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Andrew Hore Quoted Micro 22 July 2019

NEX EXCHANGE

Arbuthnot Banking (ARBB) improved its underlying pre-tax profit from £2.7m to £3.4m in the first half of 2019. The interim dividend has been raised from 15p a share to 16p a share. The recent residential mortgage portfolio acquisition was after the end of June. The strategy is to diversify the business and asset-based lending and specialist finance are being built up. Savings platform Arbuthnot Direct has recently been launched. The core private banking operations of Arbuthnot Latham are still growing, though. The shareholding in Secure Trust Bank has been sold down to below 10%, which means it is no longer consolidated. The change from associate led to a write down and NAV declined to £13.21 a share.

VI Mining (VIM) has so far paid $9.1m in cash to the vendors of the Minaspampa and Rosario projects in Peru. There is still $42.2m outstanding 18 months after the acquisition agreement was signed. Majority shareholder Sumner Group Holdings is raising money from a security token offering, which could be completed in the autumn. Some of the proceeds will be used to replace existing facilities and help to pay outstanding acquisition considering, pending renegotiation of the deal. Chief executive David Sumner has provided a $10m term loan, plus a £39m facility of which $3m has been drawn down. There is $1.2m outstanding on the Tassili Jewellery LLC loan facility.

AfriAg Global (AFRI) has completed its acquisition of a 2.325% stake in cannabis company Apollon Formularies. The Jamaican subsidiary has produced its first licensed medical cannabis oils for commercial sale on the island.

MetalNRG (MNRG) has published a prospectus for its move to a standard listing on 23 July. It has raised £193,000 at 0.3p a share.

Clean Invest Africa (CIA) says that its CoalTech subsidiary has signed a joint venture agreement with Creon Capital covering Russia and nearby countries. CoalTech is negotiating with other potential partners to set up operations in Europe, Indonesia and the US.

Tectonic Gold (TTAU) says its mining subsidiary has received approval for the R and D tax incentive scheme in Australia for 2018-19. A claim is being prepared.

Share trading has recommenced in Ganapati (GANP) after it published results for the year to January 2019. There was a cash outflow from operations of £23.8m. Since January, two new games have been generated each month.

AIM

Focusrite (TUNE) has acquired Germany-based studio monitor loudspeakers supplier Pro Audio for £16.2m in cash and it will still have £12m left in the bank. Pro Audio supplies ADAM branded products and made a pre-tax profit of €1m. This is an earnings enhancing acquisition. The businesses will operate separately but work together to develop cross-selling benefits.

Swallowfield (SWL) is selling its manufacturing business to the much larger US manufacturer Knowlton Development Corporation for £35m in order to concentrate on its portfolio of personal care and beauty brands. This should leave net cash of £23m in Swallowfield and this will be used to acquire more brands. The company is changing its name to Brand Architekts Group.

Lawyer Gateley (GTLY) grew all its main operations. Acquisitions helped revenues to increase by one-fifth to £103.5m in the year to April 2019, but there was still organic growth of 9.5%. Pre-tax profit improved from £15.4m to £18.1m. The dividend was raised from 7p a share to 8p a share. Corporate business grew more modestly than other parts of the business, but this was impressive given market conditions for corporate deals. A profit of £21m is forecast for this year.

Victoria (VCP) has raised €330m via an issue of 5.25% senior secured notes 2024. This offer was three times subscribed. The floorcoverings manufacturer is using the money to refinance existing debt and will have £80m of cash after the issue.

Packaging machinery supplier Mpac Group (MPAC) is trading significantly ahead of expectations. Equity Development has increased its 2019 operating profit forecast from £4.6m to £5.5m.

Adamas Finance Asia (ADAM) has completed a co-investment agreement with a Hong Kong-based family office for the investment in Japanese resort business Infinity Capital Group. The family office will pay Adamas $1m of the $2m already drawn by Infinity and the other $2m will be provided 50/50 by the two parties. The facility has a coupon of 17.5% per annum. This deal provides cash to invest in other opportunities. Adamas took advantage of a dip in the share price to buy back £30,400worth of shares at 38p each.

Velocys (VLS) has raised £7m at 3p a share on the back of news that Shell and British Airways will co-fund the development of the Immingham biorefinery project. The cash will be used for further technology development and to progress the Mississippi biorefinery project.

Block Energy (BLOE) has completed the increase from a 71.5% to 100% of its working interest in the West Rustavi field in Georgia. The cash and shares payment means tha Georgia Oil and Gas has increased its stake in Block to 7.7%. Miton has cut its stake from 9.17% to 4.73%.

Mortice (MORT) has decided to cancel its AIM quotation and is offering shareholders the chance to sell their shares for 12p each. A lack of liquidity and a weak share price making it difficult to finance acquisitions are the main reasons for leaving AIM.

Albert Technologies Ltd (ALB) also wants to leave AIM, but it is not offering an exit for shareholders. It believes it can attract investors, but they would prefer to invest in an unquoted company.  

Science Group (SAG) has been buying more shares in Frontier Smart Technologies (FST) at the bid price of 35p each and it has built up a 39.9% stake. It also has 3.1% acceptances for its bid.

Mirada (MIRA) has integrated Netflix into its set-top box platform and this will make its technology even more attractive to broadcasters.

Bangladesh has brought in a law that all listed companies have to pay at least 30% of post-tax profit, or an extra 10% tax charge will be levied. Beximco Pharmaceuticals (BXP) is assessing the legislation and will consider how best to manage cash.

Novacyt (NCYT) has sold its loss-making clinical labs business for £400,000 and it will concentrate on diagnostics businesses Primerdesign and Lab21. The first instalment of £100,000 has been paid and £100,000 more is due in September, but the rest will be paid in three equal instalments on the first, second and third anniversaries of the deal.

MAIN MARKET 

Spinnaker Opportunities (SOP) has received a commitment to invest up to £1.4m from a single investor conditional on the deal to acquire medicinal cannabis company Kanabo Research. The investment will be for a maximum of 4.99% of the enlarged share capital, although if there is any of the £1.4m left it could be invested in a convertible loan note. The investment underpins the expected acquisition-related fundraising and a fee of 10% of the investment is payable.

General meeting resolutions to wind-up Avocet Mining (AVM) were withdrawn at its general meeting. This comes after discussions with shareholders. There is a few weeks cash left in the business and any potential transaction would have to come with finance to cover the costs of an acquisition process.

Dukemount Capital (DKE) has commenced construction of 17 specially developed apartments and retail space on its West Derby property.

OTHER MARKETS 

Fashion On Screen has listed on the Vienna Stock Exchange, which has European Growth Market status by the HMRC. This means that there is no stamp duty. The company had previously considered a listing on the Nasdaq First North market in Copenhagen. Fashion On Screen has raised more than £3m prior to its listing. A film based on the kidnapping of racing driver Juan Fangio in Cuba in 1958 could start before the end of the year (for more about the background to the story listen to https://www.bbc.co.uk/programmes/p055fjfx).

Andrew Hore

Salt Lake Potash (SO4) Commencement of Commercial Scale SOP Evaporation

Highlights

  • Salt Lake Potash has completed construction of a commercial scale SOP brine evaporation pond at Lake Way
  • Pumping of the high grade SOP brine from Williamson Pit has now commenced
  • De-watering is expected to be finished during Q3 2019 ensuring the evaporation process will be underway during the summer months and provide the initial feed salts for the process plant
  • Salt Lake Potash has commenced a Bankable Feasibility Study (BFS) for a commercial scale 200ktpa Sulphate of Potash development at Lake Way, targeting completion in Q3 2019

Salt Lake Potash Limited (Salt Lake Potash or the Company) is pleased to announce it has commenced pumping the Williamson Pit brine into a commercial scale Sulphate of Potash (SOP) brine evaporation pond (Williamson Ponds) at its Lake Way Project.

Construction of the Williamson Ponds has recently been completed, with pond dimensions of 2.5km by 0.5km. These ponds have been designed to receive the 1.2GL of high-grade SOP brine from the Williamson Pit mine, with de-watering of the pit now underway. The de-watering is scheduled to complete in Q3 2019.  

Given the super-saturated nature of the Williamson Pit brines, precipitation of salts started immediately upon pumping into the evaporation pond. The Company will be able to harvest first salts from the Williamson Ponds which are expected to be utilised as initial feed stock for processing.

Salt Lake Potash’s Chief Executive Officer, Mr Tony Swiericzuk, said:

“It is very pleasing to see the high-grade Williamson Pit brines being pumped into the commercial scale SOP evaporation ponds. It’s a real milestone in the development of our Lake Way Project and a first in the development of an exciting new industry for Western Australia.

Importantly, construction of the Williamson Ponds has provided the team with invaluable data on both methodology and costs, which will feed into the BFS that is now well advanced and due to be completed during the September quarter.”

Link to Interview with Tony Swiericzuk as the de-watering of Williamson Pit commences

Having recently completed the Scoping Study for a commercial scale 200ktpa development at Lake Way, Salt Lake Potash has commenced the Bankable Feasibility Study targeting completion in Q3 2019.

For further information please visit www.so4.com.au or contact:

 

Tony Swiericzuk/Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Jo Battershill

Salt Lake Potash Limited

Tel: +44 (0) 20 7478 3900

Colin Aaronson/Richard Tonthat/Ben Roberts

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

Rupert Fane / Ingo Hofmaier / Ernest Bell

Hannam & Partners (Joint Broker)

Tel: +44 (0) 20 7907 8500

Forward Looking Statements

This announcement may include forward-looking statements. These forward-looking statements are based on Salt Lake Potash Limited’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Salt Lake Potash Limited, which could cause actual results to differ materially from such statements. Salt Lake Potash Limited makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that announcement.

 

Competent Persons Statement

The information in this Announcement that relates to Mineral Resources is extracted from the report entitled ‘Significant High-Grade SOP Resource Delineated at Lake Way’ dated 18 March 2019. This announcement is available to view on www.so4.com.au. The information in the original Announcement that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australasian Institute of Mining and Metallurgy (AusIMM) and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

Production Target

The Lake Way Project Production Target stated in this announcement is based on the Company’s Scoping Study as announced on 13 June 2019. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in the Company’s Announcement released on 13 June 2019. The Company confirms that the material assumptions underpinning the Production Target referenced in the 13 June 2019 release continue to apply and have not materially changed.

Salt Lake Potash Ltd (SO4) Holding(s) in Company

TR-1: Standard form for notification of major holdings

NOTIFICATION OF MAJOR HOLDINGS (to be sent to the relevant issuer and to the FCA in Microsoft Word format if possible)i

1a. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attachedii:

Salt Lake Potash Ltd

1b. Please indicate if the issuer is a non-UK issuer  (please mark with an “X” if appropriate)

Non-UK issuer

x

2. Reason for the notification (please mark the appropriate box or boxes with an “X”)

An acquisition or disposal of voting rights

 

 

An acquisition or disposal of financial instruments

An event changing the breakdown of voting rights

x

Other (please specify)iii:

3. Details of person subject to the notification obligationiv

Name

Lombard Odier Asset Management (Europe) Limited

City and country of registered office (if applicable)

London, United Kingdom

4. Full name of shareholder(s) (if different from 3.)v

Name

Disclosure on behalf of accounts managed on a discretionary basis by Lombard Odier Investment Managers group.

City and country of registered office (if applicable)

5. Date on which the threshold was crossed or reachedvi:

18/06/2019

6. Date on which issuer notified (DD/MM/YYYY):

19/06/2019

7. Total positions of person(s) subject to the notification obligation

% of voting rights attached to shares (total of 8. A)

% of voting rights through financial instruments
(total of 8.B 1 + 8.B 2)

Total of both in % (8.A + 8.B)

Total number of voting rights of issuervii

Resulting situation on the date on which threshold was crossed or reached

14.30%

14.30%

245,137,865

Position of previous notification (if

applicable)

15.07%

15.07%

 

8. Notified details of the resulting situation on the date on which the threshold was crossed or reachedviii

A: Voting rights attached to shares

Class/type of
shares

ISIN code (if possible)

Number of voting rightsix

% of voting rights

Direct

(Art 9 of Directive 2004/109/EC) (DTR5.1)

Indirect

(Art 10 of Directive 2004/109/EC) (DTR5.2.1)

Direct

(Art 9 of Directive 2004/109/EC) (DTR5.1)

Indirect

(Art 10 of Directive 2004/109/EC) (DTR5.2.1)

AU000000SO44

35,047,501

14.30%

SUBTOTAL 8. A

35,047,501

14.30%

 

 

B 1: Financial Instruments according to Art. 13(1)(a) of Directive 2004/109/EC (DTR5.3.1.1 (a))

Type of financial instrument

Expiration
date
x

Exercise/
Conversion Period
xi

Number of voting rights that may be acquired if the instrument is

exercised/converted.

% of voting rights

SUBTOTAL 8. B 1

 

 

B 2: Financial Instruments with similar economic effect according to Art. 13(1)(b) of Directive 2004/109/EC (DTR5.3.1.1 (b))

Type of financial instrument

Expiration
date
x

Exercise/
Conversion Period 
xi

Physical or cash

settlementxii

Number of voting rights

% of voting rights

SUBTOTAL 8.B.2

9. Information in relation to the person subject to the notification obligation (please mark the

applicable box with an “X”)

Person subject to the notification obligation is not controlled by any natural person or legal entity and does not control any other undertaking(s) holding directly or indirectly an interest in the (underlying) issuerxiii

X

Full chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held starting with the ultimate controlling natural person or legal entity
xiv (please add additional rows as necessary)

Namexv

% of voting rights if it equals or is higher than the notifiable threshold

% of voting rights through financial instruments if it equals or is higher than the notifiable threshold

Total of both if it equals or is higher than the notifiable threshold

10. In case of proxy voting, please identify:

Name of the proxy holder

The number and % of voting rights held

The date until which the voting rights will be held

11. Additional informationxvi

Place of completion

London, United Kingdom

Date of completion

19/06/2019

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

Salt Lake Potash #SO4 – Appendix 3B and Issue of Placement Shares

Salt Lake Potash Limited (the Company) has today released the following information on the Australian Securities Exchange (ASX), in accordance with the ASX Listing Rules.

The 25,476,000 ordinary shares of no par value (Ordinary Shares) represent the first tranche of the placement of 37.5 million Ordinary Shares (Placement) that was announced on 6 June 2019.

The balance of 12,024,000 Ordinary Shares are expected to be admitted to ASX and the full number of the Placement shares admitted to AIM on 18 June 2019.

Total Voting Rights

For the purposes of the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (DTRs), following issue of the 25,476,000 Ordinary Shares, the Company will have 232,496,581 Ordinary Shares in issue with voting rights attached. The Company holds no shares in treasury. This figure of 232,496,581 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the ASX Listing Rules or the DTRs.

 

For further information please visit www.so4.com.au or contact:

Tony Swiericzuk / Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Jo Battershill

Salt Lake Potash Limited

Tel: +44 7540 366000

Colin Aaronson / Richard Tonthat / Ben Roberts

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

Rupert Fane / Ingo Hofmaier / Ernest Bell

Hannam & Partners (Joint Broker)

Tel: +44 (0) 20 7907 8500

 

Important Information 

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available.  Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96  Origin: Appendix 5  Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

 SALT LAKE POTASH LIMITED

ABN

 98 117 085 748

We (the entity) give ASX the following information.

Part 1 ‑ All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1

+Class of +securities issued or to be issued

Ordinary Shares

2

Number of +securities issued or to be issued (if known) or maximum number which may be issued

25,476,000

3

Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

Fully paid ordinary shares

 

4

Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities?

If the additional +securities do not rank equally, please state:

·    the date from which they do

·    the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

·    the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

Yes

 

5

Issue price or consideration

$0.54

6

Purpose of the issue

(If issued as consideration for the acquisition of assets, clearly identify those assets)

Proceeds from the issue will be used to fund ongoing construction of the Lake Way Project, including the development of on-lake infrastructure, the payment of deposits on certain process plant long-lead items, completion of feasibility studies, and general working capital. 

6a

Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A?

If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i

Yes

6b

The date the security holder resolution under rule 7.1A was passed

30 November 2018

6c

Number of +securities issued without security holder approval under rule 7.1

4,822,231

 

6d

Number of +securities issued with security holder approval under rule 7.1A

20,653,769

6e

Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)

Nil

 

6f

Number of +securities issued under an exception in rule 7.2

Nil

6g

If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3?  Include the +issue date and both values.  Include the source of the VWAP calculation.

