Technical Report Summary
Salt Mineral Reserve Statement
Compass Minerals International, Inc.
Cote Blanche Mine
Louisiana, USA
Effective Date: September 30, 2021
Report Date: November 29, 2021
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Signature
All data used as source material plus the text, tables, figures, and attachments of this document have been reviewed and prepared in accordance with generally accepted professional engineering and environmental practices.
This report, Salt Mineral Reserve Statement, was prepared by a Qualified Person.
/s/ Joseph Havasi
Joseph Havasi, CPG-12040
Director, Natural Resources
Compass Minerals International, Inc.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table of Contents
Signature ii
1 Executive Summary 1
2 Introduction 8
2.1 Registrant 8
2.2 Terms of Reference and Purpose 8
2.3 Sources of Information 8
2.4 Details of Inspection 8
2.5 Report Version 9
3 Property Description 10
3.1 Property Location 10
3.2 Property Area 12
3.3 Mineral Titles 13
3.3.1 History of Titles 13
3.3.2 Amended Lease 13
3.4 Mineral Rights 14
3.5 Encumbrances 14
3.6 Other Significant Factors and Risks 14
3.7 Royalties Held 15
4 Accessibility, Climate, Local Resources, Infrastructure and Physiography 16
4.1 Topography, Elevation and Vegetation 16
4.2 Means of Access 17
4.3 Climate and Operating Season 18
4.4 Infrastructure Availability and Resources 19
5 History 20
6 Geological Setting, Mineralization and Deposit 21
6.1 Geologic Description 21
6.2 Mineral Deposit Type 22
6.3 Stratigraphic Section 23
7 Exploration 25
7.1 Procedures – Exploration Other than Drilling 25
7.2 Exploration Drilling 27
7.3 Procedures – Drilling Exploration 29
7.4 Characterization of Hydrology 29
7.5 Exploration – Geotechnical Data 30
7.6 Exploration Plan Map 31
7.7 Description of Relevant Exploration Data 31
8 Sample Preparation, Analyses and Security 33
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Cote Blanche Mine 2021 Technical Report Summary
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8.1 Sample Preparation and Quality Control 33
8.2 Sample Analyses 33
8.3 Sample Quality Control and Assurance 33
8.4 Adequacy of Sample Preparation 33
8.5 Analytical Procedures 33
9 Data Verification 35
9.1 Data Verification Procedures 35
9.2 Conducting Verifications 35
9.3 Opinion of Adequacy 35
10 Mineral Processing and Metallurgical Testing 37
10.1 Nature and Extent 37
10.2 Degree of Representation 37
10.3 Analytical and Testing Laboratories 37
10.4 Recovery Assumptions 37
10.5 Adequacy of Data 38
11 Mineral Resource Estimate 39
11.1 Introduction 39
11.1.1 Key Assumptions and Parameters 41
11.1.2 Methodology 41
11.2 Mineral Resource Statement 42
11.3 Estimates of Cut-off Grades 43
11.4 Resource Classification 43
11.5 Uncertainty of Estimates 44
11.6 Multiple Commodity Grade Disclosure 44
11.7 Relevant Technical and Economic Factors 45
12 Mineral Reserve Estimates 46
12.1 Introduction 46
12.2 Mineral Reserve Statement 47
12.3 Estimates of Cut-off Grades 47
12.4 Reserve Classification 48
12.5 Multiple Commodity Grade Disclosure 48
12.6 Risk of Modifying Factors 48
13 Mining Methods 50
13.1 Geotechnical and Hydrological Models 52
13.2 Production Details 53
13.3 Requirements for Stripping, Underground Development and Backfilling 57
13.3.1 Stripping 57
13.3.2 Underground Development 58
13.3.3 Backfilling 58
13.4 Mining Equipment, Fleet and Personnel 59
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Cote Blanche Mine 2021 Technical Report Summary
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13.5 Map of Overall Salt Mining within Cote Blanche Salt Dome 60
14 Processing and Recovery Methods 62
14.1 Process Description 62
14.2 Plant Throughput and Design 64
14.3 Transfer to Surface 65
14.4 Surface Transport 65
14.5 Waste Handling 65
14.6 Power Consumption 66
14.7 Personnel 66
15 Infrastructure 67
16 Market Studies 70
16.1 General Marketing Information 70
16.2 Material Contracts Required for Production 72
17 Environmental, Social and Permitting 74
17.1 Results of Environmental Studies and Baselines 74
17.2 Waste, Tailings and Water Plans – Monitoring and Management 74
17.3 Project Permitting Requirements 74
17.3.1 Air Permit 74
17.3.2 Surface Water Effluent Discharge Permit 74
17.4 Plans, Negotiations or Agreements (Environmental) 74
17.5 Mine Closure Plans 75
17.6 Adequacy Assessment of Plans 75
17.7 Local Hiring Commitments 75
18 Capital and Operating Costs 76
18.1.1 Capital Costs 76
18.1.2 Operating Cost 77
18.1.3 Assumptions 77
18.1.4 Accuracy 77
19 Economic Analysis 81
19.1.1 Operating Costs 81
19.1.2 Capital Costs 81
19.1.3 Economic Analysis 82
19.1.4 Sensitivity Analysis 82
20 Adjacent Properties 94
21 Other Relevant Data and Information 95
22 Interpretation and Conclusions 96
22.1 Mineral Resource 96
22.2 Mineral Reserves 97
22.3 Financial 97
23 Recommendations 98
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Cote Blanche Mine 2021 Technical Report Summary
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23.1 Geology and In-Seam Seismic 98
24 References 99
25 Reliance on Information Provided by the Registrant 100
26 Date and Signature Page 101
Tables
Table 1-1: Cote Blanche Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020 4
Table 1-2: Cote Blanche Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020 5
Table 2-1: Site Visits 9
Table 7-1: Summary of Salt Intersects from Mud-Rotary Drilling Campaigns 29
Table 7-2: Values and factors used in modelling rock mechanics 31
Table 10-1: Chemical and Physical Characteristics of Cote Blanche deicing salt 37
Table 11-1: Cote Blanche Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020 42
Table 12-1: Cote Blanche Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020 47
Table 13-1: Summary of key assumptions in the definition of the Cote Blanche Reserves 57
Table 13-2: Table of Equipment Utilized in the Mining Method 60
Table 14-1: Mill Plant Categories 64
Table 14-2: Summary of Electrical Usage 66
Table 14-3: Summary of Personnel Employed 66
Table 16-1: World Forecast Demand for salt by region 71
Table 16-2: USA and Canada: Production, trade and apparent consumption of salt, 2010-2019 72
Table 14-3: USGS Summary of US Salt Pricing 72
Table 16-4: Summary of Cote Blanche Mine Production and Sales by Segment 72
Table 18-1: Summary of Capital and Operating Costs: 2017 - 2021 79
Table 18-2: Summary of Capital Expenses through 2026 80
Table 19-1:Life of Mine Cash Flow Analysis 84
Table 19-2:Sensitivity Analysis: Cost Factors 93
Table 19-3: Sensitivity Analysis: Price 93
Table 23-1: Summary of Annual Costs for Recommended Work 96
Figures
Figure 3-1: Five Salt Domes in Louisiana 10
Figure 3-2: Cote Blanche Mine Property Location Map 11
Figure 3-3: Aerial View of Cote Blanche Island 12
Figure 4-1: USGS 7.5 minute Topographic Quadrangle Map: Cote Blanche Island 16
Figure 4-2: Ferry Landing and Barge Canal Rights of Way 18
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Figure 6-1: Stratigraphic Section 23
Figure 6-2: Geologic Cross Section of Cote Blanche Island 24
Figure 7-1: Summary of Raw (top) and Interpreted (bottom) results from 2016 Seismic survey on level 1500 26
Figure 7-2: Summary of Raw (top) and Interpreted (bottom) results from 2016 Seismic survey on level 1500 27
Figure 7-3: Exploration Intersects with Top of Salt Diapir 28
Figure 7-4: Top of Salt Diapir Validation Drill Hole Locations 31
Figure 10-1: Finished product passing #30-Mesh Screen 38
Figure 11-1: Contours of the Cote Blanche Salt Dome 40
Figure 13-1: The Room and Pillar Mining Method at Cote Blanche 50
Figure 13-2: Typical Modelling of the Room and Pillar Layout: 1500-Foot Level Example 52
Figure 13-3: 1300-foot Level Mine Plan Map 54
Figure 13-4: 1500-foot Level Mine Plan Map 55
Figure 13-5: 1700-foot Level Mine Plan Map 56
Figure 13-6: Underground Infrastructure – Screen Plant 58
Figure 13-7: Possible Final Mine Outline 61
Figure 14-1: Flow Sheet of Cote Blanche Handling and Processing 63
Figure 14-2: Plan Layout of Processing - Underground 63
Figure 14-3: Mill Plant Flow Sheet 64
Figure 14-4: Cote Blanche Mining Flowchart 65
Figure 15-1: Cote Blanche Island Infrastructure 68
Figure 15-2: Cote Blanche Barge Canal and Loadout Areas 69
Figure 16-1: Roskill Real and Nominal Price Forecast for Deicing Salt through 2028 73
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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List of Abbreviations
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Abbreviation
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Unit or Term
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%
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percent
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~
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approximately
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°
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degree
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AuEq
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gold equivalent
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C$
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Canadian dollar(s)
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EA
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Environmental Assessment
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EIS
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environmental impact statement or environmental impact study
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ft
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foot or feet
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g
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Gram
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G&A
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general and administrative
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g/t
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grams per ton
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gpm
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gallons per minute
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GSL
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Great Salt Lake
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h or hr
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hour(s)
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koz
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thousand ounces
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kt
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thousand tons
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L/s
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liters per second
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lb
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pound or pounds
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Mg/L
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Milligrams per liter
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min
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minute
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Mt
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million tons
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sec
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second
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SMU
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selective mining unit
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SRM
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standard reference material
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STM
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short term modeling
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t
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ton(s) (2,000 lb)
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t/d
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tons per day
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t/h
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tons per hour
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t/y
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tons per year
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TSF
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tailings storage facility
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US$
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United States Dollar
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y or yr
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Year
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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1 Executive Summary
The Cote Blanche mine is a production stage, underground mine that produces rock salt primarily for highway deicing customers through a series of depots located along the Mississippi and Ohio rivers (and their major tributaries) and chemical and agricultural customers in the Southern and Midwestern United States. The Cote Blanche mine is located in south-central Louisiana in the Parish of St. Mary (T15S, R7E), at the northern edge of Cote Blanche Hummoch, commonly called Cote Blanche Island.
Cote Blanche Island is situated between the Intra-Coastal Waterway and Cote Blanche Bay in the Gulf of Mexico. The Cote Blanche mine is approximately 124 miles west of New Orleans, Louisiana, and approximately 26 miles southeast of New Iberia, Louisiana, on the Gulf Coast.
The Company leases the entirety of Cote Blanche Island from a private ownership group, except for 115 acres of the southeastern sector of the island (the “115 Acre Tract”), for a total mineral lease of 1,520 acres. The lease grants salt rights to the Company for all salt from the ground surface downward 3,000 feet, except for salt located within the 115 Acre Tract. The lease also grants surface rights in the western and southwestern sectors of Cote Blanche Island, with access rights to the mine road that extends north-south from the surface lease area to the Cote Blanche Crossing.
The lease has an effective end date of June 30, 2060, unless earlier terminated. In the event that no actual mining is being completed during any five consecutive years, the lessor has the option to cancel the lease. As lessee, the Company may exercise two options to extend the term of the lease, each for a 25-year period upon the same terms and conditions contained in the lease. The Company is required to hoist a minimum of 1,500,000 tons of salt annually in order to keep the lease in full force and effect. Under the terms of the lease, the royalty for each calendar year is equal to the Net F.O.B. Mine Sales Revenue Per Ton (as defined below), multiplied by the Applicable Royalty Rate (as defined below), multiplied by the number of tons of salt hoisted from the Cote Blanche mine in that calendar year. The “Net F.O.B. Mine Sales Revenue Per Ton” for each calendar year is the quotient of the total bulk sales revenue (excluding any taxes) of the Company and its affiliates for salt sold from the Cote Blanche mine in bulk (in units of 1 short ton or more) (“Total Bulk Sales Revenue”) reduced for all freight in, freight out, fuel surcharge, additives, depot/warehouse storage, handling and operating costs, promotions/discounts and other costs as are properly deducted under generally accepted accounting principles in that calendar year, divided by the total number of tons sold. The number of tons of salt sold is the same number of tons used to generate the Total Bulk Sales Revenue. The “Applicable Royalty Rate” for 2014 and each succeeding calendar year is as follows: 2014, 4.7%; 2015, 4.9%; 2016, 5.1%’ 2017, 5.3%; and 2018 and thereafter, 5.5%.
The lease further provides that if, on or before January 1 of 2034, 2059 or 2084 (each, a “Review Year”), the lessor or the Company determines that, in operation, the royalty provisions of the lease result in the lessor receiving more or less than 5.5% of the fair value of salt at the minehead free of all costs at that point (the “Royalty Standard”).
The Cote Blanche mine operates with a production schedule targeting approximately 2.2 million tons of salt per year. That target can vary significantly depending on the severity of winter weather conditions and the resulting market demand for road salt.
Mining at the Cote Blanche mine occurs in 75-foot mining horizons at specific depths below the surface. To date, the salt dome has been mined at three levels, including the 1,300-foot level, which
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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was mined from 1965 to 1986; the 1,100-foot level, which was mined from 1986 to 2002; and the current 1,500-foot level, which began in 1998 to and is expected to remain in operation through 2026. The Company is in the process of developing a ramp to an extension of the 1,300-foot level, for which mining is projected to start in 2022. Active mining on both the 1,300-foot level and the 1,500-foot level is anticipated to take place from 2022 to 2026. The Company’s current mine plan focuses on completion of the 1,500-foot level with future expansion to the 1,700-foot level and finally advancing to the 1,900-foot level. At this time, mining is not anticipated below the 1900-foot level.
There has been extensive historical oil and gas exploration on and adjacent to Cote Blanche Island, but the Company only has access to mapping and reports that are publically available from external subsurface exploration. While the historical data provide a strong depiction of the salt ore body, the Company has undertaken in-seam seismic and mud-rotary drilling to verify and validate salt diapir position, morphology and margin at the Cote Blanche mine. The nature of salt diapirs lends itself to a strong understanding of the homogeneity of the morphology and mineralogy of the ore body. Thus, the primary concerns within the salt diapir are understanding the margin of the diapir to support the mine plan by ensuring geotechnical stability, and mapping the localized presence of sandstone partings and seams that are encountered from time to time as well as sheer planes along margins of salt stock formations. The combination of historic data collected through externally funded and directed seismic and drilling programs for oil and gas exploration in strata surrounding the diapir, combined with Compass Minerals’ salt diapir morphology validation drilling has created a reasonably strong characterization of the definition of the salt diapir.
As the mining continues and progresses to the next deeper mining level at 1,700 feet and eventually to the 1,900-foot level, definition of the upper surface of the salt diapir is no longer necessary as mining will be below the current mining level. Therefore, mud-rotary drilling to validate the salt dome surface will no longer be necessary and instead the mining operation will continue its in-seam seismic data collection to assess the potential for potential anomalies, and as mining progresses to the outer margins of the mine plan, and verify that the lateral margins of the diapir are not within the Company’s self-determined, 400-foot setback of mineral extraction.
The Cote Blanche mine utilizes the room and pillar method of extraction. In this method, excavations (rooms) are recovered by mining and are alternated with areas of undisturbed salt (pillars) that form the necessary support for maintaining stability of the mine roof. The layout of the rooms and pillars and their respective sizes are optimized to maximize the ratio of salt extracted, relative to in situ salt, while still meeting safety and surface subsidence requirements. All levels in the current mine plan, 1,300-foot through the 1,900-foot levels, are currently mining or are planned to be operated in the same manner, with the same mining parameters and with the same set of unit operations, altered only by the footprint of the mining of the room and pillar method as modified to reflect the constraints of the planned level and the lateral constraints of the salt dome contours of each level.
The current room and pillar layout has an extraction ratio of approximately 56% within the mined room area, but the overall extraction ratio of the property, taking into account barrier pillars and unmined zones and interruptions from oil wells among other anomalies is about 51%. Rooms are mined in a progression of two phases creating a total room height of 75 feet when completed. The rooms have a nominal width of 50 feet and are bounded by 100-foot square pillars. Variations in room and pillar dimensions are observed due to production blasting and scaling, so values are approximate. To achieve 75 feet of height, rooms are initially developed using a 30 foot top-cut
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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(horizontal drill and blast), which is then vertically drilled and blasted (benched) an additional 45 feet, with 5 feet of sub-drilling. Loading and hauling is completed with diesel powered loading equipment and haul trucks. Development mining typically leads ahead of benching or room advance by approximately one and a half years.
The process for salt production at the Cote Blanche mine focuses on particle size reduction of the salt product. Rock salt is processed and sized by underground crushers and the mill before it is hoisted to the surface. The mill has two distinct halves: the mine run circuit and the whole mill. Only chemical quality and non-chemical quality salt can be processed through the whole mill. Ice control quality salt is processed through the mine run circuit. Once the salt has been sized accordingly, it is either stockpiled or placed directly onto a barge for transport to market. The main stockpile area allows separate piles for chemical, non-chemical, and ice control grade salt.
The Cote Blanche mine is operated with modern mining equipment and utilizes subsurface improvements, such as vertical shaft lift systems, milling and crushing facilities, maintenance and repair shops and extensive raw materials handling systems. The milling and crushing facilities were constructed when the Cote Blanche mine developed the 1,500 foot level in 2001.
The Cote Blanche mine has procured and is operating in compliance with required operating licenses, including permits pertaining to mineral extraction, effluent discharge and air permitting. The Company will be required to renew the current air permit at the Cote Blanche mine, which is administered by the Louisiana Department of Environmental Quality, when it expires in December 2026. Surface water discharges from the site are regulated under Louisiana Pollutant Discharge Elimination System (LPDES) permit LA0103233. The permit requires discharge monitoring for effluent flows from the three outfalls that discharge into the saline waters of the Intracoastal Waterway and Cote Blanche Bay. The State of Louisiana does not require an operating permit for the Cote Blanche mine. Air and NPDES permits are maintained by the site. The site is located in a Coastal Protection Zone and therefore any new site disturbance requires permitting by the U.S. Army Corps of Engineers and the Louisiana Office of Coastal Management. Initial operations at the site predate the Coastal Resources rules so no formal reporting is required under this process.
There are no mine closure plans for the Cote Blanche mine. Once the lease agreement terminates, the Company has six months to vacate the mine of any personal property it wishes to recover before the landownership group assumes control of the mine and either continues mining or initiates other commercial or industrial uses of the surface mine site and underground void space.
Summaries of the Cote Blanche mine’s salt mineral resources and mineral reserves as of September 30, 2021 and December 30, 2020 are shown in Tables 1-1 and 1-2, respectively. Joseph Havasi, who is employed full-time as the Director, Natural Resources of the Company, served as the QP and prepared the estimates of salt mineral resources and mineral reserves at the Cote Blanche mine.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 1-1. Cote Blanche Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Resource (tons)(1)(3)(4)(5)(6)(7)
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Resource Area(2)(8)
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As of September 30, 2021
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As of December 31, 2020
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Measured Resources
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1,300-Foot Level
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25,491,881
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25,491,881
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1,500-Foot Level
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16,448,712
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20,494,440
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Total Measured Resources
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41,940,593
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45,986,321
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Indicated Resources
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1,300-Foot Level
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12,373,509
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12,373,509
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1,500-Foot Level
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9,028,840
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9,028,840
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1,700-Foot Level(9)
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361,584,762
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361,584,762
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1,900-Foot Level(9)
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246,045,618
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246,045,618
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Total Indicated Resources
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629,032,729
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629,032,729
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Measured + Indicated Resources
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1,300-Foot Level
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37,865,390
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37,865,390
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1,500-Foot Level
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25,477,552
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29,523,280
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1,700-Foot Level(9)
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361,584,762
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361,584,762
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1,900-Foot Level(9)
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246,045,618
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246,045,618
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Total Measured + Indicated Resources
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670,973,322
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675,019,049
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Inferred Resources
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1,700-Foot Level(9)
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32,915,833
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32,915,833
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1,900-Foot Level(9)
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130,851,531
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130,851,531
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Total Inferred Resources
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163,767,364
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163,767,364
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(1) Mineral resources are not mineral reserves and have not demonstrated economic viability.
(2) Underground mineral resources are reported based on assumed 75-foot mining horizons, discounted for areas not accessible due to proximity to oil wells.
(3) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot.
(4) Included process recovery is 94% based on production experience. Included mining recovery is approximately 56% based on the room and pillar layout.
(5) Although the actual sodium chloride grade is less than 100%, it is not considered in the reserve, as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(6) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing.
(7) There are multiple salable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of the Cote Blanche TRS. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $61.41 per ton. Gross sales prices are projected to increase to approximately $706.49 per ton for rock salt for road deicing through year 2138 (the current expected end of mine life).
(8) Based on approximate areas of: 5,399,000 square feet (“ft2”) for the 1,300-foot level; 2,991,000 ft2 for the 1,500-foot level; 45,721,000 ft2 for the 1,700-foot level; 50,293,000 ft2 for the 1,900-foot level; and 104,404,000 ft2 in the aggregate.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 1-2. Cote Blanche Mine – Summary of Salt Mineral Reserves at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Reserve (tons)(1)(3)(4)(5)(6)(7)
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Reserve Area(2)(8)
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As of September 30, 2021
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As of December 31, 2020
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Proven Reserves
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1,300-Foot Level
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13,316,339
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13,316,339
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1,500-Foot Level
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8,136,420
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10,422,256
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Total Proven Reserves
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21,452,759
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23,738,595
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Probable Reserves
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1,700-Foot Level(9)
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113,853,955
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113,853,955
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1,900-Foot Level(9)
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122,693,422
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122,693,422
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Total Probable Reserves
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236,547,378
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236,547,378
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Total Reserves
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1,300-Foot Level
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13,316,339
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13,316,339
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1,500-Foot Level
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8,136,420
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10,422,256
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1,700-Foot Level(9)
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113,853,955
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113,853,955
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1,900-Foot Level(9)
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122,693,422
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122,693,422
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Total Reserves
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258,000,137
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260,285,972
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(1) Ore reserves are as recovered, saleable product.
(2) Underground mineral reserves are reported based on assumed 75-foot mining horizons, discounted for areas not accessible due to proximity to oil wells.
(3) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot.
(4) Included process recovery is 94% based on production experience. Included mining recovery is approximately 56% based on the room and pillar layout.
(5) Although the actual sodium chloride grade is less than 100%, it is not considered in the reserve, as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(6) A cut-off grade was not utilized for the calculation as the recovered in situ product quality is constant and saleable after processing.
(7) There are multiple salable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of the Cote Blanche TRS. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $61.41 per ton. Gross sales prices are projected to increase to approximately $706.49 per ton for rock salt for road deicing through year 2138 (the current expected end of mine life).
(8) Based on approximate areas of: 5,399,000 ft2 for the 1,300-foot level; 2,991,000 ft2 for the 1,500-foot level; 45,721,000 ft2 for the 1,700-foot level; 50,293,000 ft2 for the 1,900-foot level; and 104,404,000 ft2 in the aggregate.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints.
The modeling and analysis of the Company’s resources and reserves has been developed by Company mine personnel and reviewed by several levels of internal management, including the QP. The development of such resources and reserves estimates, including related assumptions, was a collaborative effort between the QP and Company staff.
The Company’s salt-producing locations do not utilize exploration in the development of their assumptions around mineral resources or reserves. The mineral deposits are restricted in access by bodies of water, and industry techniques used for geological exploration for other types of mineral deposits, specifically collection of rock core from drilling, can be degradational to the salt ore being assessed. Given the nature of the salt mineral and each site’s proximity to water bodies, this limitation impedes the validation of mineral resources and reserves using exploration drilling techniques. Accordingly, geophysical techniques are utilized at Cote Blanche to assist in mine planning, and to verify that there are no obstructions ahead of advancement of the mine in the form
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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of geological anomalies or structural features, such as faults that could affect future mining. In conducting these geophysical campaigns, including in-seam seismic and ground penetrating radar technologies, the Company is able to identify the continuity of ore-body ahead of mining. Unlike Goderich, in-seam directional drilling is not conducted at Cote Blanche because of the finite lateral extent of the diapir, and risks associated with intersecting the margin of the diapir.
Geological modeling and mine planning efforts serve as a base assumption for resource estimates at each significant salt-producing location. These outputs have been prepared by both Company personnel and third-party consultants, and the methodology is compared to industry best practices. Mine planning decisions, such as mining height, execution of mining and ground control, are determined and agreed upon by Company management. Management adjusts forward-looking models by reference to historic mining results, including by reviewing performance versus predicted levels of production from the mineral deposit, and if necessary, re-evaluating mining methodologies if production outcomes were not realized as predicted. Ongoing mining and interrogation of the mineral deposit, coupled with product quality validation pursuant to industry best practices and customer expectations, provides further empirical evidence as to the homogeneity, continuity and characteristics of the mineral resource. Ongoing quality validation of production also provides a means to monitor for any potential changes in ore-body quality. Also, ongoing monitoring of ground conditions within the mine, surveying for evidence of subsidence and other visible signs of deterioration that may signal the need to re-evaluate rock mechanics and structure of the mine ultimately inform extraction ratios and mine design, which underpin mineral reserve estimates.
The Cote Blanche Mine deposit supports continued successful exploitation, given the size, grade, metallurgical characteristics, developed infrastructure, and the knowledge and experience of the individuals engaged in the project. The uncertainty and risk associated with the historic exploration data is mitigated where possible, through continued knowledge gained in the extraction and interrogation of the salt deposit, annual in-seam seismic campaigns and mud-rotary diapir surface validation drilling.
When determining the differences between resources and reserves, management developed specific criteria, each of which must be met to qualify as a resource or reserve, respectively. These criteria, such as demonstration of safety, operational sustainability, integrity of the mine workings, economic viability, points of reference, and grade that are specific and attainable. The QP believes the criteria for the purposes of estimating resources and reserves are reasonable. Calculations using these criteria are reviewed and validated by the QP. Estimations and assumptions were developed independently for Cote Blanche.
Sensitivity analysis indicates the following conclusions from the life of mine cash-flow analysis.
•If mining operating costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-1.
•If capital construction costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-1.
•The facility can also withstand a decrease in average selling price of 16.5% from those currently estimated, which equates to $51.89/ton, according to the sensitivities shown in Table 19-1. As the modelled, the NPV of the project would be negative at 20% reduction in average selling price.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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2 Introduction
2.1 Registrant
This Technical Report Summary (this “TRS”) was prepared in accordance with Items 601(b)(96) and 1300 through 1305 of Regulation S-K (Title 17, Part 229, Items 601(b)(96) and 1300 through 1305 of the Code of Federal Regulations) promulgated by the Securities and Exchange Commission (“SEC”) for Compass Minerals International, Inc. (“Compass Minerals” or the “Company”) with respect to estimation of salt mineral reserves for Compass Minerals’ existing operation producing salt in Cote Blanche, Louisiana, USA (referred to as the “Cote Blanche Mine”, “Cote Blanche mine” or the “Mine”).
2.2 Terms of Reference and Purpose
The quality of information, conclusions, and estimates contained herein are based on: i) information available at the time of preparation and ii) the assumptions, conditions, and qualifications set forth in this TRS.
Unless stated otherwise, all volumes and grades are in U.S. customary units and currencies are expressed in constant third quarter 2021 U.S. dollars. Distances are expressed in U.S. customary units.
The purpose of this TRS is to fulfill the requirements of a Mineral Reserve Assessment for the Cote Blanche Mine.
The effective date of this Technical Report Summary is September 30, 2021.
2.3 Sources of Information
This TRS is based upon technical information and engineering data developed and maintained by local personnel at the Cote Blanche Mine site, Compass Minerals’ corporate supporting resources and from work undertaken by third-party contractors and consultants on behalf of the Mine. In addition, public data sourced from the United States Geological Survey (“USGS”), internal Compass Minerals technical reports, previous technical studies, maps, Compass Minerals letters and memoranda, and public information as cited throughout this TRS and listed in Section 24 “References.
This report was prepared by Joseph R. Havasi, MBA, CPG-12040, a qualified person.
2.4 Details of Inspection
The following table summarizes the details of the personal inspections on the property by the qualified person.
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Cote Blanche Mine 2021 Technical Report Summary
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QP
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Date(s) of Visit
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Details of Inspection
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Joe Havasi
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August 2010 – February 2018
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Mr. Havasi visited the site in support of miscellaneous projects and met with Site, Engineering, and Financial Management over a period of eight years ahead of exploration activities.
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Joe Havasi
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February 2018 – April 2018
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Installation of exploratory drill holes DH-1 through DH-2
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Joe Havasi
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February 2018 – April 2018
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Installation of exploratory drill hole DH-3
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Joe Havasi
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February 2019 – April 2020
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Installation of exploratory drill holes DH-3 through DH-5
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Joe Havasi
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February 2020 – March 2020
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Installation of exploratory drill holes DH-6 through DH-9
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Joe Havasi
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April 2021
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Mr. Havasi visited the site in support of miscellaneous projects and met with Site, Engineering, and Financial Management.
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Joe Havasi
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September 2021
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Mr. Havasi visited the site in support of miscellaneous projects and met with Site, Engineering, and Financial Management.
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Source: Compass Minerals
Table 2-1: Site Visits
2.5 Report Version
This TRS is not an update of a previously filed TRS.
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Cote Blanche Mine 2021 Technical Report Summary
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3 Property Description
There are over 500 salt domes in the onshore and near offshore part of the northern Gulf Coast Region, and others occur in Mexico, Central America, Cuba, and under the Gulf of Mexico (Halbouty, 1979). However, only six domes in Louisiana contain conventional underground salt mines (the Five Islands in the coastal basin) (Figure 3-1). The Cote Blanche Mine began producing salt in 1965.
Figure 3-1: Five Salt Domes in Louisiana
Source: Halbouty, 1979
3.1 Property Location
The Cote Blanche Mine is located in south-central Louisiana in the Parish of St. Mary (T15S, R7E), at the northern edge of Cote Blanche Hummoch, commonly called Cote Blanche Island. The Mine is situated approximately 26 miles south of the town of New Iberia, Louisiana, south of Highway 83 along the coast at the end of Cote Blanche Road. The approximate GPS coordinates of the site facilities are latitude 29.751219°, longitude -91.723312° (Figure 3-2).
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Figure 3-2: Cote Blanche Mine Property Location Map
Cote Blanche Island is situated between the Intra-Coastal Waterway and Cote Blanche Bay on the Gulf of Mexico. The island is accessible by boat or vehicle via a cable ferry. The Mine is approximately 2 hours west of New Orleans, Louisiana and approximately 26 miles southeast of New Iberia, Louisiana on the Gulf Coast. Figure 3-3 provides an overview of the mine.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Figure 3-3: Aerial View of Cote Blanche Island
Source: Google Earth
3.2 Property Area
Cote Blanche Island, where Compass Minerals’ Cote Blanche mining operations are located, is unique in that the island is a result of the uprising of the salt diapir, and the island perimeter generally mimics the areal extent of the salt diapir. As such, the diapir caused an upwelling of the ground surface, creating a uniquely elevated hummoch with a ground surface elevation ranging from zero ft. above mean sea level amsl to a maximum elevation of 97 ft. amsl, with an average diameter of about 1.68 miles (1.86 miles N-S, 1.51 E-W). The resulting elevated topography forms an island relative to the surrounding marshlands of approximately 1,635 acres. Compass Minerals leases the entirety of island from a private ownership group, excepting 115 acres of the southeastern sector of the island, for a total mineral lease of 1,520 acres. The legal boundary of the island is illustrated on Figure 3-3.
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Cote Blanche Mine 2021 Technical Report Summary
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3.3 Mineral Titles
3.3.1 History of Titles
The following provides a summary of the lease under which Compass Minerals conducts its mining operations, as stated in the 2003 Mineral Reserves Analysis completed by Maptec. A “Salt & Surface Lease”, dated as of June 12, 1961 (as amended and restated on January 1, 2004, the “Lease”), with the owners of the property (referred to herein, collectively, as the “Lessor”) provides the authority for Compass Minerals to mine the Cote Blanche Mine site.
The history of the operation is as follows:
•Domtar Industries, Inc. 1961 – 1990
•Carey Salt Company 1990 – 2003
•North American Salt (Compass Minerals) 2003 – 2014
•Compass Minerals Louisiana Inc. 2014 - present
3.3.2 Amended Lease
The Company leases the entirety of Cote Blanche Island from a private ownership group, except for 115 acres of the southeastern sector of the island (the “115 Acre Tract”), for a total mineral lease of 1,520 acres. The lease grants salt rights to the Company for all salt from the ground surface downward 3,000 feet, except for salt located within the 115 Acre Tract. The lease also grants surface rights in the western and southwestern sectors of Cote Blanche Island, with access rights to the mine road that extends north-south from the surface lease area to the Cote Blanche Crossing.
The lease has an effective end date of June 30, 2060, unless earlier terminated. In the event that no actual mining is being completed during any five consecutive years, the lessor has the option to cancel the lease. As lessee, the Company may exercise two options to extend the term of the lease, each for a 25-year period upon the same terms and conditions contained in the lease. The Company is required to hoist a minimum of 1,500,000 tons of salt annually in order to keep the lease in full force and effect. Under the terms of the lease, the royalty for each calendar year is equal to the Net F.O.B. Mine Sales Revenue Per Ton (as defined below), multiplied by the Applicable Royalty Rate (as defined below), multiplied by the number of tons of salt hoisted from the Cote Blanche mine in that calendar year. The “Net F.O.B. Mine Sales Revenue Per Ton” for each calendar year is the quotient of the total bulk sales revenue (excluding any taxes) of the Company and its affiliates for salt sold from the Cote Blanche mine in bulk (in units of 1 short ton or more) (“Total Bulk Sales Revenue”) reduced for all freight in, freight out, fuel surcharge, additives, depot/warehouse storage, handling and operating costs, promotions/discounts and other costs as are properly deducted under generally accepted accounting principles in that calendar year, divided by the total number of tons sold. The number of tons of salt sold is the same number of tons used to generate the Total Bulk Sales Revenue. The “Applicable Royalty Rate” for 2014 and each succeeding calendar year is as follows: 2014, 4.7%; 2015, 4.9%; 2016, 5.1%; 2017, 5.3%; and 2018 and thereafter, 5.5%.
The lease further provides that if, on or before January 1 of 2034, 2059 or 2084 (each, a “Review Year”), the lessor or the Company determines that, in operation, the royalty provisions of the lease result in the lessor receiving more or less than 5.5% of the fair value of salt at the minehead free of all costs at that point (the “Royalty Standard”), such party shall deliver to the other party on or before January 1 of the Review Year a written statement of its reasons why the Royalty Standard is not
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being met, a computation of the amount that will satisfy the Royalty Standard and a proposed revision to the royalty provisions of the lease that will cause the royalty provisions to comply with the Royalty Standard. On or before January 30 of the Review Year, the other party is required to deliver to the first party a written statement of its opinion as to whether the royalty provisions as proposed comply with the Royalty Standard and a response to the first party’s statement delivered under the preceding sentence. If the parties are not in agreement, the parties are required to commence arbitration.
