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

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

Salt Lake Potash #SO4 -Construction Begins on Australia’s First Commercial Scale SOP Evaporation Ponds

SALT LAKE POTASH LIMITED

 

Construction Begins on Australia’s First Commercial Scale SOP Evaporation Ponds

 

Highlights:

  • 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) at Wiluna, Western Australia has begun
  • Site support infrastructure for construction of the Lake Way Ponds is in place
  • The Lake Way Ponds will be the first Commercial Scale on-lake Sulphate of Potash (SOP) evaporation ponds in Australia. The first phase will enable de-watering of the Lake Way Williamson Pit that contains the highest grade brine resource in Australia
  • The initial ponds will have the capacity to hold the Measured Resource of 1.2GL of Williamson Pit brine at an average SOP grade 25kg/m3 which contains an equivalent of 32,000 tonnes premium SOP
  • The utilisation of the Williamson Pit brine will accelerate Salt Lake Potash’s pathway to first production of SOP at Lake Way

Salt Lake Potash Limited (Salt Lake Potash or the Company) is pleased to announce that all permits have been received from the Department of Water and Environmental Regulation (DWER) for the Lake Way Ponds at Lake Way and construction has now commenced.   

Salt Lake Potash’s Chief Executive Officer, Mr Tony Swiericzuk said: “It is a very exciting time for Salt Lake Potash as we begin construction on Australia’s first commercial scale on-lake evaporation pond system.

This is a key milestone for not only Salt Lake Potash but also for the creation of the new SOP industry within Australia.

We will continue to progress works at Lake Way on both the construction of the first phase of evaporation ponds and also on the exploration of the “whole of lake” development options which we believe will underpin a globally significant SOP operation.”

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) 754 036 6000

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

 

Background

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 (SOP) production operation in Australia. Lake Way’s location and logistical advantages make it the ideal location for the Company’s first SOP operation.

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. 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. The Company’s Memorandum of Understanding with Blackham (see ASX Announcement dated 12 March 2018) allows for an expedited path to development at Lake Way.

Lake Way Evaporation Ponds – Overview

The Company has now received final approval from DWER for the construction and operation of the initial evaporation ponds for Lake Way and de-watering of the Williamson Pit. 

Site support infrastructure at Lake Way has been installed enabling an immediate start on the construction works. 

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 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 4m deep trench will also be 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.

Design

The design of the evaporation ponds has been led by Knight Piesold, a leading global engineering and consulting firm with extensive experience in evaporation pond design.

Both evaporation ponds will include 2m high perimeter berms with internal baffles to extend the flow path of the brine movement within the pond to optimise the evaporation process.

Construction

Salt Lake Potash is undertaking a wet hire and self-perform model for the construction of the Lake Way Ponds. This construction model allows 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 berms involves the stripping of the sandy evaporite layer of material on the lake’s surface. A key trench will then be constructed at the upstream toe of the embankment. An excavator will borrow lakebed clays from adjacent to the embankment and spread the material within the embankment footprint to form the pond berm.

The fill will be progressively spread, air dried, rotated and mixed to bring the moisture content to an optimum level. Dewatering of the borrow pits will be conducted throughout the construction process to manage saturation levels of the fill.

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

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 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).

On-going Work Program

The construction of the initial Lake Way ponds is planned 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.

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. 

Competent Person Statement

The information in this Announcement that relates to Mineral Resources is extracted from the report entitled ‘Scoping Study for Low Capex, High Margin Demonstration Plant at Lake Way’ dated 31 July 2018. This announcement is available to view on www.saltlakepotash.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 of the 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.

Potash a “critical mineral” – MiningNewsNet

A great read from , labelling Potash a “critical mineral”.

We have all been going gaga in recent months over critical minerals such as lithium and cobalt but MiningNewsNet have importantly drawn attention to Potash as another critical mineral worthy of attention. Potash refers to mined and manufactured salts that contain potassium in water-soluble form. The mineral is critical thanks to it’s use as a fertiliser in crop production

In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. Sulphate of Potash (SOP) is the premium source of potassium (macro-nutrient) favoured by high value, chloride intolerant crops.

Read the full story here:  

Salt Lake Potash #SO4 announces a A$13.0m Placement to Institutional & Sophisticated Investors to Fund Project Development

Salt Lake Potash Limited (the Company or Salt Lake) is pleased to announce that it has received strong commitments from both existing and new institutional and sophisticated investors in Australia and overseas to subscribe for 31.0 million new ordinary shares of the Company (Ordinary Shares), to raise gross proceeds of $13,000,000 (Placement). There was very strong demand for the Placement, an endorsement of the recent appointment of Tony Swiericzuk as CEO and also of the Company’s world class Sulphate of Potash project.

Proceeds from the Placement will be used to fund construction of the Williamson Ponds and dewatering of the Williamson Pit, as well as ongoing development of on-lake infrastructure, exploration and feasibility studies, and general working capital.

The cornerstone investor for the Placement is a significant international investment fund. Directors and senior management intend to subscribe for a total of 2.4 million shares in the Placement, including 952,381 shares by the CEO, Mr Tony Swiericzuk, and 750,000 shares by the Company’s Chairman, Mr Ian Middlemas, which will be issued subject to shareholder approval.

Commenting on the Placement, SO4’s CEO, Tony Swiericzuk, said: “We are very pleased to have received such strong support from new and existing shareholders to fund the construction of the initial on-lake infrastructure at Lake Way. These activities are on the critical path to enabling SO4 to become the first Australian commercial producer of SOP in a global sector with outstanding potential. This strong support from investors endorses our view that the Goldfields Salt Lakes Project has enormous potential for value creation and we now look forward to rapidly delivering on this potential for all shareholders and stakeholders.”

Argonaut Securities Pty Limited and Canaccord Genuity (Australia) Limited acted as Joint Lead Manager to the Placement.

The issue price of A$0.42 represents a 13.4% discount to the last closing price of $0.485 on ASX.

The Placement will be completed in two tranches as follows:

(a)      29,250,000 shares will be issued on 16 November 2018 under Listing Rule 7.1 (11,745,041 shares) and Listing Rule 7.1A (17,504,959 shares).  Following the issue of these shares the Company will have 7,612,398 remaining issue capacity under Listing Rule 7.1 and no remaining issue capacity under Listing Rule 7.1A.

(b)      1,702,381 shares intended to be subscribed for by Directors will be issued on or about Thursday 20 December 2018 subject to shareholder approval. A notice of general meeting will be sent to shareholders shortly.

Related Party transaction

The proposed participation in the Placement by Tony Swiericzuk, and Ian Middlemas constitutes a related party transaction under Rule 13 of the AIM Rules for Companies. The independent directors, 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 29,250,000 Ordinary Shares, pursuant to the Placement, 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 16 November 2018 (“Admission”).

Total Voting Rights

For the purposes of the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (“DTRs”), following Admission, Salt Lake will have 204,299,596 Ordinary Shares in issue with voting rights attached. Salt Lake holds no shares in treasury. This figure of 204,299,596 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.

