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Salt Lake Potash #SO4 – Jo Battershill discusses the new commercial scale Sulphate of Potash Evaporation Ponds on the Vox Markets podcast

Vox Markets podcast – Jo Battershill, Corporate Executive of Salt Lake Potash #SO4 and Justin Waite discuss why the start of the construction on Australia’s First Commercial Scale Sulphate of Potash Evaporation Ponds is significant. Interview starts at 10 minutes 57 seconds.

Vox Podcast – Salt Lake Potash #SO4 Corporate Executive Jo Battershill and Brand CEO Alan Green on Legendary Investments #LEG, Cadence Minerals #KDNC and Lithium, Findel #FDL & Europa Metals #EUZ

On the Vox Markets Podcast with Justin Waite today – 10th July 2018

Jo Battershill, Corporate Executive at Salt Lake Potash #SO4 discusses their projects, strategy and upcoming milestones.

(Interview starts at 55 seconds)

Alan Green CEO of Brand Communications talks about: Legendary Investments #LEG, Cadence Minerals #KDNC and lithium, Findel #FDL and Europa Metals #EUZ

(Interview starts at 13 minutes 36 seconds)

Salt Lake Potash #SO4 – Interim results

Salt Lake Potash #SO4 – Interim results

 

OPERATING AND FINANCIAL REVIEW

The Company’s aim is to develop the first salt-lake brine Sulphate of Potash (SOP) operation in Australia, starting with a Demonstration Plant producing up to 50,000tpa of SOP, at the Goldfields Salt Lakes Project (GSLP) located in the Northern Goldfields of Western Australia. The Company’s multi-lake portfolio, and the comprehensive technical achievements to date, highlight the potential for a very economic, large scale and long term project.

LAKE WAY

Ø  Subsequent to the end of the period, the Company entered a Memorandum of Understanding (MOU) with Blackham Resources Limited (Blackham) to investigate the potential development of an SOP operation based at Lake Way, near Wiluna. Under the MOU, the Company will acquire Blackham’s brine rights and Blackham will acquire gold rights to the Company’s Lake Way holdings, with each company retaining a royalty on their respective holdings. 

The Company will investigate the development of an SOP operation at Lake Way, including initially a 40-50,000tpa Demonstration Plant.

LAKE WELLS

Evaporation Pond Testwork

Ø  The Company successfully completed field trials testing its on-lake, unlined evaporation pond model, which will result in significant capital cost advantages for the GSLP.

Ø  Comprehensive geological and geotechnical investigation confirms the widespread availability of ideal in-situ clay materials ideal for use in evaporation pond construction. Modelling based on geotechnical properties of the clays confirms the potential to build unlined, on-lake ponds with negligible seepage inefficiency.

Ø  Amec Foster Wheeler estimate that comparative costs for 400ha of on-lake ponds are $1.6m (unlined) and $42.2m (HDPE lined), highlighting a significant capex advantage for the Project.

Process Testwork

Ø  The Company completed a comprehensive testwork program at globally recognised potash process consultants, Saskatchewan Research Council (SRC) that validated and refined the parameters used in the process plant flowsheet for the GSLP. Importantly, the testwork was conducted on a 60kg representative sample of kainite harvest salt produced on site at Lake Wells.

Ø  SRC will conduct further optimisation tests followed by a continuous locked cycle operation, to produce significant quantities of flotation product and SOP for further testing and marketing.

Ø  The Site Evaporation Trial (SET) at Lake Wells has now processed approximately 357 tonnes of brine and produced over 8 tonnes of harvest salts.

Surface Aquifer Characterisation and Deep Aquifer Exploration

Ø  The Company continued sustained pump tests on test trenches across Lake Wells, providing reliable data for the surface aquifer hydrogeological model for Lake Wells. 

Ø  The Company mobilised an on-lake drill rig to test deep aquifer characteristics and identify potential high yield portions of the basal aquifer.

LAKE BALLARD

Ø  An initial surface aquifer exploration program was completed at Lake Ballard, comprising a total of 160 shallow test pits and 10 test trenches. This work provides preliminary data for the geological and hydrological models for the surface aquifer of the Lake, as well as brine, geological and geotechnical samples. 

LAKE IRWIN

Ø  An initial surface aquifer exploration program was completed at Lake Irwin, comprising a total of 27 shallow test pits and 2 test trenches. This work provides preliminary data for the geological and hydrological models of the surface aquifer of the Lake, as well as brine, geological and geotechnical samples. 

REGIONAL LAKES

Ø  The Company undertook initial surface brine sampling of the near surface aquifer and reconnaissance of access and infrastructure at all remaining Lakes held under the GSLP.

Results of Operations

Net loss after tax for the half year ended 31 December 2017 was $5,354,804 (31 December 2016: $4,969,027).

