first royalty dollar arrives. So I directly fold the uncertainty into the scenario tax rates:
Bull case: 40% tax.
Base case: 42% tax.
Bear case: 44% tax.
No expense deductions, no tax shields, and taxation applied to every dollar of royalty revenue.
In all cases, the tax rate has a limited impact on the final NAV, so the cost of being wrong here is not very high.
After applying these adjustments, we get the following royalty present values by scenario:
Bull case: C$76.1M.
Base case: C$56.3M.
Bear case: C$47.0M.
That is less impressive than the pre-tax figure, but it is still roughly equal to or above Vulcan’s current market cap in the bull and base case. The bear case is 18% below Vulcan’s market cap but that also means you’re paying for Vulcan’s C$46.4M stake in Atlas for only C$10.2M (or the other way around, whichever you prefer). And that’s without counting all of Atlas’s own upside. Not bad, in my humble opinion.
Note that the range is much tighter than for Atlas equity, which is exactly the point. The royalty sits much closer to the revenue line. It does not fund the mine, issue shares, or require Atlas to capture every dollar of downstream margin. It only needs tonnes sold and a mine-level revenue base.
That is the power of the royalty, and the core strength of Vulcan. Without it, there would be little reason not to own Atlas directly instead.
We now have the important pieces to value Vulcan Minerals.
7. Valuation
We have already done most of the work.
Royalty PV → Check.
Atlas stake PV → Check.
Asset/liability value → Check.
I assume everything outside Atlas is worth 0, except for cash, the deferred tax liability, and the small negative non-cash working capital position.
That leaves two variables to model:
Wrapper costs
Dilution
I lay out the full assumptions in the DCF.
Here, I will only show the ones that matter for understanding the valuation.
Wrapper Costs
For the annual wrapper cost, I use:
Bull case: C$0.8M, which assumes an optimistic continuation of the 2025 expense level.
Base case: C$1.2M, which reflects the last two years plus 2026 annualized from what the first quarter already spent.
Bear case: C$1.6M, which assumes management keeps drilling every year the way it drilled Carbonear.
I escalate each scenario at 2% per year over the full mine life, although the impact of this escalation is minimal.
I treat these as net wrapper costs. In other words, I already include potential cash inflows such as interest income on cash, non-Atlas royalties, option exercises, grants, and other small receipts inside that number.13
It is conservative, but mostly, it is simpler.
Dilution
I split dilution into two buckets.
Survival Funding
In the bull case, Vulcan’s cash and small sources of flexibility carry the company to the first royalty cash flow. In the base and bear cases, the wait is longer, wrapper costs keep compounding, and the cash balance is eventually exhausted. So I force one equity raise to fund the gap:
The base case runs about C$1.3M short and issues 3.7M shares at C$0.35.
The bear case runs C$5.4M short and issues 21.6M shares at C$0.25.
Once the royalty starts paying, I stop modeling survival dilution. From that point, the royalty pays for the wrapper.
Management Dilution
Vulcan’s historical share-count growth is not a clean proxy for that. It needs to be decomposed.
Most of the dilution since July 2021 came from old low-priced warrants. Those warrants came from past financing dilution, at a time when Atlas was not yet the project that matters and management seemed less careful with dilution, while mostly living off the public-company G&A machine. The last financing of that kind took place in 2021. Since then, Vulcan has been more careful with its cash, precisely to avoid further dilution, and today it actually has more cash than it had in 2021. The last warrants were exercised or expired in 2025 and will no longer contribute to dilution.
I therefore base the dilution assumption on SBC alone, on top of the financing dilution already modeled in the base and bear cases.
The bull case is anchored in realized option dilution. Since July 2021, Vulcan has issued about 1.225M shares from option exercises, against a starting share count of 105.6M. That is only 1.16% total dilution, or about 0.24% annualized, so I round it to 0.25% per year.