Information required under ASX Listing Rule 3.10.5A:

(a)      Dilution to existing shareholders as a result of the issue under Listing Rule 7.1A is 9.1%, dilution to existing shareholders as a result of the issue under Listing Rule 7.1 is 6.3% and the total dilution to existing shareholders is 14.3%. Details regarding the participation of existing and new shareholders is not able to be determined yet and will be provided at completion;

(b)      The Company will issue 17,504,959 shares under Listing Rule 7.1A because the Placement was considered to be a more efficient mechanism for raising funds. The Placement did not expose the Company to additional costs, a protracted process and market volatility that may have been experienced with a pro-rata issue or other type of issue in which existing ordinary shareholders would have been eligible to participate;

(c)      No underwriting arrangements are in place for the Placement under rule 7.1A; and

(d)      A fee of up to 6% may be paid to the Brokers/Advisors in connection with the Placement under rule 7.1A.

The voluntary halt of trading of the Company’s shares on ASX was lifted prior to the opening of trade on 9 November 2018, following an announcement to the market regarding the above. 

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

Tony Swiericzuk/Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 9322 6322

Jo Battershill

Salt Lake Potash Limited

Tel: +44 (0) 20 7478 3900

Colin Aaronson/Richard Tonthat/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

 

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. 

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.

A new agricultural revolution is underway and Salt Lake Potash #SO4 is at the forefront.

By 2050:
30% increase in global population
70% increase in food demand
14% reduction in arable land
81% increase in crop yields required
A new agricultural revolution is underway and Salt Lake Potash #SO4 is at the forefront.

Brand CEO Alan Green talks Salt Lake Potash #SO4, Vast Resources #VAST, ECR Minerals #ECR & FairFX #FFX on Vox Markets podcast

Brand CEO Alan Green discusses Salt Lake Potash #SO4, Vast Resources #VAST, ECR Minerals #ECR & FairFX #FFX with Justin Waite on Vox Markets podcast. The interview is 33 minutes in.

Align Research – New Salt Lake Potash #SO4 MoU with Sinofert highlights potential upside

Investors woke up to a cracking announcement from Salt Lake Potash (AIM:SO4) this morning concerning a Memorandum of Understanding (MOU) for an Offtake Agreement with the Chinese fertiliser giant Sinofert Holdings Limited. The MOU sets out the basis for the second Offtake Agreement for SO4’s potentially vast Goldfields Salt Lakes Project (GSLP) for an initial 8 year term, beginning in January 2020.

This latest Offtake Agreement will provide Sinofert with sales and offtake rights for up to 50% of ALL Sulphate of Potash (SOP) production from across all the nine vast lakes in Western Australia which comprise the GSLP. In all, GSLP hosts a drainable exploration target of over 150Mt of SOP.

Soon, SO4 is planning to begin the construction of the Demonstration Plant at GSLP to produce 50,000 tpa of high-quality SOP, with the production being distributed by a handful of global distribution partners. Once the Demonstration Plant is up and running, the team has well-developed plans to progressively expand production across a number of the lakes within the GSLP. This is SO4’s second offtake agreement, having already entered into an agreement with Mitsubishi Corp for sales and offtake rights to 50% of the SOP production from the 50,000 tpa Demonstration Plant.

It worth taking a closer look at Sinofert which is the largest fertiliser company in China, with businesses encompassing the complete fertiliser industry chain. In all, this well-established fertiliser giant handles something like 13Mtpa of fertilisers as well as being the biggest fertiliser importer into China. Hong Kong-listed Sinofert is capitalised at over US$1 billion and is majority-owned by Sinochem Corporation, a Chinese State Owned Enterprise.

This deal serves to underline the viability and the economics of SO4’s vast high-grade SOP brine projects in Western Australia. Investors should realise that SOP represents a premium sustainable potash fertiliser which currently sells at more than double the price of the more commonly used MOP. With SOP being a high value fertiliser which is increasing being favoured by global demographics and in the shift to high value speciality crops such as citrus, potatoes, nuts, strawberries, mangoes, tomatoes, coffee, tobacco, spinach and peas.

Read the full Align research article here

Salt Lake Potash #SO4 and Chinese Fertiliser company Sinofert enter MOU for Long Term Offtake Arrangement

Salt Lake Potash (the Company) is pleased to announce that the Company has executed a Memorandum of Understanding (MOU) with the leading fertiliser distribution company in China, Sinofert Holdings Limited (Sinofert), setting out the basis for the second Offtake Agreement for the Goldfields Salt Lakes Project (GSLP).

The Offtake Agreement will provide Sinofert with sales and offtake rights for up to 50% of all Sulphate of Potash (SOP) production from the GSLP, for distribution into China. The initial term is for 8 years, from 1 January 2020.

Salt Lake Potash plans to shortly commence initial construction of a Demonstration Plant at the GSLP producing up to 50,000tpa of high quality SOP, with plans to distribute production through a small number of global distribution partnerships.  Subsequent to the Demonstration Plant, the Company plans to progressively expand production across a number of lakes in the GSLP.

The Sinofert MOU is non-binding and sets out the key terms for a subsequent formal Offtake Agreement expected to be completed before the commencement of the initial term on 1 January 2020. As well as quantities and target markets, the MOU’s other terms include:

•           Market pricing and commission mechanisms;

•           Specifications and delivery parameters; and

•           Sinochem to provide strategic advice on marketing within China.

About Sinofert

Sinofert is China’s leading fertiliser supplier and distributor, covering the whole industry chain of resource, R&D, production, distribution, and agrochemical services. Sinofert handles 13 mt of fertilisers each year and has over 60 years experience in fertiliser production and distribution. Sinofert is listed on the Hong Kong Stock Exchange and is majority owned by Sinochem Corporation, a key Chinese State Owned Corporation.

The Company has previously entered into an Offtake Agreement with Mitsubishi Australia Limited and Mitsubishi Corporation, with sales and offtake rights for up to 50% of the SOP production from a Demonstration Plant at the GSLP.

Salt Lake Potash CEO Matt Syme said: “We are very pleased to have taken this important step to partner with Sinofert in further establishing distribution channels for the Goldfields Salt Lakes Project. Our model of distribution partnerships is vital for what is essentially an export Project and Sinofert is the leading participant in the world’s largest fertiliser market, where more than half of the world’s SOP is both produced and consumed.”

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

Matt Syme/Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 9322 6322

Jo Battershill

Salt Lake Potash Limited

Tel: +44 (0) 20 7478 3900

Colin Aaronson/Richard Tonthat/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

 

Production Target

The Lake Way Demonstration Plant Production Target stated in this announcement is based on the Company’s Scoping Study as released to ASX and AIM on 31 July 2018. 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 31 July 2018. The Company confirms that the material assumptions underpinning the Production Target referenced in the 31 July 2018 release continue to apply and have not materially changed.

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 #SO4 – Final Results 2018

AIM and ASX listed company Salt Lake Potash Limited (“SO4” or the “Company”), announces its results for the year ended 30 June 2018.

The Company’s Report and Accounts can be viewed at www.saltlakepotash.com.au.

The Company also advises that an Appendix 4G (Key to Disclosures: Corporate Governance Council Principles and Recommendations) and the 2018 Corporate Governance Statement have been released today and are available on the Company’s website: www.saltlakepotash.com.au/corporate-governance/

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

 

Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 9322 6322

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

 

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. 