Yes

 

Issue date: 14 June 2019

Issue price: $0.54

15 day VWAP: $0.6144

 

 

6h

If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements

Not Applicable

6i

Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

7.1 – 11,201,537

7.1A – Nil

 

7

+Issue dates

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12).  For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

14 June 2019

Number

+Class

8

Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

232,496,581

Ordinary Shares

Number

+Class

9

Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)

 

 

 

7,500,000

 

10,000,000

 

750,000

 

 

1,000,000

 

 

250,000

 

 

500,000

 

 

750,000

 

 

400,000

 

 

1,700,000

 

 

 

2,750,000

 

 

 

3,000,000

 

 

 

21,095,016

 

Class B Performance Shares

 

Class C Performance Shares

 

Incentive Options exercise price $0.50, expiry date 29 April 2020

 

Incentive Options exercise price $0.60, expiry date 29 April 2021

 

Incentive Options exercise price $0.40, expiry date 30 June 2021

 

Incentive Options exercise price $0.50, expiry date 30 June 2021

 

Incentive Options exercise price $0.60, expiry date 30 June 2021

 

Incentive Options exercise price $0.70, expiry date 30 June 2021

 

Incentive Options exercise price $0.60, expiry date 1 November 2023

 

Incentive Options exercise price $1.00, expiry date 1 November 2023

 

Incentive Options exercise price $1.20, expiry date 1 November 2023

 

Performance rights which are subject to various performance conditions to be satisfied prior to the relevant expiry dates between 31 December 2018 and 1 November 2023

10

Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Not Applicable

Part 2 ‑ Pro rata issue

11

Is security holder approval required?

Not Applicable

12

Is the issue renounceable or non-renounceable?

Not Applicable

13

Ratio in which the +securities will be offered

Not Applicable

14

+Class of +securities to which the offer relates

Not Applicable

15

+Record date to determine entitlements

Not Applicable

 

16

Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?

Not Applicable

17

Policy for deciding entitlements in relation to fractions

Not Applicable

18

Names of countries in which the entity has security holders who will not be sent new offer documents

Note: Security holders must be told how their entitlements are to be dealt with.

Cross reference: rule 7.7.

Not Applicable

19

Closing date for receipt of acceptances or renunciations

Not Applicable

 

20

Names of any underwriters

Not Applicable

21

Amount of any underwriting fee or commission

Not Applicable

22

Names of any brokers to the issue

Not Applicable

23

Fee or commission payable to the broker to the issue

Not Applicable

24

Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders

Not Applicable

25

If the issue is contingent on security holders’ approval, the date of the meeting

Not Applicable

26

Date entitlement and acceptance form and offer documents will be sent to persons entitled

Not Applicable

27

If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders

Not Applicable

28

Date rights trading will begin (if applicable)

Not Applicable

29

Date rights trading will end (if applicable)

Not Applicable

30

How do security holders sell their entitlements in full through a broker?

Not Applicable

31

How do security holders sell part of their entitlements through a broker and accept for the balance?

Not Applicable

32

How do security holders dispose of their entitlements (except by sale through a broker)?

Not Applicable

33

+Issue date

Not Applicable

Part 3 ‑ Quotation of securities

You need only complete this section if you are applying for quotation of securities

34

Type of +securities

(tick one)

(a)

+Securities described in Part 1

(b)

All other +securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

 

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35

If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

36

If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and over

37

A copy of any trust deed for the additional +securities

 Entities that have ticked box 34(b) 

38

Number of +securities for which +quotation is sought

Not Applicable

39

+Class of +securities for which quotation is sought

Not Applicable

40

Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities?

If the additional +securities do not rank equally, please state:

·    the date from which they do

·    the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

·    the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

Not Applicable

41

Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another +security, clearly identify that other +security)

Not Applicable

Number

+Class

42

Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

  

Quotation agreement

1           +Quotation of our additional +securities is in ASX’s absolute discretion.  ASX may quote the +securities on any conditions it decides. 

2          We warrant the following to ASX.

·          The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.

·          There is no reason why those +securities should not be granted +quotation.

·          An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

·          Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

·          If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.

3          We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

4          We give ASX the information and documents required by this form.  If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins.  We acknowledge that ASX is relying on the information and documents.  We warrant that they are (will be) true and complete.

Sign here:            …………………………………………………..            Date: 14 June 2019

                             (Director/Company secretary)

Print name:         Clint McGhie

== == == == ==

Notice Under Section 708A

Salt Lake Potash Limited (the Company) has today issued 25,476,000 fully paid ordinary shares. The issued shares are part of a class of securities quoted on Australian Securities Exchange (“ASX”). 

The Company hereby notifies ASX under paragraph 708A(5)(e) of the Corporations Act 2001 (Cwth) (the “Act”) that:

1.            the Company issued the securities without disclosure to investors under Part 6D.2 of the Act;

2.            as at the date of this notice, the Company has complied with the provisions of Chapter 2M of the Corporations Act as they apply to the Company, and section 674 of the Act; and

3.            as at the date of this notice, there is no information that is “excluded information” within the meaning of sections 708A(7) and (8) of the Act.

Salt Lake Potash (SO4) Exceptional Economics of Commercial Scale Development and Lake Way

Salt Lake Potash Limited (Salt Lake Potash or Company) is pleased to report the results of the Company’s Scoping Study for a commercial scale Sulphate of Potash (SOP) development at Lake Way (Lake Way Project or Project) in Western Australia.

Based on the Scoping Study results, the Project generates exceptional economic returns due to its low capital intensity, bottom quartile operating costs and sustainable operating life.

Cautionary Statement

The Scoping Study referred to in this announcement has been undertaken to determine the potential viability of a Sulphate of Potash (SOP) development at the Lake Way Project. The Scoping Study has been prepared to an accuracy level of ±30%. The results should not be considered a profit forecast or production forecast.

The Scoping Study is a preliminary technical and economic study of the potential viability of the Lake Way Project. In accordance with the ASX Listing Rules, the Company advises it is based on low-level technical and economic assessments that are not sufficient to support the estimation of ore reserves. Further evaluation work including infill drilling and appropriate studies are required before Salt Lake Potash will be able to estimate any ore reserves or to provide any assurance of an economic development case.

Approximately 80% of the total production target is in the Measured resource category, 16% in the Indicated resource category and 4% is in the Inferred resource category. The Inferred resource included in the total production target is located at the southern end of Lake Way and is expected to be the last of the brine extraction system constructed. It does not feature as a significant portion of production either during the payback period or during the life of mine. Accordingly, the Company has concluded that it has reasonable grounds for disclosing a production target which includes a small amount of Inferred material. However, there is a low level of geological confidence associated with Inferred mineral resources and there is no certainty that further exploration work will result in the determination of Indicated mineral resources or that the production target itself will be realised.

The Scoping Study is based on the material assumptions outlined elsewhere in this announcement. These include assumptions about the availability of funding. While Salt Lake Potash considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.

To achieve the range outcomes indicated in the Scoping Study, additional funding will likely be required. Investors should note that there is no certainty that Salt Lake Potash will be able to raise funding when needed. It is also possible that such funding may only be available on terms that dilute or otherwise affect the value of the Salt Lake Potash’s existing shares. It is also possible that Salt Lake Potash could pursue other ‘value realisation’ strategies such as sale, partial sale, or joint venture of the Project. If it does, this could materially reduce Salt Lake Potash’s proportionate ownership of the Project.

The Company has concluded it has a reasonable basis for providing the forward looking statements included in this announcement and believes that it has a reasonable basis to expect it will be able to fund the development of the Project. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.

EXECUTIVE SUMMARY

Salt Lake Potash is pleased to report the results of the Scoping Study for the commercial scale development of its SOP project at Lake Way. The Scoping Study demonstrates the potential for the Lake Way Project to support a low capital and operating cost operation with annual production of approximately 200,000 tonne of premium grade SOP.

The Scoping Study demonstrates the compelling economics of the commercial scale development of Lake Way with the ability to support a long mine life:

  • Lake Way Project to produce an estimated 200,000 tonnes per year of premium grade SOP (>52% K2O)
  • High-grade SOP resource underpins long Mine Life of 20 years
  • Lowest operating cost for global SOP producers with an FOB operating cost estimate of $264/t (US$185/t)
  • Low development capital requirements of approximately A$237m (US$166m) including a growth allowance of ~13% ($32m) supported by the close proximity to infrastructure
  • Exceptional economics with estimated project post-tax NPV8 of A$381m (pre-tax NPV8 of A$580m) and post-tax IRR of 27% (pre-tax IRR 33%)
  • Steady state EBITDA of A$90m annually and average annual after tax cashflow of A$64m
  • Strong cashflow and low capital cost result in early payback period of 3.2 years
  • Construction underway on the first phase of Evaporation Ponds (the Williamson Ponds) which will support the dewatering of the Williamson Pit’s super saturated brine with an SOP grade of 25kg/m3
  • Plant commissioning expected Q4 2020 utilising salts from the Williamson Pit brine
  • BFS currently underway with completion expected in Q3 2019 to support project financing

Salt Lake Potash has already significantly de-risked the commercial scale project through the early construction works on the first phase of the Evaporation Ponds (the Williamson Ponds). The de-watering of the Williamson Pit and commencement of evaporation will provide additional insight into the critical evaporation processes which in turn will further de-risk the project.

Lowest Operating Costs

The results of the study demonstrate the potential for very low operating costs. It is estimated that the Lake Way Project will have the lowest operating costs of any SOP operation globally with an FOB operating cost of $264/t (US$185/t).

Short Payback period

The low development capital requirements and significant margins received for the Lake Way Project provides a short payback period of just 3.2 years from first production. This will result in full repayment of development capital by 2024.

KCl Addition Opportunity

The resource at Lake Way contains a significant excess of sulphate (SO4) which provides the opportunity for the Company to explore value adding measures including a potassium chloride (KCl) reaction phase to the processing stage. Preliminary work has shown significant benefits to the Lake Way Project through the inclusion of the KCl reaction phase in the process, including a potential increase in annual production of SOP and subsequent improvements in financial returns to shareholders. The Company will explore this opportunity as part of the BFS for the Lake Way Project.

Robust Economics

The Study demonstrates that the Lake Way Project provides exceptional economics even under the most extreme downside pricing scenarios. The breakeven pricing scenario is a significant 40+% decrease in price at US$323/t.

Table 1: Pricing Scenarios

SOP Price

Breakeven

US$323/t

US$400/t

US$450/t

US$500/t

Base

US$550/t

US$600/t

US$650/t

NPV
(post tax)

A$130m

A$214m

A$298m

A$381m

A$465m

A$548m

Project Funding Advanced

On 6 June 2019, the Company announced that it had received binding commitments for a placement to raise A$20.25m from strategic investors.

In addition, the Company is in advanced discussions with a debt provider for a debt funding package which will support funding for the Lake Way Project.

Next Steps

Having completed the successful Scoping Study, Salt Lake Potash has subsequently commenced a Bankable Feasibility Study (BFS) targeted for completion in Q3 2019. The Company has appointed GR Engineering Services Limited (GRES, ASX:GNG) as lead engineer for the BFS. GRES will work with a number of industry experts including Wood Saskatoon.

The BFS will include the following:

  • Further drilling and trenching programs to increase resource definition and confidence levels for the Lake Way Resource including lake playa and paleochannel
  • Additional test work at Saskatchewan Research Council (SRC) on the process flow sheet, including completion of two pilot plant test runs
  • Review KCl opportunity and determine the options for the possible inclusion of a KCl reaction within the SOP Plant Process
  • Refinement of logistics solution and identification of preferred constructors
  • Update the trench hydraulic analysis and optimisation of trench design in partnership with Cardno
  • Incorporate findings from the first phase of Evaporation Pond construction into the design and construction methodology for the commercial scale project
  • On-going design and refinement of the Process Plant including partnering with vendors for major equipment including crystallisers to conduct testwork relevant to their equipment

SCOPING STUDY RESULTS

The Scoping Study is based on the Mineral Resource Estimate for the Lake Way Project reported in March 2019, comprising 8.2Mt of SOP calculated using Drainable Porosity (73 million tonnes of SOP using Total Porosity).

The Scoping Study assumes a mine life of 20 years with plant commissioning in Q4 2020. The study mine plan, comprising a network of trenches and paleochannel bores, provides for a 200,000tpa production run rate. Table 2 provides a summary of production and cost figures for the Project.

Table 2: Lake Way Project Overview

Lake Way Project

Unit

Estimated Value

PHYSICAL

Mine life

years

20

Annual Production of SOP

tpa

200,000

Mineral Mine Plan

Measured Resource (Lake Way Playa)1.8Mt @ 15.2kg/m3 SOP

%

80

Indicated Resource (Paleochannel) 1.4Mt @ 13.6kg/m3 SOP

%

16

Inferred Resource (Lake Way Playa & Paleovalley) 5Mt @ 15.2kg/m3 SOP

%

4

MINING METHOD

Trenches (production and transport) – average depth 5m

km

130

Bores – average depth 120m

number

14

Brine Chemistry (average Lake Brine SOP grade)

Kg/m3

15.2

EVAPORATION PONDS

Area

ha

1,325

Halite Ponds

ha

1,020

Harvest Ponds

ha

291

Recovery of Potassium from feed brine

%

78

PLANT

Operating time

hpa

7,600

Recovery of Potassium from feed salt

%

80

OPERATING AND CAPITAL COSTS

LOM Cash Operating Costs FOB ex-Geraldton port

A$/t

$264

Mine Gate Operating Costs

A$/t

$184

Transport and handling

A$/t

$80

Capital Costs

A$m

$237

Direct Costs

A$m

$177

Indirect Costs & Growth

A$m

$60

FINANCIAL PERFORMANCE – LIFE OF PROJECT

Price (FOB)

US$/t

$550

Exchange Rate

US$/AUD

0.70

Discount Rate

%

8

EBITDA

A$m

$90

Average Annual after-tax cash flow

A$m

$64

Post tax Internal Rate of Return (IRR)

%

27

Post tax Net Present Value (NPV) @ 8% discount rate

A$m

$381

Pre-tax Internal Rate of Return (IRR)

%

33

Pre-tax Net Present Value (NPV) @ 8% discount rate

A$m

$580

PROJECT OVERVIEW

Lake Way is located in the Northern Goldfields Region of Western Australia, less than 15km south of Wiluna. The surface area of the Lake is over 270km2.

Salt Lake Potash holds five Exploration Licences (two granted and three under application) covering most of Lake Way and select areas off-lake, including the paleochannel defined by previous exploration. The northern end of the Lake is largely covered by a number of Mining Leases, held by Blackham Resources Limited (Blackham Resources), the owner of the Wiluna Gold Mine.

In April 2019, the Company entered into a binding Split Commodity and Access Agreement (Access Agreement) with Blackham Resources in relation to the development of the Lake Way Project on terms in line with the previously executed MOU announced on 12 March 2018.

Lake Way has a number of compelling advantages which make it an ideal site for Salt Lake Potash’s initial SOP operation, including:

  • Access to Blackham Resources’ existing infrastructure (including camps, power and maintenance) to accelerate development.
  • The site has excellent freight solutions, being adjacent to the Goldfields Highway, which is permitted for heavy haulage, quad trailer road trains to the railhead at Leonora and then direct rail access to both Esperance and Fremantle Ports, or via other heavy haulage roads to Geraldton Port.
  • The Goldfields Gas Pipeline is adjacent to Salt Lake Potash’s tenements, running past the eastern side of the Lake.
  • Access to Blackham Resources’ existing Mining Leases provides advanced permitting pathway for early development activity, including the construction of the first phase of Evaporation Ponds (the Williamson Ponds).
  • Salt Lake Potash is constructing the first phase of the Evaporation Ponds to enable the Company to commence dewatering from the existing Williamson Pit. The pit contains an estimated 1.2GL of brine at the exceptional grade of 25kg/m3 of SOP. This brine is the ideal starter feed for evaporation ponds, having already evaporated from the normal Lake Way brine grade, which averages over 15kg/m3.
  • The high grade brines at Lake Way will result in lower capital and operating costs due to lower extraction and evaporation requirements.
  • The presence of clays in the upper levels of the lake which are amenable to low cost, on-lake evaporation pond construction.