The lease provides that the lessor has full right to grant future oil, gas and other mineral leases, except salt, provided that each such future oil, gas and mineral lease shall expressly obligate the lessee to cooperate with the Company in the conduct of its operations in order that the purposes of both leases may be best effectuated. The lease obligates the Company to cooperate with the oil, gas and mineral lessee so as to permit drilling of oil and/or gas wells.
3.4 Mineral Rights
As mentioned in Section 3.3, the lease grants salt rights to Compass Minerals for all salt above 3,000 feet below ground surface, excepting salt located within the 115 Acre Tract.
3.5 Encumbrances
The Lease provides that the Lessor has full right to grant future oil, gas and other mineral leases, except salt, provided that each such future oil, gas and mineral lease shall expressly obligate the lessee to cooperate with Compass Minerals in the conduct of its operations in order that the purposes of both leases may be best effectuated. The Lease obligates Compass Minerals to cooperate with the oil, gas and mineral lessee so as to permit drilling of oil and/or gas wells.
The Lease expressly states that, unless written permission of the Lessor is first obtained, there is to be no digging for or mining of rock salt by Compass Minerals, or anyone claiming by or through Compass Minerals, in or from any formation, strata or horizon lying below a depth of 3,000 feet from the surface of the earth, provided this shall not restrict the right of Compass Minerals to drill brine wells and conduct brine operations at a greater depth.
The Lease also prohibits the Lessor from, directly or indirectly, storing or allowing or granting rights to any third party to store hydrocarbons (including liquefied natural gas) at pressures above atmospheric pressure on or under Cote Blanche Island (including the 115 Acre Tract) until June 30, 2039. The Lessor does have the right to pursue, initiate or permit the storage of hydrocarbons at atmospheric pressure below 3,000 feet or above 3,000 feet within the 115 Acre Tract.
The Mine is not subject to any known encumbrances in the form future permitting requirements, permit conditions, violations or fines.
3.6 Other Significant Factors and Risks
Cote Blanche Mine is located in a relatively remote location for delivery of goods and services and requires diligent planning and site management to ensure continuous and consistent operation. Also, due to its location in the coastal region of the Gulf of Mexico, the Mine and its facilities are subject to the regional storms and extreme weather patterns, such as hurricanes and tropical depressions, which can impact production and cause varying levels of damage requiring repairs, as reviewed in Section 4.3)..
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According to the ESRI/ FEMA Map 220192 0200B dated October 18, 1983, the site is in flood Zone C. The surrounding areas are in Zone V17, with elevations between 16 and 17 feet amsl. The site sits atop a salt dome that is high ground in the area. The site elevation varies from the lowest point to the southwest at 12 feet to the highest in the north at 55 feet. The barge dock is at sea level. The lowest critical infrastructure (besides the dock) is the mine ventilation fan at 18ft.
The average recorded annual rainfall for this area is 50.27 inches.
There is a detailed written Hurricane Preparedness Plan in place with a six-phase approach and assigned duties. Current measures/controls that address the risk of flood are as follows:
•Fixed electrical installations are located away from water in elevated areas.
•Mine access road is crowned for drainage and ditched for the entire length.
•The lowest level at the mine is the fan at the 16-ft shaft which is 16 ft above sea level. A cover may be attached over this which elevates lowest level to 27 ft above sea level at the 16’ production shaft collar. Sand bags can also be placed around the shaft collar to further increase the level to 31 ft.
•To date the mine has experienced numerous hurricanes and severe weather events with no damage or equipment loss resulting from storm surge or flooding, such as.
•Hurricane Katrina (2005): A 500-year storm event occurred with minimal damage to facilities.
•During Hurricane Lily in 2001, the tidal surge was reportedly 10ft with nominal impact to the site.
•During Hurricane Andrew in 1992, in which the eye of that Category 3 hurricane passed directly over Cote Blanche Island, the storm/ tidal surge was nowhere near the mine entrances and damage to the mine was minimal (damage to surface buildings), with no flooding and no business disruption.
3.7 Royalties Held
Not Applicable.
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4 Accessibility, Climate, Local Resources, Infrastructure and Physiography
The Cote Blanche Mine is located in south-central Louisiana in the Parish of St. Mary (T15S, R7E), at the northern edge of Cote Blanche Hummoch, commonly called Cote Blanche Island. It is located approximately 26 miles by paved and gravel road from the town of New Iberia, Louisiana.
4.1 Topography, Elevation and Vegetation
The salt intrusion has an overlying ground surface elevation ranging from zero ft. amsl to a maximum elevation of 97 ft. amsl (Figure 4-1). The resulting elevated topography forms an island of approximately 1,635 acres. The dome has an average diameter of about 1.68 miles (1.86 miles N-S, 1.51 E-W).
Figure 4-1: USGS 7.5 minute Topographic Quadrangle Map: Cote Blanche Island
Source: Compass Minerals
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Cote Blanche Island is located on the northern edge of the extensive Atchafalaya-Vermillion Bay estuarine complex. This complex consists of several bays: Atchafalaya Bay, East and West Cote Blanche Bays and Vermilion Bay. The bays are generally shallow and are rimmed by brackish intermediate, and fresh marshes on the north and by predominantly brackish marsh on the south.
The marsh in the immediate vicinity of Cote Blanche Island is classified as an intermediate marsh, while the marsh a short distance to the west is brackish. Cultivated crop land (sugar cane) is found a few miles north of the site.
The intermediate marsh surrounding the island is made up of such typical vegetation as wire grass, saw grass, wild millet, bullwhip and bull tongue. The intermediate marsh contains a greater diversity of plant life than the brackish marsh.
The island is heavily forested with upland hardwoods, which occur primarily on moist sites. The dominant trees are live oak, magnolia and hickory with a conspicuous understory of yaupon, French mulberry and immature trees. The oak hickory-magnolia association extends down to the surrounding marsh. Vines and understory plants are dense along the roadsides and transmission line corridors. Heavy accumulations of leaf litter do not occur on the island due to high temperatures and abundant rainfall aiding fast decomposition.
4.2 Means of Access
The Mine is located 26 miles south of New Iberia, Louisiana. The site is accessed by heading southeast on State Highway 90, then heading southeast on Louisiana State Highway 83 for 11 miles on paved road and then traveling south on gravel roads for 1.5 miles to the Cote Blanche Crossing (Figure 4-2). Compass Minerals accesses Cote Blanche Island via two rights-of-way (“ROWs”) with a separate private landowner group. The Ferry Landing and Barge Canal ROWs are illustrated in white in Figure 4-1.
New Iberia is served by a small regional airport and a transcontinental railroad.
To access to the island, employees, visitors, shipments and vendors cross the Gulf Intercostal Waterway by ferry boat that Compass Minerals operates and maintains (Figure 4-2). At the crossing, the ferry is boarded and the channel traversed to the 1.8 miles of road leading to the mine site.
Compass Minerals also maintains a right-of-way agreement with the same landowner group for the barge canal, which is utilized for barge access to the mine (Figure 4-2).
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Figure 4-2: Ferry Landing and Barge Canal Rights of Way
Source: Compass Minerals
4.3 Climate and Operating Season
The climate and seasons at Cote Blanche are typical of the southern coastal area of Louisiana. Operations at the mine are maintained year-round and are impacted by regional storm activity in the form of tropical storms, hurricanes and seal level condition. Cote Blanche Island averages approximately 60 inches of rainfall per annum referencing information for New Iberia (Weather averages New Iberia, Louisiana, English, US Climate Data). Cote Blanche Island is highly exposed to the weather patterns of the Gulf region and experiences impacts from tropic storms and hurricanes. These events have the potential to force delays in operations and result in storm damage at the mine which contributes to overall operational costs and a potential for additional infrastructure investment.
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4.4 Infrastructure Availability and Resources
The Mine has a barge loading dock, administrative offices and other services related structures. Power is supplied to the site by CLECO Power nearby power lines that are fed directly from the main power grid and there are telephone and cellular connections. Water is provided to the Mine by privately owned and operated wells that are on the Mine site. Additional infrastructure detail is provided in Section 15.
The Mine has been well established and in the community for over 50 years. The communities of New Iberia, Broussard and Lafayette, Louisiana have the required infrastructure (shopping, emergency services, schools, etc.) to support the workforce.
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5 History
Pre-Cote Blanche Mine Production
Historic reports indicate that exploration in the Cote Blanche dome dates to as early as 1919, when six holes were drilled. Early exploration work targeted oil, gas, and sulphur; drilling therefore was often stopped when holes intersected salt. Exploration specifically targeting salt was initiated by Carey Salt Co. in 1958. In 1959, Carey Salt Co. retained Longyear to drill three exploration holes and submit a report containing a proposed mining plan and recommendations for future geologic work.
The holes were completed, but exploration costs are reported to have exceeded budgeted costs. Hole 6, a test hole designed to test a possible shaft location, encountered serious difficulties when it encountered a gas pocket at 715 feet. In 1960, Pennsylvania Drilling Co. drilled three additional holes; no records are available from this period.
In 1961, Grafton Drilling Co. drilled two additional holes, one of which was designed to test ground for a possible shaft location; the existing 8 ft and 14 ft shaft are located near this historic hole. Historic reports note that drilling invariably showed high grade rock salt, but that due to the steep dip of the salt strata vertical diamond drill holes do not obtain representative samples.
Mine Construction and Ownership
Mine construction was initiated in 1961 by Domtar Industries, Inc. Domtar constructed the 8-foot and 14-foot shafts and the barge loadout facility over the next four years, and salt production commenced in 1966. Operations transferred by sale from Domtar Industries to Carey Salt Company in 1990 upon the DG Harris Company purchasing North American Salt Company in 1990, including the Cote Blanche Mine in 1990. The Mine operated as Carey Salt thereafter. The salt assets of DG Harris Company were sold to IMC Global (“IMC) in 1997. IMC sold a majority of its salt operations, including the Cote Blanche mine, to Apollo Management V, L.P. through an entity called Compass Minerals Group in 2001. Following a leveraged recapitalization, the company now known as Compass Minerals International, Inc. completed an initial public offering in 2003.
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Cote Blanche Mine 2021 Technical Report Summary
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6 Geological Setting, Mineralization and Deposit
6.1 Geologic Description
Approximately 170 million years ago, shallow seas began to infiltrate Louisiana and the Gulf Coast. These shallow seas had restricted circulation from other larger bodies of water. This caused large amounts of salt and other evaporates to deposit, creating large salt deposits named the Louann Formation. After this cycle of evaporitic deposition, the Gulf of Mexico was flooded by a much larger open sea. Due to the relative buoyancy of the Louann salt, the salt pushed upward, through the overlying strata. The upwelling of the salt created the diapirs, or salt domes throughout the Gulf Coast region.
The Cote Blanche salt dome is one the five ‘island salt domes’ in the Gulf Coast region. The five island domes form a northwest-southeast trend approximately 60 miles long, and each dome consists of one or more salt diapirs which have risen upward relative to 3 to 20 km of overlying sediment from their original horizontal position in the Permian-Jurassic Louann Formation.
According to the Southeastern Geological Survey Guidebook, thicknesses of the Louann Salt range from 1000 meters in the East Texas and Northern Louisiana salt basins, 1200 to 1500 meters for the Mississippi salt basin and coastal belt from southeast Texas to southern Louisiana (including the Cote Blanche area), and up to 3000-4000 meters in the Texas-Louisiana continental slope area. Up to 2000 meters of rock salt may be in the southern area in the Gulf of Campeche. The stratigraphic position of the “mother salt” layer of the Louann is presently as much as 18 km deep (60,000 feet; 11.2 miles), although it is assumed that no salt is left at that level (having long since been mobilized and evacuated in concert with sedimentation), and no salt was actually that deep (the original position having subsided with sediment loading) (Kupfer et al. 1995).
The Louann Salt is composed primarily of medium- to coarsely-crystalline, translucent light-medium gray, to opaque white, halite (up to ~98%), with lesser anhydrite (up to 10%;), and minor sylvite. The darker gray bands of halite are generally richer in anhydrite (Kupfer et al., 1995). Pyrite, quartz, and dolomite occur in trace amounts. Carnalite (KMgCl3 . 6H2O) and various Borate Group minerals have also been reported to form the Louann (Gann et al., 1987; Dockery and Thompson, 2016). On average, halite crystals are between 5-15 mm (generally 0.5 to 1cm) in length, but some are larger (“pegmatitic salt”). Halite crystals are usually interlocked, equigranular, and slightly elongated. Recrystallization is common. Larger crystals are usually associated with moisture, bubble-like inclusions of methane gas, or clastic sediment. A common rock salt texture at Cote Blanche (but rare in the other Five Island Domes) is poikiloblastic salt (a descriptor normally used in metamorphic rocks), in which small salt crystals are embedded in larger crystals (metacrysts). The anhydrite (CaSO4) occurs as small, disseminated, euhedral crystals. Sylvite (KCl/“potash”) is typically red or pink color. Some salt contains interstitial brines (connate water, trapped in the salt during its formation) which evaporate upon exposure, leaving residual iron oxide stains (limonite), coloring the salt yellow or red (and not to be confused with the pink-red color of sylvite). Halite stalactites may form in areas where the brines drip (Kupfer et al., 1995).
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The Cote Blanche salt dome consists primarily of translucent to white salt interbedded with discontinuous bands of dark grey salt varying in thickness from several centimeters to over a meter. Banding at Cote Blanche, as in most other salt domes in the region, is primarily vertical to near vertical at a mine scale. Bands are interpreted to represent original bedding in evaporitic horizons, which have subsequently been deformed from horizontal into their current sub vertical orientations. At the scale of individual pillars, contorted banding shows that locally the salt has been tightly and complexly folded.
The Cote Blanche dome is somewhat unusual in that it does not have a cap rock (likely a function of local hydrogeologic conditions). In addition to the dark bands described in the previous section, the dome also contains thin beds of a reddish-brown Aeolian sandstone, as well as local zones of material known as ‘anomalous’ salt (i.e., material that is unusually coarse, discolored, friable, hard, or contains gas pockets). Salt mined from the dome is variable enough in terms of grain size, calcium (Ca) /magnesium (Mg) content, etc., that it is divided into three broad categories: chemical-grade salt, highway salt, and specialty (high-magnesium) salt.
In contrast to the other four major island salt domes in the USA, there is no underground evidence of an internal boundary zone at the Cote Blanche Mine that would indicate the convergence of two or more salt plumes.
As in all of the other Louisiana five island salt domes, the internal structure is nearly vertical, although locally salt beds have been observed to roll over to nearly 45⁰ from horizontal. Mapping shows internal structure to be extremely complex. The alternating bands of light and dark salt are considered to be original bedding from the evaporate sequence. Sediment inclusions occur mainly in the form of an interbedded sand, as opposed to the massive incorporation of elastic and organic debris in anomalous zones.
These sandy beds are considered original bedding for several reasons. First, they follow closely the trend of salt layering in occurrences throughout the mine; second, they maintain a fairly constant thickness (1 to 6 ft); third, the contact between the sand and the adjacent salt is very sharp; and fourth, the sand has a fairly consistent mineralogic composition. This sand unit is one of the few marker beds in the complexly folded salt strata. Another marker bed is a black, carbonaceous silt clay member.
The sandstone areas described above can form areas of disturbance or low salt quality, which can prove problematic during mining and therefore Compass completed a seismic survey during 2016 to improve the confidence in the modelling of such units on the 1500-foot level. Initial results have been received but the current investigation is on-going at the time of reporting. Based on these marker beds and structural mapping, it appears that although local folding is complex, the axis of a large fold runs from the northwest to the center of the mine.
6.2 Mineral Deposit Type
The salt at Cote Blanche is a sedimentary deposit. The deposit only extends to inside the boundary of the salt dome, as described in Section 6.1 Geologic Description.
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6.3 Stratigraphic Section
*Generalize stratigraphic section from Louisiana State University
Figure 6-1: Stratigraphic Section
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Figure 6-2: Geologic Cross Section of Cote Blanche Island
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7 Exploration
Exploration at the Cote Blanche Mine has been undertaken in a variety of forms since the early 1900s. The objective of exploration activities relative to the Cote Blanche salt diapir has been targeted towards assessing the presence of oil and gas in adjacent strata and traps outside of the diapir and through this data collection, a passive, but thorough characterization of the margin of the salt diapir was created. Generally, the characterization of the nature and extent of the salt diapir that uplifted Cote Blanche Island has benefited from oil and gas exploration in the form of drilling and seismic surveys conducted along the Louisiana Gulf Coast. Relative to the salt ore body that forms the diapir, the approaches used to explore and define the mineralogic properties of salt of the diapir have been unconventional relative to other non-salt ore bodies because of the soluble nature of salt when exposed to water.
While there has been extensive exploration on and adjacent to Cote Blanche Island, Compass Minerals only has access to mapping and reports that are publically available from external subsurface exploration. While the data provide a strong depiction of the salt ore body, Compass Minerals has undertaken in-seam seismic and mud-rotary drilling to verify and validate the salt dome morphology to ensure that it maintains its self-determined setback from salt diapir margin of 400 feet. To that end, Compass Minerals’ sole objective in implementing its in-seam seismic and mud-rotary drilling campaigns is confirming salt diapir position, morphology and margin, and not for the purposes of the characterizing the ore body from a quality standpoint. The nature of salt diapirs lends itself to a strong understanding of the homogeneity of the morphology and mineralogy of the ore body. Thus, the primary concerns within the salt diapir are understanding the margin of the diapir to support the mine plan by ensuring geotechnical stability, and mapping the localized presence of sandstone partings and seams that are encountered from time to time as well as sheer planes along margins of salt stock formations. The Cote Blanche Mine has been in production since 1966, and this presence and experience has provided decades worth of data as to the nature of salt mineralogy and the products that can be produced through its extraction and production. The nature of the salt diapir’s mineralogic homogeneity provide reasonable confidence in the integrity and consistency of the Cote Blanche salt ore body, and risks inherent in drilling deeper or laterally to confirm mineralogy within the diapir are not worth the benefit of confirming what is reasonably known.
7.1 Procedures – Exploration Other than Drilling
In-seam Seismic Survey
As mining approaches the margins of the salt diapir, Compass Minerals’ operations implement in-seam seismic studies to evaluate whether operations are approaching the 400-foot setback from margin of the diapir. This work has been focused exclusively on the 1,500-foot level, and has been conducted in different campaigns annually since 2010. In November 2013, Tesla completed an underground seismic program at the 1,500 ft level of the Mine consisting of two seismic lines. The purpose of this program was to determine the depth from the roof of the salt diapir to the roof of the 1,500 ft workings and to image any undetected geological features which may influence future mining. Data collected from the program showed a short reflector near the interpreted roof of the diapir, which Tesla considered to be the result of two possible scenarios: 1) vertical abutment fracturing which inhibited the efficiency of the seismic source impacts in that location, and 2) a sudden change in the gradient of the roof, perhaps caused by previously unsuspected faulting.
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Cote Blanche Mine 2021 Technical Report Summary
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In October 2016, the seismic study was expanded and completed by DMT. The seismic instrument used “Summit-ex” is normally used in German coal mines. Data quality was checked by DMT and calibrated inside the mine. The 2016 DMT survey results highlight key geological reflections on the 1,500 level based on the initial results. The results have been subdivided into potential reflects from the edge of the dome, top of dome or a disturbance zone (likely sandstone horizons), and are shown in Figure 7-2. These have been used to review the contours on the 1500 level and to assess the risk in the current mine plan.
A typical seismic line is comprised of 35, two-component geophone locations distributed around the target areas of the mine, which is the current active production zone. Adjacent to each geophone location in the surveys, two separate seismic impulses are generated by means of a sledgehammer blow to the mine rib and a nailgun impact. Seismic data resulting from each source impulse were recorded on each of the 70 active seismic channels. Frequencies in the range 200-500Hz are monitored, and the data stacked assuming a velocity of 7915ft/second. This velocity has been selected on the basis of a range of internal evidence from a baseline survey conducted in 2010.
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Cote Blanche Mine 2021 Technical Report Summary
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Source: DMT, 2016
Figures 7-1 and 7-2: Summary of Raw (top) and Interpreted (bottom) results from 2016 Seismic survey on level 1500
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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7.2 Exploration Drilling
Due to the nature of the mineral extraction in salt and the fact that salt is soluble when exposed to unsaturated water or brine, drilling exploration has been very limited on Cote Blanche Island other than historic oil and gas drilling as well as more recent mud-rotary drilling to confirm the surface or the dome. To that end, very little drilling has been conducted to purposely penetrate the salt and potentially compromise the salt diapir with the introduction of fresh water.
There have been three types of drilling data generated that have yielded information on the location and geometry of the salt dome, including: oil and gas exploration, limited salt dome drilling during early development of mine design in the 1960s, and more recent mud-rotary drilling designed to simply document the top of salt intersect to confirm historic data not generated by Compass Minerals.
Non-salt Exploration
Historic reports indicate that exploration in the Cote Blanche dome dates to as early as 1919, when six holes were drilled. Early exploration work targeted oil, gas, and sulphur; drilling therefore was often stopped when holes intersected salt. In 1960, Pennsylvania Drilling Co. drilled three additional holes; no records are available from this period. Locations of documented oil and gas exploration drill holes with salt intersects are shown on Figure 7-3. There is no known sampling or other testing documentation for these locations other than salt contacts.
Salt Exploration
Exploration specifically targeting salt was initiated by Carey Salt Co. in 1958. In 1959, Carey Salt Co. retained Longyear to drill three exploration holes and submit a report containing a proposed mining plan and recommendations for future geologic work. The holes were completed, but exploration costs are reported to have greatly exceeded budgeted costs. Drillhole 6, a test hole designed to test a possible shaft location, encountered difficulties when it encountered a gas pocket at 715 feet. In 1961, Grafton Drilling Co. drilled two additional holes, one of which was designed to test ground for a possible shaft location; the existing 8 ft and 14 ft shaft are located near this historic hole. Historic reports note that drilling invariably showed high grade rock salt, but that due to the steep dip of the salt strata vertical diamond drill holes could not obtain representative samples. A map illustrating the location of salt development drilling activities is shown in Figure 7-3.
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Figure 7-3: Exploration Intersects with Top of Salt Diapir
Source: Compass Minerals
Salt-Dome Definition Validation Drilling
Beginning in 2016, nine drill holes were advanced in the northern margins of the Cote Blanche Island to confirm the understood margins of the salt diapir to support mine planning and ensure mining would not occur within 400 feet of the salt dome margin. Procedures for installation for these salt intersect exploration holes is provided in Section 7.3, and a map of the drill holes is provided in Figure 7-4.
7.3 Procedures – Drilling Exploration
Nine exploration holes, DH-1 through DH-9 (Figure 7-4), have been advanced since 2017 using mud-rotary drilling technology. At all holes, a surface casing was installed in the upper 300 feet of the unconsolidated sediments to protect surface aquifers containing fresh water.
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Upon installation of the surface casing and after at least 24 hours to ensure casing grout had cured, drilling continued. Cuttings and drill return fluids were monitored every ten feet of drilling advancement for salinity, temperature, and specific conductance to monitor for penetration into deeper saline groundwater. The combination of salt saturated drill returns, foaming of return fluids and increases in drilling advancement confirmed the salt contact, or top of salt diapir. All drill holes were sealed using a grout mixture designed to cure in high salinity brines. All holes were surveyed and top of salt contact integrated in to the current mine plan and salt diapir model.
Intersects for drill holes installed using mud-rotary technology are summarized in Table 7-1.
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Location
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Date Installed
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Upper Alluvium
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Chert Present
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Top of Salt
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DH-1
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March 2017
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910'
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910' - 1,200'
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1200'
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DH-2
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April 2017
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1065'
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NP
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1065'
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DH-3
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March 2018
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980'
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980'- 1,110'
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1110'
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DH-4
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February 2018
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680'
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680' - 1,268'
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1,268'
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DH-5
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February 2019
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680'
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NP
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Not intersected
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DH-6
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March 2020
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660'
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660' - 1,200'
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Not intersected
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DH-7
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April 2020
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1,120'
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1,120' - 1,160'
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1,160'
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DH-8
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March 2020
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640'
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640' - 880'
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880'
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DH-9
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April 2020
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860'
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860' - 880'
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880'
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Table 7-1: Summary of Salt Intersects from Mud-Rotary Drilling Campaigns
Source: Compass Minerals
7.4 Characterization of Hydrology
Cote Blanche is part of the coastal lowlands aquifer system. This system consists of alternating beds of sand, gravel, silt and clay. The deposition of the sediments occurred under fluvial, deltaic, and marine conditions.
The sediments of the coastal lowlands are heterogeneous with changes in the lithology occurring over short distances laterally and vertically. Gravel and sand beds are only continuous for a few miles. The total thickness of the coastal lowlands aquifer ranges from a thin lens towards the northern part of Louisiana to 16,000 ft. in southern Louisiana.
Ground water flow in the coastal lowlands aquifer system is primarily in a southerly direction towards the coast. Some of the water is discharged locally in streams or canals. Water that is not discharged moves downward and merges with the regional ground water flow.
Saltwater occurs in the marine and deltaic parts of the aquifer system. The freshwater moves down dip from the recharge area and tends to flush the saltwater ahead of it until the pressures are in balance or pinching out of salt beds or a clay lens impedes groundwater movement.
According to a United States Geological Survey (“USGS”) hydrology study of the coastal lowlands aquifer system, hydraulic conductivity, the ease at which a fluid moves through pore spaces, range
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from 163 ft./day to 72 ft./day. Clay beds separating the discontinuous sand beds can disrupt the lateral flow within. Drill logs form exploratory drilling at the site show the sand content of the subsurface is above 70%. Because of this and the site’s location, the hydraulic conductivity at the site would be in the range of 163 ft. /day.
The USGS performed a study modeling recharge and discharge rates for the coastal aquifer system. The model indicated about 207 Mft3/day enters the aquifer system as recharge from the surface and 14.1 Mft3/day enters, laterally from other surrounding aquifers. Aquifer discharge occurs in in the coastal plain, marshes and bayous.
Most groundwater withdrawals occur around New Orleans, Baton Rouge and southwestern Louisiana. Groundwater withdraws are primarily for city or agricultural use. The site has several wells for use in manufacturing and potable water. The water level at the site has not declined and has remained steady since the Mine’s operation began.
Salt domes are known to be dense in composition with a porosity tending toward zero and impervious (White, 1983) due to the re-healing process of fissures and fractures. Like other salt resources, Cote Blanche Mine maintains a halo of brine surrounding the salt dome, thus preventing freshwater penetration. The 400-foot mining buffer maintained from the edges of the dome serves to further keep the dome hydrologically stable and prevent fresh water infiltration. Due to the hydrologic nature and relative impermeability of the deposit, Compass Minerals has not performed extensive hydrogeologic studies and relies on field interrogation and production observations to monitor conditions.
7.5 Exploration – Geotechnical Data
Results and data from exploration that was attempted in the 1950s are not available to the Company. The Company has not endeavored to test properties as the operation is has been continuous and ongoing since 1966, and the mine, pillars and ore body is acting as expected within expected ranges based on the normal properties of salt. Table 7-2 provides the current applied factors when modelling rock mechanics and mine planning.
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Overburden Material
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Depth to (ft)
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Density (pcf)
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Shear Modulus (ksi)
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Bulk Modulus (ksi)
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Cohesion (psi)
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Friction (deg)
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Unconsolidated
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0-150
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110
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3.9
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7.9
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4
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18
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Consolidated
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150-300
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125
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13.3
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32.4
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12
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12
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Competent
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300-500
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145
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32.5
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49.7
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72
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8
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Shallow Country Rock
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500-600
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145
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80
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173
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104
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30
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Medium Country Rock
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600-1,800
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165
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320
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695
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1,510
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35
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Deep Country Rock
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1,800-2,200
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175
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640
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1,388
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3,380
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40
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Dome salt
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>600
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135
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722
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1,653
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868
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41
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Table 7-2: Values and factors used in modelling rock mechanics
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7.6 Exploration Plan Map
Figure 7-4: Top of Salt Diapir Validation Drill Hole Locations
7.7 Description of Relevant Exploration Data
The combination of historic data collected through externally funded and directed seismic and drilling programs for oil and gas exploration in strata surrounding the diapir, combined with Compass Minerals’ salt diapir morphology validation drilling has created a reasonably strong characterization of the definition of the salt diapir. Further, salt in diapir deposits are almost pure sodium chloride except for the caprock in which the insoluble minor constituents of the salt are thought to have been concentrated by solution of the salt. The presence of potash zones, especially carnallite, in salt diapirs is common, but is contained to small zones and has not been found to be in any appreciable or economic amount. Over 50 years of production and interrogation of salt from the Cote Blanche Mine within the salt ore body and a strong understanding of the homogeneity of salt diapirs generally with regard to mineralogy and the lack of stratification or segregation of minerals within a diapir provide reasonable certainty as to the chemical composition and quantity of salt contained within the Cote Blanche salt ore body.
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As the mining continues and progresses to the next deeper mining level at 1,700 feet and eventually to the 1,900-foot level, definition of the upper surface of the salt diapir is no longer necessary as mining will be below the current mining level. Therefore, mud-rotary drilling to validate the salt dome surface will no longer be necessary and instead the mining operation will continue its in-seam seismic data collection to assess the potential for potential anomalies within 1,000 feet of the face, and as mining progresses to the outer margins of the mine plan, verification that the lateral margins of the diapir are not within the 400-foot setback of mineral extraction.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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8 Sample Preparation, Analyses and Security
Due to the nature of the mineral extraction in salt and the fact that salt is soluble when exposed to unsaturated water or brine, drilling exploration has been very limited on Cote Blanche Island other than historic oil and gas drilling as well as more recent mud-rotary drilling to confirm the surface or the dome. To that end, very little drilling has been conducted to purposely penetrate the salt and potentially compromise the salt diapir with the introduction of fresh water. Due to this risk, no samples from recent have been collected. If samples were collected during the oil and gas exploration, results were not documented. Further, salt in diapir deposits are almost pure sodium chloride except for the caprock in which the insoluble minor constituents of the salt are thought to have been concentrated.
8.1 Sample Preparation and Quality Control
Documentation of sampling that may have occurred in the 1950’s is not in the Company’s possession and therefore not available for reporting. The combination of historic data from continuous and ongoing mining operations, its ongoing interrogation of the mineral deposit, and Compass Minerals’ salt diapir morphology validation drilling (as described in Section 9) has created a strong characterization of the definition of the salt mineralogy and chemistry.
8.2 Sample Analyses
Documentation of sampling that may have occurred in the 1950’s is not in the Company’s possession and therefore not available for reporting. The combination of historic data from continuous and ongoing mining operations, its ongoing interrogation of the mineral deposit, and Compass Minerals’ salt diapir morphology validation drilling has created a strong characterization of the definition of the salt mineralogy and chemistry.
8.3 Sample Quality Control and Assurance
Documentation of sampling that may have occurred in the 1950’s is not in the Company’s possession and therefore not available for reporting. The combination of historic data from continuous and ongoing mining operations, its ongoing interrogation of the mineral deposit, and Compass Minerals’ salt diapir morphology validation drilling has created a strong characterization of the definition of the salt mineralogy and chemistry.
8.4 Adequacy of Sample Preparation
Documentation of sampling that may have occurred in the 1950’s is not in the Company’s possession and therefore not available for reporting. The combination of historic data from continuous and ongoing mining operations, its ongoing interrogation of the mineral deposit, and Compass Minerals’ salt diapir morphology validation drilling has created a strong characterization of the definition of the salt mineralogy and chemistry.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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8.5 Analytical Procedures
Documentation of sampling that may have occurred in the 1950’s is not in the Company’s possession and therefore not available for reporting. The combination of historic data from continuous and ongoing mining operations, its ongoing interrogation of the mineral deposit, and Compass Minerals’ salt diapir morphology validation drilling has created a strong characterization of the definition of the salt mineralogy and chemistry.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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9 Data Verification
9.1 Data Verification Procedures
As discussed in Section 7, exploration of the salt ore body within the diapir forming Cote Blanche Island is a body of work, founded mainly on the work of externally funded and directed oil and gas exploration. Sufficient evidence of an economic salt deposit was available to Domtar Industries to support the development of the Mine, which was constructed in placed into production in 1966. Compass Minerals does not have access to engineering reports or data collected by Domtar Industries, but the data collected prior to development of the Mine would have been in shallower depths within the diapir than what are being mined currently, and therefore not pertinent to current and future operations.
Subsequent external and publically available information from oil and gas focused surface seismic and subsurface drilling and exploration campaigns has provided additional data relative to the margin and morphology of the dome as the extraction of oil and gas is dependent on defining the margin of diapir to locate petroleum traps.
As Compass Minerals was not involved with, included in or informed of data collection and exploration during these campaigns, it is not possible to verify procedures employed and data integrity in the creation of the Cote Blanche diapir morphology and surface. Notwithstanding, Compass Minerals has directly employed the following campaigns and ongoing procedures to validate the historic data set to ensure the integrity of the diapir is not geotechnically compromised:
•Installation of nine mud-rotary drillholes to validate salt contacts in the northern region of the dome to ensure mining does not proceed within 400 feet of the margin of the diapir.
•Annual in-seam seismic campaigns to verify that anomalies and possible edge of the diapir is not within with 1,000 feet of mining.
9.2 Conducting Verifications
The QP has been directly involved with and provided leadership in the development of design, data interpretation and logging both validation efforts. Data generated from these efforts, however, are not tangible, discrete data from sampling but rather an assessment of real-time monitoring data generated from salinity measurements and observation from drilling returns from mud-rotary drilling and in-seam seismic data. To that end, interpretation of real-time mining data cannot be completely precise, but the data returns combined with the body of knowledge relating to the surface and morphology of the diapir provide a reasonable validation of historic data that together enable Compass Minerals to understand the geometry of the dome in order to determine mineral resources.
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Cote Blanche Mine 2021 Technical Report Summary
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9.3 Opinion of Adequacy
The Company’s salt-producing locations do not utilize exploration in the development of their assumptions around mineral resources or reserves. The mineral deposits are restricted in access by bodies of water, and industry techniques used for geological exploration for other types of mineral deposits, specifically collection of rock core from drilling, can be degradational to the salt ore being assessed. Given the nature of the salt mineral and each site’s proximity to water bodies, this limitation impedes the validation of mineral resources and reserves using exploration drilling techniques. Accordingly, geophysical techniques are utilized at Cote Blanche to assist in mine planning, and to verify that there are no obstructions ahead of advancement of the mine in the form of geological anomalies or structural features, such as faults that could affect future mining. In conducting these geophysical campaigns, including in-seam seismic and ground penetrating radar technologies, the Company is able to identify the continuity of ore-body ahead of mining. In-seam directional drilling is also conducted at Cote Blanche as a means of extending the Company’s visibility into the ore body beyond the ranges that can be assessed by geophysical technologies.
In the opinion of the QP, the body of data known about the composition, mineralogy, morphology and geometry of the Cote Blanche diapir and the salt ore body therein, and ongoing interrogation of the salt through current production and sampling are sufficient to establish a resource estimation.
For the purposes of this technical report summary, the QP believes the current set of analytical procedures in place for production of resource and reserve estimations is considered reasonable for the geologic, mineralogic and environmental setting in which Cote Blanche diapir exists and are in alignment with conventional industry practice for the mining of salt on this production level.
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Cote Blanche Mine 2021 Technical Report Summary
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10 Mineral Processing and Metallurgical Testing
10.1 Nature and Extent
The Cote Blanche Mine utilizes a relatively simple process with a focus on particle size reduction of the salt product. Once the salt has been sized accordingly it is either stock piled or placed directly onto a barge for transport to market. The main stockpile area is broken into three distinct sections;: chemical, non-chemical, and ice control. The mill is broken into two distinct halves; the mine run circuit and the whole mill. Only chemical quality and non-chemical quality salt can be processed through the whole mill. Ice control quality salt is processed through the mine run circuit.