OPERATING AND FINANCIAL REVIEW

Operations

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

Highlights

The Company has undertaken a significant level of work during the year across a range of disciplines and has achieved a number of very important milestones, substantially progressing the Company’s aim is to develop the first salt-lake SOP operation in Australia. Highlights during, and subsequent to the end of, the financial year include:

LAKE WAY

MOU with Blackham Resources to access Lake Way

·      The Company entered into a Memorandum of Understanding (MOU) with Blackham Resources Limited (Blackham) to investigate the potential development of a SOP operation based at Lake Way, near Wiluna.

Pursuant to the MOU with Blackham, the Company would construct an initial pond system to dewater Blackham’s Williamson Pit, which contains approximately 1.2GL of super-saturated brine, with a very high average SOP content of 25kg/m3. These Williamson Ponds would comprise approximately 1/3 of the total Demonstration Plant pond area, and dewatering of the Williamson Pit offers a shorter development time due to its very high grade and salt saturation.

Scoping Study for Low Capex, High Margin Demonstration Plant

·      The Company completed a Scoping Study on the development of a 50,000tpa SOP Demonstration Plant at Lake Way that supports a low capex, highly profitable, staged development model, with total capital costs of approximately A$49m and average cash operating costs (FOB) of approximately A$387/t.

The Demonstration Plant is intended to validate the technical and commercial viability of brine SOP production from the GSLP, providing the basis to build a world class, low cost, long life SOP operation across the 9 lakes in the GSLP.

LAKE WELLS

Process Testwork

·      The Company completed pilot scale crystalliser validation testwork at a leading crystalliser vendor in the United States, processing approximately 400 kg of crystalliser feed salt (schoenite concentrate), produced from previous Lake Wells development work at Saskatchewan Research Council (SRC). The testwork successfully produced high quality SOP crystals, representative of a full scale plant product.

·      The Site Evaporation Trial (SET) at Lake Wells was decommissioned after completing over 18 months of operation under site conditions and through all seasons. The SET processed approximately 412 tonnes of brine and produced over 10 tonnes of harvest salts.

MOU with Australian Potash to study sharing infrastructure and other costs at Lake Wells

·      Subsequent to year end, the Company and Australian Potash Limited (ASX: APC) entered into a Memorandum of Understanding and Co-operation Agreement to undertake a joint study of the potential benefits of development cost sharing for each Company’s projects at Lake Wells.

·      The Company’s first Mining Lease at Lake Wells was granted subsequent to year end, a significant milestone in the Projects development pathway.

LAKE BALLARD

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

·      Subsequent to year end exploration drilling and excavation continued with a view to reporting an initial JORC mineral resource estimate for the shall aquifer.

LAKE IRWIN

·      A surface aquifer exploration program was completed at Lake Irwin, comprising 56 shallow test pits and 5 test trenches. This work provides preliminary data for the geological and hydrological models of the surface aquifer of the Lake, as well as brine, geological and geotechnical samples. 

REGIONAL LAKES

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

GOLDFIELDS SALT LAKE PROJECT

First MOU for an Offtake Agreement with Mitsubishi

·      The Company executed its first MOU for an Offtake Agreement with Mitsubishi, for the sales and offtake rights for up to 50% of the SOP production, from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets.

World Class Scale Revealed with Initial Exploration Target Estimation

·      The Company released an initial estimate of Exploration Targets for eight of the nine lakes comprising the Company’s GSLP. The ninth lake, Lake Wells, already having a Mineral Resource reported in accordance with the JORC code.

The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained Sulphate of Potash (SOP) with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. The total playa area of the lakes is approximately 3,312km2.

The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Background

The Company is the owner of the Goldfields Salt Lakes Project (GSLP), which comprises nine large salt lakes in the Northern Goldfields Region of Western Australia.

The GSLP has a number of important, favourable characteristics:

·      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;

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

·      The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained Sulphate of Potash (SOP) with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. [The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource].

·      Excellent evaporation conditions;

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

·      Lowest quartile capex and opex potential based on the Lake Wells Scoping Study;

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

·      Multi-lake production offers operational flexibility, cost advantages and risk mitigation from localised weather events;

·      The very high level of technical validation already undertaken at Lake Wells substantially applies to the other lakes in the GSLP; and

·      Potential co-product revenues, particularly where transport costs are lowest.

The Company’s long term plan is to develop an integrated SOP operation of global scale, producing high quality organic SOP from a number (or all) of the lakes within the GSLP, after confirming the technical and commercial elements of the Project through construction and operation of a Demonstration Plant producing up to 50,000tpa of SOP.

Demonstration Plant

The Company believes the advantages of the Demonstration Plant approach are:

·      While substantial salt-lake brine production of SOP is undertaken in China, Chile and the USA, it is new in Australia and overseas production models need to be tested and adapted for Australian conditions.

·      Proof of concept for SOP production from salt-lake brines in Australia will substantially de-risk the full-scale project, with commensurate improvement in financing costs and alternatives. While the Demonstration Plant does not benefit from economies of scale, it will provide financiers and partners a very reliable cost basis for larger scale, longer term operations, while still being low capex and high margin in its own right.

·      Refinement of design and costing of engineering elements at Demonstration Plant scale should result in considerable time and cost savings at larger scale.

·      Market acceptance of a new product in conservative agricultural markets is best achieved progressively and in conjunction with existing, established partner(s). It is important to establish Salt Lake’s product(s) as premium, sustainable nutrients in the key long-term markets, and staged production increments are the best way to achieve this objective.

·        A Demonstration Plant offers an accelerated pathway to initial production, with limited infrastructure requirements and a faster, simpler approval process. The Demonstration Plant is intended to operate for 12-24 months to establish parameters for larger scale production, and then be integrated into a larger operation. The Company’s objective is to commence construction in 2018, harvesting first salts in 2019, and producing first SOP in 2020.

Lake Way

Salt Lake holds two Exploration Licences (one granted and one under application) covering most of Lake Way, 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.

The Company entered into a Memorandum of Understanding with Blackham in March 2018 to investigate the development of an SOP operation on Blackham’s existing Mining Leases at Lake Way, including initially a 50,000tpa Demonstration Plant.

Lake Way is located less than 15km south of Wiluna. The Wiluna region is an historic mining precinct dating back to the late 19th century. It has been a prolific nickel and gold mining region with well developed, high quality infrastructure in place.

The Goldfields Highway is a high quality sealed road permitted to carry quad road trains and passes 2km from the Lake. The Goldfields Gas Pipeline is adjacent to SLP’s tenements, running past the eastern side of the Lake.

Scoping Study

In July 2018, the Company completed a Scoping Study on development of a 50,000tpa sulphate of potash (SOP) Demonstration Plant at Lake Way that supports a low capex, highly profitable, staged development model.

The Demonstration Plant is supported by an Indicated and Measured Mineral Resource (drainable) within the Blackham mining lease area totalling 500,000t (Stored Resource – 2Mt), a multiple of the resource required to support a 50,000tpa Demonstration Plant for 2-3 years.