The base case is anchored in today’s option overhang. Vulcan has 7.45M options outstanding against 129.9M shares, equal to 5.74% of the current share count. Spread over ten years, that is about 0.57% per year, so 0.50% per year is a reasonable normalized cost of the existing option book.
The bear case is the option machine that keeps moving. Vulcan granted 3.75M options in February 2025 and another 2.55M in April 2026, or 6.3M options in fourteen months, equal to 4.85% of the current share count. The April 2026 options have a ten-year life, which reduces the risk of an immediate recycling loop. Fine. But bear cases are not built around management restraint.
If the stock works, the options become valuable and exercisable. If they are exercised, Vulcan gets cash and insiders get more shares. If the board refills the pool, the leakage repeats.
That is why I use 1.00% per year in the bear case. A long-dated option loop that helps fund the wrapper while moving more ownership to insiders along the way. The 2025-2026 grant pace is too lumpy to annualize mechanically, but it is enough to justify charging the structure for recurring leakage in the bear case.
To sum up, over the 28-year model period, I use:
Bull case: 0.25%/year (7.2% dilution over 28 years).
Base case: 0.50%/year (15% dilution over 28 years, excluding financing dilution).
Bear case: 1.00%/year (32% dilution over 28 years, excluding financing dilution).
In all three cases, the 7.45M options currently outstanding are added on top of everything else.
Final Valuation
At a very high level, I value Vulcan as follows:
(PV of post-tax royalty + PV of Atlas stake - PV of wrapper costs + cash - deferred tax liabilities + non-cash working capital) / diluted share count
Here is the final table:
At a C$0.44 share price, the bear case implies 51% downside, the base case is almost a 2x, and the bull case is around 5.9x.
4 important reminders:
These are not future price targets. These are present values: the value of the business today under my assumptions and certain UFS assumptions, after discounting the future value of the assets and liabilities. All else equal, those values should mathematically increase over time as the discount period shortens. That does not mean the stock price cannot trade above or below them.
The probability asymmetry is also very pronounced. I estimate the probability of a bear case, or worse, at less than 10%. Obviously, this is an instinctive number. No serious calculation can realistically get you there. But I laid out all my arguments in the conclusion of the Atlas Salt valuation section.
I haven't updated my Atlas Salt model. That said, there has been a lot of news since then (Export Development Canada letters, a few favorable financings, a new CFO, etc.). None of them individually moves the needle, but cumulatively, I think they tilt the value and the probabilities slightly in our favor. I'll update the model once we have more concrete information.
At no point do I include the 288 Mt of additional Indicated Resources or the 868 Mt of Inferred Resources. All scenarios are based only on the reserves currently bankable under the mine plan. Over time, in a highly homogeneous salt deposit like this one, additional resources are likely to be converted into reserves as production advances.
That is what I call asymmetry and optionality. This is why I have roughly 10% of my portfolio in it (a bit more than 20% in total with Atlas Salt).
8. Vulcan vs Atlas
The risk/reward ratio is very attractive, to say the least, for both Atlas and Vulcan, but it is obviously more attractive for Vulcan. That is just arithmetic.
Vulcan carries the same upside, minus the risks that come with funding a mine: construction budget overruns, and the massive dilution that pays for them. The royalty is indifferent to both.
For anyone wondering: yes, the assumptions are the same in both cases where they overlap (except for the sales-mix haircut, which is more conservative for Vulcan).
But this is a purely mathematical analysis. The shape of the value matters too, and so does the way the risks are transformed.
If we assume that the C$4.09M of cash will be used to carry Vulcan to 2030, then Vulcan can be viewed as an Atlas stake trading at a 23.3% premium.14 That stake is exposed to almost exactly the same risks as owning Atlas directly. So this premium has to buy something.
And it does:
First, a royalty that is probably worth more than Vulcan’s current market cap, and that carries far less risk than Atlas equity, especially the most important risk in the whole setup: financing conditions.
Second, the holdco layer: additional dilution, capital allocation and governance risks at Vulcan.