10.2 Degree of Representation
In seam sampling of the salt deposit at Cote Blanche Mine is a part of the production process and is considered representative of the surrounding orebody for a particular level of mining. The deposit at Cote Blanche exhibits strong structural and grade continuity typical of this type of industrial mineral deposit and so the inseam sampling provides a reliable characterization of the product being mined. Save for an occasional inclusion or rock into a level as described in the geology sections, the inseam sampling remains reliably descriptive of the salt resource.
10.3 Analytical and Testing Laboratories
Due to the consistent and uniform nature of the salt mineral being recovered, production samples are tested by Compass at the facilities owned and operated by the Mine. This laboratory is not certified. In the event that sampling programs or quality investigations are required outside of the typical mode of operations, Cote Blanche would utilize third-party certified laboratories and testing following industry standard practices for quality assurance and control.
10.4 Recovery Assumptions
Recovery factors applied to production are based upon experiential and historical calibrations of results. For example, some mined product is lost to market through the production of fines during the mining process.
The Cote Blanche Mine uses the following values provided in Table 10-1 in a product specification sheet provided to bulk deicing customers. Figure 10-2 illustrates quality performance for bulk deicing salt in 2021 relative to material passing a 30-mesh screen.
Table 10-1: Chemical and Physical Characteristics of Cote Blanche deicing salt
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Cote Blanche Mine 2021 Technical Report Summary
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Figure 10-1: Finished product passing #30-Mesh Screen
10.5 Adequacy of Data
Laboratory data collected at Cote Blanche is adequate for the continued production of salt and in alignment with typical conventional industry practice for the industry. The fines represent approximately 11% of the mined volume. This is based upon empirical experience. Notwithstanding, fines are integrated back into production to the extent possible, netting a loss of approximately 6%. Detailed recovery of data and analysis beyond the current practices would be considered uneconomic and unnecessary in the absence of a specific issue or conditions required such further analysis.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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11 Mineral Resource Estimate
11.1 Introduction
This section describes the resource estimation methodology and summarizes the key assumptions and controlling parameters utilized by Compass mine personnel in developing the mineral resource estimates for Cote Blanche.
The resource estimation reported herein is a reasonable representation of the salt resources available at the Cote Blanche property as understood by Compass at the time of this report. The salt resources at Cote Blanche have been estimated in conformity with Items 601(b)(96) and 1300 through 1305 of Regulation S-K promulgated by the SEC, generally accepted industry practice and experience and in alignment with Canadian Institute of Mining’s (CIM) “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines (2019) as well as the Guidelines for Industrial Mineral (2003) published by the CIM Estimation Best Practice Committee. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of a mineral resource will be converted into mineral reserves.
The resource estimates are compiled utilizing data and experience of the geological continuity of the salt deposit over the history of mining in the dome (Section 5). Geologic models of the salt dome were utilized to approximate the contours of the salt dome and estimate the resource. Compass develops and continuously updates its models of the salt deposit utilizing a combination of many advanced analytical tools including; Autodesk’s AutoCAD, Carlson Mining Software, Seequent’s Leapfrog Geo, Deswik’s Mining CAD and scheduling modules as well as Microsoft Excel and other tools. Additionally, results from various and proprietary reports of engineering and geologic investigations by third-party consultants conducted for Compass were incorporated in the evaluation of the resource.
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Cote Blanche Mine 2021 Technical Report Summary
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Figure 11-1: Contours of the Cote Blanche Salt Dome
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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11.1.1 Key Assumptions and Parameters
The resulting models provide an estimate of the total resource available to Compass Minerals as defined. The resource estimate is based on the well understood stratigraphic rock sequence on a regional scale, in-seam drilling results, and more than half a century of mining the salt dome at Cote Blanche. In addition, it relies heavily upon geologic modeling and mine planning efforts by both mine personnel and third-party consultants to establish estimates consistent with industry practice. In compiling the resource estimate for the Cote Blanche salt dome, the key assumptions and parameters considered are:
•Mineral resources are not mineral reserves until converted and have not demonstrated economic viability,
•Underground mineral resources are reported based on the established mining practices, including the established 75-foot mining horizon (mining height),
•The 75-foot mining height is based upon locational experience, practical fit and the execution of historic and current mining practices as well as internal and external studies and recommendations regarding ground control and roof support,
•The specific points of reference for Cote Blanche mine are the elevations of the 75-foot mining horizons identified at the 1300-foot, 1500-foot, 1700-foot and 1900-foot levels, all as measured below mean sea level,
•The specific points of reference for the salt resource are also limited in horizontal plan extent by the modeled contours at each mining level as reduced for the prescribed 400-foot offset buffer (halo) from the modeled edge of the dome as defined by the geophysical exploration conducted regularly by the mine,
•Substantial reliance upon the modelled contours of the locations and elevations of the Cote Blanche salt dome deposit as developed by the mine engineering personnel and others in defining the limits of the salt dome and halo,
•All values have been rounded to reflect the relative accuracy of the estimates and
•Tonnage was calculated based on a tonnage factor of 0.0675 tons/ft3.
Estimated contours of the resource for the Cote Blanche salt dome are shown in Figure 11-1.
11.1.2 Methodology
The resource estimation methodology involved the following procedures:
•Review of available data, models and reports;
•Database compilation and verification;
•Definition of resource domains;
•Volumetric calculations based on salt bed assumptions;
•Resource classification and validation;
•Assessment of “reasonable prospects for economic extraction”; and
•Preparation of the Mineral Resource Statement.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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11.2 Mineral Resource Statement
The mineral resources may be affected by further exploration work such as seismic or drilling that may result in increases or decreases in subsequent mineral resource estimates. The mineral resources may also be affected by subsequent assessments of mining, environmental, processing, permitting, socio-economic, and other factors. The Mineral Resource Statement for the site is presented in Table 11-1. The effective date of the Mineral Resource Statement is September 30, 2021.
Table 11-1: Cote Blanche Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020
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Salt Resource (tons)(1)(3)(4)(5)(6)(7)
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Resource Area(2)(8)
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As of September 30, 2021
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As of December 31, 2020
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Measured Resources
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|
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1,300-Foot Level
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25,491,881
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25,491,881
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1,500-Foot Level
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16,448,712
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20,494,440
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Total Measured Resources
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41,940,593
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45,986,321
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Indicated Resources
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|
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1,300-Foot Level
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12,373,509
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12,373,509
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1,500-Foot Level
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9,028,840
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9,028,840
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1,700-Foot Level(9)
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361,584,762
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361,584,762
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1,900-Foot Level(9)
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246,045,618
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246,045,618
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Total Indicated Resources
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629,032,729
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629,032,729
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Measured + Indicated Resources
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|
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1,300-Foot Level
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37,865,390
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37,865,390
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1,500-Foot Level
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25,477,552
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29,523,280
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1,700-Foot Level(9)
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361,584,762
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361,584,762
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1,900-Foot Level(9)
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246,045,618
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246,045,618
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Total Measured + Indicated Resources
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670,973,322
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675,019,049
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Inferred Resources
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|
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1,700-Foot Level(9)
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32,915,833
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32,915,833
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1,900-Foot Level(9)
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130,851,531
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130,851,531
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Total Inferred Resources
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163,767,364
|
163,767,364
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(1) Mineral resources are not mineral reserves and have not demonstrated economic viability.
(2) Underground mineral resources are reported based on assumed 75-foot mining horizons, discounted for areas not accessible due to proximity to oil wells.
(3) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot.
(4) Included process recovery is 94% based on production experience. Included mining recovery is approximately 56% based on the room and pillar layout.
(5) Although the actual sodium chloride grade is less than 100%, it is not considered in the resource, as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(6) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing.
(7) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of this TRS. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $61.41 per ton. Gross sales prices are projected to increase to approximately $706.49 per ton for rock salt for road deicing through year 2138 (the current expected end of mine life).
(8) Based on approximate areas of: 5,399,000 square feet (“ft2”) for the 1,300-foot level; 2,991,000 ft2 for the 1,500-foot level; 45,721,000 ft2 for the 1,700-foot level; 50,293,000 ft2 for the 1,900-foot level; and 104,404,000 ft2 in the aggregate.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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11.3 Estimates of Cut-off Grades
Cote Blanche Mine produces rock salt, primarily for highway use. Mineral cut-off grades are not applicable to the recovery of rock salt and are not a primary driver for production. It is understood that, for all practical purposes, every ton recovered and hoisted to the surface at Cote Blanche is a viable sales ton. A cut-off grade is not impacted by commodity pricing, save for the event in which costs to produce and deliver rock salt to market exceed the established floor price of the commodity as discussed in the section on Economic Analysis. Production of salt is driven not by the availability of the resource or by the control of a cut-off grade in the foreseeable future, but by market demand. Salt production and correspondingly costs can be modulated in response that demand.
It is worth noting that while there is no cut-off grade, there are losses in the mining process. Mined salt that is recovered during mining operations and handling is either sales product for shipment or is lost as waste in the form of fines. Fines are defined as volumes of salt resulting the production process below saleable size consist. The waste volumes are disposed of underground in existing abandoned excavations mined previously and accounts for approximately 6% of the salt recovered. However, as noted elsewhere, for the purposes of defining the salt resource, all of the in-situ mineral within the contours of the salt dome is considered a resource within the constraints of mining practices and safety.
As stated, the controlling parameter for directing production is not a cut-off grade in terms of mineral composition but the physical characteristic in terms of product particle size. While the mine does monitor sodium chloride percent (NaCl%), magnesium content (Mg ppm), calcium content (Ca ppm) and calcium/magnesium ratio (Ca/Mg), these values are utilized primarily in the development of mine planning and scheduling to maintain a uniform product specification from the mine and do not contribute significantly to the differentiation of independent commodities with alternate prospects of economic extraction for the mineral resource. With few exceptions, the deposit at Cote Blanche exhibits strong structural and grade continuity typical of this type of industrial mineral deposit and does not incorporate any chemical cut-off grade in recovery of the orebody.
11.4 Resource Classification
Volumes, grade and tonnages estimated for the Cote Blanche Salt Mine were classified in alignment with Items 601(b)(96) and 1300 through 1305 of Regulation S-K and the CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines (2019) by Compass Minerals’ on-site engineering and corporate support.
Mineral resource classification is typically a subjective concept, and industry best practices suggest that resource classification should consider the confidence in the geological continuity of the modelled mineralization, the quality and quantity of exploration data supporting the estimates, and the geostatistical confidence in the tonnage and grade estimates. Appropriate classification criteria should aim at integrating these concepts to delineate regular areas at a similar resource classification.
The Cote Blanche resource models honor the current geological information and knowledge and are representative. The mineral resource model is informed from the seismic surveys and geological mapping where available. The geological information shows a high level of vertical continuity with local variations in salt quality and friability noted. Factors such as variations in quality typically results in reassignment of product types with some minimal wasting of product.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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The following classification has been applied to the Cote Blanche Mine resource estimate:
Inferred Mineral Resources: Volumes for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Resources at Cote Blanche are defined as inferred mineral resources within the prescribed 400-foot offset buffer (halo) from the modeled edge of the dome (defined from seismic surveys). Inferred minerals resources have the lowest level of confidence.
Indicated Mineral Resources: Contiguous volumes of rock salt for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. These resources at Cote Blanche are the portions of the salt orebody lying between the current working faces and the halo at the proposed edge of the dome on each level.
Measured Mineral Resources: Contiguous volumes of rock salt mineralization informed from confirmation of geological continuity due to mapping, and sampling information to confirm salt quality and quantity with confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Measured resources at Cote Blanche are those found on the 1300 and 1500-foot level associated with the existing, operating workings.
11.5 Uncertainty of Estimates
As stated, volumes, grade and tonnages estimated for the Cote Blanche Salt Mine were classified in conformity with generally accepted industry practice and experience and in alignment with established guidelines. While mineral resources are not mineral reserves and have not demonstrated economic viability, the estimates made here do represent the mineral potential of the property to the extent of the best available data and knowledge. The longevity, history and established nature of the salt dome and salt mining at Cote Blanche lends confidence to the estimates presented herein. Extensive use of analytical methods to establish estimates of confidence limits for the resource such as geostatistics or numerical methods are not supported by operational experience or need, existing variances in the nature of the resource, return on economics nor are such analytics supported by established industry practice for the recovery of the salt commodity.
11.6 Multiple Commodity Grade Disclosure
Cote Blanche Mine produces rock salt, primarily for highway use. A small portion of product, approximately 8%, is recovered for commercial and industrial (C&I) use and/or chemical grade sales. The differentiation in product is based upon quality (relative purity / lack of contaminants) and size consist. C&I and chemical products typically market at a higher price and margin than salt utilized for highway use, however, for purposes of resource evaluation, all estimated volumes have been conservatively represented as the lower valued commodity and do not impact resource and reserve estimations.
11.7 Relevant Technical and Economic Factors
While this estimation of the salt resource available at the Cote Blanche Mine is considered a reasonable representation, it is heavily reliant upon the continuity and homogeneity of the salt dome
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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orebody, the historical experience gained in the mining of the dome over an extended period, and the to-date modelling of the salt dome orebody based upon limited exploration practices. Increasing confidence in the characterization of the salt dome, where practical and economical, is always advised. For example, interpretations of resource variations in salt quality and operational impacts such as occur in proximity to intrusive sandstone units encountered randomly within the dome could be enhanced and better managed through further geotechnical work. However, such work would need to be evaluated to provide the necessary cost-benefit results and are unlikely to be impacting.
In terms of economic factors, the recovery of the resource is governed primarily by the floor price of the salt as discussed in Section 19, Economic Analysis, and not by any grade cut-off for salt quality as reviewed previously. In general, it is assumed that any ton of salt mined from Cote Blanche Mine is a saleable product and that economic impacts result from market influences and not resource constraints.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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12 Mineral Reserve Estimates
12.1 Introduction
This section describes the reserve estimation methodology and summarizes the key assumptions and controlling parameters utilized by the QP in developing the mineral reserve estimates for Cote Blanche.
Resources are converted to reserves for the following areas:
•Un-mineable resource, pillars, barriers and salt remaining in roof areas between levels are not considered for reserves,
•Measured or indicated resource only are considered for reserves. Any areas with inferred resources are not eligible for conversion to reserves,
•Compass has developed mine plans and polygons for each of the various levels utilizing the aforementioned model data and software packages and mapped into the contours of the various levels of the salt dome – these current plans define the mine,
•Mining blocks at depth below the planned levels or within proximity of the 400-foot buffer zone are excluded from the Reserve,
•Areas in proximity to oil wells have been excluded; and
•Additional areas surrounding shafts and underground infrastructure have been identified and removed for ground control purposes.
Resources that meet the above criteria were utilized for estimation of the reserve. Within the eligible areas, the developed long-term production layouts were applied utilizing planned mining dimensions and parameters. Areas for both planned development and benched rooms are calculated to estimate a total future mined area. With the total areas for development and rooms, the appropriate mined height is factored for thickness to generate a mined volume. Based on the mined volume and a salt density of 135 lb per ft3, the mined tonnage was then estimated. A process loss of 6% is applied to the mined tonnage, resulting in the final saleable tonnage and therefore reserve. Note that current mine plans developed by Compass for Cote Blanche focus on completion of the 1,500-foot level with future expansion to the 1,700-foot level and finally advancing to the lowest level (1,900-foot level). At this time, mining is not anticipated below the 1900-foot level.
It is noted that these plans have progressed from previous designs published and do not incorporate a 1600-foot level as was previously considered, as well as relocating the previous 1750 and 1950-foot levels (SRK, Resource and Reserve Audit Report, 2017). The election to forego the 1600-foot level and alter the lower level was founded in maintaining appropriate ground control and addressing geologic conditions. Appropriate long-term mine plans have since been developed for these future levels by the Cote Blanche Operations using the same room and pillar layout as the upper levels. It should be recognized that these mine plans may change in a similar, responsive manner as required given the extended life of expected mining in the dome. Resources that meet the above criteria were utilized for estimation of the reserve.
Finally, the definition of the reserve is also constrained by the license-to-mine being maintained by Compass. This includes such things as permits and leases that could impact and reduce mine life. A mineable resource without a license-to-mine is not a reserve.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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12.2 Mineral Reserve Statement
The reserve statement for the Cote Blanche Mine, current to September 30, 2021 is presented in Table 12-1.
Table 12-1: Cote Blanche Mine – Summary of Salt Mineral Reserves at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Reserve (tons)(1)(3)(4)(5)(6)(7)
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Reserve Area(2)(8)
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As of September 30, 2021
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As of December 31, 2020
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Proven Reserves
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|
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1,300-Foot Level
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13,316,339
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13,316,339
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1,500-Foot Level
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8,136,420
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10,422,256
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Total Proven Reserves
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21,452,759
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23,738,595
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Probable Reserves
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|
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1,700-Foot Level(9)
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113,853,955
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113,853,955
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1,900-Foot Level(9)
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122,693,422
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122,693,422
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Total Probable Reserves
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236,547,378
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236,547,378
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Total Reserves
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|
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1,300-Foot Level
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13,316,339
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13,316,339
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1,500-Foot Level
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8,136,420
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10,422,256
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1,700-Foot Level(9)
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113,853,955
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113,853,955
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1,900-Foot Level(9)
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122,693,422
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122,693,422
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Total Reserves
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258,000,137
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260,285,972
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(1) Ore reserves are as recovered, saleable product.
(2) Underground mineral reserves are reported based on assumed 75-foot mining horizons, discounted for areas not accessible due to proximity to oil wells.
(3) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot.
(4) Included process recovery is 94% based on production experience. Included mining recovery is approximately 56% based on the room and pillar layout.
(5) Although the actual sodium chloride grade is less than 100%, it is not considered in the reserve, as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(6) A cut-off grade was not utilized for the calculation as the recovered in situ product quality is constant and saleable after processing.
(7) There are multiple salable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of this TRS. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $61.41 per ton. Gross sales prices are projected to increase to approximately $706.49 per ton for rock salt for road deicing through year 2138 (the current expected end of mine life).
(8) Based on approximate areas of: 5,399,000 ft2 for the 1,300-foot level; 2,991,000 ft2 for the 1,500-foot level; 45,721,000 ft2 for the 1,700-foot level; 50,293,000 ft2 for the 1,900-foot level; and 104,404,000 ft2 in the aggregate.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints.
12.3 Estimates of Cut-off Grades
As stated, Cote Blanche Mine produces rock salt, primarily for highway use. Mineral cut-off grades are not applicable to the recovery of rock salt and are not a driver for production. It is understood that, for all practical purposes that planned tons of production may be considered saleable irrespective of grade, save for those tons lost to processing waste. The QP has established the price for deicing salt at $61.41/ton, and a floor price at $51.89/ton.
12.4 Reserve Classification
Reserve classification are in accordance with Items 601(b)(96) and 1300 through 1305 of Regulation S-K was made based upon the assumptions outlined in the introduction. The following definitions were considered, and informed the classification:
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Probable Mineral Reserve - The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.
Proven Mineral Reserve - The economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.
Reserves clearly identified within the active mining areas, the 1300 and 1500-foot levels have been considered as proven based upon Compasses experience in the levels and the homogeneity of the salt and given the limited remaining life. Confidence in these reserves is high.
Because of the nature of the certainty surrounding the remaining deposit and its mineability with increasing depth, all other reserves for remaining levels have been attributed to the probable classification. This is heavily based upon the use of historical mining experience, in-situ production sampling and the overall uniformity of the salt dome as opposed to traditional methods applied in other mineral orebodies such as significant surface drilling exploration or extensive geotechnical investigation. The uniformity of the salt and the economics make it difficult to justify such efforts and result in a probable classification.
12.5 Multiple Commodity Grade Disclosure
Cote Blanche Mine produces rock salt, primarily for highway use. As reviewed, approximately 8% of the mined salt is recovered for commercial and industrial (C&I) use and chemical grade sales. The differentiation in product is based upon salty purity, typically 99% pure, and sizing of the final mined product. C&I and chemical products market at a higher price and margin than salt utilized for highway use, however, for purposes of resource evaluation, all estimated volumes have been conservatively represented as the lower valued commodity.
12.6 Risk of Modifying Factors
As with the resource definition, the estimation of the salt reserves available at the Cote Blanche Mine is considered a reasonable representation but remains heavily reliant upon the continuity/ homogeneity of the salt dome resource, historical experience and production “exploration.”
Modifying factors are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors. Modifying factors that would impact the reserve estimate for Cote Blanche would likely be outside of the mining operation’s influence and impact it economic ability to sell the mineral. These might include such things as –
•Availability of manpower,
•Availability of infrastructure such as utilities,
•Political disruption
All of this could impact the definition of the reserve, which relies upon the assumption that all tons mined are saleable. These modifying factors are reviewed in further detail in the later sections of the summary.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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13 Mining Methods
The original shaft sinking at the mine began around 1960 to 1961 and went to the 1,300 foot level. The following summary describes the general mine design which has remained consistent since that date.
Room and pillar mining method is employed at Cote Blanche. Utilizing this method, salt is recovered in a horizontal plane, creating horizontal network of rooms and pillars at multiple stacked levels, analogous to the bays in a parking garage. To do this, "rooms" of salt are extracted via the mining process while "pillars" of untouched material are left to support the overlying roof, also of salt. In salt recovery within the Cote Blanche dome, rooms are mined in multiple lifts or “benches” due to the extensive height of the room.
The room and pillar mining technique is typically utilized in relatively flat-lying, bedded deposits such as coal, however, the method is also best suited for the vertical dome nature of Cote Blanche salt deposit, similar to the floors of a multi-level sky scraper. Room and pillar mining is also applicable at Cote Blanche because it addresses the risk of convergence and subsidence of the salt between multiple levels of mining and, where applicable, the surrounding country rock. Room and pillar is one of the earliest and most well-established techniques, can be easily mechanized, and is among the simplest of approaches compared to some other underground mining methods. It does, however, provision that a portion of the resource mineral remain in the form of the supporting structures, impacting recovery ratio and economics. A general view of plan view of the room and pillar method applied at Cote Blanche is shown in Figure 13-1.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Source: Compass Minerals (not to scale)
Figure 13-1: The Room and Pillar Mining Method at Cote Blanche
For Cote Blanche, room and pillar mining is selected as an industry standard and is considered a best practice compromise of cost and efficiency while maintaining the continued safe operation of the mine and maximizing the recovery of the natural resource.
Specific details of the layout of the mine recovering salt at the Cote Blanche dome are as follows:
•The underground is serviced by three shafts:
•16 ft diameter production No. 3 Shaft,
•14 ft diameter man and material No. 2 Shaft,
•Eight-foot diameter secondary egress No. 1 shaft.
•The current ventilation rate is 650,000 cubic feet per minute downcast in the 16 ft shaft.
•There is one downcast and two upcast shafts. The No. 3 shaft is the downcast shaft that also serves the production hoist.
•Three levels have been mined (nominal depth below ground):
•1,300-foot mined during 1965 to 1986,
•1,100-foot, mined during 1986 to 2002, and
•1,500-foot, mined during 1998 to present.
•Final elevation estimates of the 1,100 ft, 1,300 ft and 1,500 ft levels are as follows:
•1,100-foot level: Back: ≈ -1075, Development: ≈ -1100, and Bench: ≈ -1150 (approximate sill thickness is 135 ft),
•1,300-foot level: Back: ≈ -1285, Development: ≈ -1310, and Bench: ≈ -1360 (approximate sill thickness is 160 ft), and
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Cote Blanche Mine 2021 Technical Report Summary
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•1,500-foot level: Back: ≈ -1500, Development: ≈ -1530, and Bench: ≈ -1575.
Mining is currently occurring on the 1500-foot level as well as the development ramp to the extended 1300' level reserves. Mining on the 1300-foot level extension is projected to start in 2022. The 1500-foot level is projected to be mined through 2026. Active mining on both the 1300' level and the 1500' level is anticipated to take place from 2022-2026. These projections are based on an assumed production rate of 2.2 million tons per annum (Mt/y). Access to the old workings of the 1300-foot level and the 1,100-foot level are limited to emergency egress routes at present. The 1300-foot level extension will be accessible by development ramp from the 1500-foot working level.
As stated, mining utilizes the room and pillar method of extraction. In this method, excavations (rooms) recovered by mining and are alternated with areas of undisturbed salt (pillars) that form the necessary support for maintaining stability of the mine roof. The layout of the rooms and pillars and their respective sizes are optimized to maximize the ratio of salt extracted, relative to in situ salt, while still meeting safety and surface subsidence requirements.
The current room and pillar layout has an extraction ratio of approximately 56% within the mined room area, but the overall extraction ratio of the property, taking into account barrier pillars and unmined zones, interruptions from oil wells, etc. is about 51%. Rooms are mined in a progression of two phases creating a total room height of 75 ft when completed. The rooms are a nominal 50 feet wide and bounded by 100-foot square pillars as shown in Figure 13-1. Variations in room and pillar dimensions are observed due to production blasting and scaling, so values are approximate. To achieve 75 feet of height, rooms are initially developed using a 30 ft top-cut (horizontal drill and blast), which is then vertically drilled and blasted (benched) an additional 45 ft, with 5 feet of sub-drilling. Loading and hauling is completed with diesel powered loading equipment and haul trucks. Development mining typically leads ahead of benching, or room advance, by approximately one and a half years.
Ground conditions, in general, are very good due in part to the quality of the domal salt and the limited extraction ratio in the 56% range. In areas where it is considered necessary, the mine utilizes spot bolting to ensure safe working conditions. Only a few ribs in infrastructure areas have been bolted (as needed in shops, near conveyors, in mill area, etc.).
The above description details the standard mining design and practice in place and as applied at Cote Blanche Mine to the existing 1300 and 1500-foot levels. The description also represents the expected criteria for the development and extraction of the proposed future salt recovery in the 1700 and 1900-foot levels as well.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Source: Compass Minerals (not to scale)
Figure 13-2: Typical Modelling of the Room and Pillar Layout: 1500-Foot Level Example
13.1 Geotechnical and Hydrological Models
Oil and gas wells are present within the current property and mining is not planned or permitted within close proximity to the identified areas.
One of the major risks for mining at the Cote Blanche Mine is the risk of flooding from overlying sedimentary sequences, of which some are water bearing. The top of the dome is known to be overlain by a relatively porous cap rock as discussed in the geological setting and mineralization deposit section, and therefore to reduce risk, the Mine uses a self-imposed 400 ft buffer from the interpreted edge of the dome.
Salt domes are known to be dense in composition with a porosity of tending toward zero and impervious (White, 1983) due to the rehealing process of fissures and fractures. Like other salt resources, Cote Blanche Mine maintains a halo of brine surrounding the salt dome thus preventing freshwater penetration. The 400-foot mining buffer maintained from the edges of the dome serves to further keep the dome hydrologically stable and prevent fresh water infiltration. Due to hydrologic nature and relative impermeability of the deposit, Compass Minerals has not performed extensive hydrogeologic studies and relies on field interrogation and production observations to monitor conditions.
In March of 2015, RESPEC performed 9 constant strain rate tests and 5 triaxial compression creep tests from block samples. The following salt properties were used for the numerical analysis based on the results of the RESPEC testing:
• Density = 135 lb/ft3
• Uniaxial Compressive Strength (UCS) = 23 MPa (3,300 psi) from Pfiefle et al, 1995
• Young’s Modulus (E) = 27 GPa (4 million psi)
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Cote Blanche Mine 2021 Technical Report Summary
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• Poisson’s Ratio = 0.23
Creep is described as a strain-rate to effective stress relationship of the form:
• ἐ = A * óN
• A = 3.2E-27 psf-3*sec-1
• N = 3
The above tests were used by Golder to analyze the 400 ft. buffer between mining limits on each level and the salt dome, and a 150 ft. offset buffer between the extents of development and bench operations on the outermost mining perimeter. Golder concluded that the 400 ft. buffer zone is a reasonable distance to be maintained between the extents of the salt dome and mining extents. However, Golder found that there were problematic Von Mises Stresses in the salt that extend approximately 200 feet beyond the limit of the workings and suggested that leaving the Bench salt in place in the perimeter roadway would reduce the stress concentrations.
13.2 Production Details
Cote Blanch Mine operates with a production schedule targeting approximately 2.2 million tons of salt per year. That target can vary significantly depending upon market demand for road salt as conditioned by annual weather conditions. Salt production is sourced and scheduled from the mine plan developed at Cote Blanche, laying out the rooms and pillars on each of the identified levels. Example maps of the level mine plans are provided herein with active mining rooms, exclusion areas and proposed extents for the 1300 through 1700-foot levels in Figure 13-1 through 13-3 (representative, not to scale). Detailed plans and extents of the proposed mining have not been developed for the 1900-foot level as of this report. Currently, proposed mining is expected to progress utilizing the established mine planning parameters and practices previously reviewed, i.e. room and pillar dimensions, etc.
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Cote Blanche Mine 2021 Technical Report Summary
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Source: Compass Minerals (not to scale)
Figure 13-3: 1300-foot Level Mine Plan Map
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Source: Compass Minerals (not to scale)
Figure 13-4: 1500-Foot Level Mine Plan Map
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Source: Compass Minerals (not to scale)
Figure 13-5: 1700-Foot Level Mine Plan Map
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Cote Blanche Mine is operated six days per week, two shifts per day for approximately 250 to 275 days per year, depending upon planned down time for maintenance and repairs, unplanned downtime and interruptions from seasonal weather impacts. The following is an overview of the mine’s typical production parameters.
Table 13-1: Summary of key assumptions in the definition of the Cote Blanche Reserves
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Value
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Units
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Parameter
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50
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ft
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Room Width
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100
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ft
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Pillar Width (sq)
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30
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ft
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Development Room Height
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45
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ft
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Benching Room Height
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55.56%
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Local Extraction Ratio
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94.00%
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Mine Recovery
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0.0675
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st/ft3
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Density
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2.17
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mt/m3
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Density
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2,900,000
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st/y
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Name Plate Capacity
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2,200,000
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st/y
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Planned Production Capacity
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265
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days/yr
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Planned Production
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8,679
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st/d
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Production Rate
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128,581
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ft3/d
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Production Rate
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84
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years
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Expected Mine Life
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13.3 Requirements for Stripping, Underground Development and Backfilling
Operations at the Cote Blanche Mine for the stripping, underground development and backfilling functions are discussed in this section. Note that all levels, 1300-foot through the 1900-foot levels, are currently mining and are planned to be operated in the same manner, with the same mining parameters listed and with the same set of unit operations, altered only by the footprint of the mining of the room and pillar method as modified to reflect the constraints of the planned level and the lateral constraints of the salt dome contours of each level.
13.3.1 Stripping
There is no underground stripping at the Cote Blanche Mine.
13.3.2 Underground Development
As reviewed in the mine method section, Cote Blanche Mine progresses development of main entries in the upper 30-foot of mining height overlying and in advance of bench mining, maintaining
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Cote Blanche Mine 2021 Technical Report Summary
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the availability of locations for room production to the full 75 feet of salt mining. Development and bench mining progress at an approximate 45:55 ratio in terms of area of advance in the mine plan and are part of the production process.
In addition, as needed, underground rooms for facilities for support functions have been and will be developed in existing mined excavations and specific locations. This includes development of shaft areas on each level for hoist equipment, design, planning and development of ramp structures from one level to the subsequent, lower level as required, installation of underground work facilities such as maintenance shops and storage rooms.
As mining progresses, development also encompasses the design, placement, repair and maintenance of support infrastructure such as crushers, screens and other plant in support of mining. For example, and illustration of the screening plant and associated storage located near the hoist shafts is provided in Figure 13-6.
Source: Compass Minerals (not to scale)
Figure 13-6: Underground Infrastructure - Screen Plant
13.3.3 Backfilling
Waste salt that is produced during the mining process and resulting from the transport of hoisted tons constitutes the extent of backfilling at Cote Blanche. Waste salt is estimated at approximate 6% of total recovered salt tons. Waste material is collected via loaders and other supporting underground equipment and taken from the face, load out points, conveyor and crusher locations and any other impacted areas of collection as part of housekeeping and maintenance and is disposed of in previously mined workings as identified by operations management and engineering.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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13.4 Mining Equipment, Fleet and Personnel
Currently, Cote Blanche Mine operates with an approximate staffing target of 202 individuals; 69 salaried staff and 133 hourly employees assigned in crews to the various unit operations and scheduled shifts. That number is expected to remain relatively constant through the recovery of salt on the future 1700 and 1900-foot levels as well.
The following table provides a general overview of the equipment fleet and machinery utilized in the unit operations of the mining process. The asset list at Cote Blanche comprises over 800 lines of specific items include administrative items, land and building assets as well as parts inventories, etc. that are not part of the mining process and are not considered.
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Cote Blanche Mine 2021 Technical Report Summary
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Table 13-2: Table of Equipment Utilized in the Mining Method
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Number of Units
|
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|
Aerial Lifts
|
|
|
|
Manlift Rigs
|
7
|
|
|
Belt Magnets
|
|
|
|
Belt Magnets
|
3
|
|
|
Bench Production
|
|
|
|
Drill
|
2
|
|
|
Compressors
|
|
|
|
Compressors
|
4
|
|
|
Crushers
|
|
|
|
Crushers
|
4
|
|
|
Development Production
|
|
|
|
Drill
|
3
|
|
|
Kerf Cutter
|
5
|
|
|
Explosives
|
|
|
|
D&B
|
2
|
|
|
Haulage
|
6
|
|
|
Hoists
|
|
|
|
Friction hoist
|
1
|
|
|
Single drum
|
2
|
|
|
Loader Scalers
|
4
|
|
|
Mining Side Electrical Distribution Equipment
|
|
|
|
Distribution Equip.
|
16
|
|
|
Mucking Loaders
|
|
|
|
CAT 900 Class Loader
|
2
|
|
|
Permissible Carts
|
|
|
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Permissible Carts
|
|
|
|
Personnel Transportation
|
44
|
|
|
Roof Support
|
|
|
|
Roof Bolter
|
1
|
|
|
Support Equipment
|
|
|
|
Support Equip.
|
24
|
|
|
Surface Screen Plant
|
|
|
|
Barge Dock
|
1
|
|
|
Bins
|
2
|
|
|
Feeder
|
2
|
|
|
Screw Hopper Reclaim
|
1
|
|
|
Surface Stacker Belt
|
1
|
|
|
Track Scalers
|
|
|
|
Scaler
|
4
|
|
|
Underground Screen Plant
|
|
|
|
Screens
|
12
|
|
|
Ventilation
|
|
|
|
Aux. Fans
|
8
|
|
|
Main Fan
|
1
|
|
|
Welders
|
|
|
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Welders
|
5
|
|
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Grand Total
|
167
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Cote Blanche Mine 2021 Technical Report Summary
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13.5 Map of Overall Salt Mining within Cote Blanche Salt Dome
While a final mine plan and completed mining profile has not yet been developed for the Cote Blanche Salt Dome by Compass, it can be reasonably expected that the impacted area will be similar to and represented by the anticipated mining as shown in the proposed plan of the 1700-foot level as displayed here in Figure 13-7.