 

Table 1: Key Scoping Study Outcomes

Capital Costs (-10% & +30%)

Total Capital Costs

Including:

–  Temporary facilities

–  EPCM
–  Growth allowance (contingency)

A$49m

 

A$0.4m
A$4.8m
A$6.3m

Average Total Cash Cost (FOB) (+/- 30%)

Average Total Cash Cost (FOB)

Comprising:

–  Mine Gate Opex

–  Transport and handling

–  Royalties

A$387/t

A$251/t
A$96/t
A$40/t

Forecast SOP Price:

A$667/t (US$500/t)

Study Manager:

Wood (formerly Amec Foster Wheeler)

Average Annual Production:

50,000 tonnes of SOP

Development Process

The Demonstration Plant is intended to validate the technical and commercial viability of brine SOP production from the GSLP, providing the basis to build a world class, low cost, long life SOP operation across the 9 lakes in the GSLP.

The Company has previously established that larger production volumes (400,000tpa) can result in operating costs in the lowest cost quartile for SOP production globally*. This is principally a result of the economies of scale inherent in the GSLP’s advantageous location in the Northern Goldfields mining district, mostly in the main cost centres of transport, labour and power.

Pursuant to the MOU with Blackham, the Company will construct an initial pond system to dewater the Williamson Pit, which contains approximately 1.2GL of super-saturated brine, with a very high average SOP content of 25kg/m3. These Williamson Ponds will comprise approximately 1/3 of the total Demonstration Plant pond area, and dewatering of the Williamson Pit offers a shorter development time due to its very high grade and saturation.

Process Testwork

The Company undertook a range of process development testwork to enhance the process model for both Lake Way and Lake Wells.

A large scale, continuous Site Evaporation Trial (SET) at Lake Wells was successfully completed over 18 months of operation under site conditions and through all seasons. The results of the SET are an Australian first and have provided significant knowledge to the Company on the salt crystallisation pathway under site conditions in Australia. 

The SET processed approximately 412 tonnes of Lake Wells brine and produced 10.3 tonnes of harvest salts. Site-produced harvest salts have been used in a range of subsequent process development testwork programs.

The Company has used the harvest salts produced by the SET to perform comprehensive process development testwork at Saskatchewan Research Council (SRC). Most recently, SRC completed locked cycle testwork that validated the SysCAD process flowsheet and demonstrated that the process converges quickly to operate at steady state.

In addition to locked cycle testing, 1,000kg of harvest salts from Lake Wells SET were processed by SRC to produce approximately 350kg of the flotation concentrate (crystalliser feed salt) which was then provided to a globally recognized crystalliser vendor for crystalliser testwork and equipment design. The tests generated samples with large chrystal size, similar to full scale production, and allowed the vendor to refine the design and pricing of a key process equipment item.

Building on the knowledge gained from the Lake Wells project, a staged engineering approach was used in the process development for Lake Way, whereby initial evaporation modelling was undertaken followed by laboratory tests and then field trials.  The initial brine evaporation modelling, conducted by international solar pond experts, Ad Infinitum, indicated that the predicted harvest salts produced at Lake Way are comparable to those produced at Lake Wells (containing a mix of Halite, Kainite and Schoenite) and therefore suitable for conversion into SOP. 

Laboratory evaporation tests were conducted by international laboratory and testing company, Bureau Veritas (BV), to validate the evaporation model.  BV completed a series of laboratory-scale brine evaporation trials at their Perth facility, under simulated average Lake Way climate conditions. This testwork confirmed the modelled brine evaporation pathways. Furthermore it demonstrated that the Williamson pit brine follows a similar evaporation pathway to Lake Way lake brine with similar brine chemistry and salts produced. This indicates that the Williamson Pit brine is a pre-concentrated version of the Lake Way brine, which provides the advantage of a large volume of brine that is essentially accelerated in the evaporation pathway.

A range of process development testwork to provide and validate inputs to the Lake Way Scoping Study production model was also undertaken, including field evaporation tests and metallurgical processing testwork on harvest salts. The testwork incorporates brines from the Lake itself, as well as the super-concentrated brines from the Williamson Pit.

The results of testwork undertaken to date support the Company’s aim to produce an organic premium SOP product from the GSLP. Salt Lake continues to progress testwork to refine products in line with offtake partner expectations.

MOU for Offtake with Mitsubishi

The Company executed a MOU for an Offtake Agreement with Mitsubishi for the sales and offtake rights for up to 50% of the SOP production from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets. 

Salt Lake Potash is progressing its GSLP development strategy, initially involving construction of a Demonstration Plant producing up to 50,000tpa of high quality SOP, with its plans to distribute production through a small number of global distribution partnerships.

The Mitsubishi MOU is non-binding and sets out the key terms for a subsequent formal Offtake Agreement as the Demonstration Plant is developed. As well as quantities and target markets, the MOU’s other terms include:

·      Market pricing and commission mechanisms;

·      Specifications and delivery parameters;

·      Mitsubishi to provide strategic advice on marketing within the region; and

·      The parties to continue discussions regarding funding requirements for the GSLP.

Mitsubishi Australia Limited is a wholly owned subsidiary of Mitsubishi Corporation. Mitsubishi is one of the world’s largest trading and investment enterprises that develops and operates businesses across virtually every industry, including industrial finance, energy, metals, machinery, chemicals, and daily living essentials. Its current activities expand far beyond its traditional trading operations to include investments and business management in diverse fields including natural resources development, manufacturing of industrial goods, retail, new energy, infrastructure, finance and new technology-related businesses.

MOU with Australian Potash

In September 2018, Salt Lake entered into a Memorandum of Understanding and Co-operation Agreement with Australian Potash Limited (ASX: APC) to undertake a joint study of the potential benefits of development cost sharing for each Company’s project developments at Lake Wells.

The Companies’ substantial project holdings at Lake Wells are contiguous with many common infrastructure elements, including access roads, proximity to the Leonora rail terminals, and potential power and fresh water solutions. Both Companies anticipate substantial potential Capex and Opex benefits from some level of infrastructure sharing, with further potential benefits arising from shared or common evaporation and salt processing facilities.

The Companies have agreed to constitute a joint study team to carry out an initial assessment of the merits of infrastructure cooperation. The team will also conduct a high-level review of potential benefits of upstream operational synergies. A substantial part of the Study work will be outsourced to independent engineers and both Companies intend to continue with their independent project developments in parallel with the Study.

The Company’s first Mining Lease at Lake Wells was granted in September 2018, a significant milestone in the Projects development pathway.

 

Results of Operations

The net loss of the Consolidated Entity for the year ended 30 June 2018 was $11,327,108 (2017: net loss of $9,200,509). This loss is mainly attributable to:

(i)         Exploration and evaluation expenses of $8,545,647 (2017: $7,717,231) which are attributable to the Group’s accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to the acquisition of the rights to explore and up to the successful completion of definitive feasibility studies for each separate area of interest;

(ii)        Non-cash share-based payment expenses of $1,284,062 (2017: $580,976) which are attributable to the Group’s accounting policy of expensing the value (estimated using an option pricing model) of Incentive Securities issued to key employees and consultants. The value is measured at grant date and recognised over the period during which the option holders become unconditionally entitled to the options and/or rights; and 

(iii)       Business development expenses of $1,110,578 (2017: $559,247) which are attributable to additional business development and investor relations activities required to support the growth and development of the Goldfields Salt Lakes Project, including travel costs associated with representing the Company at international conferences and investor meetings.