My view is simple: the extra risks are more than offset by the royalty and its quality. Vulcan remains the better way to play Atlas on the numbers.
In market reality, two other problems show up.
Liquidity. Vulcan is clearly less liquid than Atlas, and there is no market maker “supporting” the stock the way Atlas has one. If you want to invest a few hundred thousand dollars, you will need several days at least to build the position without giving up too much to slippage. I think this problem should shrink if Atlas succeeds and the Vulcan setup becomes more visible. But if something goes wrong, getting out of Vulcan will be harder than getting out of Atlas.
M&A. As I explained in the Atlas deep dive, Vulcan may have an incentive to protect its royalty in a takeout situation and use its influence over Atlas to maximize the value of its Atlas stake plus royalty, rather than only maximizing the cleanest outcome for Atlas shareholders. Owning Vulcan is also a form of protection against that scenario.
So, Vulcan or Atlas?
The best choice, in my opinion, and the one I chose, is to own both. They have different risk profiles, and I prefer to spread that risk by owning both. Vulcan is more convex on the numbers. Atlas is cleaner. Each investor has to decide which set of problems they would rather own.
For relative position sizing, I think the right approach is to compare one against the other.
Here is Atlas Salt’s market cap in green, and Vulcan’s in purple.
If you look closely at the 2022-2026 period, the two market caps do not always move together. Sometimes one asset moves 15-20% in a few days while the other barely reacts, even though the underlying Great Atlantic exposure has not changed. The Atlas/Vulcan chart shows this well (careful, the dilution distorts the numbers).
These inefficiencies are normal at this size. They can also create opportunities to build a position in one name rather than the other, or even to reallocate between them. I compare these curves regularly, and twice I have swapped a bit from one to the other when the pricing gap became too obvious (just be careful with fees, spreads, slippage, and… taxes).
The real asset is Great Atlantic Salt. Atlas and Vulcan are two different ways to own exposure to that asset.
If you are most worried that Atlas will be forced to dilute massively at a low price, Vulcan is probably the better choice. If you are convinced that Laracy will spend too much of the royalty cash flow on value-destructive exploration, Atlas is probably the better play.
If you do not have a strong view on which risk matters more, owning both is the best answer. That’s mine.
Share this widely enough and maybe one of you will show up with the tens of millions it would take.
9. Conclusion
That is why Great Atlantic Salt is probably the best risk/reward I have seen in my career so far (I use “probably” out of epistemic honesty). They're both up roughly 40% since my deep dive in May, and my view hasn't changed. I didn't sell a single share.
That does not mean there is no risk. Far from it.
A serious accident during mine construction. A once-in-a-century earthquake like the 1929 Newfoundland event. An armed conflict. Pick your black swan.
These two deep dives were written to show how exceptional the potential upside is relative to the risk being taken. But that should never obscure the fact that the risks are real, and that capital can be permanently lost.
Personally, I have taken that bet, and I would take it again.
Here's the only company I weight more heavily than Great Atlantic Salt: 30% of my portfolio, and the setup I have the most conviction in.
Take care,
Flo
I’m not a financial advisor and this isn’t financial advice. Your money, your judgment, your risks, your returns. The fine print here.
The filings keep the royalty language in Sassy terms even though the option was assigned to Gander Gold.
The 2023 drilling included 15m of 1.21% copper and 0.51 g/t gold, including 6.75m of 2.38% copper and 1.01 g/t gold in CL-23-13, and 13.5m of 1.51% copper and 0.95 g/t gold, including 7.5m of 2.49% copper and 1.55 g/t gold in CL-23-14. The late-2024 McNeilly work added shorter but still relevant intercepts, including 5.2m of 1.01% copper in CL-24-19, 2.5m of 1.26% copper in CL-24-17, and 5.3m of 0.52% copper and 0.91 g/t gold in CL-24-18.
Vulcan flew an airborne electromagnetic survey in 2021 to look for conductive targets, collected 765 soil samples in 2023, and then used those results to rank potential drill targets.