Source: Compass Minerals (not to scale)
Figure 13-7: Possible Final Mine Outline
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Cote Blanche Mine 2021 Technical Report Summary
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14 Processing and Recovery Methods
14.1 Process Description
The Cote Blanche Mine utilizes a straight-forward process post-mining that focuses on particle size reduction of the raw salt resource to a final salt product size suitable for transport at the surface for shipping while striving to minimize the production of unsaleable fines (waste) from handling. Salt processing and handling at Cote Blanche is managed principally in the underground with only surge capacity on the surface. Salt product is delivered to the surface on demand as scheduled to a mine-owned facility, where barges are loaded for transport to the product’s final destination.
The processing begins underground. Once the salt has been mined and loaded into the diesel trucks at the face, it is transported to central points located in the mains and offloaded into one of typically two operating primary crushers maintained near active workings. These primary crushers, which move with production, reduce the mined salt from as-mined chunks of salt to an approximate 6- to 8-inch minus size. The estimated capacity of the primary crushing operation is approximately 1500 tons per hour (tph).
Once screened and crushed at the primary crusher, the mine utilizes a system of multiple 42-inch conveyors and structure to transport the salt to the underground screen plant sited at a central location near the shafts. The salt enters a secondary crusher, which reduces the size again to an approximate 2-inch minus size before transferring the mineral to either the underground stockpile area or feeding it directly into the mill or screen plant for further processing.
The mill plant, which is entirely underground as well, processes the salt into categorized product bins prior to hoisting to the surface for loading and sale. The estimated capacity of the secondary crusher is 1400 tph. Figure 14-1 provides the simplified flow sheet of the initial portion of the process while Figure 14-2 shows a typical plan view of the process at Cote Blanche underground. The number and designation of conveyors between the primary crushers and the main feed belt, C-1 will obviously vary with face position.
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Cote Blanche Mine 2021 Technical Report Summary
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Source: Compass Minerals (not to scale)
Figure 14-1: Flow Sheet of Cote Blanche Handling and Processing
Source: Compass Minerals (not to scale)
Figure 14-2: Plan Layout of Processing - Underground
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Cote Blanche Mine 2021 Technical Report Summary
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14.2 Plant Throughput and Design
Salt entering the mill plant is further processed and stored in bins or transported directly to the surface for sale. At the mill, the salt from the secondary crusher is further reduced. As needed, the main stockpile of salt receives final processing to finished product specifications through a tertiary crusher and three screen banks that sort it into four sizes: Mine Run (+ 1/2-inch), Coarse (1/2 to 1/4-inch), Medium (1/4 to 1/8-inch), Granular (1/8 to 3/64-inch). The finished grades are stockpiled or sent directly to the 16-ft shaft for transfer to the surface. The four size categories are again summarized as provided in Table 14-1 below. Figure 14-3 shows a detail process flow chart of the Mill Plant that produce the final products.
Table 14-1: Mill Plant Categories
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Category
|
Min. Size
(inches)
|
Max. Size
(inches)
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Estimated Rate
(tph)
|
Mine Run
|
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<1/2
|
70
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Coarse
|
1/4<
|
<1/2
|
381
|
Medium
|
1/8<
|
<1/4
|
213
|
Feed
|
3/64<
|
<1/8
|
37
|
Source: Compass Minerals (not to scale)
Figure 14-3: Mill Plant Flow Sheet
Salt is processed and stockpiled in these categories and can be hoisted to the surface for sale as required.
14.3 Transfer to Surface
Salt transported to the surface is moved in one of the two skips operating at the 16-foot shaft, adjacent to the screening plant. The skips are capable of approximately 17 tons per skip, operating
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Cote Blanche Mine 2021 Technical Report Summary
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at a maximum of 32 skips per hour, or 544 tph. With an availability of only 69% due to maintenance and safety, hoisting can be a limiting factor in processing.
14.4 Surface Transport
Upon arrival at the surface, the salt is either loaded into river barges (each barge holds about 1500-tons), transferred to a 50,000-ton open stockpile, or placed into two 300-ton stainless steel surge bins by way of a significant conveyor network. Loaded barges are towed along the Intra-Coastal Waterway to the Mississippi River and inland waterway system for distribution to depots or customers.
Source: Compass Minerals
Figure 14-4: Cote Blanche Mining Flowchart
This method of processing utilizing crushing and screening the mined material is in alignment with generally accepted salt industry practice and is selected by Compass Minerals as it offers the most cost efficient, maintainable approach to producing a final desired saleable product.
14.5 Waste Handling
All waste generated underground (except hazardous waste; e.g., used oil / grease) is disposed of in mined out areas of the mine. This includes old equipment and water collected by shaft sumps which is assumed to be dirty and adsorbed into waste salt. No other waste is generated by the operation other than typical trash, sewage and used oil / grease, etc. These small amounts of waste are disposed of off-site.
14.6 Power Consumption
A summary of total, fixed and variable electricity consumption and costs incurred by the owner are provided in Table 14-2.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 14-2: Summary of Electrical Usage
14.7 Personnel
A summary of required personnel is provided in Table 14-3.
Table 14-3: Summary of Personnel Employed
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Cote Blanche Mine 2021 Technical Report Summary
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15 Infrastructure
Critical infrastructure at Cote Blanche Island includes electric service, water service and egress and ingress to the island by visitors and shipments via ferry and product shipping via a barge loadout facility connected to the Intracoastal Waterway.
Electricity
Power is supplied to the site by a public utility, CLECO. Service to Cote Blanche Island is 34.5kV. Dual Feeds cross under the Intracoastal Waterway, and connect north of 8ft/14ft Hoist House and East side of Plant by 16 ft hoist house. Surface power by way of underground with some lesser voltage by overhead lines. Two feeds into the mine through 16ft and 14ft shaft that can be cross-connected. Backup power is provided by single 750 kVA diesel engine driven emergency generator that generates 480V that is stepped up to 4160V. The generator has the capacity to provide the required power to the 8ft Shaft hoist and some critical surface electrical equipment.
Water
The site operates a non-community public water system licensed by the State of Louisiana Department of Public Health to produce potable water for use on surface and in underground operations. The system removes minerals from ground water extracted from two wells operated on site.
The treatment process utilizes a series of filters with a backwash system. The potable water produced by the treatment plant is treated using a chlorination system to achieve chlorine levels necessary to meet federal and state drinking water quality requirements to protect against bacterial contamination. A licensed Public Water Treatment System operator conducts daily water checks and maintains the chlorination units. The State of Louisiana Department of Public Health provides continuous oversight of the quality of water produced by this plant and conducts periodic onsite inspections and to collect both well and plant water samples.
Ferry Landing
Access to Cote Blanche Island for employees, vendors, shipments and others is exclusively by ferry. Compass Minerals operates the ferry 7 days a week, year round. The ferry boat is a connected to a cable that lays on the bottom of the Intracoastal Waterway (Figure 15-2). Land to the north and south of the Intracoastal Waterway that connects to the cable is accessed by Compass Minerals via right of way with a private landownership group.
The ferry is capable of transporting approximately 15 light vehicles per trip, or one to two semi-trucks and trailers.
Barge Canal and Loadout
The barge canal and loadout area are submerged areas on the property and are connected to the Intracoastal Canal and ultimately Cote Blanche Bay (Figure 15-1 and 15-2). The Cote Blanche Mine ships all of its production to market via conveyor to a barge loadout facility where barges capable of containing approximately 1,500 tons of salt each are indexed to the loadout by contract tug boat services. Both empty barges awaiting filling or full barges are stored in the barge canal and managed by the aforementioned tug-boat service. The draft of the barge canal is managed by periodic dredging to maintain a minimum of 10-feet of draft that is capable of supporting fully loaded barges. The loadout are of the submerged canal is included within the surface lease from the private
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Cote Blanche Mine 2021 Technical Report Summary
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Cote Blanche Island ownership group, while Compass Minerals has rights to the north-south trending canal by right of way with a different land ownership consortium.
Figure 15-1: Cote Blanche Island Infrastructure
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Figure 15-2: Cote Blanche Barge Canal and Loadout Areas
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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16 Market Studies
16.1 General Marketing Information
According to Roskill’s Salt Outlook to 2028, global demand for salt is forecast to rise from 352Mt in 2018 to 424Mt in 2028 at an average of around 1.9%py. Regional growth will continue to be led by Asia, especially China and India. Asian demand is projected to rise by 2.8%py from 173Mt to 228Mt. By 2028, Asia is forecast to account for nearly 54% of world demand compared to 49% in 2018. Europe is expected to overtake NAFTA by growing at around 1%py, reflecting low growth in regional chloralkali and synthetic soda ash markets. Demand in North America is projected to grow at 0.4%py, mostly following a rise in chloralkali production. The North American region is the one most strongly influenced by changes in the de-icing market so actual demand by 2028 may diverge from the forecast.
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End-use
|
Asia
|
North America
|
Europe
|
Latin America
|
Africa
|
Oceania
|
Total
|
Chloralkali
|
113.8
|
29.3
|
23.1
|
3.9
|
1.5
|
0.4
|
172
|
Synthetic soda ash
|
62.1
|
1.2
|
20
|
0.3
|
-
|
-
|
83.6
|
Road de-icing
|
4
|
30
|
15
|
-
|
-
|
-
|
49
|
Food
|
20.9
|
1.2
|
2.6
|
6.1
|
6.1
|
0.2
|
33.6
|
Other
|
27.5
|
20
|
25
|
1
|
1
|
2
|
85.5
|
Total
|
228.3
|
81.7
|
85.7
|
16.8
|
8.6
|
2.6
|
423.7
|
Source: Roskill estimates
Published in: Salt: Outlook to 2028
Table 16-1: World Forecast Demand for salt by region
North American Consumption
In the United States, much of the variation in output and imports is related to that of rock salt which is dependent on the severity of winters. Most imports are from overseas subsidiaries of major US salt producers. Exports are small compared to imports but still average well over 500ktpy and mostly sent to Canada. In 2015, apparent consumption was a record 67.5Mt following a severe winter in 2014/15 and imports of over 21Mt. Mild winters in over the next two years saw this drop to under 55Mt. The return of a more severe winter in 2017/18 saw apparent consumption grow by 7Mt. According to USGS Mineral Commodity Summaries 2021, imports are mostly from Chile (33%), Canada (24%), Mexico (13%), and Egypt (9%) (USGS, 2021).
Like the United States, Canadian consumption of salt can vary widely between years as the de-icing market forms a considerable part of overall use. In years with mild winters, apparent consumption can fall below 8Mt but in those with severe winters it can exceed 11Mt. There is a considerable export trade, nearly all of rock salt, across the border with the USA, which again is closely connected to winter conditions in both countries.
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Cote Blanche Mine 2021 Technical Report Summary
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Table 16-2: USA and Canada: Production, trade and apparent consumption of salt, 2010-2019 (kt)
Table 16-3 presents a summary of the average value of price, average value of bulk, pellets and packaged salt, f.o.b. mine and plant annually as summarized by the USGS (USGS, 2021).
Source: USGS
Table 16-3: USGS Summary of US Salt Pricing
Greater than 90% of the salt produced from the Cote Blanche Mine is sold as bulk for deicing markets. A breakdown of market segments served between 2018 and 2021 by Cote Blanche Mine Production is provided in Table 16-4. A summary of demand and production (imported and exported) is provided in Table 16-2. Salt produced by the Cote Blanche Mine is US markets; mainly states along the Ohio and Mississippi River basins as salt is transported to markets via barge along the river networks.
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|
|
|
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|
|
|
|
|
|
2018
|
2019
|
2020
|
2021
|
Consumer and Industrial
|
Deicing
|
44,720
|
74,443
|
26,454
|
41,267
|
Non-Deicing
|
105,082
|
109,477
|
139,628
|
94,337
|
Total C&I
|
149,801
|
183,919
|
166,082
|
135,604
|
Bulk Highway
|
Chemical Salt
|
735,552
|
551,470
|
661,384
|
374,858
|
Highway
|
1,426,369
|
1,645,362
|
1,052,866
|
1,213,075
|
Total Bulk Highway
|
2,161,921
|
2,196,832
|
1,714,251
|
1,587,933
|
Total Production
|
2,311,722
|
2,380,751
|
1,880,333
|
1,723,537
|
Table 16-4: Summary of Cote Blanche Mine Production and Sales by Segment
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Roskill forecasts the nominal price of deicing salt to reach $80/ton in 2028 as illustrated on Figure 16-1. This forecast price is used in the economic model discussed in Section 19. Pricing between current price (five year average of average sales price for past five years) for deicing salt established at $61.41/ton and the forecast price of $80 in 2028 was increased by $3.10/ton annually between 2022 and 2028. It is reasonable to assume that pricing beyond Roskill’s forecast period will sustain based on the likelihood that winter weather conditions in inland, Midwest and south-central US markets will continue to support current demand conditions and the Cote Blanche Mine’s access to the relatively inexpensive mode of shipping via barge on the Mississippi, Ohio and Tennessee River networks will allow products sourced from the Cote Blanche to be priced competitively. Therefore, the QP sustains pricing beyond the Roskill forecast through Life of Mine, increasing average selling price by 2% annually.
Source: Roskill estimates
Published in: Salt: Outlook to 2028
Figure 16-1: Roskill Real and Nominal Price Forecast for Deicing Salt through 2028
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Cote Blanche Mine 2021 Technical Report Summary
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16.2 Material Contracts Required for Production
Most bulk salt sold form the Cote Blanche Mine is transported to market via barge along the Intracoastal canal in Louisiana to the Mississippi River, Ohio River and Tennessee River networks. The Company has a contract with a barge company to transport bulk salt to markets along these river networks. The contract is a defined term and subject to review and renewal periodically, typically five years. These arrangements are within industry standards and formed the basis of the economic evaluation.
An individual barge can hold approximately 1,500 tons of salt, and is the most efficient means of transportation in light of the source of salt and markets. Transportation and logistics costs represent a significant cost for the end product, and are built into general selling price. Costs for transportation via barge to markets has ranged from $19/ton and $25/ton between 2017 and 2021.
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Cote Blanche Mine 2021 Technical Report Summary
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17 Environmental, Social and Permitting
There is very little waste generated by the mining and processing of rock salt. All waste salt and interbedded rock remains underground in old mined out areas. There is only basic surface processing and no material surface waste is generated. No unclean water is discharged from the shafts to the surface.
17.1 Results of Environmental Studies and Baselines
Mine construction commenced in 1961 with production beginning in 1965, prior to the promulgation of the National Environmental Policy Act and Clean Water Act. Operation of the mine has been consistent and ongoing since commencement of production. Therefore, no baseline or environmental studies have been required, nor conducted.
17.2 Waste, Tailings and Water Plans – Monitoring and Management
Any waste derived from underground operations remains in the underground mine cavity, where it will remain post-mine closure. Tailings are not generated from the salt mining process aside from generation of fine-grained salt that is stored in the mine cavity. Water is not used in the mining process due to the soluble nature of salt.
17.3 Project Permitting Requirements
The State of Louisiana does not require an operating permit for the Cote Blanche mine. Air and NPDES permits are maintained by the site. The site is located in a Coastal Protection Zone and therefore any new site disturbance requires going through the US Army Corps of Engineers and Louisiana Coastal Resources permitting process. Initial operations at the site predate the Coastal Resources rules so no formal reporting is required under this process.
17.3.1 Air Permit
The site operates under an air permit, Stationary Source Permit 2660-00225-00, which is administered by the Louisiana Department of Environmental Quality. The permit covers emissions from the operations of shafts and related exhausts, as well as operations of conveyance systems on the surface from shaft, to stockpile and eventual transfer to barges for loadout. The permit expires in December 2026.
17.3.2 Surface Water Effluent Discharge Permit
Surface water discharges from the site are regulated under Louisiana Pollutant Discharge Elimination System (LPDES) permit LA0103233. The permit requires discharge monitoring for effluent flows from the three outfalls that discharge into the saline waters of the Intracoastal Waterway and Cote Blanche Bay.
17.4 Plans, Negotiations or Agreements (Environmental)
There are no plans, negotiations or agreements relative to environmental matters with any external parties.
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Cote Blanche Mine 2021 Technical Report Summary
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17.5 Mine Closure Plans
There are no mine closure plans for the Cote Blanche Mine. Once the lease agreement terminates, the mine operator has six months to vacate the mine of any personal property it wishes to recover before the landownership group assumes control of the mine and either continues mining or initiates other commercial or industrial uses of the surface mine site and underground void space.
17.6 Adequacy Assessment of Plans
Relative to other types of mining, the Cote Blanche Mine is low risk from an environmental standpoint. It does not require significant disturbance of the landscape and no surface waste (toxic or otherwise) is generated in the process. Going forward, environmental risk to the reserve is viewed as low.
17.7 Local Hiring Commitments
The Mine operates under a collective bargaining agreement (“CBA”) with the United Steelworkers of America. Other than labor commitments contained within the CBA, there are no commitments with outside entities or governments relating to the local labor force.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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18 Capital and Operating Costs
Capital and operating costs discussed in this section were developed on a unit cost and quantity basis utilizing the QP’s estimates that are based on owner’s costs from the past five years, current and historic cost data from continuous and ongoing operation of the facility, first principles, and 65 years of operational experience operating the facility at projected production capacity. Operating costs presented herein are the QP’s estimates based on the understanding of actual owner’s costs incurred at the operation since 2017, vendor/contractor quotations, and similar operation comparisons, while capital costs projected through 2026 are estimates by the QP based on owner’s cost estimates developed based on unit cost and quantity basis utilizing historic cost data, first principles, vendor/contractor quotations, and similar operation comparisons.
18.1.1 Capital Costs
The Cote Blanche Mine, as well as Compass Minerals facilities, maintains a five-year capital forecast for all foreseen capital expenditures to support current production. The average annual capital expenditure since 2017 at the Cote Blanche Mine is $5,523,000, with a high of $7,312,000 in 2020 and a low of $4,568,000 in 2017. The average annual capital expenditure over this run is $5,523,000, which is more indicative of a typical annual Maintenance of Business (MOB) expenditure. A summary of capital expenses incurred from 2017 through 2021 by the owner is provided in Table 18-1.
A summary of foreseen capital expenditures through 2026 is provided on Table 18-2. As shown on Table 18-2, total estimated capital expenditure through 2026 is $117,695,000, and is comprised of either MOB capital or safety and environmental focused, or both. Forecasted capital spend for major foreseen capital projects through 2026 total $46,009,000, and include:
•Construction of a new barge loadout facility for $12,818,000.
•Construction of a Mine Bypass Loop to optimize transportation from the face to crusher for $8,900,000.
•Construction of new docking systems for stored empty or filled barges along the barge canal and bank stabilization work for $7,393,000.
•Replacement of headframe at the production shaft and grouting the bottom 100 feet of the same shaft for $6,916,000.
•Construction of a new administrative building for $3,311,000.
•New feeder breaker and conveyors systems to support migration from the 1,500-foot mining level to the 1,300-foot level and preparation for a future migration to the 1,700-foot level for $12,447,000.
•A new screen tower upgrade at $6,671,000.
The balance of the forecasted capital expenditure through 2026 is $70,794,000 and primarily includes routine replacement for mine vehicles and equipment. Listed expenditures are based on cost estimates generated by third parties, within +/-15% level of accuracy. There are risks regarding
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Cote Blanche Mine 2021 Technical Report Summary
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the current capital costs estimates through 2026, including escalating costs of raw materials and energy, equipment availability and timing due to either production delays or supply chain gaps.
While Compass Minerals does not as formally estimate and budget projected capital expenditures beyond five years, Compass Minerals engaged Golder Associates to evaluate engineering alternatives and to develop cost estimates to plan for the eventual development of the 1,700-foot level. At the current projected mine run rate at 2,200,000 tons per year, Compass Minerals will be exclusively operating on the 1,700-foot level in 10 years, or 2032. Major projected capital costs will include driving a ramp from the 1,500-foot level to the 1,700 foot level, deepening and lining the production shaft, and relocating the mill to the 1,700-foot level. Projected capital expenses associated the development of the 1,700-foot level for the maintenance of current production is $154,000,000 from 2027 through 2032. The timing of construction is dependent on intervening annual mine run rate, the possibility of changes to reserves on current 1,300-foot and 1,500-foot levels associated with near-term diapir surface validation work via in-seam seismic technology, and further consideration of possible design alternatives which will be vetted in future, budgeted FEL1 through FEL3 engineering evaluations. Notwithstanding, the Golder cost estimate with a stated +/-50% level of accuracy for development capital, which is ultimately in support of maintaining current production levels, were built into the life of mine project cash flows discussed in Section 19.
The 1,700-foot level will exclusively sustain mining production from 2033 through 2068, whereupon the mining operation will need to initiate exclusive production on the 1,900-foot level. To that end, the Economic Analysis presented in Section 19 includes projected expenses associated with the development of the 1,900-foot level beginning in 2063, with a normal sustaining MOB capital profile between 2032 and 2068 beginning at $9,188,000 per annum beginning 2033.
18.1.2 Operating Cost
Actual operating costs incurred at the Cote Blanche Mine from 2017 through 2020 are provided in Table 18-1. Summarized costs include labor, maintenance, supplies electric, diesel, lease royalties, logistics, and taxes. Since 2017, total operating costs per ton have increased from $35.82/hoisted ton to $45.76/hoisted ton.
18.1.3 Assumptions
The capital projects are assumed to be constructed in a conventional EPCM format. Compass Minerals routinely retains qualified contractor to design projects and act as its agent to bid and procure materials and equipment, bid and award construction contracts, and manage the construction of the facilities.
18.1.4 Accuracy
The accuracy of this estimate for those items identified in the scope-of work is estimated to be within the range of plus 15% to minus 15%; i.e., the cost could be 15% higher than the estimate or it could be 15% lower. Accuracy is an issue separate from contingency, the latter accounts for undeveloped scope and insufficient data (e.g., geotechnical data).
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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|
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|
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$in thousands
|
2017
|
2018
|
2019
|
2020
|
2021
|
|
|
|
|
|
|
Capital Spend
|
(4,568)
|
(4,988)
|
(3,376)
|
(7,312)
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(7,370)
|
|
|
|
|
|
|
Hoisted Tons (000's) - Incremental
|
1,722
|
2,202
|
2,415
|
2,299
|
2,148
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Sales Tons (000's) - Incremental
|
1,473
|
2,122
|
1,986
|
1,532
|
1,776
|
Selling Price per Ton
|
56.47
|
57.08
|
65.61
|
62.81
|
65.07
|
Total Sales
|
83,172
|
121,132
|
130,290
|
96,206
|
115,576
|
|
|
|
|
|
|
OPEX
|
|
|
|
|
|
Variable Labor
|
2,545
|
3,042
|
3,190
|
3,529
|
3,628
|
Powder & Caps
|
908
|
1,154
|
1,059
|
1,225
|
1,023
|
Utilities
|
926
|
1,000
|
918
|
952
|
881
|
Operating Supplies
|
1,992
|
2,300
|
2,392
|
2,385
|
2,280
|
Diesel
|
548
|
864
|
875
|
661
|
721
|
Roof Bolting Materials
|
291
|
434
|
444
|
485
|
505
|
Ingredients
|
83
|
71
|
83
|
76
|
69
|
Royalties
|
3,133
|
3,769
|
5,334
|
6,092
|
5,099
|
Logistics
|
32,260
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50,423
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50,544
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29,258
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44,653
|
Severance Tax
|
101
|
132
|
145
|
138
|
129
|
PPV/MUV
|
20
|
(14)
|
182
|
(32)
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(130)
|
Subtotal - Variable
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(42,806)
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(63,175)
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(65,166)
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(44,770)
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(58,859)
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|
|
|
|
|
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Fixed Labor
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13,829
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14,701
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16,560
|
17,973
|
19,132
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Maint & Services Materials
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6,277
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10,391
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9,984
|
9,581
|
9,737
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Contract Maint. Services
|
3,221
|
5,231
|
5,898
|
4,047
|
1,142
|
Operating Supplies
|
800
|
1,180
|
1,152
|
1,025
|
939
|
Electric - Purchased
|
463
|
500
|
459
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218
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439
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Tow Boat /Canal Lease
|
573
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582
|
594
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700
|
722
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Mineral Lease
|
124
|
124
|
124
|
124
|
124
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Insurance/Taxes
|
2,009
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2,130
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1,733
|
2,278
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2,231
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Other
|
1,944
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1,825
|
1,602
|
1,641
|
1,165
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Subtotal - Fixed
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(29,240)
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(36,663)
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(38,105)
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(37,586)
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(35,630)
|
|
|
|
|
|
|
Operating Cost
|
(72,046)
|
(99,838)
|
(103,271)
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(82,356)
|
(94,490)
|
|
|
|
|
|
|
Operating Cost / ton hoisted
|
41.84
|
45.34
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42.76
|
35.82
|
43.99
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Table 18-1: Summary of Capital and Operating Costs: 2017-2021
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 18-2: Summary of Capital Expenses: 2022-2026
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 18-2: Summary of Capital Expenses: 2022-2026 (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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19 Economic Analysis
19.1.1 Operating Costs
An economic model was created for the Cote Blanche Mine to provide validation of the economic viability of the estimated reserve for the life of mine until 2138. Following are the key assumptions:
•Mine run rate at 2,200,000 tons hoisted
•Because sales vary year over year, typically controlled by weather in deicing markets, the QP applied the average of sales to hoisted tons rates over the previous six years (83%) to sales tons for future three year periods with the fourth year sales tons at 110% of hoisted tons to represent periodic strong sales associated with higher than average frozen precipitation in Cote Blanche’s markets served.
•The five year average sales price for Cote Blanche is $61.41/ton. This price was the beginning price used in the life of mine cash flow analysis.
•Roskill forecasts the nominal price of deicing salt to reach $80/ton in 2028 as illustrated on Figure 16-1. This forecast price is used in the economic model discussed in Section 19. Pricing between current price (five year average of average sales price for past five years) for deicing salt established at $61.41/ton and the forecast price of $80 in 2028 was increased by $3.10/ton annually between 2022 and 2028.
•Annual average sales price increase of 2% year over year after 2028
•A finance rate (cost of capital) of 10%
•Tax rate of 25.67%
•Inclusive of State and Federal Income Taxes
•Inflation rate of 2%
•Inflation rate of 2% applied to operating costs
•Sales price increase by 2% annually
•An additional 10% contingency on projected fixed and variable costs through the life of mine
The QP used partial year 2021 budgeted 2022 costs as the benchmark for which to model operating costs through life of mine, applying a 2% annual increase in operating cost annually.
19.1.2 Capital Costs
As an ongoing project that is in production and profitable, the QP established a going forward MOB capital based on the average MOB capital profile at the mine since 2016. The QP assessed projected MOB capital spend through 2026, which was collaboratively established with Cote Blanche Mine financial, engineering, operational and maintenance leadership, and validated by the QP. The QP then reviewed and validated estimated MOB capital from the Golder Associates budgeting from 2027 through 2029 that was developed in concert with 1,700-foot development capital estimates. Applying a 2% annual inflation rate on the average MOB capital spend from 2016 through present
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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and application of a 15% contingency factor, the QP based 2030 MOB capital spend at $8,658,000 per annum. A 2% annual inflation factor was applied to MOB after 2030 through end of life of mine.
Once the 1,700-foot mining level is established, mining will continue on that level through 2068. The process to advance the mine to the next deeper planned interval at 1,900-feet will involve the same procedures and design as the development of the 1,700-foot level. To that end, the QP applied the same costs that are planned for the development of the 1,700 foot development to the 1,900 foot development beginning in 2064. A 2% annual inflation factor was applied to these projected costs in the model or a 196% cost increase of Year 1 project costs in 2064, 200% increase in Year 2 of the project in 2065, a 204% increase in Year 3 project costs in 2066, a 208% increase in Year 4 project costs in 2067, and a 212% increase in Year 5 project costs in 2067. No other major development capital expenditure is projected in this model nor expected in the completion of the project for the remaining life of salt mining.
19.1.3 Economic Analysis
Because the mine is active and profitable, the calculation of an internal rate of return (“IRR”) is nuanced since there is not an initial development expenditure on which to benchmark net project value (“NPV”). Notwithstanding, as the Mine is nearing a major development project to continue production in the development of the 1,700-foot mining level, the QP calculated the NPV of all development capital from 2021 through 2031 to complete the development of a new barge loadout facility and the development of the 1,700-foot level as the initial investment, which is $105,238,000. Review of the model indicates that the Mine is cash-flow positive in 2024, and remains so through end of the life of mine. As modelled, the project has an IRR of 17.9%, and an NPV of 269,475,000.
19.1.4 Sensitivity Analysis
The QP assessed sensitivity of key variables, including reduction in expected selling price from $61.41/ton, increased capital expenses and associated depreciation, and operating costs. To assess these variables, the QP modeled a conducted where the following variables were subjected to increases and decreases of 10% and 20%:
•Average Selling Price
•Operating Costs
•Capital Costs (depreciation)
The NPV is null when the average selling price is below $51.89/ton.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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|
|
|
|
|
|
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Cost Sensitivities
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After Tax IRR
|
After Tax NPV ('000s)
|
|
Expected Case
|
17.9%
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$269,475
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Mining Cost
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20% Increase
|
6.8%
|
$39,100
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10% Increase
|
12.4%
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$154,288
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10% Decrease
|
23.4%
|
$384,663
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20% Decrease
|
28.7%
|
$499,851
|
Capital Expenditures
|
20% Increase
|
15.2%
|
$248,400
|
10% Increase
|
16.4%
|
$258,938
|
10% Decrease
|
19.7%
|
$280,013
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20% Decrease
|
21.7%
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$290,551
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Table 19-2: Sensitivity Analysis: Cost Factors
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|
|
|
|
|
|
|
|
|
|
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Price Sensitivity
|
After Tax IRR
|
After Tax NPV ('000s)
|
|
Expected Case
|
17.9%
|
$269,475
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Expected Average Selling Price
|
20% Increase
|
31.5%
|
$634,497
|
10% Increase
|
25.0%
|
$448,699
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10% Decrease
|
9.5%
|
$96,369
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20% Decrease
|
0.0%
|
-$71,037
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Table 19-3: Sensitivity Analysis: Price
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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20 Adjacent Properties
The property is bounded to the north and south by water and low-elevation marginal wetlands. The elevated topography associated with the Cote Blanche Island is driven by the up thrust of the salt diapir though overlying sediments. Thus, the margin of Cote Blanche Island generally mimics the margin of the salt dome, and thus the extent of any potential mineralization. Thus, there is no possibility of expanding production beyond the current property or lease.
Adjacent properties are used for ancillary support, including barge loading, indexing barges to water-based transportation networks including the Intracoastal Waterway and eventually the Mississippi River network, as well as personnel access to the island via ferry.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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21 Other Relevant Data and Information
All data relevant to the associated mineral reserves and mineral resources have been included in the sections of this Technical Report Summary.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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22 Interpretation and Conclusions
The Cote Blanche Mine has a long history of mining salt from the diapir that forms Cote Blanche Island. This history includes a wealth of knowledge on how the ore behaves during mining, quality of the ore, the geomechanical properties of salt to enable safe and sustainable mining practices.
The modeling and analysis of the Company’s resources and reserves has been developed by Company mine personnel and reviewed by several levels of internal management, including the QP. The development of such resources and reserves estimates, including related assumptions, was a collaborative effort between the QP and Company staff.
22.1 Mineral Resource
The Company’s salt-producing locations do not utilize exploration in the development of their assumptions around mineral resources or reserves. The mineral deposits are restricted in access by bodies of water, and industry techniques used for geological exploration for other types of mineral deposits, specifically collection of rock core from drilling, can be degradational to the salt ore being assessed. Given the nature of the salt mineral and each site’s proximity to water bodies, this limitation impedes the validation of mineral resources and reserves using exploration drilling techniques. Accordingly, geophysical techniques are utilized at Cote Blanche to assist in mine planning, and to verify that there are no obstructions ahead of advancement of the mine in the form of geological anomalies or structural features, such as faults that could affect future mining. In conducting these geophysical campaigns, including in-seam seismic and ground penetrating radar technologies, the Company is able to identify the continuity of ore-body ahead of mining. Unlike Goderich, in-seam directional drilling is not conducted at Cote Blanche because of the finite lateral extent of the diapir, and risks associated with intersecting the margin of the diapir.
Geological modeling and mine planning efforts serve as a base assumption for resource estimates at each significant salt-producing location. These outputs have been prepared by both Company personnel and third-party consultants, and the methodology is compared to industry best practices. Mine planning decisions, such as mining height, execution of mining and ground control, are determined and agreed upon by Company management. Management adjusts forward-looking models by reference to historic mining results, including by reviewing performance versus predicted levels of production from the mineral deposit, and if necessary, re-evaluating mining methodologies if production outcomes were not realized as predicted. Ongoing mining and interrogation of the mineral deposit, coupled with product quality validation pursuant to industry best practices and customer expectations, provides further empirical evidence as to the homogeneity, continuity and characteristics of the mineral resource. Ongoing quality validation of production also provides a means to monitor for any potential changes in ore-body quality. Also, ongoing monitoring of ground conditions within the mine, surveying for evidence of subsidence and other visible signs of deterioration that may signal the need to re-evaluate rock mechanics and structure of the mine ultimately inform extraction ratios and mine design, which underpin mineral reserve estimates.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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22.2 Mineral Reserves
The Cote Blanche Mine deposit supports continued successful exploitation, given the size, grade, metallurgical characteristics, developed infrastructure, and the knowledge and experience of the individuals engaged in the project. The uncertainty and risk associated with the historic exploration data was mitigated where possible, through continued knowledge gained in the extraction and interrogation of the salt deposit, annual in-seam seismic campaigns and mud-rotary diapir surface validation drilling.
When determining the differences between resources and reserves, management developed specific criteria, each of which must be met to qualify as a resource or reserve, respectively. These criteria, such as demonstration of safety, operational sustainability, integrity of the mine workings, economic viability, points of reference, and grade that are specific and attainable. The QP believes the criteria for the purposes of estimating resources and reserves are reasonable. Calculations using these criteria are reviewed and validated by the QP. Estimations and assumptions were developed independently for Cote Blanche.
22.3 Financial
Sensitivity analysis indicates the following conclusions from the life of mine cash-flow analysis.
•If mining operating costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-1.
•If capital construction costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-1.
•The facility can also withstand a decrease in average selling price of 16.5% from those currently estimated, which equates to $51.89/ton, according to the sensitivities shown in Table 19-1. As the modelled, the NPV of the project would be negative at 20% reduction in average selling price.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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23 Recommendations
Based on financial and technical measures, and positive economic benefits, and project developments to date, it is recommended that Cote Blanche Mine project continue production.
23.1 Geology and In-Seam Seismic
The QP recommends that the Cote Blanche Mine continue with routine in-seam seismic campaigns to verify the competency of the ore within 1,000 feet of the mining face as a mitigative step to avoid inadvertent mining into a significant anomaly such as a fault or salt-stock sheer zone, a sandstone inclusion, or an unmapped margin of the diapir.
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|
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Activity
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Cost (US$)
|
Annual in-seam seismic campaign
|
$100,000
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Ground Penetrating Radar Campaigns
|
$100,000
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Total Estimated Cost
|
$200,000
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Table 23-1: Summary of Annual Costs for Recommended Work
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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24 References
DMT Geosciences Ltd. 2016 seismic study, “Seismic Survey at North Panel and East Panel (DMT: CA-2016-01042), Cote Blanche Salt mine Survey Report”
Maptec, 2003 Mineral Reserves Analysis, Prepared for Salt Holdings Corporation
Molinda, G.M., 1988, Investigation of methane occurrence and outbursts in the Cote Blanche domal salt mine, Louisiana: U.S. Bureau of Mines Investigations, RI-9186, 21 p.
CIM Estimation Best Practice Committee, 2003: Guidelines for Industrial Minerals.