SCOPING STUDY CONSULTANTS

The Scoping Study was managed by Wood (formerly Amec Foster Wheeler) and is based on information and assumptions provided by a range of leading independent consultants, including the following consultants who have contributed to key components of the Scoping Study.

Table 3: Lake Way Project Scoping Study Consultants

Area

Responsibility

Study Manager

Wood

Resource Estimate

Groundwater Science

Brine Evaporation

Ad-Infinitum/ Knight Piesold

Brine Transfer Hydraulics 

Cardno

Process Plant:

–     Design basis/criteria

–     Process Test Work

–     Process Plant Design

 

Carlos Perucca Process Consulting

Saskatchewan Research Council

Wood

Plant Infrastructure

Wood

Area Infrastructure

Wood/Salt Lake Potash

Environmental & Heritage

Pendragon Environmental Solutions

Capital Estimate Compilation

Wood

Operating Estimate Compilation (Mine Gate)

Wood

Marketing

CRU International/Argus Media

Economics

Salt Lake Potash

PROJECT GEOLOGY AND MINERAL RESOURCE

Geological Setting

Lake Way is in the Northern Goldfields Province on the Archaean Yilgarn Craton. The province is characterised by granite-greenstone rocks that exhibit a prominent northwest tectonic trend and low to medium-grade metamorphism. The Archaean rocks are intruded by east-west dolerite dykes of Proterozoic age, and in the eastern area there are small, flat-lying outliers of Proterozoic and Permian sedimentary rocks. The basement rocks are generally poorly exposed owing to low relief, extensive superficial cover, and widespread deep weathering.

A key characteristic of the goldfields is the occurrence of paleochannel aquifers. These palaeodrainages are incised into the Archean basement and in-filled with a mixed Tertiary and Quaternary sedimentary sequence.

The paleochannel sediments of Lake Way are characterised by a mixed sedimentary sequence including sand, silts and clays of lacustrine, aeolian, fluvial and colluvial depositional origins. These near-surface deposits also include chemically-derived sediments of calcrete, silcrete and ferricrete. Beneath eastern parts of the playa, there is a deep paleochannel that is infilled with Tertiary-aged palaeochannel clay and basal sands in the deepest portion.

The Sediments infilling the paleochannel are described below:

Lake Bed Sediment

Recent (Cainozoic), unconsolidated silt, sand and clay sediment containing variable abundance of evaporite minerals, particularly gypsum. The unit is ubiquitous across the salt lake surface. The thickness of the unit ranges from approximately 3 to 20m.

The upper part of the unit comprises unconsolidated, gypsiferous sand and silt from surface to around 1.5m depth. The unit is widespread, homogeneous and continuous with the thickest parts in the centre and southern portion of the lake. This is underlain by well sorted, lacustrine silt and clay.

Palaeovalley Sediment

The Paleovalley sediment consists of Tertiary clay and silt that overlies basement or the Basal Sand.

Paleochannel Basal Sand

Tertiary, unconsolidated fine, medium to coarse grained sand interbedded with silt, clay and some lignite horizons.

Mineral Resource

The Mineral Resource Estimate underpinning the production target, classified as Measured, Indicated and Inferred, was prepared by a competent person and was reported in accordance with the JORC Code (2012 Edition) on 18 March 2019.

The Company engaged an independent hydrogeological consultant with substantial salt lake brine expertise, Groundwater Science Pty Ltd, to complete the Mineral Resource Estimate for the Lake Way Project.

The Lake Way Mineral Resource Estimate describes a brine hosted resource. The minerals are dissolved in brine, and the brine is contained within pore spaces of the host sediment.

The Mineral Resource Estimate of 73Mt of SOP calculated using Total Porosity and 8.2Mt of SOP calculated using Drainable Porosity is hosted within approximately 15 billion cubic metres of sediment ranging in thickness from a few metres to over 100m, beneath 189km2 of playa lake surface including the paleochannel basal sand unit of 20m thickness and 30km length.

The Mineral Resource Estimate for Lake Way is divided into resource classifications that are controlled by the host geological units:

  • Lake Bed Sediment
  • Paleovalley Sediment
  • Paleochannel Basal Sands

The mineral resource estimate is summarised in the Tables 4 – 6.

The estimated SOP tonnage represents the SOP within the in-situ contained brine with no recovery factor applied. The amount of contained brine which can be extracted depends on many factors including the permeability of the sediments, the drainable porosity, and the recharge dynamics of the aquifers.

Brines by their nature are not a static resource as they are subject to groundwater movement, dilution and concentration over time. Reporting both total and drainable porosity allows the reflection of this dynamic resource environment, including the consideration of the recharge and physical diffusion impacts on the mine plan and production output.

The impact of the recharge and physical diffusion in the development and long term abstraction of a brine resource is discussed in subsequent sections.

Table 4: Measured Resource

Total Volume

Brine Concentration

Mineral Tonnage Calculated from Total Porosity

Mineral Tonnage Calculated from Drainable Porosity

K

Mg

So4

Total Porosity

Brine Volume

SOP Tonnage

Drainable Porosity1

Brine Volume

SOP Tonnage

(Mm3)

(kg/m3)

(kg/m3)

(Kg/m3)

%

(Mm3)

(Mt)

%

(Mm3)

(Mt)

North Lakebed

(0.4-8.0 m)

1,060

6.8

8.0

27.6

43

456

6.9

11

117

1.8

Williamson Pit

1.26

11.4

14.7

48.0

1.26

0.03

Total

6.9

1.83

Table 5: Indicated Resource

Total Volume

Brine Concentration

Mineral Tonnage Calculated from Total Porosity

Mineral Tonnage Calculated from Drainable Porosity

K

Mg

So4

Brine Volume

SOP Tonnage

Brine Volume

SOP Tonnage

(Mm3)

(kg/m3)

(kg/m3)

(Kg/m3)

(Mm3)

(Mt)

(Mm3)

(Mt)

Basal Sands

(Paleochannel)

686

6.1

8.2

25.0

40

274

3.7

15

103

1.4

Table 6: Inferred Resource

Total Volume

Brine Concentration

Mineral Tonnage Calculated from Total Porosity

Mineral Tonnage Calculated from Drainable Porosity

K

Mg

So4

Total Porosity

Brine Volume

SOP Tonnage

Drainable Porosity

Brine Volume

SOP Tonnage

(Mm3)

(kg/m3)

(kg/m3)

(Kg/m3)

%

(Mm3)

(Mt)

%

(Mm3)

(Mt)

South Lakebed

(0.4-8.0 m)

316

6.8

8.0

27.6

43

135

2.0

11

35

0.5

Lakebed

(8m to Base)

9,900

6.8

8.0

27.6

40

3,960

60.0

3

297

4.5

Total

62.0

5.0

1 The Drainable Porosity does not include the significant resource potentially available through the recharge cycle.

Mineral Brine Resource Cycle

The production of brine within the lakebed sediment is cyclic and described below.

Stage 1 – Initial Resource

The initial brine resource comprises of two distinct porosity categories:

  • Brine dissolved in water held in Drainable Porosity, (11% of the total aquifer volume).
  • Brine dissolved in water held in Retained Porosity, (32% of total aquifer volume).

The combined porosity (Total Porosity) then comprises the total SOP brine resource held in the Lake Bed Sediments aquifer.

The remaining volume is occupied by solid material (sand, silt and clay grains comprising approximately 57% of the aquifer volume).

Stage 2 – Production Cycle

During production the brine drains under gravity toward the trench and is subsequently removed by pumping. This creates a hydraulic gradient toward the trench and brine is drawn some distance through the aquifer toward the trench (typically hundreds of meters depending on aquifer permeability).

Over time the aquifer immediately surrounding the trench is partially dewatered. This means that the drainable brine has been removed from the sediment, but the retained brine is still held in place by surface tension.

Stage 3 – Recharge Cycle

Western Australian Salt Lake playas receive water supply from both direct rainfall and surface run-off annually. Direct rainfall lands on the playa each year, and most years, heavy, cyclonic rain events cause run-off from the surrounding catchment onto the lake playa. This water infiltrates the lake playa surface and re-fills the drainable pores in the aquifer. The larger rainfall events usually occur from January through to March.

Stage 4 – Mixing Cycle

The water that has infiltrated and refilled the drainable porosity then mixes (by physical diffusion) with the brine held in retained porosity.

Through repeated production cycles the total brine resource is mined. The concentration of brine pumped from the production trenches will decline over time as the total resource is depleted over repeated production cycles.

The pumping rate is controlled by the hydraulic conductivity of the host sediment. The concentration of produced brine will change over time and will be controlled by the tonnage contained in total porosity and the mechanism of mixing between repeated production cycles.

MINING AND PRODUCTION TARGET

The estimated production target of 200,000tpa of SOP is supported by the total brine production volume of 23GL/year. A numerical groundwater model was developed to predict water level drawdowns due to brine production from trenches in the superficial lake sediments at Lake Way. The model simulates brine abstraction of 19.3GL/year from a trench network. This is supplemented by an assumed volume of 3.7GL/year of brine from the paleochannel delivering a total brine volume of 23GL/year sufficient to support the production target of 200,000tpa of SOP.

Recharge is a key element of the mining strategy, as it refills the drainable porosity and activates salts contained within the retained porosity by physical diffusion. Direct rainfall recharge has been estimated from water level fluctuations due to rainfall and specific yield (Groundwater Science, 2017). Evaporation from water ponded in the Lake was set to 0.7 x (pan evaporation).

Recharge calculations used in the abstraction model were based on historic (1971 – 1990) precipitation at Wiluna and estimated surface inflows (Groundwater Science, 2018) into the lake for a 20-year production period.

Over the life of mine, 80% of the total brine production volume is sourced from the Measured Mineral Resource (Lake Bed Sediment), 16% from the Indicated Mineral Resource (Paleochannel) and 4% from the Inferred Mineral Resource (Lake Bed Sediment – South). The trenches for abstraction of the Inferred component of brine production is expected to be the last of the brine extraction system constructed. Whilst the Company has a reasonable expectation that the portion of the Inferred Mineral Resource included in total brine production will be capable of upgrade, it does not feature as a significant portion of production either during the payback period or during the life of mine.

Brine Extraction

The brine extraction methodology and requirements for the Scoping Study are supported by hydrogeological modelling and hydraulic design work undertaken by Cardno Engineering.

The Scoping Study has assumed brine will be extracted from Lake Way using two methods:

  • Surface trenching provides access to brine contained within the playa lake sediments;
  • Vertical bores provide access to brine from the paleochannel aquifer.

The design requirements assumed an average brine demand of 730L/s to be supplied to the halite ponds for the extraction network concept design. The contribution to brine production is approximately 84% from trenching and 16% from bores. The current basis is:

  • Bore production rate of 8.4L/s/bore
  • Trench yield rate (flow) minimum of 4L/s/km
  • Trench yield rate (flow) maximum of 8L/s/km

The hydraulic analysis used a conceptual brine extraction network layout and the proposed evaporation pond locations to determine the likely requirements of the on-lake brine transfer pumping scheme.

Brine extracted from paleochannel bores will be fed directly into nearby trenches. Bore pumps have been sized for a flowrate of approximately 8L/s and a pumping head at 90m.

The location and geometry of the paleochannel has been identified from a passive seismic survey. Bores will be drilled using the mud rotary method through the lake bed sediments and the Tertiary clays into the basal sand terminating in the weathered bedrock horizon.

The bores will be screened across the basal sands section. Gravel pack will be installed across the screened section with a bentonite seal at the top, the annulus will be backfilled to surface.

Trench Layout

The trench network designed as part of the Scoping Study stretches a total of 130km across the lake surface and includes two types of trench systems required to maintain the feed brine into the Halite Ponds:

·    Extraction trenches provide a low pressure zone for brine contained in the surrounding playa lake sediments to drain into.

·    Transport trenches to convey brine into distinct areas as required, and capture brine pumped from the paleochannel bores into the trench network.

Trench Flow

The brine extraction pumping systems must provide sufficient brine to meet seasonal pond demand, which is at a peak during the summer months due to solar evaporation.

A hydraulic analysis was undertaken on a conceptual network layout to calculate flowrates, flow velocities, pump requirements and power demand. Typical industry norms for pumped open channels were adopted, maintaining a minimal trench base gradient of 1:5000 and a maximum flow velocity of 0.3m/s.

Pump stations are located on-lake between trench segments, and at entry points into each halite pond. In total, the trench network includes 12 transfer pump stations.

Trench Design

The trench design provides for approximately a 5m wide trench, with additional width to batter back any surficial loose soils, and from 5m to 6m deep. The trenches will likely be stepped to avoid wall collapse and to assist with constructability. The Scoping Study has assumed a construction methodology using an amphibious excavator.

Trench spoil will be used to create a light vehicle access berm on one side of the trench and include windrows if required. Bunding on the opposite side will be designed with gaps to allow surface water recharge.

The height and layout of the bunds will depend on hydrogeology requirements (i) to ensure regular groundwater recharge from surface water and (ii) to maintain surface water flow of the lake.

Regular trench maintenance will be required and allowance is made in the maintenance equipment fleet for purchase of excavators and constant coverage of personnel on-site to maintain the trench network.

BRINE EVAPORATION

Extracted brine is concentrated in a series of solar ponds to induce the sequential precipitation of salts and eventually potassium-containing salts in the harvest ponds. Based on modelling using historical data obtained from nearby weather stations at Wiluna Township and Wiluna Airport, the Lake Way region in Western Australia has an average rainfall of 260mm/a and an average water evaporation rate of 3,504mm/a, making conditions ideal for evaporation processes.

The operational area of the evaporation ponds required for the final 200,000tpa SOP production rate is 13.08km2, with area distribution between the various ponds based on mass balance modelling output.

The pond sizing is developed from a simulation using a combination of mathematical and thermodynamic models and is based on the average brine chemistry from the lake and paleochannel. The simulation uses average annual weather conditions to calculate the required brine flow and pond area (size) to meet the targeted 200,000tpa production scenario.

Salt Lake Potash engaged Ad-Infinitum to conduct meteorological modelling, evaporation modelling, pond sizing and design for the Lake Way Project. Geotechnical consulting services were provided by Knight Piésold.

Evaporation Pond Chemistry and Configuration

Brine evaporite chemistry is very complex due to the multitude of ions present in brine, however, in an effort to simplify the evaporation pathway representation, a three-component system of the major constituents (Mg-SO4-K) is commonly assumed. Sodium and chloride ions are not shown, for simplicity, as they are generally present in abundance in all salt lake brines and form halite in preference to all other salts.

The extraction brine composition used for the Scoping Study evaporation modelling is based on Lake Way sample data and is detailed below. The average brine composition below is based on an assumed 80% brine extracted from the lake playa and 20% brine extracted from the Paleochannel.

Table 7: Brine Extraction Composition

Element

Unit

Value

Na

g/L

74.3

K

g/L

6.5

Mg

g/L

7.4

Ca

g/L

0.5

SO4

g/L

26.7

Cl

g/L

122.8

 

Experience from numerous evaporation trials for Lake Way and Lake Wells has shown that astrakanite does not form, most likely because the kinetics of the formation are too slow for a dynamic pond system. Accordingly, the Scoping Study process has adopted this view and assumed that astrakanite will not form within the pond system. Instead, the composition of the solution will move directly towards the leonite-schoenite field to produce potassium sulphate salts, followed by the epsomite-kainite field where these salts precipitate. Finally, the carnallite field is reached.

Harvest salts from the kainite pond and carnallite pond are used for SOP production. Concentrated brine from the carnallite pond is sent to the bittern pond for additional concentration and store as a waste by-product.

Evaporation Pond Layout

The specific site conditions were reviewed to assess the most suitable evaporation pond locations:

  • Halite ponds (1020ha) are located on-lake, to make use of the in situ low permeability clays and avoid the need for HDPE lining.
  • Bitterns Pond (14ha) is located on-lake and unlined.
  • Kainite (200ha), Carnallite (11ha) and Recovery Ponds (80ha) are located on-lake.

On-Lake Ponds

All ponds are located on-lake providing significant benefits for both cost and operational efficiency. The on-lake evaporation pond system has been located to:

  • Avoid locating ponds in areas of high brine yield, to minimise pond footprints sterilising the available brine resource.
  • Where possible, avoid low lying areas subject to long periods of inundation resulting from surface water flow. Some ponds that span inundated areas will require specific design considerations.
  • Ensure availability of in situ clays beneath the pond footprint, proven to be of low permeability and will limit seepage of unlined ponds.
  • Ensure availability of good quality lake clays that are a potential source of embankment construction materials to allow a cut-to-fill method for pond construction.
  • Avoid disturbance of the lake edge due to environmental and heritage requirements.