(i)         Exploration and evaluation expenses were $4,549,568 (31 December 2016: $4,282,810), which is attributable to the Group’s accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to the acquisition of the rights to explore and up to the final investment decision to commence construction for each separate area of interest; and

(ii)        Business development expenses increased to $374,784 (31 December 2016: $186,990) which is attributable to additional business development and investor relations activities required to support the growth and development of the Goldfields Salt Lakes Project.

Financial Position

At 31 December 2017, the Company had cash reserves of $10.5 million (30 June 2017: $15.6 million) and net assets of $12.3 million (30 June 2017: $17.0 million). The Company is in a financial position to conduct its current and planned exploration and development activities.

SIGNIFICANT POST BALANCE DATE EVENTS

Other than as disclosed below, at the date of this report there were no significant events occurring after balance date requiring disclosure.

(i)         On 12 March 2018, the Company entered a Memorandum of Understanding (MOU) with Blackham Resources Limited (Blackham) to investigate the potential development of a Sulphate of Potash (SOP) operation based at Lake Way, near Wiluna. Under the MOU, the Company will acquire Blackham’s brine rights and Blackham will acquire gold rights to the Company’s Lake Way holdings, with each company retaining a royalty on their respective holdings.

AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, to provide the directors of Salt Lake Potash Limited with an Independence Declaration in relation to the review of the half year financial report. This Independence Declaration is attached to and forms part of this Directors’ Report. 

Signed in accordance with a resolution of the Directors.

MATTHEW SYME

CEO

16 March 2018

 

DIRECTORS’ DECLARATION

In the opinion of the Directors of Salt Lake Potash Limited:

1.     the interim consolidated financial statements comprising the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity and notes set out on pages 9 to 13 are in accordance with the Corporations Act 2001 including: 

1.     giving a true and fair view of the financial position of the consolidated entity as at 31 December 2017 and of its performance and cash flows for the six months ended on that date; and

2.     complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001; and 

2.     there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

 

Signed in accordance with a resolution of Directors:

MATTHEW SYME

CEO

16 March 2018

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2017 

31 December 2017

31 December 2016

Notes

$

$

Finance income

145,705

 71,955

Research and development rebate

456,709

Exploration and evaluation expenses

 (4,549,568)

 (4,282,810)

Corporate and administrative expenses

 (448,894)

 (382,760)

Business development expenses

 (374,784)

 (186,990)

Share based payments expenses

 (583,972)

(188,422)

Loss before tax

(5,354,804)

(4,969,027)

Income tax expense

Loss for the period

(5,354,804)

(4,969,027)

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Exchange differences arising during the period

(120)

Other comprehensive (loss)/ income for the period, net of tax

(120)

Total comprehensive loss for the period

(5,354,804)

(4,969,147)

Basic and diluted loss per share attributable to the ordinary equity holders of the company (cents per share)

(3.10)

(3.71)

The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the accompanying notes.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Notes

 

31 December
2017
$

 

30 June
2017
$

ASSETS

Current Assets

Cash and cash equivalents

10,499,568

15,596,759

Trade and other receivables

221,131

300,058

Total Current Assets

10,720,699

15,896,817

Non-Current Assets

Property, plant and equipment

353,852

303,511

Exploration and evaluation expenditure

3

2,276,736

2,276,736

Total Non-Current Assets

2,630,588

2,580,247

TOTAL ASSETS

13,351,287

18,477,064

LIABILITIES

Current Liabilities

Trade and other payables

973,969

1,348,791

Finance lease

13,011

13,011

Provisions

28,379

19,181

Total Current Liabilities

1,015,359

1,380,983

Non-Current Liabilities

Finance lease

43,724

49,638

Total Non-Current Liabilities

43,724

49,638

TOTAL LIABILITIES

1,059,083

1,430,621

NET ASSETS

17,046,443

EQUITY

Contributed equity

4

123,501,153

123,484,561

Reserves

5

1,405,797

821,824

Accumulated losses

(112,614,746)

(107,259,942)

TOTAL EQUITY

12,292,204

17,046,443

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2017 

CONSOLIDATED

Contributed Equity
$

Share- Based Payment Reserve
$

Foreign Currency Translation Reserve
$

Accumulated Losses
$

Total
Equity
$

Balance at 1 July 2017

123,484,561

821,824

(107,259,942)

17,046,443

Net loss for the period

(5,354,804)

(5,354,804)

Total comprehensive loss for the period

(5,354,804)

(5,354,804)

Transactions with owners, recorded directly in equity

Shares issued in lieu of fees

18,476

18,476

Share based payment expense

583,972

583,972

Share issue costs

(1,884)

(1,884)