 

Financial Position

As at the date of this report, the Company had working capital in excess of $4 million which includes cash and cash equivalents.

At 30 June 2018, the Company had cash reserves of $5,709,446 (2017: $15,596,759).

At 30 June 2018, the Company had net assets of $7,019,989 (2017: $17,046,443), a decrease of 59% compared with the previous year. This decrease is a result of the exploration and evaluation activity during the year, which has been expensed as discussed in the results of operations section above.

 

Business Strategies and Prospects for Future Financial Years 

The objective of the Group is to create long-term shareholder value through the discovery, exploration and development of its projects.

To date, the Group has not commenced production of any minerals. To achieve its objective, the Group currently has the following business strategies and prospects:

(i)      Complete a PFS for the Lake Way Demonstration Plant;

(ii)     Commence construction of the Williamson Ponds at Lake Way and dewatering of Blackham’s Williamson Pit;

(iii)    Commence construction of the on-lake infrastructure and Plant for the Lake Way Demonstration Plant;

(iv)    Complete a PFS on the Lake Wells Project;

(v)     Develop an organic premium SOP product in conjunction with offtake partners and potential customers; and

(vi)    Continue additional exploration activities including drilling, test pumping and other testwork across the Company’s multi lake portfolio.

All of these activities are inherently risky and the Board is unable to provide certainty of the expected results of these activities, or that any or all of these likely activities will be achieved. The material business risks faced by the Group that could have an effect on the Group’s future prospects, and how the Group manages these risks, include:

The Company’s exploration properties may never be brought into production – The exploration for, and development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately developed into producing mines. To mitigate this risk, the Company will undertake systematic and staged exploration and testing programs on its mineral properties and, subject to the results of these exploration programs, the Company will then progressively undertake a number of technical and economic studies with respect to its projects prior to making a decision to mine. However there can be no guarantee that the studies will confirm the technical and economic viability of the Company’s mineral properties or that the properties will be successfully brought into production;

The Company’s activities will require further capital – The exploration and any development of the Company’s exploration properties will require substantial additional financing.  Failure to obtain sufficient financing may result in delaying or indefinite postponement of exploration and any development of the Company’s properties or even a loss of property interest. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company;

The Company’s licences may be subject to Native title and Aboriginal Heritage – There may be areas over which legitimate common law and/or statutory Native Title rights of Aboriginal Australians exist.  If Native Title rights do exist, the ability of the Company to gain access to the Projects (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected;

The Company has contractual rights in respect of the Mining Leases on which it plans to build a Demonstration Plant at Lake Way – The Company entered into a Memorandum of Understanding with Blackham in March 2018 that outlines the respective rights and obligations of both parties. The Demonstration Plant will initially be based on Mining Leases held by Blackham and the ability of the Company to proceed with its plans at Lake Way will be dependent on ongoing co-operation with Blackham. The parties intend to formalise arrangements in a Split Commodity Agreement;

The Company’s activities are subject to Government regulations and approvals – Any material adverse changes in government policies or legislation in Western Australia and Australia that affect mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of any planned development the GSLP. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could adversely impact the Group’s mineral properties;

The Company may be adversely affected by fluctuations in commodity prices – The price of potash and other commodities fluctuates widely and is affected by numerous factors beyond the control of the Company. Future production, if any, from the Company’s mineral properties will be dependent upon the price of potash and other commodities being adequate to make these properties economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price risk.  As the Company’s operations change, this policy will be reviewed periodically going forward; and

Global financial conditions may adversely affect the Company’s growth and profitability – Many industries, including the mineral resource industry, are impacted by these market conditions.  Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. Due to the current nature of the Company’s activities, a slowdown in the financial markets or other economic conditions may adversely affect the Company’s growth and ability to finance its activities. If these increased levels of volatility and market turmoil continue, the Company’s activities could be adversely impacted and the trading price of the Company’s shares could be adversely affected.

EARNINGS PER SHARE

2018
Cents

2017
Cents

Basic and diluted loss per share

(6.47)

(6.61)

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:

(i)         On 18 August 2017, the Company issued 42,000 shares to an advisor as part of their annual fees.

(ii)        On 17 November 2017, the Company issued 1,100,000 incentive options to a key consultant as an incentive to attract and retain their services.

(iii)       On 1 December 2017, Mr Mark Hohnen retired as a Non-Executive Director of the Company.

(iv)       On 22 December 2017, the Company issued 2,300,000 performance rights to key employees and consultants of the Company pursuant to the Salt Lake Potash Limited Performance Rights Plan, and 800,000 incentive options to a key consultant as an incentive to attract and retain their services.

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

(vi)       On 9 April 2018, the Company announced that it had executed a Memorandum of Understanding with Mitsubishi Australia Limited and Mitsubishi Corporation (Mitsubishi), setting out the basis for the first Offtake Agreement for the Goldfields Salt Lakes Project.  The formal Offtake Agreement will provide Mitsubishi with sales and offtake rights for up to 50% of the Sulphate of Potash (SOP) production from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets. 

SIGNIFICANT EVENTS AFTER BALANCE DATE

(i)         Announced the results from a Scoping Study on the Lake Wells project which confirmed its potential to produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets;

(ii)        On 10 August 2018, the Company appointed Mr Clint McGhie as Company Secretary and Chief Financial Officer following the resignation of Mr Sam Cordin; and

(iii)       On 14 September 2018, the Company announced that it entered into a Memorandum of Understanding and Co-operation Agreement with Australian Potash Limited (ASX: APC) to study the potentially very substantial benefits of sharing infrastructure and other costs at Lake Wells.

Other than as noted above, as at the date of this report there are no matters or circumstances which have arisen since 30 June 2018 that have significantly affected or may significantly affect:

·           the operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;

·           the results of those operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity; or

·           the state of affairs, in financial years subsequent to 30 June 2018, of the Consolidated Entity.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group’s operations are subject to various environmental laws and regulations under the relevant government’s legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.

Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities.

There have been no significant known breaches by the Group during the financial year.

DIVIDENDS       

No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.

DIRECTORS’ INTERESTS

As at the date of this report, the Directors’ interests in the securities of the Company are as follows:

 

Interest in securities at the date of this report

Ordinary Shares1

Incentive Options 2

Performance Rights 3

Mr Ian Middlemas

11,000,000

Mr Matthew Syme

4,500,000

2,500,000

2,000,000

Mr Mark Pearce

4,000,000

200,000

Mr Bryn Jones

200,000

Notes:

1   Ordinary Shares means fully paid Ordinary Shares in the capital of the Company.

2   Incentive Options means an unlisted share option to subscribe for one Ordinary Share in the capital of the Company.

3   Performance Rights means Performance Rights issued by the Company that convert to one Ordinary Share in the capital of the Company upon satisfaction of various performance conditions.