SRK, 2017: Compass_2016_Audit_Report_Vol_3-CoteBlanche_395700 250_Rev08_20170215
White, R.M. & C.A. Speirs 1983. Characterization of salt domes for storage and waste disposal. In Proc. Of 6th Int. Symp. On Salt, The Salt Institute, Virginia, Vol 1, pp. 511-518.
Pfeifle et al., January 1995. Correlation of Chemical, Mineralogic, and Physical Characteristics of Gulf Coast Dome Salt to Deformation and Strength Properties. RESPEC Inc.
Golder, August 2020, High-Level Geotechnical Evaluation of the Salt Dome – Cote Blanche Mine
White, R.M. & C.A. Speirs 1983. Characterization of salt domes for storage and waste disposal. In Proc. Of 6th Int. Symp. On Salt, The Salt Institute, Virginia, Vol 1, pp. 511-518.
Martin, Angel, Whiteman, C.D. Hydrology of the Coastal Lowlands Aquifer System in Parts of Alabama, Florida, Louisiana, and Mississippi, U.S. Geological Survey Professional Paper 1416-H
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Cote Blanche Mine 2021 Technical Report Summary
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25 Reliance on Information Provided by the Registrant
The QP has relied upon Compass Minerals’ information and data in completing this TRS, in addition to written reports and statements of other individuals and companies with whom it does business. Materials provided by Compass Minerals include permits, licenses, historic exploration data, production records, equipment lists, geologic and ore body resource and reserve information, mine modeling data, financial data and summaries, plant equipment specifications and summaries, and plant process information. It is believed that the basic assumptions are factual and accurate, and that the interpretations are reasonable. This data has been relied upon in the mine planning, capital and cost planning, and audited. There is no reason to believe that any material facts have been withheld or misstated. The QP has taken all appropriate steps, in its professional judgment, to ensure that the work, information, or advice from outside governmental agencies and historic engineering and design studies is sound and the QP does not disclaim any responsibility for this Technical Report Summary.
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Compass Minerals International, Inc.
Cote Blanche Mine 2021 Technical Report Summary
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26 Date and Signature Page
Signed on this 29th Day of November, 2021.
Prepared by a Qualified Person
Joseph Havasi, MBA, CPG-12040
Technical Report Summary
Salt Mineral Reserve Statement
Compass Minerals International, Inc.
Goderich Mine
Ontario, Canada
Effective Date: September 30, 2021
Report Date: November 29, 2021
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Signature
All data used as source material plus the text, tables, figures, and attachments of this document have been reviewed and prepared in accordance with generally accepted professional engineering and environmental practices.
This report, Salt Mineral Reserve Statement, was prepared by a Qualified Person.
/s/ Joseph Havasi
Joseph Havasi, CPG-12040
Director, Natural Resources
Compass Minerals International, Inc.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table of Contents
Contents
Signature ii
List of Abbreviations ix
1 Executive Summary 1
2 Introduction 8
2.1 Registrant 8
2.2 Terms of Reference and Purpose 8
2.3 Sources of Information 8
2.4 Details of Inspection 8
2.5 Report Version 9
3 Property Description 10
3.1 Property Location 10
3.2 Property Area 11
3.3 Mineral Titles 12
3.3.1 History of Titles 12
3.4 Mineral Rights 13
3.5 Encumbrances 14
3.6 Other Significant Factor and Risks 14
3.7 Royalties Held 14
4 Accessibility, Climate, Local Resources, Infrastructure and Physiography 15
4.1 Topography, Elevation and Vegetation 15
4.2 Means of Access 16
4.3 Climate and Operating Season 17
4.4 Infrastructure Availability and Resources 17
5 History 18
6 Geological Setting, Mineralization and Deposit 19
6.1 Geologic Description 19
6.2 Mineral Deposit Type 19
6.3 Stratigraphic Section 20
7 Exploration 22
7.1 Procedures – Exploration Other than Drilling 22
7.2 Exploration Drilling 22
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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7.3 Procedures – Drilling Exploration 24
7.4 Characterization of Hydrology 24
7.5 Exploration – Geotechnical Data 26
7.6 Description of Relevant Exploration Data 27
8 Sample Preparation, Analyses and Security 29
8.1 Sample Preparation and Quality Control 29
8.2 Sample Analyses 29
8.3 Sample Quality Control and Assurance 29
8.4 Adequacy of Sample Preparation 29
8.5 Analytical Procedures 29
9 Data Verification 30
9.1 Data Verification Procedures 30
9.2 Conducting Verifications 30
9.3 Opinion of Adequacy 30
10 Mineral Processing and Metallurgical Testing 31
10.1 Nature and Extent 31
10.2 Degree of Representation 31
10.3 Analytical and Testing Laboratories 31
10.4 Recovery Assumptions 31
10.5 Adequacy of Data 33
11 Mineral Resource Estimate 34
11.1 Introduction 34
11.1.1 Key Assumptions and Parameters 34
11.1.2 Methodology 35
11.2 Mineral Resource Statement 35
11.3 Estimates of Cut-off Grades 36
11.4 Resource Classification 36
11.5 Uncertainty of Estimates 38
11.6 Multiple Commodity Grade Disclosure 39
11.7 Relevant Technical and Economic Factors 39
12 Mineral Reserve Estimates 40
12.1 Introduction 40
12.2 Mineral Reserve Statement 40
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Goderich Mine 2021 Technical Report Summary
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12.3 Estimates of Cut-off Grades 41
12.4 Reserve Classification 41
12.5 Multiple Commodity Grade Disclosure 41
12.6 Risk of Modifying Factors. 42
13 Mining Methods 43
13.1 Geotechnical and Hydrological Models 47
13.2 Production Schedule 49
13.3 Requirements for Stripping, Underground Development and Backfilling 51
13.3.1 Stripping 51
13.3.2 Underground Development 51
13.3.3 Backfilling 52
13.4 Mining Equipment, Fleet and Personnel 52
14 Processing and Recovery Methods 54
14.1 Process Description 54
14.2 Waste Handling 58
14.3 Power and Natural Gas Consumption 58
14.4 Personnel 58
15 Infrastructure 59
15.1 Roads 59
15.2 Electricity 60
15.3 Natural Gas 60
15.4 Water 60
15.5 Rail 61
15.6 Navigation 61
15.6.1 North River Wall 61
15.6.2 South and North Piers 62
15.6.3 North and South Breakwaters 62
15.6.4 Lake Shipping Traffic 62
16 Market Studies 64
16.1 General Marketing Information 64
16.2 Material Contracts Required for Production 66
17 Environmental, Social and Permitting 67
17.1 Results of Environmental Studies and Baselines 67
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17.2 Waste, Tailings and Water Plans – Monitoring and Management 67
17.3 Project Permitting Requirements 67
17.3.1 Air Permit 67
17.3.2 Surface Water Effluent Discharge Permit 67
17.4 Plans Negotiations or Agreements (Environmental) 68
17.5 Mine Closure Plans 68
17.6 Adequacy Assessment of Plans 68
17.7 Local Hiring Commitments 68
18 Capital and Operating Costs 69
18.1.1 Capital Costs 69
18.1.2 Operating Cost 69
18.1.3 Assumptions 73
18.1.4 Accuracy 73
19 Economic Analysis 74
19.1.1 Operating Costs 74
19.1.2 Capital Costs 74
19.1.3 Economic Analysis 82
19.1.4 Sensitivity Analysis 82
20 Adjacent Properties 84
21 Other Relevant Data and Information 85
22 Interpretation and Conclusions 86
22.1 Mineral Resource 86
22.2 Mineral Reserves 86
22.3 Financial 87
23 Recommendations 88
23.1 Geology and In-Seam Seismic 88
23.2 Costs 88
24 References 89
25 Reliance on Information Provided by the Registrant 90
26 Date and Signature Page 91
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List of Tables
Table 1-1: Goderich Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020 4
Table 1-2: Goderich Mine – Summary of Salt Mineral Reserves at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020 4
Table 2‑1: Site Visits. 9
Table 6‑1: Thickness of A-2 Salt in Exploration Drilling. 20
Table 7‑1: Typical Borehole Log Near Shafts at Goderich Mine. 24
Table 7-2: Geologic Conditions Identifed During Shaft Sinking. 25
Table 7-3: Hydrogeologic data from Test Well VWP-1. 25
Table 7-4: Drill Hole Locations. 27
Table 11‑1: Goderich Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020. 35
Table 12‑1: Goderich Mine – Summary of Salt Mineral Reserves at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020. 40
Table 13‑1: Summary of Rock Properties. 47
Table 13‑2: Summary of Comparison between New Three-Room Layout Performance and Current Regional Pillar Layout 48
Table 13‑3: Summary of key assumptions in the definition of the Goderich Reserves. 51
Table 13‑4: Table of Equipment Used in the Mining Method. 53
Table 14-1: Summary of Mine Processing Equipment 56
Table 14-2: Summary of Electricity and Natural Gas Consumption. 58
Table 14-3: Summary of Personnel Employed. 58
Table 16‑1: World Forecast Demand for salt by region. 64
Table 16‑2: US and Canada: Prodcution, trade, and apparent consumption of salt, 2010-2019 (kt) 65
Table 16‑3: USGS Summary of Salt Pricing. 65
Table 16‑4: Summary of Goderich Mine Production and Sales by Segment 65
Table 18-1: Summary of Capital and Operating Costs: 2017-2021. 70
Table 18-2: Summary of Capital Expenses through 2026. 71
Table 19-1: Life of Mine Cash Flow Analysis. 76
Table 19-2: Sensitivity Analysis: Cost Factors. 82
Table 19-3: Sensitivity Analysis: Price. 83
Table 23-1: Summary of Annual Costs for Recommended Work 89
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List of Figures
Figure 3-1: Site Location Map 10
Figure 3-2: Aerial View of Mine Site and Extent of Mineral Lease 11
Figure 3-3: Extent of Mine Site 12
Figure 3-4: Goderich Mine Salt Lease Water Lots 13
Figure 4-1: Goderich Harbor 15
Figure 4-2: Topographic Quadrangle Map: Goderich Mine 16
Figure 6-1: General Cross Section of Michigan Basin 20
Figure 6-2: Stratigraphic Sequence of the Michigan Basin and the Goderich Salt Mine 21
Figure 7-1: Exploration Drilling and In-seam Seismic Surveys at the Goderich Salt Mine 23
Figure 7-4: Drill Hole Locations 27
Figure 10-1: Standard QC Report for key Testing Parameters for Highway Deicing Salt 32
Figure 10-2: 303 Highway Salt Fines (%28 Mesh) Performance 33
Figure 11-1: Resource Classification Domains 38
Figure 13-1: Representation of Room and Pillar Mining 44
Figure 13-2: Salt Mining Cycle Fowchart 45
Figure 13-3: Mining Layout Near Shaft Locations 45
Figure 13-4: Layout of Current Mining Extents 46
Figure 13-5: Goderich Mine Long-Term Production Layout 50
Figure 14-1: Mining Process Flow Chart 55
Figure 15-1: Overview of Goderich Harbor Infrastructure 59
Figure 15-2: Goderich Harbor Navigational Infrastructure 63
Figure 16-1: Roskill Deicing Salt Forecast through 2028 66
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List of Abbreviations
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Abbreviation
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Unit or Term
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%
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percent
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~
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approximately
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°
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degree
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AuEq
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gold equivalent
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C$
|
Canadian dollar(s)
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EA
|
Environmental Assessment
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EIS
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environmental impact statement or environmental impact study
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ft
|
foot or feet
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g
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Gram
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G&A
|
general and administrative
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g/t
|
grams per ton
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gpm
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gallons per minute
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GSL
|
Great Salt Lake
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h or hr
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hour(s)
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koz
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thousand ounces
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kt
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thousand tons
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L/s
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liters per second
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lb
|
pound or pounds
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Mg/L
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Milligrams per liter
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min
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minute
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Mt
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million tons
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sec
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second
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SMU
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selective mining unit
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SRM
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standard reference material
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STM
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short term modeling
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t
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ton(s) (2,000 lb)
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t/d
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tons per day
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t/h
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tons per hour
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t/y
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tons per year
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TSF
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tailings storage facility
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US$
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United States Dollar
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y or yr
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Year
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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1Executive Summary
The Goderich mine is a production stage, underground mine that produces rock salt primarily for highway deicing use and as feed product for other uses. The Goderich mine is located west of the town of Goderich, Ontario, on an isthmus in the mouth of the Maitland River, as it enters Lake Huron.
The Goderich mine is approximately 60 miles northwest of London, Ontario, and 120 miles west of Toronto, Ontario. Its approximate coordinates are 43˚ 44’ 50” North and 81˚ 43’ 30” West. Access to the Goderich mine is considered excellent. The town of Goderich has established infrastructure for both mining and exporting salt and can be accessed via regional highways from Toronto from the east (2.5 hours). The triangular-shaped mine site is surrounded by the lake on three sides and the Maitland River on the north side. Goderich Harbor and the Goderich mine site are accessed via North Harbor Road, a municipally owned and maintained road that connects the harbor area to Highway 21. The Goderich mine is connected to local power, water, natural gas and sewage infrastructure. Primary logistics for transporting mined product include the rail siding at the mine site and direct loading into ships or barges in Goderich Harbor. The town of Goderich provides all necessary resources for the Goderich mine, with a ready labor supply, housing, hotels, food and all other typical facilities. The close proximity to rail, port and roads provides easy access for all logistical needs.
The Goderich mine site is located on 16.3 acres of Company-owned land on a man-made peninsula consisting of several large buildings and silos associated with mining and material handling, a ship loading facility and three shafts. The Company actively mines salt west of its owned land under Salt Mining Lease No. 107377, dated November 9, 2001, with the Ontario Ministry of Energy, Northern Development and Mines, comprising approximately 13,195 acres. The lease has a 21-year term expiring on May 31, 2022. The Company has an option to renew the lease for an additional 21 years, until 2043, so long as the Company can demonstrate that the Goderich mine’s useful life extends through the 21-year renewal term, which the Company expects to exercise. The only material payments associated with the lease are royalties on the salt produced. The current royalty rate paid is $1.05 / ton.
The Goderich mine’s underground infrastructure is situated in the A-2 salt bed approximately 1,750 feet to 1,760 feet below the surface at the mine shafts’ location. The A-2 salt bed in the shaft area is approximately 79 feet thick. The regional stratigraphic sequence is well understood from many wells drilled across the basin and locally in the Goderich, Ontario, area. The salt strata are highly continuous over the basin, and most of the major salt units can be traced for hundreds of miles. On a local scale, the continuity of the salt beds can be impacted by the presence of pinnacle reefs, displacement by faults, or the local leaching of salt. The Company can use various tools to characterize geological conditions in nearby areas to assess the possibility of encountering these local ground conditions at the mine. Accordingly, the Company has engaged third parties to conduct in-seam seismic surveys and, more recently, has begun use of ground penetrating radar and in-seam directional drilling techniques to identify disturbances in salt continuity and the thickness of the A-2 salt bed in development.
The Goderich mine has procured and is operating in compliance with all required operating licenses, including permits pertaining to mineral extraction, effluent discharge and air permitting. The Ontario Ministry of Energy, Northern Development and Mines regulates closure for the Goderich mine. The most recent closure plan was approved by the ministry in 2012, and is in process of being amended
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as of September 30, 2021. Long-term cleanup of the site will essentially include demolishing surface facilities, removal of surface infrastructure and restoring a natural alvar ecological community on the surface, flooding of the workings, and decommissioning (plugging). The Goderich mine operates under two air permits issued by the Ontario Ministry of Environment, Conservation and Parks, one for the lab (8-1131-96-007), and the other for the garage for welding exhaust (5522-78NUN2). Site drainage into Snug Harbour and the Maitland River is permitted pursuant to Certificate of Approval 2342-7ULQEU and Environmental Compliance Approval 1236-8YGK8A, respectively, issued by the Ontario Ministry of Environment, Conservation and Parks.
The Goderich mine progresses development of main entries in advance of bench mining. The subsequent benches achieve the remainder of the 60-foot room height for room production. Development and bench mining progress at an approximate 40:60 ratio in terms of area of advance in the mine plan and are part of the production process. As needed, underground rooms for facility support functions have been and will be developed in excavated areas of the mine. This includes development of shaft areas on each level for hoist equipment, design, planning and development of ramp structures from one level to the subsequent, lower level as required, installation of underground work facilities such as maintenance shops and storage rooms. As mining progresses, development also encompasses the design, placement, repair and maintenance of support infrastructure such as crushers, screens and other plant in support of mining. All portions of mine development within the A-2 salt are planned to be operated in the same manner and mining method, with the same mining parameters and with the same set of unit operations.
The general method of mining employed at the Goderich mine is known as room and pillar mining. Beginning in 2012 and 2013, the Company advanced the Goderich mine to mechanized room and pillar mining as continuous miners (each a “CM”) replaced the previous under-cutter/over-cutter equipment and drilling and blasting sequence in the development areas of the mine. By 2017, the Company was engaged in continuous mining of the entire 60-foot face of the mined rooms in multiple lifts with a goal of improving efficiency, reducing costs and reducing the amount of diesel equipment utilized underground, thus largely eliminating the use of drilling and blasting at the Goderich mine. The Company continues to upgrade its CM fleet at the Goderich mine.
Certain mining units at the Goderich mine are equipped with both a CM and a flexible conveyor train (“FCT”), a dynamic move-up unit and a belt storage unit. On these mining units, the CM cuts the salt directly from the face and discharges it into a hopper on the end of the FCT. From the FCT, the rock salt is offloaded to the main underground belt conveyance system where it is then transported to the underground crushers and the mill. Other mining units are also equipped with a CM, but are supported with rubber-tired haulage equipment to transfer salt. Salt mined from these CMs is transferred from the face by rubber-tired haulage to a centralized dump point with a crusher and then follows the same process as the other units once the salt is put onto the underground conveyance system. Rock salt is processed and sized at the underground crushers and the mill before being hoisted to the surface. Salt is stockpiled at the surface in domes and it then may be treated with yellow prussiate of soda (“YPS”), depending on the end use of the salt. The salt is then distributed to depots, packaging facilities and customers via ship (approximately 80%), and rail car and truck (approximately 20%).
All of the surface exploration at Goderich mine occurred during the 1950’s. The drilling results were summarized by Kenneth K. Landes in a report titled Report on Rock Salt Reserves at Goderich, Ontario, dated March 30, 1957. The Landes report concluded the A-2 salt had an average NaCl
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content of 98.17%. The report does not indicate the tests performed, if the samples were composited or any specific detail of how analytical testing and sample handling were performed. However, the purities described in the Landes report are indicative of the purity levels found within the mine.
The salt resources at Goderich mine have been estimated in conformity with Items 601(b)(96) and 1300 through 1305 of Regulation S-K promulgated by the SEC generally accepted industry practice. The resource estimates are compiled utilizing data and experience of the geological continuity of the salt deposit gained over approximately 65 years of mining the A-2 salt bed, as well as the information gathered from 10 vertical core boreholes drilled in the 1950s in the salt bed.
The resulting models provide an estimate of the total resource available to Compass Minerals as defined. In compiling a resource estimate for the Goderich mine, several key assumptions were made:
•Mineral resources are not mineral reserves and do not have demonstrated economic viability,
•Underground mineral resources were initially reported based on the established mining practices, including the established 56-foot mining horizon (mining height). The mining height of 60 feet is proposed, being incorporated, and is utilized for estimates,
•The 60-foot mining height is based upon locational experience, practical fit and execution of mining practices, and past studies and recommendations regarding ground control and roof support performed,
•The proposed mining height at Goderich is under review and may vary in the future,
•The specific point of reference for Goderich mine is constrained to the current elevation of the salt bed on the lease at the base of the A-2 salt, approximately 1,750 ft to 1,760 ft below ground surface at the mine shaft location. Mining occurs within the 82-foot thick A-2 salt bed and is limited within the existing leases as described in the paragraphs in Section 3,
•All values have been rounded to reflect the relative accuracy of the estimates, and
•Tonnage was calculated based on a tonnage factor of 0.0675 tons/ft3.
The resource estimation methodology involved the following procedures:
•Review of available data and reports,
•Database compilation and verification,
•Definition of resource domains,
•Volumetric calculation based on A-2 salt bed assumptions,
•Resource classification and validation,
•Assessment of “reasonable prospects for economic extraction”, and
•Preparation of the Mineral Resource Statement.
Summaries of the Goderich mine’s salt mineral resources and mineral reserves as of September 30, 2021 and December 30, 2020 are shown in Tables 1-1 and 1-2, respectively. Joseph Havasi, who is
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employed full-time as the Director, Natural Resources of the Company, served as the QP and prepared the estimates of salt mineral resources and mineral reserves at the Goderich mine.
Table 1-1. Goderich Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Resource (tons)(1)(2)(4)(5)(6)(7)(8)
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Resource Area(3)(9)
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As of September 30, 2021
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As of December 31, 2020
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Measured Resources
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—
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—
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Indicated Resources
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1,485,710,000
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1,503,121,000
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Measured + Indicated Resources
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1,485,710,000
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1,503,121,000
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Inferred Resources
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148,200,000
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148,200,000
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(1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(2) All figures have been rounded to reflect the relative accuracy of the estimates.
(3) Underground mineral resources are reported based on an expected representative A-2 salt bed thickness of 82 feet.
(4) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot
(5) Included process recovery is 97.5% based on production experience. Included mining recovery is approximately 38.7% based on the room and pillar mine plan.
(6) Although the actual sodium chloride grade is less than 100%, it is not considered in the reserve as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(7) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing.
(8) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 hereof. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $60.58 per ton. Gross sales prices are projected to increase to approximately $295.60 per ton for rock salt for road deicing through year 2094 (the current expected end of mine life).
(9) Based on an area of approximately 575,257,000 square feet for the A-2 salt bed within the lease area.
Table 1-2. Goderich Mine – Summary of Salt Mineral Reserves at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Reserve (tons)(1)(2)(3)(4)(5)(6)(7)(8)
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Reserve Area(3)(9)
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As of September 30, 2021
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As of December 31, 2020
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Proven Reserves
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—
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—
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Probable Reserves
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470,030,000
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476,768,000
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Total Reserves
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470,030,000
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476,768,000
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(1) Ore reserves are as recovered, saleable product.
(2) All figures have been rounded to reflect the relative accuracy of the estimates.
(3) Reserve volume assumes a mining thickness of 18 meters (approximately 60 feet) production, 8.5 meters (approximately 28 feet) mains.
(4) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot.
(5) Included process recovery is 97.5% based on production experience. Included mining recovery is approximately 38.7% based on the room and pillar mine plan.
(6) Although the actual sodium chloride grade is less than 100%, it is not considered in the reserve as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(7) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing.
(8) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 hereof. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $60.58 per ton. Gross sales prices are projected to increase to approximately $295.60 per ton for rock salt for road deicing through year 2094 (the current expected end of mine life).
(9) Based on an area of approximately 575,257,000 square feet for the A-2 salt bed within the lease area.
Capital and operating costs were developed on a unit cost and quantity basis utilizing the QP’s estimates that are based on owner’s costs from the past five years, current and historic cost data from continuous and ongoing operation of the facility, first principles, and 65 years of operational
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experience operating the facility at projected production run rates. Operating costs presented herein are the QP’s estimates based on the understanding of actual owner’s costs incurred at the operation since 2017, vendor/contractor quotations, and similar operation comparisons, while capital costs projected through 2026 are estimates by the QP based on owner’s cost estimates developed based on unit cost and quantity basis utilizing historic cost data, first principles, vendor/contractor quotations, and similar operation comparisons.
The average annual capital expenditure since 2017 at the Goderich mine is $37,172,000, with a high of $56,984,000 in 2017 and a low of $17,999,000 in the nine-month 2021 fiscal year. The higher than average capital spend in 2017 was primarily associated with a shaft-lining project that was undertaken for safety and maintenance of business. A summary of capital expenses incurred from 2017 through 2021 by the owner is provided in Table 18-1.
The Goderich mine, as well as all Compass Minerals facilities, maintains a five-year capital forecast for all foreseen capital expenditures to support current production. A summary of foreseen capital expenditures is provided on Table 18-2. As shown on Table 18-2, total estimated capital expenditure through 2026 is $189,691,000, and is comprised of either MOB capital and capital spend for major foreseen capital projects through 2026 including:
•Construction of a new Mill and new egress / ingress from Mill to shaft for $44,687,000.
•Maintenance, replacement and rebuilds of the fleet of Continuous Miners for $78,499,000.
The balance of the forecasted capital expenditure through 2026 is $66,506,000 and primarily includes routine replacement for mine vehicles and equipment. Listed expenditures are based on cost estimates generated by third parties, within +/-15% level of accuracy. There are risks regarding the current capital costs estimates through 2026, including escalating costs of raw materials and energy, equipment availability and timing due to either production delays or supply chain gaps.
Actual operating costs incurred at the Goderich mine from 2017 through 2020 are provided in Table 18-2. Summarized costs include labor, maintenance, supplies electric, diesel, lease royalties, logistics and taxes.
Since 2016, total operating costs per ton have ranged from $32.00 per ton in 2021 to $51.30 in 2018 (impacted by a strike). A 66% increase in hoisted tons over the period is the primary factor in the resulting decrease in cost per hoisted ton, as well as efficiencies realized from the exclusive operation of CMs and what is viewed as an equitable CBA with labor at the Mine.
Excluding impacts associated with mining inefficiency associated with ramp development, the mine has realized a 4% increase headcount from 509 to 530 employees since 2017.
The Goderich mine has a long history of mining salt from the A2 salt deposit. This history includes a wealth of knowledge on how the ore behaves during mining, quality of the ore, the geomechanical properties of salt to enable safe and sustainable mining practices.
The modeling and analysis of the Company’s resources and reserves has been developed by Company mine personnel and reviewed by several levels of internal management, including the QP. The development of such resources and reserves estimates, including related assumptions, was a collaborative effort between the QP and Company staff.
The Company’s salt-producing locations do not utilize classic exploration techniques in the development of their assumptions around mineral resources or reserves. The mineral deposit at
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Goderich is restricted in access by bodies of water, and industry techniques used for geological exploration for other types of mineral deposits, specifically collection of rock core from drilling, can be degradational to the salt ore being assessed. Given the nature of the salt mineral and each site’s beneath a massive water body, this limitation impedes the validation of mineral resources and reserves using exploration drilling techniques. Accordingly, geophysical techniques are utilized at Goderich to assist in mine planning, and to verify that there are no obstructions ahead of advancement of the mine in the form of geological anomalies or structural features, such as faults that could affect future mining. In conducting these geophysical campaigns, including in-seam seismic and ground penetrating radar technologies, the Company is able to identify the continuity of ore-body ahead of mining. In-seam directional drilling is also conducted at Goderich as a means of extending our visibility into the ore body beyond the ranges that can be assessed by geophysical technologies.
Geological modeling and mine planning efforts serve as a base assumption for resource estimates at each significant salt-producing location. These outputs have been prepared by both Company personnel and third-party consultants, and the methodology is compared to industry best practices. Mine planning decisions, such as mining height, execution of mining and ground control, are determined and agreed upon by Company management. Management adjusts forward-looking models by reference to historic mining results, including by reviewing performance versus predicted levels of production from the mineral deposit, and if necessary, re-evaluating mining methodologies if production outcomes were not realized as predicted. Ongoing mining and interrogation of the mineral deposit, coupled with product quality validation pursuant to industry best practices and customer expectations, provides further empirical evidence as to the homogeneity, continuity and characteristics of the mineral resource. Ongoing quality validation of production also provides a means to monitor for any potential changes in ore-body quality. Also, ongoing monitoring of ground conditions within the mine, surveying for evidence of subsidence and other visible signs of deterioration that may signal the need to re-evaluate rock mechanics and structure of the mine ultimately inform extraction ratios and mine design, which underpin mineral reserve estimates.
The Company assesses risks inherent in mineral resource and reserve estimates, such as the accuracy of geophysical data that is used to support mine planning, identify hazards and inform operations of the presence of mineable deposit. Also, management is aware of risks associated with potential gaps in assessing the completeness of mineral extraction licenses, entitlements or rights, or changes in laws or regulations that could directly impact the ability to assess mineral resources and reserves or impact production levels.
Notwithstanding, the salt deposit supports continued successful exploitation, given the size, grade, metallurgical characteristics, developed infrastructure, and the knowledge and experience of the individuals engaged in the project. The uncertainty and risk associated with the historic exploration data can be mitigated where possible, through annual in-seam seismic campaigns, application of ground penetrating radar, and in-seam directional validation drilling.
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Sensitivity analyses conducted on the life-of-mine cash flow analysis indicates that this is a robust project that can withstand 20% increases in the key cash flow components:
•If mining operating costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-2.
•If capital construction costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-2.
•The facility can also withstand a decrease in average selling price of 20% from those currently estimated according to the sensitivities shown in Table 19-3.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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2Introduction
2.1Registrant
This Technical Report Summary (this “TRS”) was prepared in accordance with Items 601(b)(96) and 1300 through 1305 of Regulation S-K (Title 17, Part 229, Items 601(b)(96) and 1300 through 1305 of the Code of Federal Regulations) promulgated by the Securities and Exchange Commission (“SEC”) for Compass Minerals International, Inc. (“Compass Minerals” or the “Company”) with respect to estimation of salt mineral reserves for Compass Minerals’ existing operation producing salt in Goderich, Ontario, Canada (referred to as the “Goderich Mine”, “Goderich mine” or the “Mine”).
2.2Terms of Reference and Purpose
The quality of information, conclusions, and estimates contained herein are based on: i) information available at the time of preparation and ii) the assumptions, conditions, and qualifications set forth in this TRS.
Unless stated otherwise, all volumes and grades are in U.S. customary units and currencies are expressed in constant third quarter 2021 U.S. dollars. Distances are expressed in U.S. customary units.
The purpose of this TRS is to fulfill the requirements of a Mineral Reserve Assessment for the Goderich Mine.
The effective date of this Technical Report Summary is September 30, 2021.
2.3Sources of Information
This TRS is based upon technical information and engineering data developed and maintained by local personnel at the Goderich Mine site, Compass Minerals’ corporate supporting resources and from work undertaken by third-party contractors and consultants on behalf of the mine. In addition, public data sourced from the Goderich Port Management Commission, Huron County GIS, internal Compass Minerals technical reports, previous technical studies, maps, Compass Minerals letters and memoranda, and public information as cited throughout this TRS and listed in Section 24, “References,” and 25, “Reliance on Information Provided by the Registrant.”
This report was prepared by Joseph R. Havasi, MBA, CPG-12040, a qualified person.
2.4Details of Inspection
The following table summarizes the details of the personal inspections on the property by the qualified person.
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QP
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Date(s)
of Visit
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Details of
Inspection
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Joe Havasi
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August 2010 – August 2020
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Mr. Havasi visited the site in support of miscellaneous projects and met with Site, Engineering, and Financial Management over a period of ten years. Visits and meetings at the site and with Town leaders regarding Mine Closure Plan, completion of the Mine Closure Plan, and leasing matters.
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Joe Havasi
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August 2021
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Mr. Havasi visited the site in support of completion of the Mine Closure Plan, miscellaneous projects and met with Site, Engineering, and Financial Management to procure information for use in this TRS.
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Joe Havasi
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September 2021
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Mr. Havasi visited the site in support of miscellaneous projects and met with Site, Engineering, and Financial Management.
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Table 2-1: Site Visits
2.5Report Version
This TRS is not an update of a previously filed TRS.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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3Property Description
The Goderich mine is a production stage, underground mine that produces rock salt primarily for highway use and as feed product for other uses. The Goderich mine is located in southwestern Ontario, Canada, on the eastern shore of Lake Huron. The Goderich mine is located west of the town of Goderich, Ontario, on an isthmus in the mouth of the Maitland River, as it enters Lake Huron. The Goderich mine location is shown in Figure 3-1, while Figure 3-2 illustrates the juxtaposition of owned land where the mine site is located with Compass Minerals salt lease.
Figure 3-1: Site Location Map
3.1Property Location
The Goderich mine is approximately 60 miles northwest of London, Ontario, and 120 miles west of Toronto, Ontario. Its approximate coordinates are 43˚ 44’ 50” North and 81˚ 43’ 30” West.
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Goderich Mine 2021 Technical Report Summary
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Source: Compass, 2012 (Mine Closure Plan)
Figure 3-2: Aerial View of Mine Site and Extent of Mineral Lease
3.2Property Area
The mine site includes approximately 16.3 Company-owned acres of man-made peninsula consisting of several large buildings and silos associated with mining and material handling, a ship loading facility and three shafts. Compass Minerals owns the surface and mineral rights shown on Figure 3-3. Compass Minerals actively mines salt west of its owned land under a salt lease with the Ministry of Energy, Northern Development and Mines (ENDM)(lease #107377) comprising approximately 13,195 acres (Figure 3-1).
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Source: Compass, 2012 (Mine Closure Plan)
Figure 3-3: Extent of Mine Site
3.3Mineral Titles
3.3.1History of Titles
Salt production began in Goderich, Ontario, in 1867 by Sifto Canada (“Sifto”), after an unsuccessful search for oil uncovered a vast bed of rock salt. Sifto used basic solution mining and evaporation, now known as mechanical evaporation, to begin the nearby Goderich plant.
Salt exploration was initiated in the area in the early 1950s. That exploration targeted a potential underground mining operation started in the Goderich Harbor area. However, prior to that, a narrow peninsula had been constructed for use as a trunk line for the CN Railway. Further, the Department of Transport operated a small marina on the south east side of what was to become the mine lease which, at that time, was only accessible by water. The peninsula was widened and the area to be used by the mine and neighboring facilities was constructed using materials from local quarries and supplemented with materials from the first mine shaft.
In 1956, Sifto received approval to operate an underground salt mine while under the ownership of Dominion Tar and Chemical Company Ltd. Initial drilling at the Goderich mine started in 1955 with the sinking of the first shaft beginning in 1957. The Goderich mine started production upon the completion of the first shaft in 1959. Additional increases in production were enabled after a second mine shaft and a third mine shaft were completed in 1962 and 1982, respectively. In 1990, Domtar Chemicals Limited (previously known as Dominion Tar and Chemical Company Ltd.) sold Sifto to the North American Salt Company, a subsidiary of D.G. Harris & Associates (“DGHA”). In 1993, DGHA founded Harris Chemical Group as a holding company for salt operations which was acquired by IMC Global (“IMC”) in 1997. IMC sold a majority of its salt operations, including the Goderich mine, to Apollo Management V, L.P. through an entity called Compass Minerals Group in 2001. Following a
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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leveraged recapitalization, the company now known as Compass Minerals International, Inc. completed an initial public offering in 2003.
3.4Mineral Rights
The Goderich mine site is located on 16.3 acres of Company-owned land (PIN 41369-0004) on a man-made peninsula consisting of several large buildings and silos associated with mining and material handling, a ship loading facility and three shafts. The Company actively mines salt west of its owned land under Salt Mining Lease No. 107377, dated November 9, 2001, with the Ontario Ministry of Energy, Northern Development and Mines, comprising approximately 13,195 acres. The lease has a 21-year term expiring on May 31, 2022. The Company has an option to renew the lease for an additional 21 years, until 2043, so long the Company can demonstrate that the Goderich mine’s useful life extends through the 21-year renewal term, which the Company expects to exercise. The only material payments associated with the lease are royalties on the salt produced. The current royalty rate paid is $1.05 per ton.