The pond sizes are detailed in Table 8.

Table 8: On-lake Ponds

 

Halite

Bitterns

Kainite

Carnallite

Recovery

Area (ha)

1,020

14

200

11

80

Evaporation Pond Construction

On-lake construction requires specialist equipment given the challenges trafficking and placing fill on the soft lake surface. Construction material will either be clay sourced from borrow pits immediately adjacent to the embankments, or imported materials source from existing mining waste materials or planned mine pre-stripping.

The general construction methodology is currently being trialled and proven up as part of the first phase of the Evaporation Pond construction currently underway at Lake Way. This will provide important information to ensure an efficient construction methodology is implemented for the remaining pond construction operations at Lake Way.

Salt Harvesting

The harvest ponds have been designed to allow for up to 12 months of salt growth before harvest. Harvests may be made more frequently in the kainite ponds during plant start-up and operation. The carnallite and recovery ponds will also be harvested and salt processed through the plant.

Sulphate salts are to be recovered from the harvest ponds (kainite, carnallite and recovery) by grader and front end loader. Dump trucks are loaded to transport the salt to the process plant, where it is stockpiled in separate areas to allow for a blended feed to the process plant.

PROCESS PLANT

The potassium salts harvested from the solar evaporation ponds will be treated in a processing plant to convert these salts into sulphate of potash (SOP or K2SO4), while minimising deportment of chlorides to the product.

Salt Lake Potash has conducted extensive testing of lake brines and harvest salts from its salt lake projects, predominantly Lake Way and Lake Wells, in order to confirm the evaporation and associated harvested salt processing operations. The testing thus far has proven that lake brine can be concentrated economically, via solar evaporation, to produce mixed potassium sulphate double salts. It has also been shown that these salts, when harvested, can be economically converted into a valuable, high purity SOP fertiliser product.

The SOP production process consists of:

·    Attrition to break up crystals

·    Conversion of the mixed sulphate salts to schoenite in a sulphate solution at ambient temperatures

·    Reverse Flotation to remove chlorides

·    Conversion of the schoenite to SOP (in a schoenite solution at around 50°C)

·    Filtering, drying and packaging

The key design parameters are shown in Table 9.

Table 9: Design Basis

Parameter

Value

Flowsheet configuration

Feed preparation, conversion, reverse flotation and SOP crystallisation.

SOP production

200,000tpa

Process plant potassium recovery

80%

Operating Time

 

Brine extraction; evaporation ponds and harvesting

8200h/a

Process plant

7600h/a

Product Composition

 

SOP Grade

>96%

%K2O equivalent

>52%

Target Cl Content

<0.5%

Target Mg Content

<0.2%

The harvested salt is crushed in a roll mill to break up lump material and is further broken down and scrubbed in attritioning cells. The resulting slurry is pumped to the conversion circuit where the potassium harvest salts are converted to schoenite prior to flotation.

The conversion tanks’ discharge slurry is transferred to the conversion thickener, an inclined plate unit. The conversion thickener underflow slurry, now predominantly schoenite, reports to the reverse flotation circuit.

The converted harvest salts still contain an appreciable amount of halite which needs to be removed to minimise chloride and sodium reporting to the product. Therefore a reverse flotation configuration is used employing self-aspirated columns to remove the halite. The resulting halite slurry is filtered, then stockpiled for disposal back on the lake. The flotation product is a Schoenite slurry which is filtered, to remove excess flotation brine, and is presented to the crystalliser circuit. The filtered flotation brine, which is saturated in potassium, is internally recycled with any excess brine sent to the recovery pond.

The purified schoenite salt from flotation is re-slurried with a calculated amount of dilution water and then pumped into the SOP crystalliser which is maintained at 50°C to convert to the schoenite to SOP by dissolving the magnesium sulphate from the double salt. The SOP crystalliser mother liquor reports to a cooling crystalliser where schoenite is precipitated from the liquor by cooling the liquor to 20°C with a chiller system. The secondary schoenite produced by the cooling crystalliser is recycled to the SOP crystalliser along with the primary schoenite from flotation.

The SOP crystalliser produces fine SOP crystals which are first dewatered, then the SOP cake is dried in a rotary drier and then conveyed to the product storage shelter. Product is periodically reclaimed by an FEL and transferred into a loadout hopper for transportation to port.

MAJOR INFRASTRUCTURE

The Lake Way Project is located in the Goldfields region of Western Australia approximately 15km south of Wiluna. The Project is located in close proximity to the Goldfields Highway which is a state highway that extends 800km from south of Kambalda in the Goldfields to Meekatharra in the Mid-West. Given the proximity to the Goldfields Highway which supports quad road trains, road haulage options include either travelling south toward Leonora or west to Geraldton.

The process plant is located 5km from the evaporation ponds and connected by an existing haul road that services the Williamson Pit. A 1.4km haul road from the Williamson pit causeway to the Williamson pond has been constructed as part of the first phase of Evaporation Pond construction. Unsealed access roads will be required for access to the Goldfield Gas Pipeline, raw water borefield and paleochannel bores.

The Project power requirements will be provided by a standalone natural gas power station located near the process plant under a build, own, operate (BOO) arrangement and local diesel generators at remote locations. 

The Project requires natural gas for the power station and for process requirements such as the boiler. Natural gas will be supplied from the Goldfields Gas Pipeline which runs along the eastern side of Lake Way. The distance from the process plant to the gas pipeline is approximately 27km.

Water required for the Project will be sourced from a nearby borefield. Raw water will be extracted from the borefield by bore pumps. The total raw water requirement for the Project is 2.0GL/a.

A fly in/fly out (FIFO) workforce has been adopted for the Lake Way Project using the Wiluna Airport which is located 5km south of the main township. A permanent accommodation village with a capacity for 100 workers has been assumed. The village will be expanded to include 180 construction workers during the construction phase.

PRODUCT TRANSPORT AND LOGISTICS

Salt Lake Potash engaged several highly qualified transport logistic companies to assist with defining the optimal logistics solution for transportation of 200,000tpa of SOP from Lake Way to port. An assessment of numerous haulage options was undertaken, applying a fixed origin and modelling multiple potential destinations including Geraldton, Fremantle and Esperance. This assessment has included a road direct assessment, rail direct assessment, and intermodal hub and spoke solution incorporating both road and rail.

The road direct solution to Geraldton has been established as the most cost-effective option to use for the product transport logistics for the standalone 200,000tpa SOP project from Lake Way to underpin the overall economic assessment for the Scoping Study.

The relatively close proximity to the Geraldton Port facilities (780km) and the ability to leverage off the established sealed highway network from Lake Way to Geraldton provides cost effective access into the Geraldton port facility.

The transportation solution will consist of truck loading at Lake Way site via Front End Loader. The transport from Lake Way to Geraldton will be undertaken by trucks suitable for quad combinations. The Mainroads Restricted Access Vehicles (RAV) approvals for quad combination transport covers the entire route from Lake Way all the way into Geraldton Port.

Geraldton Port is capable of handling fully loaded Panamax size vessels up to 70,000 tonnes and 225m in length. The Port handles approximately 19 million tonnes per annum of trade per year with significant excess capacity available for handling and storage.

PRODUCT QUALITY AND MARKETING

Fertilisers consist of essential plant nutrients that are applied to farmed crops in order to achieve favourable quality and yield. They replace the nutrients that crops remove from the soil, thereby sustaining the quality of crops, and are considered the most effective means for growers to increase yields.

The key components of agricultural fertilisers are nitrogen (ammonia and urea), phosphates (ammonium phosphates), and potassium (muriate of potash and sulphate of potash). In addition, sulphate has gained increased attention over the past several years due to soils becoming deficient in sulphur (the ‘fourth macronutrient’).

Global fertiliser demand is expected to increase significantly in the coming years due to the world population growth accompanied by decreasing arable land per capita, changes in diet and growth in income. These increases will provide an incentive for farmers to increase fertiliser use for improved yields and quality.

The most widely available source of potassium used by growers is Muriate of Potash (MOP or KCl), with around 65 million tonnes consumed annually. SOP is a speciality type of potassium fertilisers that is produced and consumed on a smaller scale.

MOP is widely used in all types of farming, however it can be detrimental to some plants, especially fruits and vegetables, due to its chloride content. SOP is primarily used as a source of potassium for crops intolerant to chloride. SOP is priced at a premium to MOP, due to supply constraints, high production costs and because of its ability to be used on chloride intolerant crops (such as fruits, vegetables, beans, nuts, potatoes, tea, tobacco and turf grass), which typically sell at sufficiently higher prices to absorb the premium cost.

SOP can be used in most applications where MOP is used and is preferred in many circumstances as it enhances yield and quality, shelf life and improves taste. SOP generally outperforms MOP in terms of crop quality and yield. SOP performs particularly well with crops that have a low tolerance to the chloride in MOP and in arid, saline and heavily cultivated soils. The low volume of SOP consumption relative to market demand is partly a result of the scarcity of reliable SOP supply.

SOP’s premium to the MOP price is correlated to the conversion costs from MOP to SOP (Mannheim Process) where MOP is used as an input in the process. The premium has been around 60% for the past decade. In recent years, this premium has expanded significantly, as decreases in the MOP price have not translated to similar declines in the price of SOP, indicating that the SOP market is supply constrained.

SOP can be sold as a standard powder, premium granular or soluble product. Granular and soluable SOP generally attracts a price premium. Salt Lake Potash plans to sell at a premium to the market price as a certified organic producer and also with a soluable product offering. The premium achievable for a soluable product can be upwards of 20% (CRU SOP Market Study May 2019).

The Company has engaged Argus Media (Argus) and CRU International Group to provide market analysis on both the broader SOP market and also specifically the Lake Way Project. The current SOP price averages between US$525/t (NW Europe – Standard bulk) (Argus Media 6 June 2019) and US$625 (California) (Greenmarkets 31 May 2019) with Salt Lake Potash utilising a life of mine SOP price of US$550/t (FOB) for the Scoping Study.

The Company will initially be targeting both global and domestic markets for its premium grade SOP product. SOP production is not easily substitutable and is in supply deficit, therefore the Company is confident in the current and forecasted levels of demand.

MINING TENURE

The Lake Way Project site has been secured with a mixture of contractual rights with Blackham Resources under the Access Agreement and Salt Lake Potash’s own exploration and mining tenements and applications. The Company’s and Blackham Resources mineral exploration and mining tenement locations are detailed in Table 10.

Salt Lake Potash is optimising the tenure approval process by staging the required approvals to ensure construction will be undertaken in line with the project schedule.

In addition to the exploration and mining tenements the Company is progressing the approval for various miscellaneous licences for non-process infrastructure, including water and power.

Table 10: Tenure Summary

Tenement

Status

Holding Name

E53/1878

Live

Piper Preston Pty Ltd

E53/1897

Live

Piper Preston Pty Ltd

E53/2057

Pending

Piper Preston Pty Ltd

E53/2059

Pending

Piper Preston Pty Ltd

E53/2060

Pending

Piper Preston Pty Ltd

L53/208

Pending

Piper Preston Pty Ltd

M53/1102

Pending

Piper Preston Pty Ltd

E53/1862

Live

Kimba Resources Pty Ltd

E53/1905

Pending

Matilda Operations Pty Ltd

E53/1952

Pending

Kimba Resources Pty Ltd

M53/121

Live

Kimba Resources Pty Ltd

M53/122

Live

Kimba Resources Pty Ltd

M53/123

Live

Kimba Resources Pty Ltd

M53/147

Live

Kimba Resources Pty Ltd

M53/253

Live

Kimba Resources Pty Ltd

M53/796

Live

Kimba Resources Pty Ltd

M53/797

Live

Kimba Resources Pty Ltd

M53/798

Live

Kimba Resources Pty Ltd

M53/910

Live

Kimba Resources Pty Ltd

P53/1642

Live

Kimba Resources Pty Ltd

P53/1646

Live

Kimba Resources Pty Ltd

P53/1666

Live

Matilda Operations Pty Ltd

P53/1667

Live

Matilda Operations Pty Ltd

P53/1668

Live

Matilda Operations Pty Ltd

ENVIRONMENTAL

Salt Lake Potash has engaged Pendragon Environmental Solutions (Pendragon) and a number of specialist ecological consultants to provide assistance with the necessary approvals for the Lake Way Project.

The Company has identified the key environmental risks for Lake Way Project and has commenced and completed its own studies to obtain the necessary information for the Company to complete environmental impact assessment/referral documentation as required under the Environmental Protection Act 1986 (EPA Act). In addition to the studies commissioned by the Company, the arrangement Salt Lake Potash has established with Blackham Resources has afforded the Company access to an extensive range of environmental studies completed by Blackham Resources across the Lake Way region. Refer Table 11 below for a summary of the key relevant studies completed by the Company and Blackham Resources to date.

The early environmental study information available, has greatly improved the Company’s understanding of the local and regional environment. This has allowed the Company to optimise and de-risk the development to minimise environmental impacts and constraints.

Table 11: Surveys Completed

Report Title

Area

Date

Study Description

Flora and Vegetation Assessment Lake Way Demonstration Plant Project

Lake Way and Surrounds

2019

Level 1 and Field Survey

Demonstration Plant Flood study

Lake Way

2019

Flood study

Lake Way Acid Sulphate Soil investigation

Lake Way

2019

Acid Sulphate investigation

Lake Way Fauna assessment of proposed project area

Lake Way and Surrounds

2019

Level 1 and Field Survey

Fauna Survey

Lake Way and Surrounds

2019

Targeted Night Parrot Survey

Lake Way Potash Project Subterranean Fauna Baseline Survey

Lake Way and Surrounds

2017

Level 1 Baseline survey

Detailed Flora and Vegetation Survey Lake Way Potash Project

West of Lake Way

2017

Level 1

Lake Way Potash Project Wetland Ecology Baseline Survey

Lake Way and Surrounds

2017

Level 1 Base line Survey

Fauna Survey Lake Way Potash

Lake Way and Surrounds

2017

Level 2

Fauna Assessment Lake Way Project Area

Lake Way and Surrounds

2016

Level 1

Flora & Vegetation Survey Lake Way

Lake and Surrounds

2015

Level 1

Matilda Gold Project Murchison Western Australia

Williamson Pit, Matilda Operations and Wiluna

2015

Level 1 Biological Survey

Matilda Gold Project Murchison Western Australia

Williamson Pit, Matilda Operations and Wiluna

2015

Field survey for Landscape Function Analysis Survey

Biological Assessment of Lake Way 2009

Lake Way and Surrounds and E53/1897

2010

Field Investigation of Lake Way discharge environment

NATIVE TITLE AND HERITAGE

The Lake Way Project is located in the Wiluna Peoples’ native title determination area (WCD2013/004). The Determination first took effect 23 January 2015, covering an area of approximately 40,665 km2. The determination area includes a number of pastoral leases, parts of the township of Wiluna, parts of the Canning Stock Route, areas of unallocated Crown Land and the Lake Way Project area.

Tarlka Matuwa Piarku Aboriginal Corporation RNTBC (TMPAC) manage the Wiluna Peoples native title rights over their determined area.

In December 2018, the Company signed a Native Title Land Access and Brine Minerals Exploration Agreement (the Agreement) with TMPAC, on behalf of the Wiluna People, covering the Lake Way Project area and providing consent to the grant of its exploration licences and for the area required for the construction and operation of the first phase of Evaporation Ponds.

The Company is continuing extensive consultation with TMPAC to achieve a Native Title Mining Agreement to provide consent to the grant of its mining lease and for the ongoing mining operation. The Native Title Mining Agreement negotiations are advanced and the Native Title Mining Agreement is expected to be finalised and signed in the near future.

The Aboriginal Cultural Material Committee (ACMC) is of the view that Lake Way is an Aboriginal Site for the purposes for the Aboriginal Heritage Act 1972. The Company’s full and ongoing consultation with TMPAC, will enable the Project to take into consideration TMPAC’s heritage requirements. The Company has, with the support of TMPAC, established a framework for obtaining consents under the Aboriginal Heritage Act 1972 necessary to ensure continuity of works on the Lake.

ECONOMICS

Operating Costs

Operating costs have been estimated for the Lake Way Project based on the production rate of 200,000tpa to an accuracy of ±30%.