SHARE OPTIONS, PERFORMANCE SHARES AND PERFORMANCE RIGHTS

At the date of this report the following options and performance shares have been issued over unissued Ordinary Shares of the Company:

·            750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;

·            750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;

·            1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;

·            250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;

·            500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;

·            750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021;

·            400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021;

·            5,000,000 ‘Class A’ Performance Shares expiring on or before 31 December 2018;

·            7,500,000 ‘Class B’ Performance Shares on or before 31 December 2019;

·            10,000,000 ‘Class C’ Performance Shares on or before 12 June 2020;

·            1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018;

·            1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019;

·            1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and

·            1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.

During the year ended 30 June 2018, no Ordinary Shares have been issued as a result of the exercise of Unlisted Options, and no Ordinary Shares have been issued as a result of the conversion of Performance Shares or Rights. Subsequent to year end and until the date of this report, no Ordinary Shares have been issued as a result of the exercise of Unlisted Options.

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2018

 

30 June

2018

30 June

2017

Notes

$

$

Finance income

3

238,208

 123,477

Other income

4

456,709

 604,468

Exploration and evaluation expenses

(8,545,647)

 (7,717,231)

Corporate and administrative expenses

(1,081,738)

 (1,071,000)

Business development expenses

(1,110,578)

 (559,247)

Share based payment expense

5

(1,284,062)

(580,976)

Loss before tax

(11,327,108)

(9,200,509)

Income tax expense

6

Loss for the year

(11,327,108)

(9,200,509)

Other comprehensive income

Items that may be reclassified subsequently to profit or loss:

Foreign currency translation differences reclassified to profit or loss on disposal of controlled entity

(454,468)

Other comprehensive loss for the year, net of tax

(454,468)

Total comprehensive loss for the year

(11,327,108)

(9,654,977)

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

16

(6.47)

(6.61)

 

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

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

 

Notes

30 June 2018
$

30 June 2017
$

ASSETS

Current Assets

Cash and cash equivalents

7

5,709,446

15,596,759

Trade and other receivables

8

227,273

300,058

Total Current Assets

5,936,719

15,896,817

Non-Current Assets

Property, plant and equipment

9

535,344

303,511

Exploration and evaluation expenditure

10

2,276,736

2,276,736

Total Non-Current Assets

2,812,080

2,580,247

TOTAL ASSETS

8,748,799

18,477,064

LIABILITIES

Current Liabilities

Trade and other payables

11

1,620,527

1,348,791

Finance lease

11,829

13,011

Provisions

12

57,462

19,181

Total Current Liabilities

1,689,818

1,380,983

Non-Current Liabilities

Finance lease

38,992

49,638

Total Non-Current Liabilities

38,992

49,638

TOTAL LIABILITIES

1,728,810

1,430,621

NET ASSETS

7,019,989

17,046,443

EQUITY

Contributed equity

13

123,501,153

123,484,561

Reserves

14

2,105,886

821,824

Accumulated losses

(118,587,050)

(107,259,942)

TOTAL EQUITY

7,019,989

17,046,443

 

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

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2018

 

Contributed Equity

Share- Based Payment Reserve

Foreign Currency Translation Reserve

Accumulated Losses

Total Equity

$

$

$

$

$

Balance at 1 July 2017

123,484,561

   821,824

                                  –

(107,259,942)

17,046,443

Net loss for the year

 (11,327,108)

(11,327,108)

Total comprehensive loss for the year

 (11,327,108)

 (11,327,108)

Shares issued in lieu of fees

18,476

18,476

Share issue costs

 (1,884)

 (1,884)

Share based payment expense

1,284,062

1,284,062

Balance at 30 June 2018

123,501,153

2,105,886

(118,587,050)

7,019,989

Balance at 1 July 2016

106,761,669

240,848

454,468

(98,059,433)

9,397,552

Net loss for the year

 (9,200,509)

(9,200,509)

Exchange differences reclassified to profit or loss on disposal of controlled entity

 (454,468)

 (454,468)

Total comprehensive loss for the year

 (454,468)

 (9,200,509)

 (9,654,977)

Shares issued in lieu of fees

86,400

86,400

Share placement

17,630,000

17,630,000

Share issue costs

(993,508)

(993,508)

Share based payment expense

580,976

580,976

Balance at 30 June 2017

123,484,561

821,824

(107,259,942)

17,046,443

 

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2018

 

Note

30 June

2018
$

30 June

2017
$

Cash flows from operating activities

Payments to suppliers and employees

(10,275,823)

(8,657,842)

Exploration investment scheme received

30,000

120,000

R&D tax incentive

456,709

Interest received

242,852

114,423

Net cash outflow from operating activities

15(a)

(9,546,262)

(8,423,419)

Cash flows from investing activities

Payments for property, plant and equipment

(256,890)

(162,675)

Net cash outflow from investing activities

(256,890)

(162,675)

Cash flows from financing activities

Proceeds from issue of shares

17,630,000

Lease payments

(11,829)

Transaction costs from issue of shares

(72,332)

(945,448)

Net cash inflow/(outflow) from financing activities

(84,161)

16,684,552

Net increase/(decrease) in cash and cash equivalents held

(9,887,313)

8,098,458

Net foreign exchange differences

16

Cash and cash equivalents at the beginning of the year

15,596,759

7,498,285

Cash and cash equivalents at the end of the year

15(b)

5,709,446

15,596,759

 

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

 

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018

 

1.       STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in preparing the financial report of Salt Lake Potash Limited (Salt Lake or Company) and its consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2018 are stated to assist in a general understanding of the financial report.

Salt Lake is a Company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX), and the AIM Market (AIM) of the London Stock Exchange.

 

The financial report of the Group for the year ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors on 26 September 2018.

(a)      Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards (“AASBs”) and other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The Group is a for-profit entity for the purposes of preparing the consolidated financial statements.

The financial report has been prepared on a historical cost basis. The financial report is presented in Australian dollars.

Going concern 

The consolidated financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

For the year ended 30 June 2018, the Consolidated Entity incurred a net loss of $11,327,108 (2017: $9,654,977) and experienced net cash outflows from operating and investing activities of $9,821,628 (2017: $8,586,094). As at 30 June 2018, the Group had cash and cash equivalents of $5,709,446 (2017: $15,596,759) and net current assets of $4,246,901 (2017: $14,515,834).

The Company has recently completed a successful Scoping Study for the Lake Way Demonstration Plant and is currently in the process of finalising parameters for the Pre-Feasibility Study and construction of holding ponds to dewater Blackham’s Williamson Pit. The Scoping Study on the development of a 50,000tpa sulphate of potash (SOP) Demonstration Plant at Lake Way supports a low capex, highly profitable, staged development model. In order to continue to progress the Demonstration Plant at Lake Way and ongoing studies for the wider GSLP, the Company will be required to raise additional capital during the current financial year.