There are three Water Lot Locations that comprise the overall Salt Mining Lease:
•CL 3803, covering 1,058.3 hectares,
•CL 3804 covering 1,269.6 hectares and
•CL 9861 covering 3,012.2 hectares.
These three Water Lots total 5,340.1 hectares.
Figure 3-4 shows the individual Water Lots comprising the overall Salt Lease.
Source: Archibald, Gray & McKay (Ontario Land Surveyors), 1996
Figure 3-4: Goderich Mine Salt Lease Water Lots
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Goderich Mine 2021 Technical Report Summary
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3.5Encumbrances
The Mine is not subject to known encumbrances in the form of future permitting requirements, permit conditions, violations or fines.
Notwithstanding, the QP is aware of an aboriginal land claim filed in 2003 by The Chippewas of Nawash and The Chippewas of Saugeen (the “Chippewas”) in the Ontario Superior Court against The Attorney General of Canada and Her Majesty The Queen In Right of Ontario. The Chippewas claim that a large part of the land under Lake Huron was never surrendered by treaty and thus seek a declaration that the Chippewas hold aboriginal title to those submerged lands. The land to which aboriginal title is claimed includes land under which our Goderich mine operates and has mining rights granted to it by the government of Ontario. The actions also seek damages for the value and loss of use of lands. The Company is not a party to the court actions. On July 29, 2021, the Court in Ontario issued an order holding that the Chippewas do not have aboriginal title to the submerged lake lands. The Chippewas subsequently appealed that ruling, and the appeal is still pending.
3.6Other Significant Factor and Risks
All significant factors or risks have been identified and described in the TRS.
3.7Royalties Held
Not Applicable.
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Goderich Mine 2021 Technical Report Summary
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4Accessibility, Climate, Local Resources, Infrastructure and Physiography
4.1Topography, Elevation and Vegetation
The Goderich Mine surface facility is situated on ‘made-land’ that was created in 1872, following the redirection and dredging of the Maitland River, north to its current alignment, and the construction of a breakwater separating the river mouth from the harbor. Construction of the north and south piers was also undertaken in 1872, with north and south breakwaters being constructed between 1904 and 1908, and extended in 1911 (GPMC, 2014) (Figure 4-1). The elevation of the Goderich Mine is 179m amsl, and is bounded by the Maitland River to the north, Lake Huron to the west, the Goderich Harbor and Snug Harbor to the south and east. The entire site is very gently sloping to the southwest (Figure 4-2).
Figure 4-1: Goderich Harbor
Source: Compass Minerals
The datum elevation of Lake Huron is 176 meters (IGLD, 1985). Maximum and minimum water levels range from 175.6 m to 177.5 m above sea level (ASL), as reported by International Great Lakes Datum (IGLD) 1985. The long-term average lake level is established at 176.5 m ASL.
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Goderich Mine 2021 Technical Report Summary
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Figure 4-2: Topographic Quadrangle Map: Goderich Mine
Source: Compass Minerals
Although species diversity was relatively high in the areas associated with the Lower Maitland River Valley, the harbor area has been heavily influenced by human activity, including the creation of much of the harbor’s infrastructure; consequently, there is very little vegetation at the mine site. The Town of Goderich is located in the Physiographic Region known as the Huron Slope. This is a narrow strip of land between the Wyoming Moraine and the eastern shoreline of Lake Huron. The Huron Slope extends from Sarnia to Tobermory and is characterized by a number of dominant landforms including spillways, till plains, kame moraines, beach ridges, sand dunes and shore cliffs. The Huron Slope is considered to be a clay plain of glacial Lake Warren overlying a fine-grained (i.e. primarily silt and clay sized particles) basal glacial till. Till is sometimes exposed at the surface and thin surficial layers of sand are found in the immediate area of Goderich (Golder 2012).
4.2Means of Access
Access to the Goderich mine is considered excellent. The town of Goderich has established infrastructure for both mining and exporting salt and can be accessed via regional highways from Toronto from the east (2.5 hours). The triangular-shaped mine site is surrounded by the lake on three sides and the Maitland River on the north side. Goderich Harbor and the Goderich mine site are accessed via North Harbor Road, a municipally owned and maintained road that connects the harbor area to Highway 21. Commercial air travel is available from London, Ontario, Toronto, Ontario, and Detroit, Michigan, all of which are in relative proximity to the site.
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Goderich Mine 2021 Technical Report Summary
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4.3Climate and Operating Season
The Town of Goderich is located on the windward side of Lake Huron, approximately 120 km north of Sarnia, which is at the southern end of the lake. Goderich’s climate is moderated by its proximity to Lake Huron with a summer daytime average temperature of 17.75oC and a winter daytime average temperature of -4.75oC. Goderich receives a monthly average of 90.25 mm of rain during the summer and a monthly average of 74.75 cm of snow during the winter (Environment Canada 2012).
4.4Infrastructure Availability and Resources
The Operation is connected to local power, water, natural gas and sewage infrastructure. Primary logistics for transporting mined product include the rail siding and direct loading into ships or barges in Goderich Harbor.
The town of Goderich provides all necessary resources for the Operation with a ready labor supply, housing, hotels, food and all other typical facilities. The close proximity to rail, port and roads provides easy access for all logistical needs.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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5History
The following history of Goderich Harbor was derived from the Goderich Port Management Corporation’s Environmental Assessment in support of potential port expansion project:
Since the 1820’s Goderich has had an active harbor associated with lumber and agricultural produce (InterVISTAS 2009). The area surrounding Goderich’s natural harbor was surveyed by the Canada Company in 1827, with a trading post established at the mouth of the Maitland River by 1828. Between 1830 and 1850 the Canada Company built two wooden piers to protect vessels in the harbor from storms (Heritage Resources Centre 2010). Today’s modern harbor was created in 1872, following the redirection and dredging of the Maitland River, north to its current alignment, and the construction of a breakwater separating the river mouth from the harbor. Construction of the north and south piers was also undertaken in 1872, with north and south breakwaters being constructed between 1904 and 1908, and extended in 1911 (Heritage Resources Centre 2010).
The Goderich Port became a favorite wintering spot for schooners and other ships. Between 1840 and 1962, over 100 vessels were built in the harbor. The first grain elevator at the Port was built in 1866 but was later destroyed by fire. The current elevators, constructed in the 1920s, are still in operation today. In 1866, Samuel Platt discovered salt while drilling for oil in the harbor.
Salt production began in Goderich, Ontario, in 1867 by Sifto Canada (“Sifto”), after an unsuccessful search for oil uncovered a vast bed of rock salt. Sifto used basic solution mining and evaporation, now known as mechanical evaporation, to begin the nearby Goderich plant.
Salt exploration was initiated in the area in the early 1950s. That exploration targeted a potential underground mining operation started in the Goderich Harbor area. However, prior to that, a narrow peninsula had been constructed for use as a trunk line for the CN Railway. Further, the Department of Transport operated a small marina on the south east side of what was to become the mine lease which, at that time, was only accessible by water. The peninsula was widened and the area to be used by the mine and neighboring facilities was constructed using materials from local quarries and supplemented with materials from the first mine shaft.
In 1956, Sifto received approval to operate an underground salt mine while under the ownership of Dominion Tar and Chemical Company Ltd. Initial drilling at the Goderich mine started in 1955 with the sinking of the first shaft beginning in 1957. The Goderich mine started production upon the completion of the first shaft in 1959. Additional increases in production were enabled after a second mine shaft and a third mine shaft were completed in 1962 and 1982, respectively. In 1990, Domtar Chemicals Limited (previously known as Dominion Tar and Chemical Company Ltd.) sold Sifto to the North American Salt Company, a subsidiary of D.G. Harris & Associates (“DGHA”). In 1993, DGHA founded Harris Chemical Group as a holding company for salt operations which was acquired by IMC Global (“IMC”) in 1997. IMC sold a majority of its salt operations, including the Goderich mine, to Apollo Management V, L.P. through an entity called Compass Minerals Group in 2001. Following a leveraged recapitalization, the company now known as Compass Minerals International, Inc. completed an initial public offering in 2003.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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6Geological Setting, Mineralization and Deposit
6.1Geologic Description
The Goderich Salt Mine is located near the east edge of the Michigan salt basin (Figure 6-1). The stratigraphy consists of a sedimentary rock sequences which includes salt evaporates (or halites) contained within the Silurian-age Salina formation (Figure 6-2). The Silurian dolomites, shales, and evaporites are overlain by the dolomites and limestones of Devonian-age and underlain by Ordovician limestones and shales. The Salina group is classified into units in ascending order from A to G.
The sediments of the Salina formation approach 3,000 ft (900 m) maximum thickness near the basin depositional center (Figure 6-1), thinning out to several hundred meters or less on the basin margins where the salt is absent. The aggregate thickness of the salt in the Salina formation can exceed 2,000 ft (600 m) in the thickest sequences in the depositional center of the basin, thinning out to zero at the basin margins. The salt strata are highly continuous over the basin, and most of the major salt units can be traced for hundreds of kilometers.
In the Goderich area, the aggregate thickness of the Salina formation is about 1,000 ft (300 m), of which approximately 40% consists of salt beds, with the B unit salt being the dominant salt bed.
The geological interpretation assumes that the A-2 evaporite salt bed is continuous and potentially thickens to the west towards the center of the Michigan basin. The regional stratigraphic sequence is well understood from many wells drilled across the basin and locally in the Goderich area. The salt strata are highly continuous over the basin, and most of the major salt units can be traced for hundreds of kilometers.
On a local scale, the continuity of the salt beds can be impacted by the presence of pinnacle reefs, displacement by faults, or the local leaching of salt. The Company can use various tools to characterize geological conditions in nearby areas to assess the possibility of encountering these local ground conditions at the mine.
6.2Mineral Deposit Type
The Goderich Salt Mine is situated in the A-2 salt bed. The A-2 salt is immediately overlain by the A-2 carbonate sequence and underlain by the A-1 carbonate sequence. The base of the A-2 salt bed is located approximately 1,750 ft to 1,760 ft below surface at the mine shafts’ location. Figure 6-2 shows the stratigraphic column at the mine.
The A-2 salt bed in the shaft area is approximately 79 ft thick. Other salt beds above the mine consist of B, D, and F salt beds at progressively shallower depths. The upper most F salt bed is about 980 ft below surface at the shafts’ locations. The salt beds are nearly horizontal and dip at approximately 1.5° to the southwest.
The A-2 salt contains parting features that may be encountered during mining or present stability challenges when shallow in the roof. The clay partings often exhibit rippled surfaces. The features tend to be weak and roof separation is common when located immediately above the roof at room center. The dolomite / anhydrite / clay bands’ (commonly referred to as rock bands) thickness ranges from thin lamina (less than one quarter inch) and four to six inches. The frequency and thickness of
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the rock bands increase near the top and the bottom of the A-2 salt. Slumping or folding structures within the salt are common.
The rock of the A-2 carbonate bed, which overlies the A-2 salt, is a dolomite. The thickness of the A-2 carbonate bed is about 140 ft and the bedding has prominent partings that range in spacing from less than one inch and one to two feet (Table 6-1). The estimated cohesive strength at bedding features is very low. There is little evidence of cross fracturing or jointing within the dolomite. The rock is prone to raveling as observed in areas where it has been exposed in the mine roof.
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Hole ID
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From (ft)
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To (ft)
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Lithology
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Thickness (ft)
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DDH02
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1,676.0
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1,754.7
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A2_Salt
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78.7
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DDH03
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1,715.7
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1,748.0
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A2_Salt
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32.3
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DDH05*
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-
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-
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-
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-
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DDH06
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1,692.3
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1,767.2
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A2_Salt
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74.9
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DDH09
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1,681.7
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1,768.7
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A2_Salt
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87.0
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DDH10
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1,696.9
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1,781.8
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A2_Salt
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84.9
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DDH11
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1,699.0
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1,780.0
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A2_Salt
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81.0
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DDH12
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1,711.6
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1,797.3
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A2_Salt
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85.7
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DDH13
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1,673.0
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1,759.0
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A2_Salt
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86.0
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DDH14
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1,782.7
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1,863.5
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A2_Salt
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80.8
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A2
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Average†
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82.4
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Table 6-1: Thickness of A-2 Salt in Exploration Drilling
Notes: *A2 salt not intercepted in Salina formation.
† Average excludes anomalous boreholes DDH03 andDDH05
Source: SRK from Compass data
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6.3Stratigraphic Section
Source: Johnson and Gonzales, 1978 as referenced in Dusseault, 2004
Figure 6-1: General Cross-Section of the Michigan Basin
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Source: modified from left: Johnson and Gonzales, 1978 as referenced in Dusseault, 2004 and right: Sanford, 1969
Figure 6-2: Stratigraphic Sequence of the Michigan Basin and the Goderich Salt Mine
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Goderich Mine 2021 Technical Report Summary
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7Exploration
Exploration on the Goderich Salt Mine is very limited. In the late 1950s, the Sifto Salt Company Ltd. drilled 16 vertical core boreholes, 10 of which were drilled to a depth sufficient to intercept the A-2 salt bed (Figure 7-1). The drilling results are summarized by Kenneth K. Landes (1957) in a report titled Report on Rock Salt Reserves at Goderich, Ontario dated March 30, 1957.
All of the surface exploratory holes were drilled in the 1950’s. Most of the Goderich Mine is located under Lake Huron. This makes any surface exploratory drilling expensive and inherently risky.
Compass has undertaken an in-mine exploration program along with Ground Penetrating Radar (GPR) and in-seam seismic surveys. All the current exploration projects are to verify thickness of the ore deposit and not to determine quality. This is due to the fact the salt has been found to be uniform in its quality.
7.1Procedures – Exploration Other than Drilling
In-seam seismic surveys were conducted at two areas with ground condition problems at the current southern extent of the mine workings (Figure 7-1). In-seam seismic is able to detect disturbances in salt continuity but cannot observe salt thickness. The survey conducted by Associated Mining Consultants (AMC) in 1997 concluded that they had encountered “events” coinciding with “the range at which hard material had been encountered during drilling”. Mining operation efforts were halted at the first seismic reflector.
The in-seam seismic survey done in 2013 by DMT showed P – and S- waves within salt with some detected seismic reflections showing disturbances in the salt interpreted as possible faults or increases in organic material.
In 2019, the mine began using GPR to identify the thickness of the A-2 Salt layer in development. The mine purchased a Sensors and Software Pulse EKKO 100 MHz antenna, and processing software suite. The thickness was calculated using common midpoint (CMP) survey-derived wave speeds, taking the geometry of the GPR system into account and propagating the associated uncertainties. The surveys have identified areas of decreased and increased thickness in the mine allowing the mine plan to be adjusted accordingly.
7.2Exploration Drilling
The report by Landes concluded that commercial salt beds have been defined in the A-2 and F salt beds. The A-2 salt was reported as having a minimum mining thickness of 70 ft with an average NaCl content of 98.17%. The F salt was reported at a minimum mining thickness of 15 ft with an average NaCl content of 98.24%. The other salt units, A-1, B, and D were deemed at the time as either too thin or with too many impurities for commercial extraction.
The average thickness of the A-2 salt bed is 82.4 ft, as defined by eight drill intercepts that have pierced through the whole unit Table 6-1. Drill intercepts closest to the lease (boreholes 9, 10, 11 and 12) average 84 feet thickness and the salt zone generally thickens moving to the west, where mining is occurring. Interestingly, the A-2 salt thins to a thickness of 32 ft on borehole 3 and completely disappears in borehole 5. Landes (1957) interprets the disappearance of the A2 salt in borehole 5 as being due to leaching of the salt and subsequent collapse of the overlying beds, as evidenced by a steepening of the beds and the presence of salt-filled fractures in the core. Landes
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Goderich Mine 2021 Technical Report Summary
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does not however attribute the thinning of the A-2 salt in borehole 3 to the same leaching process as no brecciation was observed and the A-2 carbonate is also thinned by over 70 ft. Therefore, to explain the anomalous situation at borehole 3 by leaching would involve not only dissolving the upper three-fifth of the A-2 salt but also half of the overlying A-2 dolomite, all without disturbing the strata above. As such, Landes interpreted this oddity as being related to faulting though no faults were interpreted in the log and the QP is not aware of any mapped fault in the area. The orientation of such a fault is unknown but restricted by the fact that it has not been observed in existing workings. However, Terry Carter, consultant geologist for Compass with many years of experience at the mine, believes that the thinning of A-2 salt on borehole 3 could still be due to salt dissolution. Further geological work is required to understand the reason for salt thinning in this area.
Source: Compass Minerals
Figure 7-1: Exploration Drilling and In-seam Seismic Surveys at the Goderich Salt Mine (existing mine workings in red)
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Goderich Mine 2021 Technical Report Summary
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7.3Procedures – Drilling Exploration
The first exploration holes were drilled in the 1950’s. Drilling logs exist; however, drilling procedures have not been found.
In 2019, Compass Minerals began an inseam drilling program. This program was designed to confirm the thickness of the ore body in the proposed new mine workings and was not designed to collect information about quality of the salt.
The drilling program used a small diamond drill rig along with directional drilling tool. The drillholes were located to drill into areas where new mine workings are proposed. The typical drillhole was drilled using NQ core barrel. The drill holes were drilled horizontally with 20 ft cemented casings. The cement was allowed to cure for 12 hours, then pressure tested to 1,000 psi for 10 minutes. If the casing fails the pressure test, re-cementing the casing is performed. If the casing fails the pressure test twice, the hole is abandoned, and another location is drilled.
Every 100 meters, upwards and then downwards wedges were branched off the main horizontal hole to intersect with the anhydrite formations above and below the salt. All drill holes are logged, and cores remain within Goderich Mine to be used for future reference.
The drilling program is an on-going program with new sites chosen as mine planning dictates.
7.4Characterization of Hydrology
Golder Associates (2013) summarized hydrogeological conditions and observations made during the sinking of the three shafts. The sequence of geologic strata typically encountered near the shafts are summarized in Table 7-1.
Table 7-1: Typical Borehole Log Near Shafts at Goderich Mine
This geologic sequence is consistent with the information available from shaft sinking logs. The shale beds and salt beds of the Salina Formation in the area represent an aquitard and form the base of the more active groundwater flow system present in the overlying units (starting at 230 m, or about 750 ft bgs). It is understood that groundwater in the Lucas, Amherstburg, Bois Blanc, and Bass Islands Formations is typically fresh to brackish, with water in the deeper Salina units being of high salinity. An additional source of information includes geologic observations that were made during shaft sinking and summarized in a report by Phillips (2000). The observations are summarized in Table 7-2. Below the superficial sand and gravel deposits associated with the lake bed and riverbed,
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the strata are nearly horizontally bedded. This means that strata can be correlated as approximately horizontal between the nearby boreholes and shafts.
Table 7-2: Geologic Conditions Identified During Shaft Sinking
As part of the study by Golder Associates (2013), a hydrogeological investigation was conducted in test well VWP-1 to provide information and aid in the design of a program for re-lining shafts #1 and #2. This investigation included collecting geophysical data, borehole video images, and geological logging. Hydrogeologic testing included flow profiling, hydraulic testing, and water chemistry sampling. The test borehole was cemented and abandoned upon completion of test program. The measured water levels and flow conditions from the test program are summarized on Table 7-2, along with estimates of hydraulic conductivity for the various intervals.
Table 7-3: Hydrogeologic data from Test Well VWP-1
Appendix B shows a log of the inflows encountered during the sinking of shafts #1 and #2. This data is considered relevant to the prediction of hydrogeological inflow conditions to the underground workings and around the shaft seals.
The review of hydrogeologic data is summarized in the following points:
• The dolostone (shaley dolomite) of the Lucas, Amherstburg, Bois Blank, and Bass Island Formations to a depth of about 230 m are water bearing with artesian flow measured through the sequence.
• There is presence of vertical groundwater gradients to the depth of about 230 m with hydraulic heads varied from 1 to 3 m above ground between depths of 40 to 89 m. Average hydraulic head
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of 4.3 m above ground between depths of 90 and 230 m, resulting in strong artesian flow in boreholes.
• Significant artesian flow rates of 18 to 32 L/sec (285 to 507 gpm) were measured throughout the Amherstburg, Bois Blanc, and Bass Island Formation between depths of 97 and 217 m with the deepest major flow zone encountered at a depth of 213 m. Significant flow producing zones were encountered through the upper 200 m of rock generally corresponding to karstified, weathered bedding partings, vertical fractures, and stratigraphic discontinuities.
• The anhydrite beds identified at depths between approximately 230 and 248 m in the base of the Bass Island Formation, when intact as they were observed in Test Well VWP-1, likely represent an aquitard or caprock to the large-scale groundwater circulation.
• The Salina Formation G and F Members encountered in Test Well VWP-1 between depths of 248 and 258 m appeared to be intact and did not exhibit an indication of significant weathering. However, some minor open bedding partings were observed that may be associated with minor groundwater flow zones.
• Groundwater level measured in the Salina Formation was approximately 120 m below ground surface. The strong hydraulic head difference of 124 m observed across the lower Bass Island Formation anhydrite beds suggests that they are acting as an effective aquitard, at least in the immediate vicinity of Test Well VWP-1.
• The observed intact rock and absence of major flow zones below 213 m in Test Well VPW-1 are generally consistent with observations from the original sinking of Shaft #2, which reports dry conditions below 219 m. However, regular groundwater inflows to the depth to 335 m with a flow range of 0.5 to 1.5 L/sec were reported during construction of Shaft #1.
7.5Exploration – Geotechnical Data
No geotechnical data was found for the above ground exploration holes. The current drilling program does not contain any provisions for the collection or testing for geotechnical purposes.
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Source: Compass Minerals
Figure 7-4: Drill Hole Locations
7.6Description of Relevant Exploration Data
The combination of historic data collected through historical exploration, the large body of geologic knowledge of the area and the Michigan Basin, combined with the long operational history of the mine and Compass Minerals’ underground GPR and drilling exploration has created a strong understanding of the thickness and continuity of the salt bed. Furthermore, the salt deposit has been shown to be almost pure sodium chloride (~98%), less some anhydritic interbedding. The presence of the anhydritic banding is common in salt beds and is due to the depositional process of halite. The undulating thickness as discovered using GPR is localized and has no significant impact on reserves.
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The mine has been in operation for over 60 years and has accumulated a wealth of knowledge about the homogeneity and continuity of the salt bed. As mining operations continue to the west, towards the center of the basin, all geologic information points to the salt bed becoming thicker. The only limiting factor of the mine and the reserves, is the boundaries of the lease.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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8Sample Preparation, Analyses and Security
All of the surface exploration occurred during the 1950’s. The previously referenced report by Landes concluded the A-2 salt had an average NaCl content of 98.17%. The report does not indicate the tests performed, if the samples were composited or any specific detail of how analytical testing and sample handling were performed. However, the purities described in the Landes report are indicative of the purity levels found within the mine.
Halite is a sedimentary rock that is formed when large volumes of sea or salty water is evaporated from an arid climate basin. The basin has a replenishing flow of salty water and a restricted input of fresh or any other water. This depositional environment creates large uniform beds of halite. The size and uniformity of halite beds allows the mining environment where exploratory sampling can be limited in scope. Compass Minerals samples for purity during production, as described in Section 10.
8.1Sample Preparation and Quality Control
The sampling occurred in the 1950’s and was not documented.
8.2Sample Analyses
The sampling occurred in the 1950’s and was not documented.
8.3Sample Quality Control and Assurance
The sampling occurred in the 1950’s and was not documented.
8.4Adequacy of Sample Preparation
The sampling occurred in the 1950’s and was not documented.
8.5Analytical Procedures
The sampling occurred in the 1950’s and was not documented.
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9Data Verification
9.1 Data Verification Procedures
Data verification of the information contained herein and review of the practices and procedures of the engineering and mine planning at Goderich Mine is typically performed with the assistance of third-party consulting firms familiar with the salt mineral industry. The mine utilizes on-site installations of Deswik Mining Software along with these independent consultants to review and assist with the construction of resource and reserve models, mine plans and mine sampling.
9.2 Conducting Verifications
Verification of resource and reserve information has been limited in the past to third-party consulting and internal review by Compass corporate engineering. This is consistent with past industry practice.
9.3 Opinion of Adequacy
For the purposes of this technical report summary, given the uniformity of the resource orebody being evaluated, the consistent nature of the salt output from the mine over its extended history and the expected extended duration of the mining operations, the current set of analytical procedures in place for production of resource and reserve estimations is considered adequate and in alignment with conventional industry practice for the mining of salt on this production level.
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Goderich Mine 2021 Technical Report Summary
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10Mineral Processing and Metallurgical Testing
10.1 Nature and Extent
Goderich Mine produces chemical grade salt and highway deicing salt. The mine utilizes a process of physical gradation whereby the oversized pieces of salt are sent to be crushed and fines are compacted into blocks, while rock and other impurities are removed by optical sorting machines. A water and acid soluble analysis are performed and follows ASTM E-534-2008 guidelines.
Samples are taken from the production conveyor belt, hoisting and at the vessel. Production samples are taken four times a shift for chemical salt. Hoisting samples are taken every 250 tons for chemical salt and 800 tons for highway grade salt. Vessel samples are taken every 800 tons and composited for chemical grade salt and 2000 tons, composited for highway grade salt.
10.2 Degree of Representation
In seam sampling of the salt deposit at Goderich Mine is a part of the production process and is considered representative of the surrounding orebody for a particular level of mining. The deposit at Goderich Mine exhibits strong structural and grade continuity typical of this type of industrial mineral deposit and so the inseam sampling provides a reliable characterization of the product being mined. Save for an occasional inclusion or rock into a level as described in the geology sections, the inseam sampling remains reliably descriptive of the salt resource.
10.3 Analytical and Testing Laboratories
Due to the consistent and uniform nature of the salt mineral being recovered, production samples are tested by Compass at the facilities owned and operated by the mine. This laboratory is not certified. If sampling programs or quality investigations are required outside of the typical mode of operations, Goderich Mine would utilize third-party certified laboratories and testing following industry standard practices for quality assurance and control.
10.4 Recovery Assumptions
Recovery factors applied to production are based upon experiential and historical calibrations of results. For example, some mined product is lost to market through the production of fines during the mining process. An example QC report from May 2021 is provided as Figure 10-1 illustrating test methods and results for moisture, fines, and purity for this period.
The Company tests for fines using the 303-CC/HWY standard. The test evaluates the percentage deicing salt product passing -28 mesh screen with a control limit of 15%. Figure 10-2 illustrates the Mine’s performance within upper and lower control limits relative to fines for 2021. Where and when possible, fines are blended back into certain products, and when that is not available, the fines are moved into the mine for long-term storage.
The Goderich Mine also tests for percent NaCl and has a control limit of 96%. This standard is commonly met, with results ranging between 96% and 98%. Standard 303-CC/HWY also has a moisture standard of 0.5%. The Goderich Mine commonly passes this test as well.
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Goderich Mine 2021 Technical Report Summary
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Figure 10-1: Standard QC Report for key Testing Parameters for Highway Deicing Salt
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Figure 10-2: 303 Highway Salt Fines (%28 Mesh) Performance
10.5 Adequacy of Data
Laboratory data collected at Goderich Mine is adequate for the continued production of salt and in alignment with typical conventional industry practice for the industry. This is based upon empirical experience. Detailed recovery of data and analysis beyond the current practices would be considered uneconomic and unnecessary in the absence of a specific issue or conditions required such further analysis.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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11Mineral Resource Estimate
11.1 Introduction
This section describes the resource estimation, methodology applied and summarizes the key assumptions considered. The resource estimation reported herein is a reasonable representation of the rock salt mineralization found in the Goderich Salt Mine at the current level of understanding.
The salt resources at Goderich Mine have been estimated in conformity with Items 601(b)(96) and 1300 through 1305 of Regulation S-K promulgated by the SEC, according to generally accepted industry practice and experience and in alignment with Canadian Institute of Mining’s (CIM) “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines (2019) as well as the Guidelines for Industrial Mineral (2003) published by the CIM Estimation Best Practice Committee. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of a mineral resource will be converted into mineral reserves.
The resource estimates are compiled utilizing data and experience of the geological continuity of the salt deposit gained over approximately 65 years of mining the A-2 salt bed, as well as the information gathered from 10 vertical core boreholes drilled in the 1950s in the salt bed.
Compass develops and continuously updates its models of the salt bed utilizing a combination of many advanced analytical tools, including Autodesk’s AutoCAD, Seequent’s Leapfrog Geo, Deswik’s Mining CAD and scheduling modules as well as Microsoft Excel and other tools. Additionally, results from various and proprietary reports of engineering and geologic investigations by third-party consultants conducted for Compass were incorporated in the evaluation of the resource.
11.1.1 Key Assumptions and Parameters
The resulting models provide an estimate of the total resource available to Compass Minerals as defined. In compiling a resource estimate for the Goderich Mine, several key assumptions were made:
•Mineral resources are not mineral reserves and do not have demonstrated economic viability,
•Underground mineral resources were initially reported based on the established mining practices, including the established 56-foot mining horizon (mining height). The mining height of 60 feet is proposed, being incorporated, and is utilized for estimates,
•The 60-foot mining height is based upon locational experience, practical fit and execution of mining practices, and past studies and recommendations regarding ground control and roof support performed,
•The proposed mining height at Goderich is under review and may vary in the future,
•The specific point of reference for Goderich Mine is constrained to the current elevation of the salt bed on the lease at the base of the A-2 salt, approximately 1,750 ft to 1,760 ft below ground surface at the mine shaft location. Mining occurs within the 82-foot thick A-2 salt bed and is limited within the existing leases as described in the paragraphs in Section 3,
•All values have been rounded to reflect the relative accuracy of the estimates, and
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•Tonnage was calculated based on a tonnage factor of 0.0675 tons/ft3.
11.1.2 Methodology
The resource estimation methodology involved the following procedures:
•Review of available data and reports,
•Database compilation and verification,
•Definition of resource domains,
•Volumetric calculation based on A-2 salt bed assumptions,
•Resource classification and validation,
•Assessment of “reasonable prospects for economic extraction”, and
•Preparation of the Mineral Resource Statement
11.2 Mineral Resource Statement
The mineral resources may be affected by further exploration work such as seismic or drilling that may result in increases or decreases in subsequent mineral resource estimates. The mineral resources may also be affected by subsequent assessments of mining, environmental, processing, permitting, socio-economic, and other factors. The Mineral Resource Statement for the site is presented in Table 11-1. The effective date of the Mineral Resource Statement is September 30, 2021.
Table 11-1: Goderich Mine – Summary of Salt Mineral Resources at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Resource (tons)(1)(2)(4)(5)(6)(7)(8)
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Resource Area(3)(9)
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As of September 30, 2021
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As of December 31, 2020
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Measured Resources
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—
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—
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Indicated Resources
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1,485,710,000
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1,503,121,000
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Measured + Indicated Resources
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1,485,710,000
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1,503,121,000
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Inferred Resources
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148,200,000
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148,200,000
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(1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(2) All figures have been rounded to reflect the relative accuracy of the estimates.
(3) Underground mineral resources are reported based on an expected representative A-2 salt bed thickness of 82 feet.
(4) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot
(5) Included process recovery is 97.5% based on production experience. Included mining recovery is approximately 38.7% based on the room and pillar mine plan.
(6) Although the actual sodium chloride grade is less than 100%, it is not considered in the resource, as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(7) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing.
(8) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of this TRS. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $60.58 per ton. Gross sales prices are projected to increase to approximately $295.60 per ton for rock salt for road deicing through year 2094 (the current expected end of mine life).
(9) Based on an area of approximately 575,257,000 square feet for the A-2 salt bed within the lease area.
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11.3 Estimates of Cut-off Grades
Goderich Mine produces rock salt, primarily for highway use and as feed product for other uses. Mineral cut-off grades are not applicable to the recovery of rock salt and are not a driver for production. It is understood that, for all practical purposes, every ton recovered and hoisted to the surface at Goderich is a viable sales ton. A cut-off grade is not impacted by commodity pricing, save for in the event in which costs to produce and deliver rock salt to market exceed the established floor price of the commodity as discussed in the section on Economic Analysis. Production of salt is driven not by the availability of the resource and control of a cut-off grade, but by market demand. Salt production and correspondingly costs can be modulated in response to that demand.
It is worth noting that while there is no cut-off grade, there are losses in the mining process. Mined salt that is recovered during mining operations and handling is either sales product for shipment or is lost as waste in the form of fines. Fines are defined as volumes of salt resulting the production process below saleable size consist. The waste volumes are disposed of underground in existing abandoned excavations mined previously and accounts for approximately 2.5% of the salt recovered. This value does fluctuate with production. Efforts are underway to reduce fines loss by conversion into a saleable product through compaction. Results from those effort are still preliminary and are not considered or reported in this summary. However, as noted elsewhere, for the purposed of defining the salt resource, all of the in-situ mineral within the contours of the salt dome is considered a resource within the constraints of mining practices and safety.
11.4Resource Classification
Volumes, grade and tonnages estimated for the Goderich Salt Mine were classified in alignment with Items 601(b)(96) and 1300 through 1305 of Regulation S-K and the CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines (2019) by Compass Minerals on-site engineering and corporate support.
Mineral resource classification is typically a subjective concept, and industry best practices suggest that resource classification should consider the confidence in the geological continuity of the modelled mineralization, the quality and quantity of exploration data supporting the estimates, and the geostatistical confidence in the tonnage and grade estimates. Appropriate classification criteria should aim at integrating these concepts to delineate regular areas at a similar resource classification.
The mineral resource model is informed from feedback provided by the ongoing mining operations, historic core boreholes drilled at or near the shore of Lake Huron and limited in-seam seismic data. The current mining face is nearly 5.4 kilometers from the shaft. Continuity of the stratigraphic unit containing the rock salt mineralization has been found to be consistent and stable over the currently mined area.
The primary criteria considered for classification consists of confidence in local geological continuity. The confidence in geological continuity of the rock salt mineralization is good based on the mining history of the deposit. Therefore, on the basis of geological continuity alone, Indicated or Inferred categories can be reported. However, the confidence in the geological continuity deteriorates near a potential fault detected in core borehole 3 where the A-2 salt thins to a thickness of 32 ft, and in the south-central part of the mine where uncertain ground conditions were encountered with a potential pinnacle reef. On this basis, an Inferred classification was assigned to these two areas.
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Other factors such as grade continuity were not considered for classification. While local variations exist regarding impurities in the salt, such as organic materials, dolomite, or anhydrite, insignificant and inconsistent data exist to establish any substantial impact of such materials on the resource. As the primary end market of the Goderich Mine salt is as road salt, such impurities are not typically addressed in the recovery of the resource and these factors are not expected to have a material impact on the resource estimate. All recovered material is considered to be 100% saleable as road salt after processing. Waste salt, which is represented as fines unsuitable for sale, represents approximately 2.5% of the recovered tons.
The following classification has been applied to the Goderich Salt Mine resource estimate:
Inferred Mineral Resource: Volumes for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. At Goderich, contiguous volumes of mineralization are informed by existing mining history. The confidence in local geological continuity is however impacted by the potential for localized pinnacle reef intrusions (south central area of lease) and/or the possible presence of faults which may have displaced the A-2 sequence by as much 50 to 100 ft (northeast part of lease).
Indicated Mineral Resource: Contiguous volumes of rock salt for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. These volumes of are also informed by the existing mining history and historical core boreholes with expected A-2 salt thicknesses but include the existing lease area, the pillars, roof, and floor of mined areas with the potential of extraction during retreat or by solution and all other mining in the A-2 mine area.