Vulcan drilled 715m at McNeilly in December 2024: five holes against C$211k of exploration cash spent that quarter. That is C$295/m for the drill + the crew + the assays.
Exercised, canceled, or expired options return to the pool. The bucket refills as options roll off and expands as the share count expands.
Vulcan granted:
2.7M director options at C$0.15 in March 2021 for five years;
1.8M director options at C$0.30 in January 2022 for ten years;
300k employee/consultant options at C$0.30 in January 2022 for five years;
3.75M director/employee options at C$0.15 in February 2025 for two years;
and 2.55M director/employee options at C$0.23 in April 2026 for ten years.
After year-end 2025, 700k options were exercised and 4M expired. As of the April 2026 MD&A, Vulcan had 7.45M options outstanding, of which 6.175M were vested and exercisable, and no warrants. The overhang now runs to 2032 and 2036.
The formula needs care. Vulcan usually describes the asset as a 3% net production royalty. Earlier technical disclosure used slightly different language around the royalty base. The 2025 UFS is more specific: it models the royalty as 3% of gross revenue less port charges, processing costs, and the Newfoundland and Labrador Mining Tax. For the valuation, I use the 2025 UFS formula because that is the formula embedded in the current Great Atlantic economics.
I still have two strong arguments.
First, if the royalty were intended to capture Atlas’s share of downstream JV-level profits, the agreement would normally need to say so expressly. A standard NSR/NPR-style royalty is generally tied to the proceeds or market value of mineral product produced and sold from the property, less specified deductions. It is not normally a participation in the operator’s broader downstream business profits. A Net Profits Interest (NPI), or an explicit profit-participation clause, would be much closer to the type of drafting one would expect if Vulcan were meant to share in Atlas’s JV profit distributions. Even then, the agreement would likely need to make clear that JV distributions or indirect sale proceeds are included.
Second, comparable public royalty agreements usually deal with affiliate or non-arm’s-length sales by substituting fair market value or arm’s-length value for the transfer price, rather than by giving the royalty holder a direct share of downstream marketing, trading, or JV profits. For example, the Newmont/Barrick NSR agreement values sales to Newmont or its affiliates at fair market value and expressly states that Barrick has no right to share in Newmont’s marketing profits or losses.
Using the royalty formula in the UFS, the royalty base is approximately C$8.86B over the initial 24.25-year mine plan, or about C$365M per operating year on average. At 3%, that gives Vulcan about C$266M of undiscounted royalty cash flow before Vulcan-level tax. Discounted at 8% from the UFS effective date, with the pre-production period and the UFS ramp, the stream is worth about C$80M. Just under 9% of Atlas’s C$920M after-tax project NPV.
(C$10.7B total revenue - C$854M processing costs - C$1.0B NL Mining Tax) / C$10.7B = 82.7%.
Processing costs and port costs are already escalated at 2% per year in the royalty revenue build. Their impact is small, and modeling separate cost-overrun scenarios for them would add far more complexity than the point deserves. I therefore chose to absorb those potential overruns into the upside I have deliberately left out of the model.
The same reasoning applies to the NL Mining Tax, which can vary in either direction depending on a wide range of factors.
These are Vulcan-level taxes. The NL Mining Tax deducted in the UFS calculation is already captured upstream, at the Atlas/project level.
I added a “runway flexibility” variable, which allows the model to simulate lower costs or cash inflows, such as asset sales or option exercises, if mine construction is delayed. It reflects management’s ability to modestly adjust cash inflows and outflows to avoid diluting shareholders for a few hundred thousand Canadian dollars. This runway flexibility is not treated as a positive NAV item. If it is exhausted, the model assumes dilution, as it does in the base and bear cases.
C$57.2M market cap / C$46.4M of Atlas shares - 1 = 23.3%.
Bravo!
this article alone made my subscription worth it, that’s an amazing situation you found there