Based on the successful results of the Scoping Study and having previously raised funds for the GSLP, the Directors are confident that they will be able to raise additional capital as and when required to continue to fund operations. In addition, the Directors have been involved in a number of recent successful capital raisings for other listed resource companies, and accordingly, they are satisfied that they will be able to raise additional capital when required to enable the Consolidated Entity to meet its obligations as and when they fall due, and accordingly, consider that it is appropriate to prepare the financial statements on the going concern basis.

Should the Consolidated Entity be unable to raise additional capital as and when required, the Consolidated Entity would need to reduce operational expenditure to continue as a going concern. In the event that the Consolidated Entity is unable to achieve the matters referred to above, uncertainty would exist that may cast doubt on the ability of the Consolidated Entity to continue as a going concern.

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the Consolidated Entity be unable to continue as a going concern.

(b)      Statement of Compliance

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

New and revised standards and amendments thereof and interpretations effective for the current reporting period that are relevant to the Group include:

 

·           AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses which clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not effected by possible future changes in the carrying amount or expected manner of recovery of the asset;

 

·           AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 which amend existing presentation and disclosure requirements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes; and

 

·           AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2016-2016 Cycle which clarify the existing disclosure requirements and scope of AASB 12 Disclosure of Interest in Other Entities to apply to interests that are classified as held for sale or distribution.

 

The adoption of these new and revised standards has not resulted in any significant changes to the Group’s accounting policies or to the amounts reported for the current or prior periods.

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Group for the annual reporting period ended 30 June 2018. Those which may be relevant to the Group are set out in the table below. 

 

Standard/Interpretation

Application date of standard

Application date for Group

AASB 9 Financial Instruments, and relevant amending standards

1 January 2018

1 July 2018

AASB 15 Revenue from Contracts with Customers, and relevant amending standards

1 January 2018

1 July 2018

AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions

1 January 2018

1 July 2018

AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration

1 January 2018

1 July 2018

AASB 16 Leases

1 January 2019

1 July 2019

Management has reviewed the requirements of these accounting standards and has assessed that these will not have any significant impact on the Group’s financial statements based on the following:

·      At 30 June 2018, the Group’s only financial assets and liabilities are cash, receivables, finance lease and payables for which no significant measurement changes have been introduced under AASB 9.  The changes to the impairment model are not anticipated to have an impact on the Group as receivables are primarily comprised of GST and interest;

·      The Group does not currently have any revenue contracts and accordingly AASB 15 is not expected to have an impact on the Group’s results; and

·      The Group’s main operating lease is for office space, currently at a cost of $10,170 per month.  Under AASB 16, an asset (the right to use the leased item) and a financial liability to pay rentals will be recognised. AASB 16 will not apply to short term contracts of less than 12 months.

(c)      Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2018 and the results of all subsidiaries for the year then ended.

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

 

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.

 

Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. Intercompany transactions and balances, income and expenses and profits and losses between Group companies, are eliminated.

(d)      Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

(e)      Trade and Other Receivables

Trade receivables are recognised and carried at the original invoice amount less a provision for any uncollectable debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written‑off as incurred.

Short term receivables from related parties are recognised and carried at the nominal amount due and are interest free.

(f)       Investments and Other Financial Assets

(i)       Classification

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than twelve months after the reporting date which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position.

 Loans and receivables are carried at amortised cost using the effective interest rate method.

(ii)      Impairment

Collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment allowance is recognised when there is objective evidence that the Consolidated Entity will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

(g)      Property, Plant and Equipment

(i)       Recognition and measurement

All classes of property, plant and equipment are measured at historical cost.

Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in the Statement of Profit or Loss and other Comprehensive Income as incurred.

(ii)      Depreciation and Amortisation

Depreciation is provided on a straight line basis on all property, plant and equipment.

 

2018

2017

Major depreciation and amortisation periods are:

Plant and equipment:

22%- 40%

22%- 40%

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(iii)     Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

(h)      Exploration and Development Expenditure

Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method.

Exploration and evaluation expenditure encompasses expenditures incurred by the Group in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets are measured at cost at recognition and are recorded as an asset if:

a.      the rights to tenure of the area of interest are current; and

b.      at least one of the following conditions is also met:

 

·      the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and

·      exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation expenditure incurred by the Group subsequent to acquisition of the rights to explore is expensed as incurred, up to costs associated with the preparation of a feasibility study.

 

(i)    Impairment

Capitalised exploration costs are reviewed each reporting date to establish whether an indication of impairment exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and transferred to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced. Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

(i)       Payables

Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts payable are normally settled within 60 days. Payables are carried at amortised cost.

(j)       Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(k)      Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

Interest income

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.

(l)       Income Tax

The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose on goodwill or in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same taxation authority.

 

Tax consolidation

Salt Lake Potash Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Company. The current tax liability of each group entity is then subsequently assumed by the Company. The tax consolidated group has entered a tax sharing agreement whereby each company in the Group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

(m)     Employee Entitlements

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within 12 months have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits expected to be settled more later than 12 months after the year end have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(n)      Earnings per Share

Basic earnings per share (EPS) is calculated by dividing the net profit attributable to members of the Company for the reporting period, after excluding any costs of servicing equity, by the weighted average number of Ordinary Shares of the Company, adjusted for any bonus issue.

Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive potential Ordinary Shares and the effect on revenues and expenses of conversion to Ordinary Shares associated with dilutive potential Ordinary Shares, by the weighted average number of Ordinary Shares and dilutive Ordinary Shares adjusted for any bonus issue.

 

(o)      Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(p)      Acquisition of Assets

A group of assets may be acquired in a transaction which is not a business combination. In such cases the cost of the group is allocated to the individual identifiable assets (including intangible assets that meet the definition of and recognition criteria for intangible assets in AASB 138) acquired and liabilities assumed on the basis of their relative fair values at the date of purchase.

(q)      Impairment of Non-Current Assets

The Group assesses at each reporting date whether there is an indication that a non-current asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(r)      Issued and Unissued Capital

Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(s)      Foreign Currencies

(i)         Functional and presentation currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Company’s functional and presentation currency.

(ii)           Transactions and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.

Exchange differences arising on the translation of monetary items are recognised in the Statement Profit or Loss and other Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the other Comprehensive Income.

(iii)          Group companies

The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows:

·           assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

·           income and expenses are translated at average exchange rates for the period; and

·           items of equity are translated at the historical exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the statement of financial position. These differences are recognised in the Statement of Profit or Loss and other Comprehensive Income in the period in which the operation is disposed.

(t)         Share-Based Payments

Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These share-based payments are measured at the fair value of the equity instrument at the grant date. Fair value is determined using the Binomial option pricing model. Further details on how the fair value of equity-settled share based payments has been determined can be found in Note 20.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest. At each reporting date, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the share based payments reserve.

Equity-settled share-based payments may also be provided as consideration for the acquisition of assets. Where Ordinary Shares are issued, the transaction is recorded at fair value based on the quoted price of the Ordinary Shares at the date of issue. The acquisition is then recorded as an asset or expensed in accordance with accounting standards.