Measured Mineral Resource: Contiguous volumes of rock salt mineralization informed from confirmation of geological continuity due to mapping, and sampling information to confirm salt quality and quantity with confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluation of the economic viability of the deposit. In general, measured resource is not reported for Goderich because of the lack of non-production data even though detailed mine planning is de facto. This is in alignment with CIM industrial minerals guidance. The classification would require advanced A-2 salt bed modelling, additional seismic or drilling data and substantial investment to demonstrate geological continuity in un-mined areas of the mining lease.
Uncategorized: All remaining salt strata in the lease area, such as the B, D, and F salt beds, where more work is required to show prospect of economic extraction. These strata are not considered or reported in this document.
Figure 11-1: Resource Classification Domains provides a map of the resource at the Goderich Mine for reference with the categorization and current mine plan as constructed by the mine and reviewed.
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Source: Compass Minerals – Goderich Mine
Figure 11-1: Resource Classification Domains
11.5Uncertainty of Estimates
As indicated, volumes, grade and tonnages estimated for the Goderich Salt Mine were classified in conformity with generally accepted industry practice and experience and in alignment with established guidelines. While mineral resources are not mineral reserves and do not have demonstrated economic viability, the estimates made here do represent the mineral potential of the property to the extent of the best available data and knowledge. The longevity, history and
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established nature of the salt dome and salt mining at Goderich lends confidence to the estimates presented herein. Extensive use of analytical methods to establish estimates of confidence limits for the resource such as geostatistics or numerical methods are not supported by operational experience, existing variance in the nature of the resource, return on economics nor supported by established industry practice for the recovery of the salt.
11.6Multiple Commodity Grade Disclosure
Goderich Mine produces rock salt, primarily for highway use. A small portion of product, approximately 8%, is recovered for commercial and industrial (C&I) use and chemical grade sales. The differentiation in product is based upon quality (relative purity / lack of contaminants) and size consist. C&I and chemical products typically market at a higher price and margin than salt utilized for highway use, however, for purposes of resource evaluation, all estimated volumes have been conservatively represented as the lower valued commodity and do not impact resource and reserve estimations.
11.7Relevant Technical and Economic Factors
While this estimation of the salt resource available at the Goderich Mine is considered a reasonable representation, it is heavily reliant upon the continuity and homogeneity of the salt bed resource, the historical experience gained in the mining of the dome over an extended period, and the to-date modelling of the salt orebody based upon limited exploration practices. Increasing confidence in the characterization of the orebody dome, where practical and economical, is always advised. For example, interpretations of resource variations in salt quality and operational impacts such as occur in proximity to the pinnacle reef intrusions encountered and truncating some of the northern mining systems could be enhanced and better managed through further geotechnical work. Such work would need to be evaluated to provide the necessary cost-benefit results.
In terms of economic factors, the recovery of the resource is governed primarily by the floor price of the salt as discussed in Section 19, Economic Analysis, and not by any grade cut-off for salt quality as discussed previously. In general, it is assumed that any ton of salt mined from Goderich Mine is a saleable product and that economic impacts result from market influences and not resource constraints.
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12Mineral Reserve Estimates
12.1Introduction
This section describes the reserve estimation methodology and summarizes the key assumptions and controlling parameters utilized by the QP in developing the mineral reserve estimates for Goderich Mine.
Resources are converted to reserves for the following areas:
•Un-mineable resource, pillars, barrier and salt remaining in roof areas between levels are not considered for reserves,
•Measured or indicated resource only are considered for reserves. Any areas with inferred resources are not eligible for conversion to reserves,
•Compass Minerals has developed mine plans and polygons for the A-2 salt bed utilizing the aforementioned model data and software packages and mapped into the limits of existing mining and current leasing – these current plans define the mine,
•Any additional areas surrounding shafts and underground infrastructure that have been identified as un-mineable or that have been removed for ground control purposes have been excluded.
Resources that meet the above criteria were utilized for estimation of the reserve. Within the eligible areas, the developed long-term production layouts were applied utilizing planned mining dimensions and parameters. Areas for both planned development and benched rooms are calculated to estimate a total future mined area as described in Section 13. Resources that meet the above criteria were utilized for estimation of the reserve.
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12.2 Mineral Reserve Statement
The reserve statement for the Goderich Mine, current to September 30, 2021 is presented in Table 12-1.
Table 12-1: Goderich Mine – Summary of Salt Mineral Reserves at the End of the Fiscal Years Ended September 30, 2021 and December 30, 2020.
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Salt Reserve (tons)(1)(2)(3)(4)(5)(6)(7)(8)
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Reserve Area(3)(9)
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As of September 30, 2021
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As of December 31, 2020
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Proven Reserves
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—
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—
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Probable Reserves
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470,030,000
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476,768,000
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Total Reserves
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470,030,000
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476,768,000
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(1) Ore reserves are as recovered, saleable product.
(2) All figures have been rounded to reflect the relative accuracy of the estimates.
(3) Reserve volume assumes a mining thickness of 18 meters (approximately 60 feet) production, 8.5 meters (approximately 28 feet) mains.
(4) Tonnage was calculated based on a tonnage factor of 0.0675 tons per cubic foot.
(5) Included process recovery is 97.5% based on production experience. Included mining recovery is approximately 38.7% based on the room and pillar mine plan.
(6) Although the actual sodium chloride grade is less than 100%, it is not considered in the reserve, as the final saleable product is the in situ product, as-present after processing (i.e., the saleable product includes any impurities present in the in situ rock).
(7) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing.
(8) There are multiple salable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt). For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of this TRS. The pricing data is based on a five-year average of historical gross sales data for rock salt for road deicing of $60.58 per ton. Gross sales prices are projected to increase to approximately $295.60 per ton for rock salt for road deicing through year 2094 (the current expected end of mine life).
(9) Based on an area of approximately 575,257,000 square feet for the A-2 salt bed within the lease area.
12.3Estimates of Cut-off Grades
As stated previously, Goderich Mine produces rock salt, primarily for highway use. Mineral cut-off grades are not applicable to the recovery of rock salt and are not a driver for production. It is understood that, for all practical purposes that planned tons of production may be considered saleable irrespective of grade, save for those tons lost to processing waste. The QP has assumed a price for deicing salt of $60.58/ton, and a floor price of $41.98/ton.
12.4Reserve Classification
Reserve classification are in accordance with Items 601(b)(96) and 1300 through 1305 of Regulation S-K was made based upon the assumptions outlined in the introduction. The following definitions were considered and informed the classification:
Probable Mineral Reserve - The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.
Proven Mineral Reserve - The economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.
Reserve classification using these definitions and was made based upon the assumptions outlined in the introduction. Because of the nature of the certainty surrounding the remaining deposit and its mineability across the extensive A-2 salt bed, all reserves have been attributed to the probable classification. The use of historical mining experience, in-situ production sampling and the overall
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uniformity of the salt dome as opposed to traditional methods applied in other mineral orebodies such as significant surface drilling exploration or extensive geotechnical investigation dictates that, in accordance with Items 601(b)(96) and 1300 through 1305 of Regulation S-K and alignment with CIM guidelines, the reserves be considered as probable.
The uniformity of the salt and the economics make it difficult to justify such efforts to result in a probable classification.
12.5Multiple Commodity Grade Disclosure
Goderich Mine produces rock salt, primarily for highway use. As reviewed, approximately 8% of the mined salt is recovered for commercial and industrial (C&I) use and chemical grade sales. The differentiation in product is based upon salty purity, typically 99% pure, and sizing of the final mined product. C&I and chemical products market at a higher price and margin than salt utilized for highway use, however, for purposes of resource evaluation, all estimated volumes have been conservatively represented as the lower valued commodity. Utilizing this assumption, there is no significant change in the definition of reserves.
12.6Risk of Modifying Factors.
As with the resource definition, the estimation of the salt reserves available at the Goderich Mine is considered a reasonable representation but remains heavily reliant upon the continuity/ homogeneity of the salt dome resource, historical experience and production “exploration.”
Modifying factors that would impact the reserve estimate would likely be outside of the mining operation’s influence and impact its economic ability to sell the mineral. These might include such things as –
•Availability of manpower,
•Availability of infrastructure such as utilities,
•Political disruption
•Maintaining Compass Minerals’ license-to-mine at Goderich Mine (permits, etc.)
All of this could impact the definition of the reserve, which relies upon the assumption that all tons mined are saleable. These modifying factors are reviewed in further detail in the later sections of the summary.
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13Mining Methods
The general method of mining employed at the Goderich Mine is known as room and pillar mining. The following summary describes the mining method historically and in its present state.
In utilizing room and pillar mining, salt is recovered in a horizontal plane, creating a horizontal network of rooms and pillars at multiple stacked levels, analogous to the bays in a parking garage. To do this, "rooms" of salt are extracted via the mining process while "pillars" of untouched material are left to support the overlying roof, also of salt. In salt recovery at Goderich, rooms are mined in multiple lifts or “benches” due to the extensive height of the room.
From initial start-up until the early 1990’s, Goderich mined salt with rooms and pillars incorporating a technique of blasting the salt face and loading out, or “mucking” the fragmented material to the surface. The approach was referred to as “conventional mining”. The active face was undercut to a depth of approximately 12 feet. Next, approximately 100, 12-foot-deep auger drill holes were drilled into the face, loaded with explosives and set off, fragmenting the salt in a controlled volume. The resulting 2,000 tons of muck were loaded into trucks and hauled to the crusher or temporary storage area.
In the early 1990’s, Goderich mine adopted the development-bench system to advance room and pillar mining. The development heading was 12 feet high by 60 feet wide at that time. An under-cutter/over-cutter machine cut a slot along both the floor and the back (roof). The resulting blast produced approximately 620 tons of muck. The muck was transported by loading/tramming equipment to feeder breakers, which further fragmented the salt and fed the product onto conveyors taking the muck to the surge pile. Once the development headings were advanced approximately 1,000 feet, the floor was drilled with a down-hole drill to a vertical depth of 48 feet. The holes were loaded with blasting agent of ammonium nitrate and fuel oil (ANFO) and the resulting blast sizes could be anywhere from 10,000 to 40,000 tons. The fragmented salt or muck was loaded into trucks and hauled to the crusher or temporary storage areas.
Beginning in 2012 and 2013, the Company advanced the Goderich mine to mechanized room and pillar mining as continuous miners (each a “CM”) replaced the previous under-cutter/over-cutter equipment and drilling and blasting sequence in the development areas of the mine. By 2017, the Company was engaged in continuous mining of the entire 60-foot face of the mined rooms in multiple lifts with a goal of improving efficiency and reducing the amount of diesel equipment utilized underground, thus largely eliminating the use of drilling and blasting at the Goderich mine. The Company continues to upgrade its CM fleet at the Goderich mine.
Certain mining units at the Goderich mine are equipped with both a CM and a flexible conveyor train (“FCT”), a dynamic move-up unit and a belt storage unit. On these mining units, the CM cuts the salt directly from the face and discharges it into a hopper on the end of the FCT. From the FCT, the rock salt is offloaded to the main underground belt conveyance system where it is then transported to the underground crushers and the mill. Other mining units are also equipped with a CM, but are supported with rubber-tired haulage equipment to transfer salt. Salt mined from these CMs is transferred from the face by rubber-tired haulage to a centralized dump point with a crusher and then follows the same process as the other units once the salt is put onto the underground conveyance system.
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The room and pillar mining method employed at Goderich Mine is contained completely within the A-2 salt bed as described previously and the mining method applied is selected as a direct result of the uniform nature of the mineral deposit and accepted industry practice in recovery of the salt resource. Room and pillar mining is elected for salt recovery as an industry standard and preferred practice for this type of bedded salt deposit that results in a best compromise of cost, efficiency and safety while maximizing the recovery of the natural resource.
In room and pillar mining, the pillars are standing structures which remain after rooms of salt have been extracted as described. These pillars function as the primary ground control and support and are required to maintain the continued safe operation of the mine. A broad characterization of the method is seen in the illustration in Figure 13-1. The illustration shows the technique prior to the utilization of continuous miners but presents a general representation of the orebody geometry and the mining volumetric progression.
Source: Hasan Z, Harraz, Underground Mining Methods: Room and Pillar Method, 2015
Figure 13-1: Representation of Room and Pillar Mining
Once mined, salt is transported by conveyer to underground facilities where it is processed and sized before being hoisted to the surface. It then may be treated with YPS, depending on the end use of the salt, before being transported to final market. Details of the processing are reviewed in later sections, but a flowsheet of the overall process is included here for clarification (Figure 13-2). The mining activities at Goderich are supported by three shafts, clustered on the eastern portion of the lease in older workings as shown in Figure 13-3.
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Source: Compass, 2021
Figure 13-2: Salt Mining Cycle Flowchart
Source: Compass, 2012 (Mine Closure Plan, Figure 3, Not to Scale)
Figure 13-3: Mining Layout near Shaft Locations
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The layout of the current mining is shown in Figure 13-4.
Source: Compass, 2021 (Not to Scale)
Figure 13-4: Layout of Current Mining Extents
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13.1Geotechnical and Hydrological Models
The A2 Salt formation that is mined is between two dolomite units, a shaly dolomite above and a brown dolomite below. Neither one of these units contain any significant amount of water due to the small pores and lack of any appreciable permeability. The water encountered in the mine, is highly saline and considered formational water.
The rock mass properties for the dolomite units were tested by Golder Associates (Technical Memorandum: Goderich – Numerical Analysis, 26 May 2003). Creep tests were performed by Itasca (Itasca Verbal Communications – Une 14 2001; Prediction of Convergence Rates in the Western Expansion of Sifto Salt Mine and Analysis of Surface Subsidence). A table of rock properties is summarized below is provided as Table 13-1.
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Material Unit
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Bulk Modulus (GPa)
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Shear Modulus (GPa)
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Density (Kg/m3)
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Tensile Strength (MPa)
|
Cohesion (MPa)
|
Friction (°)
|
A MPa-ns-1
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n
|
Dolomite
|
22.7
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7.6
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2899
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4
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15
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30
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Best Fit
1.45E-12
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3
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Salt
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11.7
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8.6
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2470
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1
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3
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30
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Worst Fit
1.45E-6
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3
|
Table 13-1: Summary of Rock Properties
SRK Consulting (U.S.) completed a geotechnical study to support the modified room and pillar design required to accommodate the use of CM / FTC units for mining in July 2016 (SRK, 2016). This layout is further modified to not include cross cuts through barrier pillars, decreases the barrier pillar width and includes deeper stub room cuts into the barrier pillar. However, the extraction ratio for the modeled three-room layout discussed below is similar to the extraction ratio utilized for the current reserve estimate.
To accommodate the continuous mining and material handling operations, a new three-room layout and four-cut mining sequence was required in the West Mining Panel (WMP) area to allow mining to maximize productivities. The new layout represented a substantial change from the previous four-room layout and benching sequence. Goderich has put forward with SRK’s guidance a new three-room layout with the objective of improving mining productivity while maintaining or improving ground conditions.
The three-room layout was implemented in 2016. Rates of separation are measured by a ground movement monitor that is placed 15 ft into the roof. The average rate of separation in the outside rooms has remained stable at 0.1” per year in both the 4-room and 3-room mining systems. The steady state closure rate for the 3-room system is approximately 2.7 years whereas the rate for the 4-room system is 2.0 years. However, this is most likely related to the extraction ratio.
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Goderich Mine 2021 Technical Report Summary
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Performance Criteria
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New 3-Room Layout
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Previous 4-Room Layout
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Room Closure Rate
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Time steady state (Months)
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6.5 – 7.0
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6.5 – 7.0
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Total closure 1 yr after mining
(inches)
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5.0 – 7.0
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4.2 – 7.4
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Steady state closure rate
(inches/yr)
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4.8-5.4
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5.2 – 6.2
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Yield Pillar Stress Distribution
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Tensile zone from yield pillar edge
(ft)
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7 - 13
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8 – 14
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Maximum stress at mid yield pillar
(MPa)
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33 - 35
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38 - 40
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Minimum stress at mid yield pillar
(MPa)
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4-6
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6-8
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Pillar factor of safety
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2.3
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1.5
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Yield Pillar Damage Potential
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Dilatancy period
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After 300 days
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After 300 days
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Dilatancy potential magnitude1
|
1.3
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1.3
|
Differential deformation
(sag vs squat)
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Days to no differential deformation
(days)
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55 - 60
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60 – 70
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Transition period
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140 - 150
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150 - 160
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Squat vs roof sag difference
(inches/day)
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0.015 - 0.020
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0.025 - 0.030
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1Insufficient data to calibrate allowable limit
Source: SRK
Table 13-2: Summary of Comparison between New Three-Room Layout Performance and Current Regional Pillar Layout
Table 13-2 suggests the following:
•Closure rates provide a general indicator of room response to mining. Creep rates and thus closure rates are initially high, but decrease with time as mining moves away from a location and stresses relax. The table indicates that closure and closure rates are lower for the three-room layout and thus more favorable.
•Stress levels in the yield pillars provides a general indicator of pillar loading and stability. It is the shear stresses that control the rate the yield pillars deformation. The table indicates that stress levels in the three-room layout are slightly less than the current four-room layout although the critical pillar dimensions are the same.
•The yield pillar damage potential expressed as a function of the shear stresses to the confining stress provides an indicator of the potential for fracture generation in the pillar skin. Although insufficient field data has been collected to quantify threshold damage levels, the table indicates that the three-room and four-room layouts have similar damage potential.
•The differential deformation between the yield pillars (squat) and the roof movement (sag) provide an indicator of the potential for roof beam shearing due to differential
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displacements. The table indicates slightly less differential deformations and more similar roof stiffness (more favorable conditions) for the three-room layout.
The panel-scale model results predict average closure rates in the North Mining Panel (NMP) to be similar when the WMP is mined using the new layout as compared to the current regional pillar layout.
Although the roof span for the three-room layout is smaller than the four-room layout, the slenderness ratio of the yield pillars are the same and predicted closure rates in center room are considered similar at comparable days after mining. SRK predicted that similar ground conditions exist between the new and old layouts. The primary geotechnical advantages resulting from the new three-room layout over the four-room layout includes:
•The narrower rooms have more stable roof beam conditions;
•Mined panels are abandoned sooner and thus experiences less closure, roof sag and wall damage;
•The overall resource extraction ratio is slightly lower resulting in lower stress concentrations due to overburden pressures, which reduce room closure and decrease peak pillar loads; and
•There is more similar roof-beam stiffness (between the yield pillars and the roof) resulting in less roof flexure, thereby improving the roof stability of the three-room system.
The yield pillars have an estimated FOS of 2.3 against brittle failure. The three-room layout reaches steady state conditions in about three months after the last level cuts are excavated. Individual panels are only open for about 2.5 years. Current four-room monitoring data indicates that the steady state is reached after about nine months (about three times longer) due to proximity to nearby mining.
13.2 Production Schedule
For the purposes of this TRS, it is assumed that an average rate of six and one half million tons of salt per annum is produced by Goderich based upon recorded production over the last five years. Although the determined design production capacity of the mine is estimated at eight million tons per year, actual production varies significantly due to market demand, planned maintenance schedules and other factors. Production is sourced from the mine plan layout as shown in Figure 13-5 and key assumptions used in planning are summarized on Table 13-3. Historically mined areas are shown in green, proposed future production areas are shown in purple. Mine operations are currently active in the northwest portion of the project area. Based on the proposed mine layout and using a 6.5 million tons per annum production run rate assumption, the Goderich Mine has a current mine life of approximately 72 years.
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Source: Compass Minerals – Goderich Mine (Not to Scale)
Figure 13-5: Goderich Mine Long-Term Production Layout
Goderich Mine is operated six days per week, two shifts per day for approximately 250 to 275 days per year, depending upon planned down time for maintenance and repairs, unplanned downtime and interruptions from seasonal weather impacts. The following is an overview of the mine’s typical production parameters.
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Goderich Mine 2021 Technical Report Summary
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Value
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Units
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Parameter
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50
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ft
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Room Width
|
100
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ft
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Pillar Width (sq)
|
28
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ft
|
Development Room Height
|
56
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ft
|
Benching Room Height
|
38.7%
|
|
Local Extraction Ratio
|
97.5%
|
|
Mine Recovery
|
0.0675
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st/ft3
|
Density
|
2.17
|
mt/m3
|
Density
|
8,000,000
|
st/y
|
Capacity
|
6,500,000
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st/y
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Production Run Rate
|
265
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days/yr
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Number of Production Days
|
24,528
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st/d
|
Production Rate
|
363,382
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ft3/d
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Production Rate
|
72
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years
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Expected Mine Life
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Table 13-3: Summary of key assumptions in the definition of the Goderich Reserves
13.3 Requirements for Stripping, Underground Development and Backfilling
Operations at the Goderich Mine for the stripping, underground development and backfilling functions are discussed in this section. Note that all portions of mine development within the A-2 salt are planned to be operated in the same manner and mining method, with the same mining parameters listed and with the same set of unit operations. Refinements in mine planning, operations and efficiencies, geologic impacts and other unforeseen factors can and will impact the design and layout of the future mining process at Goderich. As such, requirements for stripping, underground development and backfilling may also change in response.
13.3.1 Stripping
Currently, there is no underground stripping at the Goderich Mine unless one considers the scaling or removal of flaking salt and other materials from the walls and ceiling, part of mine maintenance, as stripping.
13.3.2 Underground Development
As reviewed in the mine method section, Goderich Mine progresses development of main entries in the multiple lift of two, achieving 26 feet of mining height overlying and in advance of bench mining. The subsequent benches achieve the remainder of the 60-foot room height for room production.
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Development and bench mining progress at an approximate 40:60 ratio in terms of area of advance in the mine plan and are part of the production process.
In addition, as needed, underground rooms for facilities for support functions have been and will be developed in existing mined excavations and specific locations. This includes development of shaft areas on each level for hoist equipment, design, planning and development of ramp structures from one level to the subsequent, lower level as required, installation of underground work facilities such as maintenance shops and storage rooms.
As mining progresses, development also encompasses the design, placement, repair and maintenance of support infrastructure such as crushers, screens and other plant in support of mining.
13.3.3 Backfilling
Waste salt that is produced during the mining process and resulting from the transport of hoisted tons constitutes the extent of backfilling. Waste salt is estimated at approximate 2.5% of total recovered salt tons. Waste material is collected via loaders and other supporting underground equipment and taken from the face, load out points, conveyor and crusher locations and any other impacted areas of collection as part of housekeeping and maintenance and is disposed of in previously mined workings as identified by operations management and engineering.
13.4 Mining Equipment, Fleet and Personnel
Currently, Goderich Mine operates with an approximate staffing target of 533 individuals: 121 salaried staff and 408 hourly and 4 temporary employees. That number is expected to remain relatively constant for the foreseeable future if production rates remain at current levels.
Table 13-4 provides a general overview of the equipment fleet and machinery utilized in the unit operations of the mining process. The asset list at Goderich Mine comprises over 1000 lines of specific items include administrative items, land and building assets as well as parts inventories, etc. that are not part of the mining process and are not considered.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 13-4: Table of Equipment Utilized in the Mining Method
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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14Processing and Recovery Methods
14.1Process Description
Salt is mined using the room and pillar method via development mining using continuous miners (each a “CM”) with tungsten carbide teeth shear the salt from the rock face. Production mining is completed using CMs in production panels. Once a panel has been mined, the back is scaled and bolted on a 6’ x 4’ pattern with 7’-6” point anchored mechanical bolts. Continuous miners (CM) are manufactured by Joy Global, a Komatsu company.
Once mined, rock salt is loaded immediately onto a flexible conveyor train (“FCT”) that is located at the rear of the CM or by bulldozer (if needed). From the FCT, the rock salt is offloaded to the main underground belt conveyance system where it is then transported to underground crushers and the mill.
Mill Process
All salt, once extracted onto the FCT; goes through a series of conveyors, chutes and bins before arriving at the mill. The milling process is primarily designed to crush and screen the salt to make highway product (<9/16”) and chemical product through a series of primary, secondary and tertiary crushers, optical sorters, and fines compaction.
The mill is designed to run at a capacity of 2,000 tph to produce up to 7.0M tons per year. All salt, as previously mentioned, passes through a series of conveyors belts, chutes and bins to the primary crusher, which is a roll crusher. The roll crusher is set to size all material >3.5” and its capacity 600 tph with peaks of 1,000tph, powered by two 100-hp motors.
The crushed salt is then transported via 48” conveyor belt to A-Screens, max capacity of 2000 tph, which sizes the product towards the “A-side” if <9/16” or “B-side” if >9/16”.
The “A-Side” of the mill, where approximately 70% of the material passes through, consists of the following:
–Mogensen sizers, max capacity 800 tph (200 tph per unit). The six screen deck unit has the following three outputs:
•Coarse (>0.248”) to be sent to optical sorters
•Middlings (<0.248”, >0.039”x1.5”) to be sent to highway product pile
•Fines (<0.039”x1.5”) to be sent to compactor
–A Compactor, max capacity of 150 tph for material <0.039”x1.5”
–Mogensen optical sorters, max capacity 400tph (40 tph per unit).
•Accept rate varies on input material but averages 75% accept or 300 tph of chemical production at full feed rate.
–Moisture sensor and by-pass system to avoid sizer blinding.
•At a sustained 0.55% moisture content in A-Side material, all material bypasses Mogensen sizers (and thus Compactor and Optical Sorters) and continues to the underground highway surge pile.
•Also utilized when feed to Mogensen sizers exceeds 800tph.
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The B-Side of the mill, where 30% of the material passes through compromises of:
–Secondary Impact Crusher, max capacity of 600 tph (>9/16”)
–B-Screen, max capacity 2,000 tph to allow material <9/16” to continue to highway pile
–Tertiary Crusher, max capacity of 500 tph (>9/16”)
–C-Screen, max capacity of 750 tph to allow for waste/grade control, re-crush at tertiary crusher and highway production:
•Salt over 1.5” goes to waste pile
•Salt between 1.5”<x<9/16” to tertiary crusher
•Salt <9/16” to underground highway surge pile
Figure 14-1: Mining Process Flow Chart
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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DESCRIPTION
|
DESIGN
|
Capacity
|
|
Tons per year, tpy
|
8,000,000
|
Tons per day, tpd, nominal
|
30,000
|
Primary crusher, tph
|
600
|
Secondary crusher, tph
|
600
|
Tertiary crushers, tph
|
500
|
Compactor, tph
|
150
|
Sorters, tph
|
400
|
Primary Crusher
|
McLanahan 30”x72” BDDR
|
Motor, Hp
|
2x 100
|
A-Screen
|
Haver-Tyler
|
Type
|
Punch plate/wire mesh, Flexmat
|
Screen opening, top deck, inches
|
2”
|
Screen opening, bottom deck, inch
|
9/16”
|
B-Screen
|
Haver-Tyler
|
Type
|
Square mesh, flexmat
|
Screen opening, top deck, inches
|
1”
|
Screen opening, bottom deck, inch
|
9/16”
|
C-Screen
|
Haver-Tyler
|
Type
|
Square mesh, flexmat
|
Screen opening, top deck, inches
|
1.5”
|
Screen opening, bottom deck, inch
|
9/16”
|
Secondary Crushing
|
Hazemag APS 1620/B
|
Motor, Hp
|
600
|
Tertiary Crusher
|
Hazemag APS-1340/B
|
Motor, Hp
|
500
|
Mogensen Sizer
|
|
Top Deck, screen opening, inches
|
0.551"
|
Fifth Deck, screen opening, inches
|
0.354"
|
Fourth Deck, screen opening, inches
|
0.248"
|
Third Deck, screen opening, inches
|
0.098x5"
|
Second Deck, screen opening, inches
|
0.063x1.5"
|
Bottom Deck, screen opening, inches
|
0.039x1.5"
|
Table 14-1: Summary of Mine Processing Equipment
Approximately 5% of the salt is screened for deicing and water softener product. An optical sorter is used to sort premium product. Salt is stockpiled at surface in domes prior to distribution to depots, packaging facilities and customers via lake freighter (80%), rail, and truck (20%).
Access to the underground for mine workers, materials, ventilation as well as hoisting of salt is completed through three shafts. The #1 Shaft was constructed in late 1959 and it is a 16’ diameter concrete and steel lined shaft measuring 1,800’ to 1,900’ deep. This shaft originally provided intake air but has been converted to exhaust air as part of the relining project which was completed in 2019. With the completion of the relining project of the #1 Shaft is also used as a secondary production shaft and a secondary means of personnel travel on an as needed basis.
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The #2 Shaft, which was built in 1962, is a 16’ diameter concrete and steel lined shaft measuring 1,800’ to 1,900’ deep. It is equipped with a Blair winch and used for heavy material movement. Currently, this shaft provides intake air. The #2 Shaft was relined in conjunction with the #1 Shaft and is used for fresh air intake to the mine.
The #3 Shaft, also concrete lined, is as deep as the # 1 and #2 Shafts but was constructed in 1982 and it is 22’ diameter. This shaft is equipped with a double drum hoist system capable of hoisting salt from underground in two 30 t skips using the #6 Hoist. The #3 Hoist also operates in #3 Shaft, and is used for workers and material movement. This shaft also provides exhaust air.
Two, 1.5 MW natural gas fired emergency generators are provided to run the #3 Hoist and underground de-watering pumps in the event of a long-term power outage.
The underground primary mill reduces the size of the salt rocks. The mill utilizes a system of screens and crushers, optical sorters and a compactor to size and classify the salt into two categories:
- Highway salt (~90%)
- Chemical salt (~10%)
These products are transported to the shaft bottom where they are hoisted via the #1 Shaft and/or #3 Shaft. The #1 Shaft is equipped with dual 15t skips and the #3 Shaft is equipped with dual 30t skips for hoisting product to surface.
Transfer to Surface:
Once crushed and screened underground, the salt is hoisted to the surface. A system of overhead and below grade conveyors are used to transport the salt to the various storage areas. It then may be treated with YPS, depending on the end use of the salt. The salt is conveyed to Bulk Storage in either Dome 4 or 5, depending on the product specifications.
Surface Storage and Transport:
Dome No. 4 is used to stockpile chemical salt while Dome No 5 is used to stockpile highway salt. It is estimated that Dome 5 holds roughly 70,000 tones while Dome 4 holds roughly 16 to 18,000 tons. Maximum storage height averages 11 m - 15 m (35 ft.- 50 ft.).
A third storage facility, the FC building, is used for rail loading and can hold 1800 tons. From Dome’s 4 and/or 5, product is transferred via a series of reclaim conveyors below each storage building to the ship-loader for lake-freighter loadout. Approximately 70,000 tons of salt is transported to the Goderich Evaporation Plant annually for use in manufacture of water conditioning and consumer deicing products.
Approximately 5% of produced salt is shipped by railcar loading is said to represent a fraction of the shipments and less than 5 percent at the time of writing.
Lake freighters are rated to hold approximately 33,000 tons. It is estimated that truck shipments can be roughly 12 to 15,000 tons per day.
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Goderich Mine 2021 Technical Report Summary
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14.2Waste Handling
All waste generated underground (except hazardous waste; e.g., used oil / grease) is disposed of in mined out areas of the mine. This includes old equipment and water not collected by shaft sumps which is assumed to be dirty and adsorbed into waste salt. No other waste is generated by the operation other than typical trash, sewage and used oil / grease, etc. These small amounts of waste are disposed of off-site.
14.3Power and Natural Gas Consumption
A summary of total, fixed and variable electricity consumption and costs incurred by the owner are provided in Table 14-2.
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|
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|
|
|
|
2021 Actual
|
2020 Actual
|
2019 Actual
|
2018 Actual
|
2017 Actual
|
Total Electricity
|
kWh
|
74,998,668
|
67,157,106
|
67,430,311
|
58,174,769
|
63,334,264
|
Avg Price
|
0.0390
|
0.0406
|
0.0364
|
0.0505
|
0.0450
|
Global Adjustment
|
2,876,512
|
2,960,090
|
2,890,398
|
3,257,400
|
4,408,190
|
Total Cost
|
5,803,782
|
5,683,544
|
5,345,379
|
6,194,891
|
7,258,072
|
Natural Gas
|
MMBTUs
|
40,908
|
51,199
|
44,025
|
75,844
|
59,265
|
Cost/MMBTU
|
3.64
|
4.02
|
10.68
|
6.20
|
4.61
|
Total Cost
|
148,890
|
205,884
|
470,298
|
470,298
|
273,215
|
Table 14-2: Summary of Electricity and Natural Gas Consumption
14.4Personnel
A summary of required personnel is provided in Table 14-3.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Actual
|
2020 Actual
|
2019 Actual
|
2018 Actual
|
2017 Actual
|
Salaried
|
119
|
123
|
94
|
80
|
93
|
Hourly
|
|
|
|
|
|
Underground
|
220
|
215
|
179
|
175
|
238
|
Surface
|
55
|
60
|
53
|
41
|
57
|
Maintenance
|
117
|
118
|
100
|
87
|
99
|
Inactive
|
13
|
10
|
19
|
14
|
11
|
Temporary
|
6
|
6
|
5
|
3
|
2
|
Total Headcount
|
530
|
532
|
450
|
400
|
500
|
Table 14-3: Summary of Personnel Employed
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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15Infrastructure
Figure 15-1 provides an overview of key infrastructure at the Goderich Mine, including port infrastructure, roads, docks, rail and key utilities.
Figure 15-1: Overview of Goderich Harbor Infrastructure
15.1Roads
The Mine is accessed via North Harbor Road, a municipally owned and maintained road that connects the harbor area to Highway 21. North Harbor Road provides vehicle access to the harbor, Goderich mine site, Da-Lee, Maitland Valley Marina and Trailer Park and Maitland Valley Golf and Country Club. There is also an access route from North Harbor Road to Goderich Elevators on the south side of the harbor.
North Harbor Road is a two lane, asphalt road that comes to a sign-controlled t-intersection with Highway 21. The road varies in width, ranging from 9.7 m (at the intersection with Highway 21) to 22 feet wide (at the railroad crossing). Portions of the road have curbs and gutters, however, there is no sidewalk. There is a drainage ditch on the south side of the road, between the railroad crossing and the intersection with Highway 21, as well as a number of catch basins for stormwater. The posted speed limit for North Harbor Road is 30 miles per hour.
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15.2Electricity
Electricity is supplied by Hydro One. The Hydro One Goderich Transformer Station (TS) was built in 2013. The Goderich TS has a new 83 MW transformer (primary 115 000 volts; secondary side 27.6 volts). Compass Minerals purchased its own breaker position on the Hydro One board so as to have a dedicated feed line M4 from the Goderich TS to the Mine. The feed line is over two miles long and maintained by the electrical distribution company, Earth Power, responsible for electrical distribution from the Hydro One Goderich TS to site.
Power is provided to the mine site via a 3-phase overhead power line providing 27,600 volts to the on-site power distribution center (surface substation). These power lines are located on the north side of the access road.
Power underground is supplied by 2 main feeder cables running from the surface substation located at the east end of the site. Two 13.8 KV lines run down #3 shaft to a switch line at the front of the mine. From there, the 13.8KV is run to a series of substations and transformers located throughout the mine to provide power to the mining operations.
15.3Natural Gas
Natural gas requirements (heating of mine intake air during the colder months) for the mine site are provided through 2 – 4-inch pipelines. They are tied into the main supply system located in Goderich. The system is owned and operated by Union Gas.
15.4Water
Water is supplied by the Town of Goderich in addition to Compass Minerals Permit to Take Water from the Maitland River. The water intake for the Town of Goderich is located in Lake Huron approximately 820 feet due south of the most southerly extent of the south breakwall. The existing intake is located at a depth of approximately 23 feet at a point 1700 feet from the water treatment plant structure, extending in a northwesterly orientation from the facility. The water system serves a total of 7,500 people and has a design capacity of 44 gallons/second with a flow volume of 3.1 million gallons/day.