Balance at 31 December 2017

123,501,153

1,405,797

(112,614,746)

12,292,204

Balance at 1 July 2016

106,761,669

240,848

454,468

(98,059,433)

9,397,552

Net loss for the period

(4,969,027)

(4,969,027)

Exchange differences on translation of foreign operations

 (120)

 (120)

Total comprehensive loss for the period

 (120)

(4,969,027)

(4,969,147)

Transactions with owners, recorded directly in equity

Shares issued in lieu of fees

86,400

86,400

Share based payment expense

188,422

188,422

Share issue costs

(1,794)

(1,794)

Balance at 31 December 2016

106,846,275

429,270

454,348

(103,028,460)

4,701,433

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2017

31 December

2017
$

31 December

2016
$

Cash flows from operating activities

Payments to suppliers and employees

 (5,594,353)

(4,028,053)

Research and development rebate received

 456,709

Exploration investment scheme received

30,000

Interest received

133,705

70,930

Net cash outflow from operating activities

 (4,973,939)

(3,957,123)

Cash flows from investing activities

Payments for property, plant and equipment

 (83,030)

(71,664)

Net cash outflow from investing activities

 (83,030)

(71,664)

Cash flows from financing activities

Transaction costs from the issue of shares

(40,222)

Net cash inflow from financing activities

(40,222)

Net decrease in cash and cash equivalents held

(5,097,191)

(4,028,787)

Net foreign exchange differences

15

Cash and cash equivalents at the beginning of the half year

15,596,759

7,498,285

Cash and cash equivalents at the end of the half year

10,499,568

3,469,513

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

 

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2017

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)        Statement of Compliance

The interim condensed consolidated financial statements of the Group for the half year ended 31 December 2017 were authorised for issue in accordance with the resolution of the directors on 9 March 2018.

The interim condensed consolidated financial statements for the half year reporting period ended 31 December 2017 have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This half year financial report does not include all the notes of the type normally included in an annual financial report.  Accordingly, this report is to be read in conjunction with the annual report of Salt Lake Potash Limited for the year ended 30 June 2017 and any public announcements made by Salt Lake Potash Limited and its controlled entities during the half year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

(b)        Basis of Preparation of Half Year Financial Report

The financial statements have been prepared on an accruals basis and are based on historical cost. All amounts are presented in Australian dollars.

The financial statements for the half-year have been prepared on the basis of going concern, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. Certain comparatives have been reclassified to conform with current year presentation.

(c)        New Accounting Standards

In the current period, the Group has adopted all of the new and revised standards, interpretations and amendments that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2017. 

The adoption of new and revised standards and amendments has not affected the amounts reported for the current or prior half-year periods.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

2.       SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

The Consolidated Entity operates in one segment, being mineral exploration. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Consolidated Entity.

3.       EXPLORATION AND EVALUATION

(a)        Areas of Interest

SOP Project

2,276,736

2,276,736

Carrying amount at end of period 1

2,276,736

2,276,736

(b)        Reconciliation

Carrying amount at start of period

2,276,736

2,276,736

Impairment losses

Carrying amount at end of period 1

2,276,736

2,276,736

 

Notes:

1 The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest.

SOP Project

Salt Lake holds a number of large salt lake brine projects (Projects) in Western Australia, South Australia and the Northern Territory, each having potential to produce highly sought after Sulphate of Potash (SOP) for domestic and international fertiliser markets.

 

4.       CONTRIBUTED EQUITY

31 December

2017
$

30 June

 2017
$

Share Capital

175,049,596 (30 June 2017:175,007,596) Ordinary Shares

123,501,153

123,484,561

123,501,153

123,484,561

Movement in Share Capital during the past six months

 

Number of Ordinary Shares

Issue Price

$

$

01-Jul-17

Opening Balance

175,007,596

123,484,561

19-Aug-17

Share issue 1

42,000

0.48

18,476

Jul-16 to Jun-17

Share issue costs

(1,884)

31-Dec-17

Closing balance

175,049,596

123,501,153

Notes:

1.   Issued to an advisor of the Company in lieu of fees.

 

5.       RESERVES

Notes

31 December

2017
$

30 June

 2017
$

Share-based payment reserve

5(a)

1,405,797

821,824

1,405,797

821,824

Movement in share-based payment reserve during the past six months

Date

Details

Number of Performance Rights

Number of Options

$

1 Jul 2017

Opening Balance

3,100,000

2,500,000

821,824

22 Nov 2017

Issue of Incentive Options

1,100,000

15 Dec 2017

Issue of Incentive Options

800,000

15 Dec 2017

Issue of Performance Rights

2,300,000

1 Jul – 31 Dec 2017

Share Based Payments Expenses

583,972

31 Dec 2017

Closing Balance

5,400,000

4,400,000

1,405,797

6.       SHARE-BASED PAYMENTS

For the six months end 31 December 2017, the Group has recognised $583,972 of share-based payments expenses in the statement of profit or loss (31 December 2016: $188,422).