The estimated cash operating costs were built up by creating cost schedules for the following categories:

Table 12: Operating Costs

Area

Cost per tonne ($A)

Labour

 $    49

Power

 $    33

Maintenance

 $    17

Reagents

 $      3

Consumables

 $    37

Miscellaneous

 $    27

General and Administration

 $    18

Total (Operating Costs per tonne) Mine Gate

 $  184

Transportation

 $    80

Total (Operating Costs per tonne)

 $  264

The total operating cash cost estimate of $264/t places the Lake Way Project as the lowest cost producer globally for SOP projects.

Capital Costs

Salt Lake Potash estimates the total capital cost to construct the brine extraction, evaporation and process plant and associated infrastructure to produce 200,000tpa SOP at $237 million.

Table 13: Capital Costs

Area

$Am

Brine Extraction

22

Evaporation

36

Process Plant

75

Plant Infrastructure

20

Area Infrastructure

12

Regional Infrastructure

1

Miscellaneous

11

Total Direct

177

Temporary Facilities

7

EPCM

21

Total Indirect

28

Total Bare

205

Growth Allowance

32

Total Initial Capital

237

Royalties, Taxes, Depreciation, and Depletion

The Scoping Study project economics include the following key parameters related to royalties, tax, depreciation, and depletion allowances:

·    State Government Royalties are 2.5% of Gross Revenue

·    Other Royalties up to 4.9% of Gross Revenue

·    Tax rate of 30% is applied

·    Depreciation is assumed on a diminishing basis over the life of the assets

Financial Modelling

An economic model has been prepared which reflects the proposed mine life for the Lake Way Project of 20 years. The Scoping Study assumes first production to occur in Q4 2020 with a gradual ramp up to full name plate capacity of 200,000tpa over the year 2021. This assumes completion of the BFS in Q3 2019 and a development timeframe of 12-15 months subject to availability of funding and in accordance with required approvals.

Financial modelling of the Lake Way Project highlights exceptional economic returns with a post tax NPV8 of $381m (pre-tax NPV8A$580m) and a post tax IRR of 27% (pre-tax IRR of 33%). Table 2 provides a summary of production and cost figures for the Lake Way Project.

Payback Period

Payback period for the initial development capital for the Lake Way Project is 3.2 years. The payback period is based on free-cash flow, after taxes.

Sensitivity Analysis

The Scoping Study was prepared at a ±30% accuracy to investigate the technical and economic parameters of a SOP production operation at Lake Way.

The Company has modelled numerous scenarios during the study process to evaluate the impact of key inputs to the Lake Way Project economics. The modelling has highlighted the robustness of the project with the findings detailed in Table 14 and 15 below.

Table 14: Scenario Analysis – NPV

Sensitivities (NPV)

-20%

-15%

-10%

-5%

Base

5%

10%

15%

20%

Price

197

243

289

335

381

427

473

519

565

FX

611

543

483

430

381

338

298

261

228

Operating Costs

449

432

415

398

381

364

347

331

314

Capital Costs

420

410

401

391

381

372

362

352

343

Table 15: Scenario Analysis – IRR

Sensitivities (IRR)

-20%

-15%

-10%

-5%

Base

5%

10%

15%

20%

Price

19%

21%

23%

25%

27%

29%

31%

32%

34%

FX

36%

33%

31%

29%

27%

25%

23%

22%

20%

Operating Costs

30%

29%

28%

28%

27%

26%

25%

25%

24%

Capital Costs

33%

31%

30%

28%

27%

26%

25%

24%

23%

NEXT STEPS

On the back of the outstanding results from the Scoping Study, the Company has commenced a Bankable Feasibility Study (BFS). Due to the advanced nature of the Scoping Study the Company expects to deliver the BFS within Q3 2019.

Salt Lake Potash is in advanced discussions with a debt provider for a debt funding package which will support funding for the Lake Way Project.

In parallel with work being undertaken on the BFS and utilising experience gained from the construction of the initial Evaporation Ponds, the Company is moving into a Front End Engineering Design (FEED).

For further information please visit www.so4.com.au or contact:

 

Tony Swiericzuk / Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Jo Battershill

Salt Lake Potash Limited

Tel: +44 7540 366000

Colin Aaronson / Richard Tonthat / Ben Roberts

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

Rupert Fane / Ingo Hofmaier / Ernest Bell

Hannam & Partners (Joint Broker)

Tel: +44 (0) 20 7907 8500

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Forward Looking Statements

This announcement may include forward-looking statements. These forward-looking statements are based on Salt Lake Potash’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Salt Lake Potash, which could cause actual results to differ materially from such statements. Salt Lake Potash makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that announcement.

 

Competent Persons Statement

The information in this Announcement that relates to Mineral Resources is extracted from the report entitled ‘Significant High-Grade SOP Resource Delineated at Lake Way’ dated 18 March 2019. This announcement is available to view on www.so4.com.au. The information in the original ASX Announcement that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australasian Institute of Mining and Metallurgy (AusIMM) and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

The information in this announcement that relates to Process Testwork Results is extracted from the report entitled ‘Field Trials at Lake Way Confirm Salt Production Process’ dated 29 January 2019. This announcement is available to view on www.so4.com.au. The information in the original ASX Announcement that related to Process Testwork Results was based on, and fairly represents, information compiled by Mr Bryn Jones, BAppSc (Chem), MEng (Mining) who is a Fellow of the AusIMM. Mr Jones is a Director of Salt Lake Potash Limited. Mr Jones has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to the Process Plant, Non-Process Infrastructure and Capital and Operating Costs are based on information compiled by Mr Peter Nofal, who is a fellow of AusIMM. Mr Nofal is employed by Wood, an independent consulting company. Mr Nofal has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Nofal consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

 

SUMMARY OF MODIFYING FACTORS AND MATERIAL ASSUMPTIONS

The Modifying Factors included in the JORC Code have been assessed as part of the Scoping Study, including mining (brine extraction), processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and government factors. The Company has received advice from appropriate experts when assessing each Modifying Factor.

A summary assessment of each relevant Modifying Factor is provided below.

Mining (Brine Extraction) – refer to sections entitled ‘Project Geology and Mineral Resource’ and ‘Mining and Production Target’ in the Announcement.

Salt Lake Potash has conducted extensive exploration programs across Lake Way involving numerous evaluation methods.

To evaluate the lake bed sediments, sampling and data collation for the exploration field programme comprised extended pumping trials at 5 trenches across the lake for hydraulic parameter determination of drainable porosity and hydraulic conductivity (permeability). Separately, 49 test pits were developed and evaluated to assess variations in geology, brine grade and hydraulic parameters (determined from recovery testing and laboratory testing of in situ samples) across the Lake and 13 auger holes were developed to assess the deeper layers of the lake bed sediments validating the variations in geology and hydraulic parameters.

Salt Lake Potash undertook work in relation to the paleochannel which comprised a volumetric calculation from the geophysics and aquifer parameters and brine grade from the test pumping.

The Company engaged an independent hydrogeological consultant with substantial salt lake brine expertise, Groundwater Science Pty Ltd, to complete the Mineral Resource Estimate for the Lake Way Project. The Principal Hydrogeologist of Groundwater Science, Mr Jeuken, has over 10 years of experience in groundwater resources assessment and management for mining. He has experience in salt lake brine potash evaluation, aquifer testing, wellfield planning and installation for mining, and the development of conceptual hydrogeological models.

Refer to ASX Announcement dated 18 March 2019 for further details on the Mineral Resource Estimate upon which the production target is based.

The hydrological model was produced by the Company in consultation with independent experts. The two methods of extraction outlined in the Announcement are common practice for brine extraction. These extraction methods are used by the three main current operations which include Great Salt Lake in the US, Lop Nur Salt Lake (Luobupo) and SQM in Chile.

Recharge is a key element of the mining strategy, as it refills the drainable porosity and activates salts contained within the retained porosity by physical diffusion. Direct rainfall recharge has been estimated from water level fluctuations due to rainfall and specific yield (Groundwater Science, 2017). Evaporation from water ponded in the Lake was set to 0.7 x (pan evaporation).

Recharge calculations used in the abstraction model were based on historic (1971 – 1990) precipitation at Wiluna and estimated surface inflows (Groundwater Science, 2018) into the lake for a 20-year production period.

Importantly, over the life of mine, 96% of the total production target is in the Measured and Indicated resource categories:

·    Lake Bed Sediment (84% of the total production target)

o  80% Measured resource category

o  4% Inferred resources category

·    Paleochannel Basel Sands

o  16% Indicated resource category

The Inferred resource included in the total production target is located at the southern end of Lake Way and is expected to be the last of the brine extraction system constructed. Whilst the Company has a reasonable expectation that this portion of the Inferred Mineral Resource will be capable of resource category upgrade, it does not feature as a significant portion of production either during the payback period or during the life of mine.

Processing (including Metallurgical) – refer to sections entitled ‘Brine Evaporation’ and ‘Process Plant’ in the Announcement.

The Company engaged brine-processing experts Carlos Perucca Processing Consulting Ltd (CPPC) and AD Infinitum Ltd (AD Infinitum) and their principals Mr Perucca and Mr Bravo, who are highly regarded international experts in the potash industry. Mr Bravo previously worked as Process Manager Engineer at SQM, the third largest salt lake SOP producer globally. He specialises in the front end of brine processing from feed brine through to the crystallisation of harvest salts. Mr Perucca has over 25 years of experience in mineral process engineering and will provide high-level expertise with respect to plant operations for the processing of harvest salts through to final SOP product. AD Infinitum and CPPC were responsible for the brine evaporation and salt processing components in the Scoping Study.

Lake Way’s process development relied heavily on experience applied by Wood, SRC and specialist consultants (CPPC and Ad Infinitum) who are well experienced from working on similar operations. Production of SOP from lake brines is well understood and a well-established process.

Salt Lake Potash has conducted extensive testing of lake brines and harvest salts from its salt lake projects, predominantly Lake Way and Lake Wells. The testing conducted to date supports that lake brine can be concentrated economically, via solar evaporation, to produce mixed potassium sulphate double salts. It has also been shown that these salts, when harvested, can be economically converted into a valuable, high purity SOP fertiliser product.

In early 2018, modelling of the Lake Way evaporation pathway was completed by solar evaporation experts, Ad-Infinitum. The modelling revealed that the salts produced by solar evaporation were suitable for processing into SOP. The potassium harvest salts were predicted to include leonite (K2SO4·MgSO4·4H2O), schoenite (K2SO4·MgSO4·6H2O) and kainite (KCl·MgSO4·2.75H2O), which are all amenable to the conversion to SOP via the process developed for Lake Wells.

In March 2018, laboratory scale (wind tunnel) evaporation tests were initiated on brine from both the Williamson Pit and Lake Way brine. These tests were compared to the brine evaporation chemistry predicted by Ad-Infinitum showing an excellent correlation to the model. The tests also confirmed the Williamson Pit brine to be a pre-concentrated form of Lake Way brine with similar evaporation brine chemistry.

In April 2018, field evaporation tests were initiated at Lake Way as part of the Lake Way Site Evaporation Trials. These tests consisted of small batch tests designed to duplicate wind tunnel tests at site conditions, and larger batch tests including a specific evaporation rate trial to validate the Ad-Infinitum evaporation modelling.

Three small batch tests were completed in December 2018 using Lake Way playa brine and Williamson pit brine (INT-LY, INT-WP and INT-WP2). Each batch began with a single fill of brine and was subject to evaporation until the brine was exhausted of economic levels of potassium. The volume of brine was moved into progressively smaller ponds throughout the trial and the residual salts were harvested. The harvest salts were homogenised and sampled for analysis and characterisation.

A number of larger batch evaporation tests using larger evaporation ponds were conducted in parallel, and further batch evaporation testing has been continued throughout 2019.

These large batches began with over 100 tonnes of Lake Way playa brine and were operated in a similar manner to the smaller trials. Over 5 tonnes have been harvested from these batch trials. Throughout the trial, brine concentration was monitored and a portion was removed at various concentrations for use in an evaporation rate trial, consisting of multiple class “A” evaporation pans of varying brine concentrations.

The nearby weather station at Wiluna Airport, operated and maintained by the Bureau of Meteorology, provides meteorological conditions to correlate brine evaporation performance for the test work.

Harvest salts from laboratory evaporation tests have been sent to Saskatchewan Research Council (SRC) in Canada to perform a flowsheet testing program for the Lake Way Project. The program’s objective was to verify the suitability of the previous process flowsheet conditions developed for the Lake Wells project. The testing program involved:

·    Mineralogical characterisation

·    Conversion of mixed harvest salts to schoenite

·    Reverse flotation of halite from converted salts

·    Crystallisation tests to produce high purity SOP.

It was found that the type of potassium salts present in the Lake Way harvests were similar to Lake Wells (Kainite, Leonite and Schoenite) albeit in different ratios and therefore the process flowsheet remains very similar to Lake Wells. It was also found that potassium was present in both fine and coarse size fractions in the laboratory produced harvest salt sample, therefore finer crushing was required to achieve similar flotation results to Lake Wells. On-going tests are being undertaken on the site generated harvest salt to confirm mineralogy, size fraction and hence crushing size.

The program demonstrated that Lake Way harvest salt can be successfully converted to SOP using the identified process flowsheet, including; attritioning, crushing, conversion, flotation and crystallisation to produce an SOP product of very good chemical quality (>52% K2O equivalent).

Infrastructure – refer to sections entitled ‘Major Infrastructure’ and ‘Product Transport and Logistics’ in the Announcement.

Lake Way’s proximity to the West Australian goldfields means relatively minor area infrastructure upgrades and modifications are required.

The Scoping Study was managed by Wood. Wood is a recognised global leader in potash projects with capabilities extending to detailed engineering, procurement and construction management. Wood are able to leverage an international network, including access to its Centre of Potash Excellence located in Saskatoon, Canada.

Salt Lake Potash engaged several highly qualified transport logistic companies to assist with defining the optimal logistics solution for transportation of SOP to port facilities. The transport cost estimates have been derived directly from transport providers who have extensive knowledge of the Western Australian logistics market.

Marketing – refer to section entitled ‘Product Quality and Marketing’ in the Announcement.

Independent potash market forecasts and assessments were provided by experts CRU International and Argus Media.

These reports emphasised that the specifications proposed by Salt Lake Potash of a K2O content of >52% and Chloride content of <0.1% placed the product into the premium range. The reports confirmed that it would be feasible for Salt Lake Potash to monetise the high level of K2O content in its product relative to the more commonly traded specifications of 50-51% K2O. There is also a market for premium pricing for low chloride content where the chloride content can consistently be produced at levels below 0.5%.

The Company has previously entered MOUs with Mitsubishi Australia Limited and Sinofert Holdings Limited setting out the basis for binding offtake agreements. The Company continues to progress discussions with these parties and others with a view to signing binding offtake and marketing agreements for the future sale of its product.

Economic – refer to sections entitled ‘Economics’ in the Announcement.

Capital Estimates have been prepared by Salt Lake Potash and Wood, a global expert in engineering, using a combination of cost estimates from suppliers, historical data, reference to recent comparable projects, and benchmarked construction costs for Western Australia. Costs are presented in real 2019 terms and are exclusive of escalation. The overall accuracy is deemed to be ± 30%.

Capital costs include the cost of all services, direct costs, contractor indirects, EPCM expenses, non-process infrastructure, area infrastructure, sustaining capital and other facilities used for the operation of the Mine and Process Plant.

Operating costs have been estimated by Salt Lake Potash and Wood. Operating costs are based on a combination of first principles build-up, direct supplier quotes, and experience on similar projects with unit rates benchmarked to costs attributable to Western Australia.

Labour costs have been developed based on a first-principles build-up of staffing requirements with labour rates from bench marks for the Western Australian region.

Government royalties have been assumed at a 2.5% FOB gross revenue basis for the life of the project. Private royalties associated with Blackham Resources and Native Title are up to 4.9% gross revenue depending on the level of brine derived from Blackham Resources tenure.

Royalties account for an average life of mine cost of A$20/t per annum.

Rehabilitation and mine closure costs are included within the discounted cash flow modelling based on 10% of initial development capital and incurred at the end of mine life.