The Mine consumes approximately 31,700 gallons per day of fresh water from the Town of Goderich. The water is distributed as follows:
•Approximately 8,800 gallons per day was consumed by the continuous mining systems, cleaning mobile equipment, and spillage in shaft sumps.
•Approximately 8,000 gallons for clean-up of salt spillage in and around the ground level conveyors.
•Approximately 13,000 gallons per day was used for hygiene and showers.
•Approximately 1,300 gallons per day is used in the office and laboratory.
The site is connected to an 8” water line from the Town of Goderich. There are 764 feet of 6” fire line, and 100 feet of 4” potable water line beneath the site.
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15.5Rail
Rail service at the Goderich Harbour is provided via the Goderich-Exeter Railway. The rail line was purchased from the Canadian National Railway Company in 1992 and is currently owned and operated by the Goderich-Exeter Railway Company, a subsidiary of Genesee and Wyoming Railroad. The Goderich-Exeter Railway is a short line freight railway consisting of approximately 180 miles of track in Southern Ontario, servicing urban centers such as Goderich, Stratford, Elmira, Cambridge, Kitchener, Waterloo and Guelph.
In Goderich, rail lines extend from the Mine and run adjacent to the river wall before crossing North Harbour Road south of the boat launch. There is also a rail line along the eastern edge of the harbor that goes to the Goderich Elevators. From the harbor, the rail line continues east, generally following Maitland Road before crossing Highway 8 and continuing south away from the Town. The Goderich-Exeter Railway Company collects and delivers rail cars to and from the harbor with commodities including: salt, and agricultural products.
Railcars are also used to transport grain and salt from the Harbour. Annually, an average of 3,155 rail cars are loaded and shipped from the Harbour, for an average of 17.5 trains per month.
Rail service to the site is provided by the Goderich-Exeter Railway Company. The main line is split into two trunk lines at the entrance to the peninsula. The two trunk lines merge into one approximately 80m to the east of the roadway that passes the mine site on the east. This single line enters the site through the gates at the east side of the mine site and extend to the west of the rail loading building. There is approximately 487m of track which service the rail loading facility area within the mine site.
15.6Navigation
Salt that is produced at the Mine is transported to market via lake freighter, rail, and trucks. The water-based commerce and infrastructure at the Mine is managed by the Goderich Port Management Corporation (GPMC). The GPMC is a not-for-profit organization, formed by commercial port users, following the transfer of ownership rights from federal authorities to the Town of Goderich. While the Town of Goderich owns the port, it is GPMC that assumes management responsibilities for the port facilities, including: port maintenance, managing commercial traffic, infrastructure developments, collecting user fees, and managing the Port’s finances and assets. Key elements of the Port’s infrastructure are descried below.
15.6.1North River Wall
The north river wall was constructed in the 1860’s to form a protective basin for shipping activities. To accommodate additional ships into the basin, additional north and south river walls were later constructed in the 1870’s. The construction of the river walls resulted in the rerouting of the outlet of the Maitland River from the harbor to its current location (Figure 15-2).
In 1985, the north river wall underwent a significant physical reconstruction. The work included the construction of the north outer harbor rubble mound breakwater, which extended the river wall 610 m lake ward. This project resulted in an additional wharf space for ships in the north outer harbor. Further rehabilitation occurred in 2001-2002 and involved underpinning the toe of the river wall with steel bearing pile, constructing reinforced concrete pile caps, armoring the base of the wall with rock and repairing the existing concrete.
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15.6.2South and North Piers
The south and north piers were initially constructed in the 1870’s to facilitate the development of the harbor. Numerous upgrades have since occurred. Currently the south and north piers extend approximately 1,500 feet and 1,558 feet, respectively, into the harbor. The channel between the two structures is 195 feet wide and provides access to the grain elevators, salt loading dock and other docking facilities in the inner harbor basin. The piers are constructed of steel sheet pile walls filled with various stone and concrete materials.
A rubble mound extension was constructed in 2008 to effectively lengthen the south pier. Reconstruction of the south pier was completed in December 2012, followed by the completion of the rubble mound construction on the south breakwater in May of 2013. Rehabilitation of the north pier and rubble mound on the north breakwater are expected to be completed by the end of 2014.
15.6.3North and South Breakwaters
The outer breakwaters were constructed in phases between 1904 and 1913. The two structures, which are at a 45° angle to the shore, are approximately 5 feet above datum. At the south end of the breakwater, which is nearest to the shore, the structure is approximately 1,300 feet from shore, the south breakwater is 1,350 feet long. The north breakwater is 2,600 feet from shoreline at its nearest point, and is approximately 1,500 feet long with a bend at the north end. The entrance channel between the two breakwaters is 510 feet.
15.6.4Lake Shipping Traffic
Presently, the average annual ship traffic in the Harbour is 242 vessels. The majority of the ship traffic occurs between April and December. Of the 242 vessels, approximately 24 come to the Port between January and March. In a given year, approximately 80% of the incoming vessels dock at the Mine (Dock 1). The majority of those vessels are then loaded with salt. Ships loading and unloading grain at Goderich Elevators account for 17% of annual ship traffic, with the remaining 3% of annual traffic transporting calcium chloride for Da-Lee.
The majority of ships that arrive in the Harbour are lake freighters. Generally, lake freighters have a load capacity of between 22,500 and 26,000 tonnes. The average amount of time spent by a vessel that is loading or unloading cargo in the Harbour is 13 hours.
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Goderich Mine 2021 Technical Report Summary
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Figure 15-2: Goderich Harbor Navigational Infrastructure
From GPMC EA, 2011
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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16Market Studies
16.1General Marketing Information
According to Roskill’s Salt Outlook to 2028, global demand for salt is forecast to rise from 352 million tons in 2018 to 424 million tons in 2028 at an average of around 1.9% per year. Regional growth will continue to be led by Asia, especially China and India. Asian demand is projected to rise by 2.8%py from 173 million tons to 228 million tons. By 2028, Asia is forecast to account for nearly 54% of world demand compared to 49% in 2018. Europe is expected to overtake NAFTA by growing at around 1%py, reflecting low growth in regional chloralkali and synthetic soda ash markets. Demand in North America is projected to grow at 0.4% per year, mostly following a rise in chloralkali production. The North American region is the one most strongly influenced by changes in the de-icing market so actual demand by 2028 may diverge from the forecast.
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|
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End-use
|
Asia
|
North America
|
Europe
|
Latin America
|
Africa
|
Oceania
|
Total
|
Chloralkali
|
113.8
|
29.3
|
23.1
|
3.9
|
1.5
|
0.4
|
172
|
Synthetic soda ash
|
62.1
|
1.2
|
20
|
0.3
|
-
|
-
|
83.6
|
Road de-icing
|
4
|
30
|
15
|
-
|
-
|
-
|
49
|
Food
|
20.9
|
1.2
|
2.6
|
6.1
|
6.1
|
0.2
|
33.6
|
Other
|
27.5
|
20
|
25
|
1
|
1
|
2
|
85.5
|
Total
|
228.3
|
81.7
|
85.7
|
16.8
|
8.6
|
2.6
|
423.7
|
Figures expressed in millions
Source: Roskill estimates, Salt: Outlook to 2028
Table 16-1: World Forecast Demand for salt by region
North American Consumption
A summary of demand and production (imported and exported) is provided in Table 16-2. Salt produced by the Goderich Mine is sold into both Canadian and US markets; mainly states and provinces within and contiguous to the Great Lakes.
In the United States, much of the variation in output and imports is related to that of rock salt which is dependent on the severity of winters. Most imports are from overseas subsidiaries of major US salt producers. Exports are small compared to imports but still average well over 500 thousand tons per year and mostly sent to Canada. In 2015, apparent consumption was a record 67.5 million tons following a severe winter in 2014/15 and imports of over 21 million tons. Mild winters over the next two years saw this drop to under 55 million tons. The return of a more severe winter in 2017/18 saw apparent consumption grow by 7 million tons. According to USGS Mineral Commodity Summaries 2021, imports are mostly from Chile (33%), Canada (24%), Mexico (13%), and Egypt (9%) (USGS, 2021).
Like the United States, Canadian consumption of salt can vary widely between years as the de-icing market forms a considerable part of overall use. In years with mild winters, apparent consumption can fall below 8 million tons but in those with severe winters it can exceed 11 million tons. There is a considerable export trade, nearly all of rock salt, across the border with the USA, which again is closely connected to winter conditions in both countries.
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Goderich Mine 2021 Technical Report Summary
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Table 16-2: USA and Canada: Production, trade and apparent consumption of salt, 2010-2019 (kt)
Table 16-3 presents a summary of the average value of price, average value of bulk, pellets and packaged salt, f.o.b. mine and plant annually as summarized by the USGS (USGS, 2021).
Figures expressed in millions of tons
Source: USGS
Table 16-3: USGS Summary of US Salt Pricing
Greater than 90% of the salt produced from the Goderich Mine is sold as bulk for deicing markets. A breakdown of market segments served between 2018 and 2021 by Goderich Mine Production is provided in Table 16-4.
Figures expressed in tons
Table 16-4: Summary of Goderich Mine Production and Sales by Segment
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Goderich Mine 2021 Technical Report Summary
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The majority of sales of bulk deicing products are procured through annual contracts from state, provincial, county or municipal government tenders. Contracts are awarded to the lowest bidder, awards are typically public information. Some contracts can span multiple years as well.
Roskill forecasts the nominal price of deicing salt to reach $80/ton in 2028 as illustrated on Figure 16-1. This forecast price is used in the economic model discussed in Section 19. Pricing between current price (five year average of average sales price for past five years) for deicing salt established at $60.58/ton and the forecast price of $80 in 2028 was increased by $3.24/ton annually between 2022 and 2028. It is reasonable to assume that pricing beyond Roskill’s forecast period will sustain based on the reasonable likelihood that winter weather conditions along the Great Lakes markets will continue to support current demand conditions and the Goderich Mine’s access to inexpensive modes of shipping relative to market geographies will continue to allow products sourced from the Goderich Mine to be priced competitively. Therefore, the QP sustains pricing beyond the Roskill forecast through Life of Mine, increasing average selling price by 2% annually to account for inflation.
Figure 16-1: Roskill Deicing Salt Price Forecast through 2028
16.2Material Contracts Required for Production
Most bulk salt sold form the Goderich Mine is transported to market via Great Lakes freighter vessels. Freighters can hold approximately 25,000 tons of salt, and is the most efficient means of transportation. Transportation contracts vessel providers are currently in place and can span multiple years. These arrangements are within industry standards and formed the basis of the economic evaluation. Transportation and logistics costs represent a significant cost for the end product, and are built into general selling price. Costs for transportation via lake-freighter to markets has ranged from $15/ton and $19/ton between 2017 and 2021.
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Goderich Mine 2021 Technical Report Summary
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17Environmental, Social and Permitting
There is very little waste generated by the mining and processing of rock salt. All waste salt and interbedded rock remains underground in old mined out areas. There is no surface processing that requires permitting or has an environmental impact; no material surface waste is generated. The only discharge from site is shaft inflow water, which is clean and is discharged into the lake.
17.1Results of Environmental Studies and Baselines
Mine construction commenced in 1956 with production beginning in 1959, prior to the promulgation of environmental regulations. Operation of the mine has been consistent and ongoing since commencement of production. Therefore, no baseline or environmental studies have been required, nor conducted.
17.2Waste, Tailings and Water Plans – Monitoring and Management
Any waste derived from underground operations remains in the underground mine cavity, where it will remain post-mine closure. Tailings are not generated from the salt mining process aside from generation of fine-grained salt that is stored in the mine cavity. Water is not used in the mining process due to the soluble nature of salt.
17.3Project Permitting Requirements
The Ontario Ministry of Energy, Northern Development and Mines regulates closure for the Goderich Mine. The most recent closure plan was approved by the ministry in 2012, and is in process of being amended as of September 30, 2021. Long-term cleanup of the site will essentially include demolishing surface facilities, removal of surface infrastructure and restoring a natural alvar ecological community on the surface, flooding of the workings, and decommissioning (plugging). As there are no waste repositories or ponds and no associated contamination, closure will be straightforward and relatively simple (for a mining project).
17.3.1Air Permit
The Goderich mine operates under two air permits issued by the Ontario Ministry of Environment, Conservation and Parks, one for the lab (8-1131-96-007), and the other for the garage for welding exhaust (5522-78NUN2).
17.3.2Surface Water Effluent Discharge Permit
Site drainage into Snug Harbour and the Maitland River is permitted pursuant to Certificate of Approval 2342-7ULQEU and Environmental Compliance Approval 1236-8YGK8A, respectively, issued by the Ontario Ministry of Environment, Conservation and Parks.
Site drainage occurs through a Stormceptor STC 750 system located at the west end of Snug Harbour and to the north into Maitland River via a Stormceptor SWQ 20 system. Both Stormceptor systems treat runoff by removing pollutants through gravity separation and flotation. Stormceptor creates a non-turbulent treatment environment below the insert platform within the system. The insert diverts water into the lower chamber, allowing free oils and debris to rise, and sediment to settle under relatively low velocity conditions. These pollutants are trapped and stored below the insert and protected from large runoff events for later removal during the maintenance procedure.
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Goderich Mine 2021 Technical Report Summary
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The Stormceptor SWQ 20 system is designed to accept runoff from 1 hectare with 100% imperviousness and removes an average of 85% TSS of 94% of treated runoff volumes. The Stormceptor SWQ 20 system has a sediment capacity of 3,000 liters, an oil capacity of 915 liters, with a total capacity of 4,070 liters and a maximum treatment capacity of 23 liters per second discharging to a 450mm diameter storm sewer directed to the Maitland River.
The discharge into the Maitland River was authorized in 2013 by Environmental Compliance Approval 1236-8YGK8A and requires that the system be inspected twice a year and to undertake cleaning and maintenance to remove any debris, sediment and excessive decaying vegetation, as well as ensure there are no obstructions at the discharge. While no testing of effluent is required, no visible oil sheens are permitted from the effluent of the system.
The Stormceptor STC 750 system has a sediment capacity of 3,000 liters, an oil capacity of 915 liters, with a total capacity of 3,915 liters and a maximum treatment capacity of 20 liters per second discharging to Snug Harbor.
The discharge to the Snug Harbour was authorized in 2009 via Certificate of Approval 2342-7ULQEU. While no testing of effluent is required, no visible oil sheens are permitted from the effluent of the system, and all observations and actions undertaken during inspections shall be logged in a logbook that must be made available to the MECP upon request.
17.4Plans Negotiations or Agreements (Environmental)
There are no plans or agreements relative to environmental matters with any external parties.
17.5Mine Closure Plans
The most recent closure plan was approved by the Ontario Ministry of Energy, Northern Development and Mines in 2012, and is in process of being amended as of September 30, 2021. Long-term cleanup of the site will essentially include demolishing surface facilities, removal of surface infrastructure and restoring a natural alvar ecological community on the surface, flooding of the workings, and decommissioning (plugging). The mine closure plan serves as the main operating license for the Mine and is described in Section 17.3.
17.6Adequacy Assessment of Plans
Relative to other types of mining, the Goderich Mine is low risk from an environmental standpoint. It does not require significant disturbance of the landscape and no surface waste (toxic or otherwise) is generated in the process. Going forward, environmental risk to the reserve is viewed as low.
17.7Local Hiring Commitments
The mine operates under a CBA with the Unifor Local 16-0 labor union. Other than labor commitments contained within the CBA, there are no commitments with outside entities or governments relating to the local labor force.
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Goderich Mine 2021 Technical Report Summary
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18Capital and Operating Costs
Capital and operating costs discussed in this section were developed on a unit cost and quantity basis utilizing the QP’s estimates that are based on owner’s costs from the past five years, current and historic cost data from continuous and ongoing operation of the facility, first principles, and 65 years of operational experience operating the facility at projected production run rates. Operating costs presented herein are the QP’s estimates based on the understanding of actual owner’s costs incurred at the operation since 2017, vendor/contractor quotations, and similar operation comparisons, while capital costs projected through 2026 are estimates by the QP based on owner’s cost estimates developed based on unit cost and quantity basis utilizing historic cost data, first principles, vendor/contractor quotations, and similar operation comparisons.
18.1.1 Capital Costs
The average annual capital expenditure since 2017 at the Goderich Mine is $37,172,000, with a high of $56,984,000 in 2017 and a low of $17,999,000 in the nine-month 2021 fiscal year. The higher than average capital spend in 2017 was primarily associated with a shaft-lining project that was undertaken for safety and maintenance of business. A summary of capital expenses incurred from 2017 through 2021 by the owner is provided in Table 18-1.
The Goderich Mine, as well as all Compass Minerals facilities, maintains a five-year capital forecast for all foreseen capital expenditures to support current production. A summary of foreseen capital expenditures is provided on Table 18-2. As shown on Table 18-2, total estimated capital expenditure through 2026 is $189,691,000, and is comprised of either MOB capital and capital spend for major foreseen capital projects through 2026 including:
•Construction of a new Mill and new egress / ingress from Mill to shaft for $44,687,000.
•Maintenance, replacement and rebuilds of the fleet of Continuous Miners for $78,499,000.
The balance of the forecasted capital expenditure through 2026 is $66,506,000 and primarily includes routine replacement for mine vehicles and equipment. Listed expenditures are based on cost estimates generated by third parties, within +/-15% level of accuracy. There are risks regarding the current capital costs estimates through 2026, including escalating costs of raw materials and energy, equipment availability and timing due to either production delays or supply chain gaps.
18.1.2 Operating Cost
Actual operating costs incurred at the Goderich Mine from 2017 through 2020 are provided in Table 18-2. Summarized costs include labor, maintenance, supplies electric, diesel, lease royalties, logistics and taxes.
Since 2016, total operating costs per ton have ranged from $32.00 per ton in 2021 to $51.30 in 2018 (impacted by a strike). A 66% increase in hoisted tons over the period is the primary factor in the resulting decrease in cost per hoisted ton, as well as efficiencies realized from the exclusive operation of CMs and what is viewed as an equitable CBA with labor at the Mine.
Excluding impacts associated with mining inefficiency associated with ramp development, the mine has realized a 4% increase headcount from 509 to 530 employees. Application of labor costs to tons hoisted reveals a reduction in labor cost per ton from $2.82 in 2016 to $2.57 in 2021.
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Goderich Mine 2021 Technical Report Summary
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$in thousands
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2017
|
2018
|
2019
|
2020
|
2021
|
|
|
|
|
|
|
Capital Spend
|
(56,984)
|
(30,751)
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(45,965)
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(34,159)
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(17,999)
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Shaft Lining CAPEX
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(37,461)
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(23,003)
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(6,089)
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(546)
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0
|
Northeast Mains and New Mill
|
|
|
|
|
(638)
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Winch
|
|
|
(2,899.00)
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(2,906.00)
|
(665.00)
|
Chemical Salt Processing
|
(6,076)
|
|
(10,135)
|
|
|
MOB
|
(13,447.00)
|
(7,748.00)
|
(26,842.00)
|
(30,707.00)
|
(16,696.00)
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|
|
|
|
|
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Hoisted Tons (000's) - Incremental
|
5,256
|
3,882
|
5,444
|
6,484
|
6,569
|
Sales Tons (000's) - Incremental
|
5,361
|
4,647
|
4,179
|
4,009
|
3,824
|
Selling Price per Ton
|
53.28
|
56.75
|
64.48
|
65.93
|
64.46
|
Total Sales
|
285,598
|
263,709
|
269,468
|
264,353
|
246,495
|
|
|
|
|
|
|
OPEX
|
|
|
|
|
|
Hourly Non-Built-In Overtime
|
5,900
|
3,668
|
6,346
|
6,789
|
5,895
|
Powder & Caps
|
669
|
(12)
|
38
|
82
|
0
|
Electricity (Variable)
|
1,953
|
1,452
|
1,879
|
1,998
|
2,203
|
Ingredients
|
115
|
120
|
383
|
395
|
364
|
Operating Supplies and Diesel
|
6,720
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5,946
|
12,919
|
8,121
|
7,083
|
Roof-bolting materials
|
1,820
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1,042
|
1,904
|
2,304
|
3,217
|
Royalties
|
3,103
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2,244
|
3,147
|
3,748
|
4,489
|
Material Usage Variance
|
101
|
266
|
308
|
298
|
384
|
Purchase Price Variance
|
107
|
442
|
79
|
45
|
30
|
Logistics
|
83,860
|
80,744
|
78,955
|
71,949
|
68,832
|
Other
|
1,128
|
2,709
|
4,478
|
827
|
314
|
Demurrage
|
3,452
|
2,494
|
2,148
|
1,832
|
1,871
|
Subtotal - Variable
|
(108,930)
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(101,115)
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(112,583)
|
(98,389)
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(94,682)
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Labor / Benefits
|
58,279
|
47,990
|
53,916
|
60,710
|
70,409
|
Insurance/Taxes
|
3,799
|
3,937
|
3,965
|
4,508
|
5,550
|
Maintenance Materials / Services
|
23,346
|
35,170
|
27,464
|
32,145
|
30,131
|
Operating Supplies (Fixed)
|
831
|
2,704
|
1,196
|
7,357
|
3,267
|
Electricity (Fixed)
|
5,305
|
4,743
|
3,466
|
3,685
|
3,636
|
Natural Gas
|
273
|
470
|
470
|
206
|
149
|
Administrative Services
|
2,867
|
3,030
|
3,086
|
2,545
|
2,423
|
Subtotal - Fixed
|
(94,700)
|
(98,045)
|
(93,564)
|
(111,155)
|
(115,565)
|
|
|
|
|
|
|
Operating Cost
|
(203,630)
|
(199,160)
|
(206,147)
|
(209,545)
|
(210,247)
|
|
|
|
|
|
|
Cost / per hoisted ton
|
38.74
|
51.30
|
37.86
|
32.32
|
32.00
|
|
|
|
|
|
|
Table 18-1: Summary of Capital and Operating Costs: 2017-2021
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Table 18-2: Summary of Capital Expenses: 2022-2026
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 18-2: Summary of Capital Expenses: 2022-2026 (continued)
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Goderich Mine 2021 Technical Report Summary
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18.1.3 Assumptions
The capital projects are assumed to be constructed in a conventional EPCM format. Compass Minerals routinely retains qualified contractor to design projects and act as its agent to bid and procure materials and equipment, bid and award construction contracts, and manage the construction of the facilities.
18.1.4 Accuracy
The accuracy of this estimate for those items identified in the scope-of work is estimated to be within the range of plus 15% to minus 15%; i.e., the cost could be 15% higher than the estimate or it could be 15% lower. Accuracy is an issue separate from contingency, the latter accounts for undeveloped scope and insufficient data (e.g., geotechnical data).
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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19Economic Analysis
19.1.1 Operating Costs
An economic model was created for the Goderich Mine to provide validation of the economic viability of the estimated reserve for the Life of Mine until 2094. Following are the key assumptions:
•Mine run rate at 6,500,000 tons hoisted.
•Because sales vary year over year, typically controlled by weather in deicing markets, the QP applied the average of sales to hoisted tons rates over the previous six years (91%) to sales tons for future three year periods with the fourth year sales tons at 110% of hoisted tons to represent periodic strong sales associated with higher than average frozen precipitation in Goderich’s markets served.
•The five year average sales price for is $60.58/ton. This price was the beginning price used in the life of mine cash flow analysis.
•Roskill forecasts the nominal price of deicing salt to reach $80/ton in 2028 as illustrated on Figure 16-1. This forecast price is used in the economic model discussed in Section 19. Pricing between current price (five year average of average sales price for past five years) for deicing salt established at $60.58/ton and the forecast price of $80 in 2028 was increased by $3.24/ton annually between 2022 and 2028.
•Annual average sales price increase of 2% year over year.
•A finance rate (cost of capital) of 10%.
•A tax rate of 33.07%, inclusive of Canadian federal and provincial income tax as well as provincial mining tax.
•Inflation rate of 2%.
•Inflation rate of 2% applied to operating costs.
•Sales price increase by 2% annually.
•An additional 10% contingency on projected fixed and variable costs through the life of mine.
The QP used partial year 2021 budgeted 2022 costs as the benchmark for which to model operating costs through life of mine, applying a 2% annual increase in operating cost annually.
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Goderich Mine 2021 Technical Report Summary
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19.1.2 Capital Costs
As an ongoing project that is in production and profitable, the QP established a going forward MOB capital based on the average MOB capital profile at the mine since 2017. The QP assessed projected MOB capital spend through 2026, which was collaboratively established with Goderich Mine financial, engineering, operational and maintenance leadership, and validated by the QP.
Beyond 2026, the QP determined the expected replacement and re-build schedule for the fleet of seven CMs required to attain the run of mine rate of 6.5 million tons, and applied projected capital costs on to the life of mine cash flow analysis through the end of life of mine. The QP also calculated the average MOB capital spend from 2017 through present, applied a 2% inflation factor on the average MOB through 2026, and applied of a 15% contingency factor on the projected 2026 MOB capital amount of $27,945,000. The QP then based the 2027 MOB capital spend at $30,375,000. A 2% annual inflation factor as applied to MOB after 2027 through end of life of mine.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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Table 19-1: Life of Mine Cash Flow Analysis (continued)
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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19.1.3 Economic Analysis
The QP constructed a cash flow model through life of mine completion in 2161. The QP established the selling price of salt sold in 2022 based on the five-year average of selling prices between 2017 and 2021, which is $60.58/ton. The QP then extrapolated price increases from 2023 and 2028 to attain the Roskill forecasted selling price of $80/ton in 2028 with annual increase in selling price of $3.24/ton during this period. Selling price thereafter was increased by at 2% percent per annum through end of life of mine.
Because the mine is active and profitable, the calculation of an IRR is nuanced since there is not initial development expenditure from which to benchmark net project value. Notwithstanding, the QP calculated the NPV of all development capital from 2021 through 2032 which is $250,437,000. Review of the model indicates that the Mine is immediately cash-flow positive in 2022, and remains so through end of the life of mine. As modelled, the project has an IRR of 53.3%, and an NPV of $1.613 billion.
19.1.4 Sensitivity Analysis
The QP assessed sensitivity of key variables, including reduction in expected selling price, increased capital expenses and associated depreciation, and operating costs. To assess these variables, the QP modeled a conducted where the following variables were subjected to increases and decreases of 10% and 20% (Tables 19-2 and 19-3):
•Average Selling Price
•Operating Costs
•Capital Costs (depreciation)
The IRR of the project approaches zero when selling price is reduced to $41.98 / ton.
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Cost Sensitivities
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After Tax IRR
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After Tax NPV ('000s)
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Expected Case
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53.3%
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$1,613,621
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Capital Expenditures
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20% Increase
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46.0%
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$1,568,087
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10% Increase
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49.4%
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$1,590,854
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10% Decrease
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58.1%
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$1,636,388
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20% Decrease
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64.0%
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$1,659,155
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Mining Cost
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20% Increase
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38.1%
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$1,076,330
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10% Increase
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45.6%
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$1,344,975
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10% Decrease
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61.2%
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$1,882,267
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20% Decrease
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69.1%
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$2,150,913
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Table 19-2: Sensitivity Analysis: Cost Factors
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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After Tax IRR
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After Tax NPV ('000s)
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Expected Case
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53.3%
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$1,613,621
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Expected Average Selling Price
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20% Increase
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78.8%
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$2,753,606
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10% Increase
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66.1%
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$2,174,002
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10% Decrease
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40.5%
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$1,071,268
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20% Decrease
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27.4%
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$545,832
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Table 19-3: Sensitivity Analysis: Price
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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20Adjacent Properties
The mine is located on an inlet and is surrounded by Lake Huron and Goderich Harbor. The only property connected to the site is the Canadian Coast Guard to the east. All ancillary support is located on site.
Shoreline properties consist of a marina, residential homes and Goderich public beach. The zoning, the amount of unique landowners and minerals rights create a cost prohibitive environment to extend the current lease boundaries upland from the shoreline.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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21Other Relevant Data and Information
All data relevant to the mineral reserves and mineral resources evaluation have been included in the sections of this Technical Report Summary.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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22Interpretation and Conclusions
The Goderich Mine has a long history of mining salt from the A2 salt deposit. This history includes a wealth of knowledge on how the ore behaves during mining, quality of the ore, the geomechanical properties of salt to enable safe and sustainable mining practices.
The modeling and analysis of the Company’s resources and reserves has been developed by Company mine personnel and reviewed by several levels of internal management, including the QP. The development of such resources and reserves estimates, including related assumptions, was a collaborative effort between the QP and Company staff.
22.1 Mineral Resource
The Company’s salt-producing locations do not utilize classic exploration techniques in the development of their assumptions around mineral resources or reserves. The mineral deposit at Goderich is restricted in access by bodies of water, and industry techniques used for geological exploration for other types of mineral deposits, specifically collection of rock core from drilling, can be degradational to the salt ore being assessed. Given the nature of the salt mineral and each site’s beneath a massive water body, this limitation impedes the validation of mineral resources and reserves using exploration drilling techniques. Accordingly, geophysical techniques are utilized at both Goderich and Cote Blanche to assist in mine planning, and to verify that there are no obstructions ahead of advancement of the mine in the form of geological anomalies or structural features, such as faults that could affect future mining. In conducting these geophysical campaigns, including in-seam seismic and ground penetrating radar technologies, the Company is able to identify the continuity of ore-body ahead of mining. In-seam directional drilling is also conducted at Goderich as a means of extending our visibility into the ore body beyond the ranges that can be assessed by geophysical technologies.
Geological modeling and mine planning efforts serve as a base assumption for resource estimates at each significant salt-producing location. These outputs have been prepared by both Company personnel and third-party consultants, and the methodology is compared to industry best practices. Mine planning decisions, such as mining height, execution of mining and ground control, are determined and agreed upon by Company management. Management adjusts forward-looking models by reference to historic mining results, including by reviewing performance versus predicted levels of production from the mineral deposit, and if necessary, re-evaluating mining methodologies if production outcomes were not realized as predicted. Ongoing mining and interrogation of the mineral deposit, coupled with product quality validation pursuant to industry best practices and customer expectations, provides further empirical evidence as to the homogeneity, continuity and characteristics of the mineral resource. Ongoing quality validation of production also provides a means to monitor for any potential changes in ore-body quality. Also, ongoing monitoring of ground conditions within the mine, surveying for evidence of subsidence and other visible signs of deterioration that may signal the need to re-evaluate rock mechanics and structure of the mine ultimately inform extraction ratios and mine design, which underpin mineral reserve estimates.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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22.2Mineral Reserves
The Company assesses risks inherent in mineral resource and reserve estimates, such as the accuracy of geophysical data that is used to support mine planning, identify hazards and inform operations of the presence of mineable deposit. Also, management is aware of risks associated with potential gaps in assessing the completeness of mineral extraction licenses, entitlements or rights, or changes in laws or regulations that could directly impact the ability to assess mineral resources and reserves or impact production levels.
Notwithstanding, the salt deposit supports continued successful exploitation, given the size, grade, metallurgical characteristics, developed infrastructure, and the knowledge and experience of the individuals engaged in the project. The uncertainty and risk associated with the historic exploration data can be mitigated where possible, through annual in-seam seismic campaigns, application of ground penetrating radar, and in-seam directional validation drilling.
22.3 Mineral Reserves
Sensitivity analyses conducted on the life-of-mine cash flow model indicates that this is a robust project that can withstand 20% increases in the key cash flow components:
•If mining operating costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-2.
•If capital construction costs were to increase 20% from those currently estimated, the project would still remain viable by interpolation of the sensitivities shown in Table 19-2.
•The facility can also withstand a decrease in average selling price of 20% from those currently estimated according to the sensitivities shown in Table 19-3.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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23Recommendations
Based on financial and technical measures, and positive economic benefits, and project developments to date, it is recommended that Goderich Mine project continue production.
23.1Geology and In-Seam Seismic
The QP recommends that the Goderich Mine continue with routine in-seam seismic, ground penetrating radar and in-seam directional drilling campaigns to verify the competency of the ore within 1,000 feet of the mining face as a mitigative step to avoid inadvertent mining into a significant anomaly such as a fault or salt-stock sheer zone, a sandstone inclusion, or an unmapped margin of the diapir.
23.2Costs
Based upon the recommendations presented in Section 23.1, the following cost estimate has been completed to summarize costs for recommended work programs (Table 25-3).
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Activity
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Cost (US$)
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Annual in-seam seismic campaign
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$50,000
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In-Seam Directional Drilling
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$750,000
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Ground Penetrating Radar Campaigns
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$100,000
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Total Estimated Cost
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$900,000
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Table 23-1: Summary of Annual Costs for Recommended Work
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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24References
Archibald, Gray & McKay (Ontario Land Surveyors), 1996: GM_ML Survey 22R4113.
Associated Mining Consultants Inc. (AMC), 1997: In-seam Seismic Reflection and Ground Penetrating Radar (GPR) Investigations, Goderich Salt Mine. Report prepared for Sifto Canada Inc., dated January 7, 1997.
Carter, T., 2016: Stratigraphic Review, West Mining Panel, Goderich Salt Mine. Report prepared for Compass Minerals, dated April 27, 2016.
DMT Geosciences Ltd., 2013: In-seam-seismic Survey – SIFTO Salt Mine, Goderich, Ontario. Report prepared for Compass Minerals.
Dusseault, M.B., 2004: Brine Cavern Operations, Maitland River Operations Part II, Brine Exploitation Salt Caverns at Goderich, Ontario, General Aspects of Salt Behavior and Cavern Design. Report prepared for Sifto Canada Ltd.
Goderich Port Management Corporation (GPMC) (2014). Goderich Harbour Wharf Expansion. Environmental Assessment, February 2014.
Golder (2018). GODERICH MINE – FUTURE EGRESS ROUTE GEOTECHNICAL MODELLING STUDY REV 1 FINAL. Technical Memorandum. June 7, 2018.
Landes, K.K., 1957: Report on Rock Salt Reserves at Goderich, Ontario. Report prepared for Siftco Salt Company Limited. March 30, 1957.
Province of Ontario, 2001: GM_Mineral Rights Lease Agreement 2001.
SRK (2018). Goderich Mine Closure Support Report, February 14, 2018.
SRK (2019). Life of Mine Subsidence Analysis Report, June 2019.
SRK, 2016: Goderich_MineDesignRmLayout_Report_395700-110_395700-150_013_20160726.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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25Reliance on Information Provided by the Registrant
The QP has relied upon the Owner’s information and data in completing this TRS, in addition to written reports and statements of other individuals and companies with whom it does business. Materials provided by the Owner include permits, licenses, historic exploration data, production records, equipment lists, geologic and ore body resource and reserve information, mine modeling data, financial data and summaries, plant equipment specifications and summaries, and plant process information. It is believed that the basic assumptions are factual and accurate, and that the interpretations are reasonable. This data has been relied upon in the mine planning, capital and cost planning, and audited and there is no reason to believe that any material facts have been withheld or misstated. The QP has taken all appropriate steps, in its professional judgment, to ensure that the work, information, or advice from outside governmental agencies and historic engineering and design studies is sound and the QP does not disclaim any responsibility for this Technical Report Summary.
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Compass Minerals International, Inc.
Goderich Mine 2021 Technical Report Summary
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26Date and Signature Page
Signed on this 29th Day of November, 2021.
Prepared by a Qualified Person
Joseph Havasi, MBA, CPG-12040