(a)      Options

The fair value of the equity-settled incentive options granted is estimated as at the date of grant using the Binomial option valuation model taking into account the terms and conditions upon which the options were granted.

Inputs

Series 1

Series 2

Series 3

Exercise price

$0.40

$0.50

$0.60

Grant date share price

$0.500

$0.500

$0.500

Dividend yield 1

Volatility 2

70%

70%

70%

Risk-free interest rate

1.99%

1.99%

1.99%

Grant date

22-Nov-17

22-Nov-17

22-Nov-17

Expiry date

30-Jun-21

30-Jun-21

30-Jun-21

Expected life of option 3

3.61

3.61

3.61

Fair value at grant date

$0.228

$0.207

$0.188

Notes:

1  The dividend yield reflects the assumption that the current dividend payout will remain unchanged.

2   The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.

3   The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise of options

 

Inputs

Series 4

Series 5

Series 6

Exercise price

$0.50

$0.60

$0.70

Grant date share price

$0.465

$0.465

$0.465

Dividend yield 1

Volatility 2

70%

70%

70%

Risk-free interest rate

2.13%

2.13%

2.13%

Grant date

15-Dec-17

15-Dec-17

15-Dec-17

Expiry date

30-Jun-21

30-Jun-21

30-Jun-21

Expected life of option 3

3.54

3.54

3.54

Fair value at grant date

$0.317

$0.301

$0.288

Notes:

1  The dividend yield reflects the assumption that the current dividend payout will remain unchanged.

2   The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.

3   The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise of options.

(b)        Performance rights

The fair value of performance rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to granting). The table below lists the inputs to the valuation model used for the performance rights granted by the Group:

Inputs

Series 1

Series 2

Series 3

Series 4

Milestones

Pre-Feasibility Study

Definitive Feasibility Study

Construction

Production

Exercise price

Grant date share price

$0.465

$0.465

$0.465

$0.465

Grant date

15-Dec-17

15-Dec-17

15-Dec-17

15-Dec-17

Expiry date

30-Jun-18

30-Jun-19

30-Jun-20

30-Jun-21

Expected life

0.5 years

1.5 years

2.5 years

3.5 years

Fair value at grant date

$0.486

$0.486

$0.486

$0.486

7.       COMMITMENTS AND CONTINGENCIES

Management have identified the following material commitments for the consolidated group as at 31 December 2017 and 30 June 2017:

31 December 2017

30 June

2017

$

$

Finance lease commitments

Within one year

13,011

13,011

Later than one year but not later than five years

43,724

49,638

56,735

62,649

Operating lease commitments

Within one year

67,122

Later than one year but not later than five years

134,244

201,366

Exploration commitments

Within one year

652,000

1,061,000

Later than one year but not later than five years

652,000

1,061,000

8.       DIVIDENDS PAID OR PROVIDED FOR

No dividend has been paid or provided for during the half year (31 December 2016: nil).

9.       FINANCIAL INSTRUMENTS

Fair Value Measurement

At 31 December 2017, the Group had no material financial assets and liabilities that are measured at fair value on a recurring basis and at 31 December 2017, the carrying amount of financial assets and financial liabilities for the Group is considered to approximate their fair values

10.     SUBSEQUENT EVENTS AFTER BALANCE DATE

Other than as disclosed below, at the date of this report there were no significant events occurring after balance date requiring disclosure.

(i)         On 12 March 2018, the Company entered a Memorandum of Understanding (MOU) with Blackham Resources Limited (Blackham) to investigate the potential development of a Sulphate of Potash (SOP) operation based at Lake Way, near Wiluna. Under the MOU, the Company will acquire Blackham’s brine rights and Blackham will acquire gold rights to the Company’s Lake Way holdings, with each company retaining a royalty on their respective holdings. 

For further information please visit www.saltlakepotash.com.au or contact:

Matt Syme/Sam Cordin

Salt Lake Potash Limited

Tel: +61 8 9322 6322

Jo Battershill

Salt Lake Potash Limited

Tel: +44 (0) 20 7478 3900

Colin Aaronson/Richard Tonthat

Grant Thornton UK LLP (Nominated Adviser)

Tel: +44 (0) 20 7383 5100

Derrick Lee/Beth McKiernan

Cenkos Securities plc (Joint Broker)

Tel: +44 (0) 131 220 6939

Jerry Keen/Toby Gibbs

 

Shore Capital (Joint broker)

Tel: +44 (0) 20 7468 7967

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