A detailed financial model and discounted cash flow (DCF) analysis has been prepared in order to demonstrate the economic viability of the Project. The DCF analysis demonstrated compelling economics of the Lake Way Project, with an NPV (ungeared, after-tax, at an 8% discount rate) of A$382 million, assuming a LOM Sulphate of Potash price of US$550/t and an (ungeared) IRR of 27%.

The Scoping Study assumes first production to occur in Q4 2020 with a gradual ramp up to full name plate capacity of 200,000tpa over the year 2021. This assumes completion of the BFS in Q3 2019 and a development timeframe of 12-15 months subject to availability of funding and in accordance with required approvals.

Sensitivity analysis was performed on all key assumptions used including price operating and capital costs and exchange rate. The sensitivity analysis highlighted the robustness of the project with the breakeven pricing calculated at US$323/t being a greater than 40% discount to central pricing assumptions.

Payback period for the Lake Way Project is 3.2 years. The payback period is based on free-cash flow, after taxes.

Salt Lake Potash is confident in being able to secure the required funding to develop the Lake Way Project.  The Company is in advanced discussions with a debt provider for a debt funding package which will support funding for the Lake Way Project. This is also supported by the recent capital raising of A$20.25m (ASX announcement 6 June 2019).

Environmental – refer to section entitled ‘Environmental’ in the Announcement.

An opportunities and constraints assessment was completed for the Project by Pendragon Environmental, a leading Western Australian environmental management consultancy. Based on the Project’s stage of development, Pendragon Environmental confirmed there are no current impediments on the Project.

To date, Salt Lake Potash has only undertaken preliminary desktop studies for the purposes of identifying potential environmental opportunities and constraints. Extensive data is available across the Scoping Project area from work undertaken historically by Blackham Resources. The further development of the Project may require additional detailed flora, fauna and other studies; this is dependent on the final design criteria.

Social, Legal and Governmental – refer to sections entitled ‘Mining Tenure’ and ‘Native Title and Heritage’ in the Announcement.

The Company has taken legal advice in relation to relevant Modifying Factors.

Material Assumptions

Project Start Date

Q4 2020

 

Cost and Pricing Basis

2019 Dollars

 

Currency

Australian Dollars (unless otherwise stated)

 

Cost Escalation

0%

 

Revenue Escalation

0%

 

Scoping Study Accuracy

±30%

 

Capex Growth and Allowance

13%

 

Mining & Processing

Mineral Resource (Drainable Porosity)

8.2Mt

 

Portion of Production Target – Measured

80%

 

Portion of Production Target – Indicated

16%

 

Portion of Production Target – Inferred

4%

 

Trenches (production and transport) – average depth 5m

130km

 

Bores – average depth 120m

14

 

Bore Production rate

8.4L/s/bore

 

Trench yield rate (flow) – minimum

4L/s/km

 

Trench yield rate (flow) – maximum

8L/s/km

 

Brine Chemistry (average Lake Brine SOP grade)

15.2Kg/m3

 

Annual Production (steady state)

200ktpa

 

Life of mine

20 Years

 

Pond Recovery

78%

 

Plant Recovery

80%

 

Pricing

Sulphate of Potash (FOB)

US$550/t

 

Operating Costs

   

Brine Extraction

A$23/t

 

Brine Evaporation & Harvesting

A$23/t

 

Process Plant

A$104/t

 

Plant Infrastructure

A$4/t

 

Area Infrastructure

A$7/t

 

General & Administration

A$22/t

 

Transportation

A$80/t

 

Capital

   

Brine Extraction

A$22 million

 

Evaporation

A$36 million

 

Process Plant

A$75 million

 

Plant Infrastructure

A$20 million

 

Area Infrastructure

A$12 million

 

Regional Infrastructure

A$1 million

 

Miscellaneous

A$11 million

 

Indirect Costs & Growth

A$60 million

 

Other

   

Royalties

Govt – 2.5%

Other – 4.9%

 

Corporate tax rate

30%

 

Discount rate

8%

 

 

Stockhead: LionOre founders among the canny investors climbing aboard at Salt Lake Potash (SO4)

Salt Lake announced this morning that it had received binding commitments to place 37.5 million shares at $0.54 each to raise $20.25 million, with the funds to be used to advance construction of its Lake Way Sulphate of Potash (SOP) Project near Wiluna in the WA goldfields.

The company said the placement was led by a consortium of cornerstone investors, including the LionOre founders, which had agreed to subscribe for shares worth $14.25 million.

The consortium also includes investors that took early positions in African-focused uranium explorer Mantra Resources. Mantra, which was listed on the ASX, was taken over by Rosatom for $1.02 billion in 2010.

Salt Lake managing director Tony Swiericzuk said the company was “delighted to have attracted such a group of investors at a pivotal time in the rapid development of the Lake Way Project”.

“We intend to collaborate closely with the consortium and expect to benefit substantially from the advice of its members,” he said.

“These are individuals that possess a wealth of management, global finance and project development expertise and bring access to very well established commodities marketing networks.”

The Williamson Pit at Lake Way hosts the highest grade brine resource in the country (Supplied).

The balance of the placement was taken up by Salt Lake’s largest shareholder, Swiss private bank and asset manager Lombard Odier, which subscribed for shares worth $6 million.

The placement was completed at the same price, $0.54, as Salt Lake shares last traded on the ASX before a trading halt was requested before the market opened on Wednesday.

Upon the resumption of trading this morning, the stock gained 7.4 per cent to $0.58.

At this price, the company has a market capitalisation of about $120 million.

Leading the potash pack

Salt Lake is one of a handful of ASX-listed companies seeking to pioneer the production of SOP, a premium grade potassium fertiliser, from Western Australian salt lakes.

It is well placed to take honours as the first to achieve commercial production, with construction well underway at Lake Way on the country’s first commercial scale on-lake evaporation ponds.

Construction of the evaporation ponds at Lake Way is nearly complete (Supplied).

These ponds will have a capacity of 1.8 gigalitres, enough to capture the total measured brine resource in the nearby Williamson Pit.

At 1.2 gigalitres grading 25kg/m3, this is the highest grade brine resource in the country.

Once construction of the ponds is complete, they will allow for the dewatering of the Williamson Pit, a process that will accelerate first production at Lake Way.

Salt Lake owns nine large salt lakes in the northern goldfields and has a long-term plan to develop an integrated SOP operation, producing from several, or all, of the lakes.

Specific uses for the funds from the latest raising include the development of on-lake infrastructure at Lake Way, paying deposits on process plant long-lead items, completion of feasibility studies and general working capital.

This story was developed in collaboration with Salt Lake Postash, a Stockhead advertiser at the time of publishing.
This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice. If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.

Salt Lake Potash (SO4) Strategic Placement to Fund Lake Way Development

This Announcement does not constitute a prospectus or offering memorandum or an offer in respect of any securities and is not intended to provide the basis for any investment decision in respect of Salt Lake Potash Limited or other evaluation of any securities of Salt Lake Potash Limited or any other entity and should not be considered as a recommendation that any investor should subscribe for or purchase any such securities.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

SALT LAKE POTASH LIMITED

STRATEGIC PLACEMENT OF A$20.25M TO FUND LAKE WAY CONSTRUCTION

 

Salt Lake Potash Limited (Salt Lake Potash or the Company) is pleased to announce that it has received binding commitments from investors for 37.5 million Salt Lake Potash ordinary shares of no par value (“Ordinary Shares”) at A$0.54 (29.8p) each to raise a total of A$20.25 million before costs (Placement).  The placement was led by a consortium of cornerstone investors, including the founders of LionOre Mining International (LionOre) as well as the key investors in Mantra Resources at its inception, who will collectively subscribe for 26.4 million shares to raise A$14.25 million. LionOre was bought by Norilsk Nickel for US$6.3 billion in 2007, whilst Mantra Resources was sold to Rosatom in 2010 for A$1.02 billion.

Salt Lake Potash is delighted to have attracted a consortium of highly experienced and successful natural resources investors at a pivotal time in the rapid development of its Lake Way Project. The Company expects to benefit from advice and collaboration with the consortium, including substantial management, global finance and project development expertise, as well as access to their commodities marketing networks.

The Company is also pleased that the largest shareholder, Lombard Odier Asset Management (Europe) Limited, has agreed to subscribe for 11.1 million shares to raise A$6.0 million, further confirming its continued support for Salt Lake Potash and the Lake Way Project.

Subject to Shareholder approval being obtained for the issue of the Options, subscribers in the Placement will also receive one unlisted option exercisable at A$0.85 on or before 30 June 2023 (Option) for every four shares subscribed for in the Placement.

The Placement will fund ongoing development of the Lake Way Project, including the development of on-lake infrastructure, the payment of deposits on certain process plant long-lead items, completion of feasibility studies, and general working capital.  

Related party transaction

The participation in the Placement by Lombard Odier, a substantial shareholder in the Company, constitutes a related party transaction under Rule 13 of the AIM Rules for Companies. The directors of Salt Lake Potash, having consulted the Company’s nominated adviser, Grant Thornton UK LLP, consider that the terms of the transaction are fair and reasonable insofar as the Company’s shareholders are concerned.

Settlement and dealings

Application will be made to the AIM Market of the London Stock Exchange (“AIM”) for 37.5 million Ordinary Shares, which rank pari passu with the Company’s existing issued Ordinary Shares, to be admitted to trading. Dealings on AIM are expected to commence at 8:00am on or around 14 June 2019 (“Admission”).

 

The Options will be issued following Shareholder approval being obtained at a general meeting of the Company, which is expected to be held in late July 2019.

Total Voting Rights

For the purposes of the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (“DTRs”), following Admission, Salt Lake will have 244,520,581 Ordinary Shares in issue with voting rights attached. Salt Lake holds no shares in treasury. This figure of 244,520,581 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the ASX Listing Rules or the DTRs.

The voluntary halt of trading of the Company’s shares on ASX was lifted prior to the opening of trade on 6 June 2019, following an announcement to the market regarding the above.

For further information please visit www.so4.com.au or contact:

 

Tony Swiericzuk / Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Jo Battershill

Salt Lake Potash Limited

Tel: +44 7540 366000

Colin Aaronson / Richard Tonthat / Ben Roberts

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

Rupert Fane / Ingo Hofmaier / Ernest Bell

Hannam & Partners (Joint Broker)

Tel: +44 (0) 20 7907 8500

 

About Salt Lake Potash

Salt Lake Potash is the owner of nine large salt lakes in the Northern Goldfields Region of Western Australia. This outstanding portfolio of assets has a number of important, favourable characteristics:

·    Over 3,300km2 of playa surface, with in-situ clays suitable for low cost on-lake pond construction;

·    Very large paleochannel hosted brine aquifers, with chemistry amenable to evaporation of salts for SOP production, extractable from both low-cost trenches and deeper bores;

·    Excellent evaporation conditions;

·    Excellent access to transport, energy and other infrastructure in the Goldfields mining district;

·    Clear opportunity to reduce transport costs by developing lakes closer to infrastructure and by capturing economies of scale; and

·    Potential for multi-lake production offers optionality and significant scale potential, operational flexibility, cost advantages and risk mitigation from localised weather events.

Salt Lake Potash’s immediate focus is on the rapid development of the Lake Way Project. Lake Way’s location and logistical advantages make it the ideal location for the Company’s first SOP operation. Construction has commenced on Australia’s first commercial scale on-lake evaporation ponds.

The Company’s long-term plan is to develop an integrated SOP operation, producing from a number (or all) of the lakes.  Salt Lake Potash will progressively explore each of the lakes with a view to estimating resources for each Lake, and determining the development potential. Exploration of the lakes will be prioritised based on likely transport costs, scale, permitting pathway and brine chemistry.

 

Important Information

This announcement may include forward-looking statements. These forward-looking statements are based on Salt Lake Potash Limited’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Salt Lake Potash Limited, which could cause actual results to differ materially from such statements. Salt Lake Potash Limited makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that announcement.

 

Cenkos is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting as joint broker to the Company for the purposes of the AIM Rules for Companies. Cenkos is acting exclusively for the Company and no one else and will not be responsible to any other person for providing protections afforded to its customers nor for providing advice in relation to the contents of this announcement. No representation, warranty, express or implied, is made by Cenkos for the accuracy of any information or opinions contained in this announcement or the omission of any material information, nor has Cenkos authorised the contents of this announcement for any purpose and no liability whatsoever is accepted by it. Cenkos expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

Andrew Hore – Quoted Micro 6 May 2019

NEX EXCHANGE

In 2018, Newbury Racecourse (NYR) increased revenues by 8% to £19.3m. This was despite lower race course attendances because of two abandoned days of racing. Underlying pre-tax profit jumped from £188,000 to £568,000. The NAV was £50.7m at the end of 2018. There was a further £3.25m payment from David Wilson Homes, which helped to finance capital investment.

MetalNRG (MNRG) has entered into heads of terms with AIM-quoted Mkango Resources so that it can earn up to 75% of the Thambi licence in Southern Malawi. The licence allows exploration for uranium, tantalum and niobium. MetalNRG has to spend $500,000 in the first 12 months and then a further $700,000 in the next 12 months. A further $800,000 has to be spent in the third year to earn the full 75%. The Kyrgyz Republic has banned uranium exploration and mining and the farm-in agreement for the Kamushanovskoye uranium deposit has been suspended.

Secured Property Developments (SPD) had a NAV of £554,000 at the end of 2018. There is £584,000 in cash on the balance sheet.

High Growth Capital (HASH) has raised £4.99m after expenses via a placing at 1.75p a share with Mirador FZE, which also has warrants to subscribe for 300 million shares at 2.5p each until the end of 2019. If the High Growth Capital share price closes above 4p for five consecutive days, the warrants have to exercised or they will lapse. Mirador has a 14.2% stake. Mike Power has been appointed as a non-executive director.

Sativa Investments (SATI) has opened the first Goodbody and Blunt centre in Bath. The centre will sell cannabidiol products and have a café area.

V22 (V22O) is asking shareholders to approve the cancellation of the NEX quotation 31 May, after nearly 13 years on the market. The art investor and studio space provider plans to sell assets and distribute the cash to shareholders. A matched bargains quotation via JP Jenkins is planned for six months after leaving NEX.

Trading in Valiant Investments (VALP) shares has been suspended because it has not produced its annual report.

Queros Capital Partners (BFD) has raised £205,000 in the past two weeks from the issue of 8% unsecured bonds 2025.

The shortlist for the NEX share of the year at the Small Cap Awards 2019 has been announced. The companies are National Milk Records (NMR), Sativa Investments (SATI), NQ Minerals (NQMI), Chapel Down (CDGP), DXS International (DXSP) and Walls and Futures REIT (WAFR) ,which is also on the shortlist for impact company of the year.

AIM     

Capital equipment manufacturer Mpac Group (MPAC) is acquiring Lambert Automation for an initial £15m. UK-based Lambert provides automation equipment to the medical and healthcare markets. Revenues and profit have been declining, but there was an order intake of £24.5m in 2018 and that should help revenues to recover. Revenues were £17.9m in 2018. There is potential earn out consideration of up to £2.5m. Mpac’s own trading is in line with expectations.

Park Group (PARK) says that trading was better than expected in the second half of its financial year, but there were additional costs and the effects of accounting changes. Edison has reduced its 2018-19 pre-tax profit by 3% to £12.5m. Additional costs next year mean that the profit forecast has been cut from £14.3m to £11.7m.

Tracsis (TRCS) has acquired timetable optimisation software developer Bellvedi for an initial £4m with up to £7.9m more payable over four years depending on performance. Bellvedi made a pre-tax profit of £700,000 on revenues of £1.6m last year. Acquiring the ATTUne software means that less needs to spend on the development of existing Tracsis software. The deal adds 2% to this year’s earnings per share, moving it to 27.3p. Next year’s is enhanced by 7% to 32.3p.

Competitions organiser Best of the Best (BOTB) has published a fourth positive trading update in a year. This prompted finnCap to increase its earnings forecast from 15.4p a share to 18.6p a share. The previous upgrade was in January. The switch to a predominantly online model is paying off. Any upgrades to the forecasts for the year to April 2020 will happen after the 2018-19 figures are published on 20 June.

Allergy Therapeutics (AGY) says that the PQ Grass allergy phase III study will start a year later than expected. It should commence by June 2020. This follows an end of phase II study meeting with the FDA. This means that this year and next year the reported loss will be lower because of deferred spending on the study.

Eight Peaks Group (8PG) plans to cancel its AIM quotation because of limited liquidity. This will save £80,000 a year.

Trading in the shares of property investor Safeland (SAF) will end on 10 May.

MAIN MARKET 

Motor dealer Pendragon (PDG) is selling two Jaguar Land Rover dealerships in California. This is expected to generate around £60m of cash, although £6.9m of profit contribution before central costs will be lost. However, Jaguar Land Rover has right of first refusal.

Papillon Holdings (PPHP) has appointed Novum as broker and it has committed to invest £300,000 in convertible loan notes. The planned purchase of a 50% stake in used car market focused fintech company Pace Cloud.

Ross Group (RGP) has reported its 2018 results, but these are before the completion of the Archipelago Aquaculture which happened early in 2019. Revenues fell from £335,000 to £60,000 and a profit of £57,000 was turned into a loss of £250,000. That is partly down to costs relating to the acquisition of Archipelago Aquaculture.

Thalassa (THAL) received acceptances of 18.5% of the share capital in its bid for Local Shopping REIT (LSR) and this offer has lapsed. Thalassa owned or had acceptances of 39.3%.

Standard list shell Bermerle (BERM) went to a 50% premium on the first day of trading. However, the bid/offer spread of 1p/2p means that investors could only sell at the 1p a share placing price. The company is seeking a pharma acquisition. The areas that Bermele is assessing include diabetes, cancer and mental health. It is also looking at personalised medicine.

Standard list shell Auctus Growth (AUCT) had £920,000 in the bank at the end of 2018. Fellow shell daVictus (DVT) had £355,000 in the bank at the end of 2018 and it has agreed to buy the rights to a restaurant concept from Typical Dutch NV for £100,000. The Havana Rolled Cigar Music Café concept has been developed at a site in Aruba. Spinnaker Opportunities (SOP) has also secured a possible acquisition in the form of Kanabo Research, which is a medicinal cannabis oil company. Kanabo is developing over the counter products and has distribution rights to a vaporiser. Spinnaker had £1.04m in the bank at the end of 2018.

Trading in the shares of Tex Holdings (TXH) and Avocet Mining (AVM) has been suspended because they have not published 2018 accounts.

Andrew Hore

Salt Lake Potash #SO4 – March 2019 Quarterly Report & Appendix 5B Report

The Board of Salt Lake Potash Limited (the Company or Salt Lake Potash) is pleased to present its Quarterly Report for the period ending 31 March 2019.

The Company is focussed on rapidly progressing the development of its Lake Way Project, intended to be the first salt-lake brine Sulphate of Potash (SOP) production operation in Australia.

Highlights for the quarter and subsequently include:

Significant Increase in the high-grade SOP resource at Lake Way

Ø Mineral Resource Estimate for the whole of Lake Way contains 73 million tonnes (Mt) of SOP using Total Porosity and 8.2Mt of SOP calculated using Drainable Porosity, including:

Measured – Lake Way Playa – 6.9Mt (total porosity) & 1.8Mt (drainable porosity) @ 15.4kg/m3

Measured – Williamson Pit 32Kt (drainable porosity) @ 25.5kg/m3

Indicated – Paleochannel 3.7Mt (total porosity) & 1.4Mt (drainable porosity) @ 13.6kg/m3

Inferred – Lake Way Playa & Paleovalley Sediment 62.2Mt (total porosity) & 5.0Mt (drainable porosity) @ 15.2kg/m3

Ø Lake Way confirmed as very high-grade with consistent brine chemistry both laterally and at depth, with an average grade of 14.5kg of SOP per cubic metre of brine across the Lake Way tenements (Measured and Indicated)

Ø The Company has successfully delineated a Paleochannel in excess of 30km in length along the eastern boundary of Lake Way, which supports the ability and optionality to produce brine from two separate sources (lake playa and paleochannel)

Ø The Mineral Resource Estimate for the ‘whole of lake’ will enable the Company to progress technical studies for a larger production scenario with an anticipated release date towards the end of Q2 2019

Key Approval Obtained and Construction of initial Lake Way Ponds Commences

Ø Following receipt of the final approval from the Department of Water and Environmental Regulation (DWER), construction and operation of the First Phase of Lake Way Evaporation Ponds (Lake Way Ponds) immediately commenced

Ø Construction works for the Lake Way Evaporation ponds are progressing well with the Company having commenced 24/7 operations to rapidly progress development

Ø The first phase of the Lake Way Ponds will enable de-watering of the Lake Way Williamson Pit that contains the highest grade brine resource in Australia. Dewatering is expected to commence in Q2, 2019

Ø Onsite infrastructure for de-watering the Williamson Pit is under construction, including the placement and welding of piping

Ø The utilisation of the Williamson Pit brine will accelerate Salt Lake Potash’s pathway to first production of SOP at Lake Way

Binding Access Agreement Signed with Blackham Resources

Ø A binding Split Commodity and Access Agreement with Blackham Resources was executed for  the Lake Way Project, in line with the terms of the MOU

Ø Under the Agreement, Salt Lake Potash acquires the brine rights over Blackham’s tenure and Blackham will acquire gold rights over Salt Lake Potash’s tenure. Each company retains a royalty on their respective mineral resources

Ø The Agreement with Blackham facilitates an accelerated pathway to production through the utilisation of Blackham’s Mining Lease for early construction works and the de-watering and utilisation of the high grade Williamson Pit brine

Planned Activities for the Lake Way Project over the coming months

Ø Completion of initial Lake Way Ponds and commencement of dewatering the Williamson Pit

Ø Resource drilling and trenching in the southern section of Lake Way to enable the Company to upgrade the resource category in the lake bed sediments.

Ø Progress technical studies for a larger production scenario with an anticipated release date during Q2 2019

Ø Completion of pilot plant process testwork at Saskatchewan Research Council (SRC) to lockdown process flowsheet and produce SOP product samples for end user trials

Ø Ongoing discussions with Tarlka Matuwa Piarku (Aboriginal Corporation) RNTBC (TMPAC) to convert Native Title Land Access and Exploration Agreement for Lake Way into a Native Title Mining Agreement

OVERVIEW

Salt Lake Potash is the owner of nine large salt lakes in the Northern Goldfields Region of Western Australia.  This outstanding portfolio of assets has a number of important, favourable characteristics:

·     Over 3,300km2 of playa surface, with in-situ clays suitable for low cost on-lake pond construction;

·     Very large paleochannel hosted brine aquifers, with chemistry amenable to evaporation of salts for SOP production, extractable from both low-cost trenches and deeper bores;

·     Excellent evaporation conditions;

·     Excellent access to transport, energy and other infrastructure in the Goldfields mining district;

·     Clear opportunity to reduce transport costs by developing lakes closer to infrastructure and by capturing economies of scale; and

·     Potential for multi-lake production offers optionality and significant scale potential, operational flexibility, cost advantages and risk mitigation from localised weather events.

Salt Lake Potash’s immediate focus is on the rapid development of the Lake Way Project, intended to be the first salt-lake brine Sulphate of Potash production operation in Australia. Lake Way’s location and logistical advantages make it the ideal location for the Company’s first SOP operation. Construction has commenced on Australia’s first commercial scale on-lake evaporation ponds.

The Company’s long term plan is to develop an integrated SOP operation, producing from a number (or all) of the lakes.  Salt Lake Potash will progressively explore each of the lakes with a view to estimating resources for each Lake, and determining the development potential. Exploration of the lakes will be prioritised based on likely transport costs, scale, permitting pathway and brine chemistry.

LAKE WAY PROJECT

Lake Way is located in the Northern Goldfields Region of Western Australia, less than 15km south of Wiluna. The surface area of the Lake is over 270km2.

Salt Lake Potash holds five Exploration Licences (two granted and three under application) and one application for a Mining Lease, covering most of Lake Way and select areas off-lake, including the paleochannel defined by previous exploration. The northern end of the Lake is largely covered by a number of Mining Leases, held by Blackham Resources Limited (Blackham), the owner of the Wiluna Gold Mine.

In April 2019, the Company entered into a binding Split Commodity and Access Agreement with Blackham in relation to the development of the Lake Way Project on terms in line with the previously executed MOU announced on 12 March 2018.

Lake Way has a number of compelling advantages which make it an ideal site for Salt Lake Potash’s initial SOP operation, including:

Ø  Utilisation of Blackham’s existing infrastructure (including camps, power and maintenance) to accelerate development.

Ø  The site has excellent freight solutions, being adjacent to the Goldfields Highway, which is permitted for heavy haulage, quad trailer road trains to the railhead at Leonora and then direct rail access to both Esperance and Fremantle Ports, or via other heavy haulage roads to Geraldton Port.

Ø  The Goldfields Gas Pipeline is adjacent to Salt Lake Potash’s tenements, running past the eastern side of the Lake.

Ø  Access to Blackham’s existing Mining Leases provides advanced permitting pathway for early development activity, including the construction of the initial Lake Way Evaporation Ponds.

Ø  Salt Lake Potash has commenced construction of the initial Lake Way Evaporation Ponds which will enable the Company to dewater the existing Williamson Pit. The pit contains an estimated 1.2GL of brine at the exceptional grade of 25kg/m3 of SOP. This brine is the ideal starter feed for evaporation ponds, having already evaporated from the normal Lake Way brine grade, which averages over 14kg/m3.

Ø  The high grade brines at Lake Way will result in lower capital and operating costs due to lower extraction and evaporation requirements.

Ø  The presence of clays in the upper levels of the lake which are amenable to low cost, on-lake evaporation pond construction.

The Company is concurrently progressing the construction of the initial Lake Way Evaporation Ponds, whilst also rapidly advancing a ‘whole of lake’ scenario, including mineral resource estimates, permitting and approvals, pilot plant process testwork and assessment of infrastructure and logistical options.

The Mineral Resource Estimate for the ‘whole of lake’ reported in March 2019 will enable Salt Lake Potash to progress technical studies for a larger production scenario with an anticipated release date towards the end of the current quarter.  

Discussions are also ongoing with a number of offtake partners and the testwork currently underway at SRC will provide high-grade SOP product samples for testing by these partners.

Field Work

During the quarter, the Company completed an extensive field based program providing inputs for the ‘whole of lake’ Mineral Resource Estimate announced in March 2019.

Thirteen shallow bores were drilled to a maximum depth of 7m, and each hole was sampled for brine and completed as piezometers for use in future water level monitoring. Up to three insitu samples were taken from each bore and analysed in the lab for total porosity and specific yield. 

Trench 5 was excavated to a depth of 4m or refusal and to length of 110m.  The trench was test pumped for a total of 10 days and the brine drawdown around the trench was measured using piezometer areas extending 100m from the trench.  This data was used to determine drainable porosity and aquifer hydraulic conductivity.

Two historic investigation bores were test pumped to determine aquifer parameters.  The bores were pumped by Global Groundwater Pty Ltd at a constant rate for 24 hours.  Water level drawdown in the pumped bore, and in nearby observation bores was monitored manually and by data logger.  The data was analysed to determine aquifer properties of transmissivity (Product of bulk average hydraulic conductivity and aquifer thickness), Storage coefficient and boundary conditions.

Several additional lines of passive seismic survey were also completed during the Quarter.  The results were interpreted and incorporated into the overall dataset. Correlation of the passive seismic dataset with the historical drilling confirmed the presence of a significant paleochannel with several tributaries lying beneath the lake surface down the eastern side of the lake.  

Mineral Resource Estimate

In March 2019, the Company completed an extensive exploration program covering the remaining areas of Lake Way and reported a ‘whole of lake’ Mineral Resource Estimate, covering the playa surface and the Paleochannel aquifers of Lake Way. 

The Mineral Resource Estimate of 73Mt of SOP calculated using Total Porosity and 8.2Mt of SOP calculated using Drainable Porosity is hosted within approximately 15 billion cubic metres of sediment ranging in thickness from a few metres to over 100m, beneath 189km2 of Playa Lake surface including the paleochannel basal sand unit of 20m thickness and 30km length.

The Mineral Resource Estimate for Lake Way is divided into resource classifications that are controlled by the host geological units:

·     Lake Bed Sediment

·     Paleovalley Sediment

·     Paleochannel Basal Sands

The mineral resource estimate is summarised in the Tables below:

Table 1: Measured Resource

Total Volume

Brine Concentration

Mineral Tonnage Calculated from Total Porosity

Mineral Tonnage Calculated from Drainable Porosity

K

Mg

SO4

Total Porosity

Brine Volume

SOP Tonnage

Drainable Porosity1

Brine Volume

SOP Tonnage

(Mm3)

(kg/m3)

(kg/m3)

(Kg/m3)

(Mm3)

(Mt)

(Mm3)

(Mt)

North Lakebed

(0.4-8.0 m)

1,060

6.8

8.0

27.6

0.42

445

6.9

0.11

117

1.8

Williamson Pit

1.26

11.4

14.7

48.0

1.26

0.03

Total

6.9

1.83

 

Table 2: Indicated Resource

Total Volume

Brine Concentration

Mineral Tonnage Calculated from Total Porosity

Mineral Tonnage Calculated from Drainable Porosity

K

Mg

SO4

Total Porosity

Brine Volume

SOP Tonnage

Drainable Porosity1

Brine Volume

SOP Tonnage

(Mm3)

(kg/m3)

(kg/m3)

(Kg/m3)

(Mm3)

(Mt)

(Mm3)

(Mt)

Basal Sands

(Paleochannel)

686

6.1

8.2

25.0

0.40

274

3.7

15

103

1.4

 

Table 3: Inferred Resource

Total Volume

Brine Concentration

Mineral Tonnage Calculated from Total Porosity

Mineral Tonnage Calculated from Drainable Porosity

K

Mg

SO4

Total Porosity

Brine Volume

SOP Tonnage

Drainable Porosity1

Brine Volume

SOP Tonnage

(Mm3)

(kg/m3)

(kg/m3)

(Kg/m3)

(Mm3)

(Mt)

(Mm3)

(Mt)

South Lakebed

(0.4-8.0 m)

316

6.8

8.0

27.6

0.42

133

2.0

0.11

35

0.5

Lakebed

(8m to Base)

9,900

6.8

8.0

27.6

0.40

3,960

60.0

0.03

297

4.5

Total

62.0

5.0

(1) The Drainable Porosity does not include the significant resource potentially available through the recharge cycle. Refer Announcement dated 18 March 2019, Appendix 1.

The northern section of Mineral Resource Estimate (including the Blackham tenements) has been classified into a Measured category for the upper 8m of lakebed sediments. The resources contained within the lakebed sediments below 8m, and the southern section of the lake at all depths, are all classified in the Inferred category. The Paleochannel running along the eastern boundary of the lake has been classified in the Indicated category.

The Company will complete further drilling and trenching during the current quarter to increase the resource definition in the southern section of the lake and ultimately convert the Mineral Resource Estimate into Ore Reserves following further technical studies.

For further details on the Mineral Resource Estimate, refer to the Company’s Announcement dated 18 March 2019.

Civil Construction – On-Lake Infrastructure

Construction of the initial Lake Way Evaporation Ponds (Lake Way Ponds) commenced in March 2019 following receipt of the Part V works approval from the Department of Water and Environmental Regulation (DWER). The approval allows construction and operation of the Company’s initial phase commercial scale evaporation ponds for Lake Way and de-watering of the Williamson Pit. 

Salt Lake Potash is constructing Australia’s first commercial scale on-lake evaporation ponds for a Sulphate of Potash (SOP) project at Lake Way. The initial phase ponds will consist of:

·     Two evaporation ponds:

(i)   Kainite Harvest Pond 500m x 500m (25 Ha); and

(ii)  Halite Pond 2,000m x 500m (100 Ha);

·     A 2km long and 8m deep trench is also being constructed running parallel to the ponds which will provide additional brine feed into the pond network;

·     A 1.4km causeway from the Williamson Pit to the Kainite Harvest Pond; and

·     Associated piping and pumping infrastructure.

The initial Lake Way Ponds will have a volume of 1.8GL which will be capable of capturing the total Williamson Pit Measured Brine Resource (1.2GL @ 25kg/m3 SOP equivalent).

The construction of the initial Lake Way Ponds is on track to be completed by the end of Q2 2019. The de-watering of the 1.2GL of Williamson Pit brine is expected to commence towards the end of Q2 2019.

Construction works for the Lake Way Ponds are progressing well with the Company moving to 24/7 operations to rapidly progress development. The Company is undertaking a wet hire and self-perform model for the construction of the initial Lake Way Ponds. This construction model allowed fast track mobilisation and execution of the works, whilst providing the Company with critical hands on experience allowing testing and validating of all design criteria to de-risk the future on-lake construction.

The construction works for the pond bund walls involves the stripping of the sandy evaporite layer of material on the lake’s surface and constructing the bund walls from adjacent won lake material. A key trench is then constructed at the upstream toe of the embankment.

The works are being completed with a number of specialised pieces of civil earthmoving equipment suited to the unique conditions, including amphibious excavators and low ground pressure equipment.

The de-watering of the Williamson Pit will commence in Q2 2019 once the first phase of the evaporation ponds is complete. Onsite preparation works have commenced for de-watering activity including the placement and welding of piping.

The Company has also established support infrastructure on Lake Way, comprising a site office, crib room, and full mechanical workshop with canopy capable of undertaking repairs to our fleet of equipment onsite without the need for demobilization to external repair facilities.

The Company continues to progress the Early Contractor Involvement (ECI) process for the larger ‘whole of lake’ development. Initial proposals for various elements of the on-lake development work have been received and are in the process of review.

Continuous Site Evaporation Trial

The Company commenced a further site evaporation trial (SET), with the objective of replicating the proposed Lake Way evaporation process in a continuous manner to produce harvest salts representative of on-lake conditions. Furthermore, these SETs will provide valuable experience to operators of large-scale ponds and enable testing of the currently proposed control philosophy of the solar evaporation ponds. The harvest salts attained from these continuous SETs will provide feedstock for testwork to provide design inputs for the commercial processing plant equipment.

The continuous SETs are currently reaching a steady-state, running as expected and producing harvest salts confirming the viability of the proposed Lake Way pond system design.

Weather stations are being procured and installed to accurately log the weather conditions at Lake Way. This in conjunction with on-going PAN evaporation trails, at various Mg concentrations, will allow Salt Lake Potash to accurately build a profile of the weather conditions expected at Lake Way and firm up final design and operational requirements.

Process Testwork

During the quarter, the Company engaged the world’s leading potash processing laboratory, Saskatchewan Research Council (SRC), to establish a pilot plant based on the process flow sheet for the Lake Way Project. The pilot plant will validate and refine the Lake Way process flowsheet and also produce high-grade SOP product samples for offtake partners.

Bench testwork from the initial batch of harvest salts delivered to SRC is now complete, thus confirming the flow sheet for the first pilot run.

The second batch of harvest salts has arrived at SRC for further test work and production of SOP product samples. Pilot plant testwork at SRC is expected to be completed during Q2, 2019.

In parallel SRC will also produce a measured amount of schoenite salt, enabling the selected crystalliser supplier to finalise preliminary design.

Native Title

In December 2018, the Company signed a Native Title Land Access and Brine Minerals Exploration Agreement (the Agreement) with Tarlka Matuwa Piarku (Aboriginal Corporation) RNTBC (TMPAC) covering the Lake Way Project area.

TMPAC entered into the Agreement with Salt Lake Potash on behalf of the Wiluna People who are the recognised Native Title Holders of the land covering the Lake Way Project area. TMPAC also provided consent for the total area required for the construction and operation of the initial Lake Way Ponds.

Salt Lake Potash and TMPAC are finalising negotiations on the terms of a Native Title Mining Agreement required for the ongoing mining operation.

Approvals Advancing

The Company received final approval from the Department of Water and Environmental Regulation (DWER) for the Part V works approval in March 2019, for construction and operation of the initial evaporation ponds for Lake Way and de-watering of the Williamson Pit. 

The Department of Mines, Industry Regulation and Safety (DMIRS) has previously approved the Company’s Mining Proposal and Project Management Plan for the initial Lake Way Ponds, enabling an immediate start to construction.

A series of studies have continued to progress during the quarter in support of the ongoing environmental approvals. These include flora and fauna surveys, hydrological assessment, flood modelling and geotechnical investigations. Initial findings of these studies have indicated that:

·     The planned minimal clearing of native vegetation and fauna habitat will not cause adverse impacts to flora or fauna of high conservation significance;

·     Groundwater drawdown will not alter current groundwater levels;

·     Construction of ponds on the lake surface will result in negligible local increases in water levels (Knight Piesold, 2019); and

·     Underlying lake sediments show no significant sulfidic or sulphuric materials and/or monosulfidic black oozes, and the lake system has significant buffering capacity to neutralise potential impacts, if any.

During the quarter E53/1897 was granted, SO4’s granted tenure at Lake Way now covers approximately 278km2 with an additional 143km2 under application including Mining Lease Application M53/1102 applied for in March 2019. 

Access Agreement

In April 2019, the Company entered into a binding Split Commodity and Access Agreement (Agreement) with Blackham Resources Limited (Blackham) in relation to the development of the Lake Way Project on terms in line with the previously executed MOU announced on 12 March 2018.

The Agreement with Blackham facilitates an accelerated pathway to production through the utilisation of Blackham’s Mining Lease for early construction works and the de-watering and utilisation of the Williamson Pit brine.

Under the Agreement, Salt Lake Potash will acquire Blackham’s brine rights and Blackham will acquire gold rights to Salt Lake Potash’s Lake Way holdings, with each company retaining a royalty on their respective holdings.

The Agreement is binding on the parties with the key terms including:

·     Salt Lake Potash to acquire the Brine Rights over the Blackham tenements;

·     Blackham to acquire the Gold Rights over the Salt Lake Potash tenements;

·     Salt Lake Potash to receive a 2% royalty on all gold production from the Salt Lake Potash tenements;

·     Blackham to receive a 4% royalty on all Brine production (including SOP) from the Blackham tenements;

·     Salt Lake Potash to make a rehabilitation liability payment of $500,000 to Blackham by 30 June 2019. This amount is deductible from future brine royalties;

·     Salt Lake Potash is required to achieve the following construction and production milestones:

o  Completion of the de-watering of the Williamson Pit by 31 July 2019;

o  Commence the construction of the SOP processing plant by 30 June 2020; and

o  Achieve first commercial production of SOP by 31 December 2021

These dates may be extended by mutual agreement.

The following Conditions Precedent must be satisfied within 2 months of the date of the Agreement (or such later date as may be agreed by the parties):

·     the Minister consenting (to the extent required):

o  to Blackham granting the Brine Rights to Salt Lake Potash;

o  to Salt Lake Potash granting the Gold Rights to Blackham.

·     Blackham obtaining any approvals necessary to proceed with the Agreement, including the release of various encumbrances relating to the Brine Rights.

Corporate

During the Quarter, the Company appointed Mr Matthew Bungey as Project Director – Strategy and Funding. Mr Bungey’s initial focus is on advancing various funding alternatives for the Lake Way Project including debt financing, strategic partners and royalty financing.

Mr Bungey is an experienced advisor across M&A and financing, most recently as Managing Director with Barclays Bank in London. He has been involved in tens of billions of dollars of executed M&A transactions across the resources and agriculture sectors. Mr Bungey has also been involved in numerous financings and is a Board member of BGC Australia. Prior to banking he worked as a Chemical Engineer in the mining sector.

Discussions with a number of financiers regarding project financing are progressing well.

For further information please visit www.so4.com.au or contact:

 

Tony Swiericzuk / Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Jo Battershill

Salt Lake Potash Limited

Tel: +44 7540 366000

Colin Aaronson / Richard Tonthat / Ben Roberts

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

Rupert Fane / Ingo Hofmaier / Ernest Bell

Hannam & Partners (Joint Broker)

Tel: +44 (0) 20 7907 8500

 

Forward Looking Statements

This announcement may include forward-looking statements. These forward-looking statements are based on Salt Lake’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Salt Lake, which could cause actual results to differ materially from such statements. Salt Lake makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that announcement. 

Competent Persons Statement

The information in this Announcement that relates to Mineral Resources is extracted from the report entitled ‘Significant High-Grade SOP Resource Delineated at Lake Way’ dated 18 March 2019. This announcement is available to view on www.so4.com.au. The information in the original Announcement that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement

Appendix 1 – Summary of Exploration and Mining Tenements

As at 31 March 2019, the Company holds interests in the following tenements:

 

Project

Status

Type of Change

License Number

Interest (%)

1-Jan-19

Interest (%)

31-Mar-19

Western Australia

Lake Way

Central

Granted

E53/1878

100%

100%

East

Application

E53/2057

100%

100%

South

Granted

Granted

E53/1897

100%

100%

South

Application

E53/2059

100%

100%

South

Application

E53/2060

100%

100%

Central

Application

Application

M53/1102

100%

Lake Wells

Central

Granted

E38/2710

100%

100%

South

Granted

E38/2821

100%

100%

North

Granted

E38/2824

100%

100%

Outer East

Granted

E38/3055

100%

100%

Single Block

Granted

E38/3056

100%

100%

Outer West

Granted

E38/3057

100%

100%

North West

Granted

E38/3124

100%

100%

West

Granted

L38/262

100%

100%

East

Granted

L38/263

100%

100%

South West

Granted

L38/264

100%

100%

South

Granted

L38/287

100%

100%

South Western

Granted

E38/3247

100%

100%

South

Granted

M38/1278

100%

100%

Central

Application

Application

E38/3380

100%

Lake Ballard

West

Granted

E29/912

100%

100%

East

Granted

E29/913

100%

100%

North

Granted

E29/948

100%

100%

South

Granted

E29/958

100%

100%

South East

Granted

E29/1011

100%

100%

South East

Granted

E29/1020

100%

100%

South East

Granted

E29/1021

100%

100%

South East

Granted

E29/1022

100%

100%

South

Application

Application

E29/1067

100%

South

Application

Application

E29/1068

100%

North

Application

Application

E29/1070

100%

Lake Irwin

West

Granted

E37/1233

100%

100%

Central

Granted

E39/1892

100%

100%

East

Granted

E38/3087

100%

100%

North

Granted

E37/1261

100%

100%

Central East

Granted

E38/3113

100%

100%

South

Granted

E39/1955

100%

100%

North West

Granted

E37/1260

100%

100%

South West

Granted

E39/1956

100%

100%

Lake Minigwal

West

Granted

E39/1893

100%

100%

East

Granted

E39/1894

100%

100%

Central

Granted

E39/1962

100%

100%

Central East

Granted

E39/1963

100%

100%

South

Granted

E39/1964

100%

100%

South West

Granted

E39/1965

100%

100%

Lake Marmion

North

Granted

E29/1000

100%

100%

Central

Granted

E29/1001

100%

100%

South

Granted

E29/1002

100%

100%

West

Granted

E29/1005

100%

100%

West

Application

Application

E29/1069

100%

Lake Noondie

North

Granted

E57/1062

100%

100%

Central

Granted

E57/1063

100%

100%

South

Granted

E57/1064

100%

100%

West

Granted

E57/1065

100%

100%

East

Granted

E36/932

100%

100%

Lake Barlee

North

Granted

E30/495

100%

100%

Central

Granted

E30/496

100%

100%

South

Granted

E77/2441

100%

100%

Lake Raeside

North

Granted

E37/1305

100%

100%

Lake Austin

North

Application

E21/205

100%

100%

West

Application

E21/206

100%

100%

East

Application

E58/529

100%

100%

South

Application

E58/530

100%

100%

South West

Application

E58/531

100%

100%

Lake Moore

Granted

E59/2344

100%

100%

Northern Territory

Lake Lewis

South

Granted

EL 29787

100%

100%

North

Granted

EL 29903

100%

100%

 

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96  Origin Appendix 8  Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Salt Lake Potash Limited

ABN

Quarter ended (“current quarter”)

98 117 085 748

31 March 2019

Consolidated statement of cash flows

Current quarter $A’000

Year to date              (9 months)
$A’000

1.

Cash flows from operating activities

1.1

Receipts from customers

1.2

Payments for

(2,235)

(5,489)

(a)   exploration & evaluation

(b)   development

(1,129)

(1,129)

(c)   production

(d)   staff costs

(1,100)

(2,573)

(e)   administration and corporate costs

(458)

(965)

1.3

Dividends received (see note 3)

1.4

Interest received

62

115

1.5

Interest and other costs of finance paid

1.6

Income taxes paid

1.7

Research and development refunds

1.8

Other (provide details if material)
– Business Development

(254)

(780)

1.9

Net cash from / (used in) operating activities

(5,114)

(10,821)

2.

Cash flows from investing activities

(56)

(315)

2.1

Payments to acquire:

(a)   property, plant and equipment

(b)   tenements (see item 10)

(c)   investments

(d)   other non-current assets

2.2

Proceeds from the disposal of:

(a)   property, plant and equipment

(b)   tenements (see item 10)

(c)   investments

(d)   other non-current assets

2.3

Cash flows from loans to other entities

2.4

Dividends received (see note 3)

2.5

Other (provide details if material)

2.6

Net cash from / (used in) investing activities

(56)

(315)

3.

Cash flows from financing activities

13,000

3.1

Proceeds from issues of shares

3.2

Proceeds from issue of convertible notes

3.3

Proceeds from exercise of share options

3.4

Transaction costs related to issues of shares, convertible notes or options

(30)

(745)

3.5

Proceeds from borrowings

3.6

Repayment of borrowings

3.7

Transaction costs related to loans and borrowings

3.8

Dividends paid

3.9

Other (provide details if material)

3.10

Net cash from / (used in) financing activities

(30)

12,255

4.

Net increase / (decrease) in cash and cash equivalents for the period

12,028

5,709

4.1

Cash and cash equivalents at beginning of period

4.2

Net cash from / (used in) operating activities (item 1.9 above)

(5,114)

(10,821)

4.3

Net cash from / (used in) investing activities (item 2.6 above)

(56)

(315)

4.4

Net cash from / (used in) financing activities (item 3.10 above)

(30)

12,255

4.5

Effect of movement in exchange rates on cash held

4.6

Cash and cash equivalents at end of period

6,828

6,828

5.

Reconciliation of cash and cash equivalents
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

Current quarter
$A’000

Previous quarter
$A’000

5.1

Bank balances

1,635

2,901

5.2

Call deposits

5,193

9,127

5.3

Bank overdrafts

5.4

Other (provide details)

5.5

Cash and cash equivalents at end of quarter (should equal item 4.6 above)

6,828

12,028

6.

Payments to directors of the entity and their associates

Current quarter
$A’000

6.1

Aggregate amount of payments to these parties included in item 1.2

(169)

6.2

Aggregate amount of cash flow from loans to these parties included in item 2.3

6.3

Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

Payments include salaries, director and consulting fees, superannuation and provision of corporate, administration services, and a fully serviced office.

7.

Payments to related entities of the entity and their associates

Current quarter
$A’000

7.1

Aggregate amount of payments to these parties included in item 1.2

7.2

Aggregate amount of cash flow from loans to these parties included in item 2.3

7.3

Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

Not applicable.

8.

Financing facilities available
Add notes as necessary for an understanding of the position

Total facility amount at quarter end
$A’000

Amount drawn at quarter end
$A’000

8.1

Loan facilities

8.2

Credit standby arrangements

8.3

Other (please specify)

8.4

Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

Not applicable

9.

Estimated cash outflows for next quarter

$A’000

9.1

Exploration and evaluation

2,500

9.2

Development

2,000

9.3

Production

9.4

Staff costs

1,500

9.5

Administration and corporate costs

400

9.6

Other (provide details if material)
– Business Development

– Exercise of Unlisted Options


100
(300)

9.7

Total estimated cash outflows

6,200

10.

Changes in tenements
(items 2.1(b) and 2.2(b) above)

Tenement reference and location

Nature of interest

Interest at beginning of quarter

Interest at end of quarter

10.1

Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced

Refer to Appendix 1

10.2

Interests in mining tenements and petroleum tenements acquired or increased

Compliance statement

1        This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2        This statement gives a true and fair view of the matters disclosed.

Sign here:         ……………………………………………………                        Date: 30 April 2019

(Director/Company secretary)

Print name:       Clint McGhie

Notes

1.       The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2.       If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3.       Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

Salt Lake Potash (SO4) – Company Presentation

The Company is pleased to advise that a new corporate presentation is now available to view on the Company’s website at: 

https://www.saltlakepotash.com.au/company-presentations/

 

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

 

Tony Swiericzuk/Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 6559 5800

Jo Battershill

Salt Lake Potash Limited

Tel: +44 (0) 20 7478 3900

Colin Aaronson/Richard Tonthat/
Ben Roberts

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

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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