(u)      Use and Revision of Accounting Estimates, Judgements and Assumptions

The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes:

·              Exploration and Evaluation Expenditure (Note 10)

·              Share-Based Payments (Note 20)

2.       SEGMENT INFORMATION

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

3.       FINANCE INCOME

2018

2017

Note

$

$

Interest income

238,208

123,477

238,208

123,477

4.       OTHER INCOME

2018

2017

Note

$

$

Gain on disposal of controlled entity1

454,468

Exploration Incentive Scheme

150,000

R&D tax incentive

456,709

456,709

604,468

Notes:

1  During the 2017 year, the Company sold its United States subsidiary, Golden Eagle Uranium, for a nominal amount which resulted in a gain on disposal of A$454,468 relating to prior exchange differences on translation of Golden Eagle Uranium that have been transferred from the foreign currency translation reserve.

5.       EXPENSES

2018

2017

Note

$

$

(a)        Depreciation included in statement of comprehensive income

Depreciation of plant and equipment

9

75,031

37,088

 

(b)        Employee benefits expense (including KMP)

Salaries and wages

1,942,801

 1,342,932

Superannuation expense

176,466

126,503

Share-based payment expense

20

1,284,062

580,976

Total employment expenses included in profit or loss

3,403,329

 2,050,411

6.       INCOME TAX

2018

2017

$

$

(a)        Recognised in the statement of comprehensive income

Current income tax

Current income tax benefit in respect of the current year

Deferred income tax

Deferred income tax

Income tax expense reported in the statement of Profit or Loss and other Comprehensive income

(b)        Reconciliation between tax expense and accounting loss before income tax

Accounting loss before income tax

(11,327,108)

 (9,200,509)

At the domestic income tax rate of 27.5% (2017: 27.5%)

(3,114,955)

(2,530,140)

Expenditure not allowable for income tax purposes

511,763

280,752

Income not assessable for income tax purposes

(125,595)

(124,979)

Adjustment in respect of current income tax of previous years

(3,447)

Deferred tax assets not brought to account

2,732,234

2,374,367

Income tax expense/(benefit) reported in the statement of Profit or Loss and other Comprehensive income

 

2018

2017

$

$

(c)        Deferred Tax Assets and Liabilities

Deferred income tax at 30 June relates to the following:

Deferred Tax Liabilities

Accrued income

4,833

6,110

Exploration and evaluation assets

43,209

43,209

Deferred tax assets used to offset deferred tax liabilities

(48,042)

(49,319) 

Deferred Tax Assets

Accrued expenditure

21,813

7,200

Capital allowances

243,070

341,543

Tax losses available for offset against future taxable income

9,183,494

6,368,677

Deferred tax assets used to offset deferred tax liabilities

(48,042)

 (49,319)

Deferred tax assets not brought to account

(9,400,335)

 (6,668,101)

 

The benefit of deferred tax assets not brought to account will only be brought to account if:

·      future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;

·      the conditions for deductibility imposed by tax legislation continue to be complied with; and

·      no changes in tax legislation adversely affect the Group in realising the benefit.

Deferred tax assets have not been recognised in respect to tax losses because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

 

(d)        Tax Consolidation

The Company and its wholly-owned Australian resident entities have formed a tax consolidated group and are therefore taxed as a single entity. The head entity within the tax consolidated group is Salt Lake Potash Limited.

7.       CASH AND CASH EQUIVALENTS

2018

2017

$

$

 

Cash on hand and at bank

1,596,390

15,524,703

Deposit on call

4,113,056

72,056

5,709,446

15,596,759

8.       TRADE AND OTHER RECEIVABLES

2018

2017

$

$

 

Accrued interest

17,572

22,216

GST and other receivables

209,701

277,842

227,273

300,058

9.       PROPERTY, PLANT AND EQUIPMENT

2018

2017

$

$

(a)        Plant and Equipment

Gross carrying amount – at cost

652,644

345,780

Accumulated depreciation

(117,300)

(42,269)

Carrying amount at end of year, net of accumulated depreciation

535,344

303,511

 

(b)        Reconciliation

Carrying amount at beginning of year, net of accumulated depreciation

303,511

115,275

Additions

306,864

225,324

Depreciation charge

(75,031)

(37,088)

Carrying amount at end of year, net of accumulated depreciation

535,344

303,511

Finance Leases

The carrying value of plant and equipment held under finance leases at 30 June 2018 was $55,857 (2017: $64,036). Additions during the year include $Nil (2017: $64,036) of plant and equipment under finance lease.

10.     EXPLORATION AND EVALUATION EXPENDITURE

2018

2017

Note

$

$

(a)        Areas of Interest

SOP Project

2,276,736

2,276,736

Carrying amount at end of year, net of impairment1

2,276,736

(b)        Reconciliation

Carrying amount at start of year

2,276,736

2,276,736

Impairment losses

Carrying amount at end of year net of impairment 1

2,276,736

 

Notes:

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

 

SOP Project

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

11.     TRADE AND OTHER PAYABLES

2018

2017

$

$

Trade creditors

1,483,554

1,250,959

Accrued expenses

136,973

97,832

1,620,527

1,348,791

 

Terms and conditions of the above financial liabilities:

–    Trade payables are non-interest bearing and are normally settled on 30-day terms.

12.     PROVISIONS

2018

2017

$

$

Statutory employee benefits

57,462

19,181

57,462

19,181

 

13.     CONTRIBUTED EQUITY

30 June 2018
$

30 June 2017
$

Share Capital

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

123,501,153

123,484,561

123,501,153

123,484,561

(a)        Movements in Ordinary Shares During the Past Two Years Were as Follows:

Number of Ordinary Shares

Issue Price

$

$

01-Jul-17

Opening Balance

175,007,596

123,484,561

18-Aug-17

Share issue 1

42,000

0.44

18,476

Jul-17 to Jun-18

Share issue costs

(1,884)

30-Jun-18

Closing balance

175,049,596

123,501,153

01-Jul-16

Opening Balance

133,827,596

106,761,669

09-Sep-16

Share issue 1

180,000

0.48

86,400

02-May-17

Share placement

 30,700,000

0.43

13,201,000

21-Jun-17

Share placement

 10,300,000

0.43

4,429,000

Jul-16 to Jun-17

Share issue costs

(993,508)

30-Jun-17

Closing balance

175,007,596

123,484,561

 

Notes:

1        Shares issued to a key consultant of the Company in lieu of fees.

 

 

(b)        Rights Attaching to Ordinary Shares:

 

The rights attaching to fully paid Ordinary Shares (Ordinary Shares) arise from a combination of the Company’s Constitution, statute and general law.

Ordinary Shares issued following the exercise of Unlisted Options in accordance with Note 14(c) or Performance Shares in accordance with Note 14(d) or Performance Rights in accordance with Note 14(e) will rank equally in all respects with the Company’s existing Ordinary Shares. 

Copies of the Company’s Constitution are available for inspection during business hours at the Company’s registered office. The clauses of the Constitution contain the internal rules of the Company and define matters such as the rights, duties and powers of its shareholders and directors, including provisions to the following effect (when read in conjunction with the Corporations Act 2001 or the listing rules of the ASX and AIM (Listing Rules)).

(i)       Shares

The issue of shares in the capital of the Company and options over unissued shares by the Company is under the control of the Directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any special class of shares.

(ii)      Meetings of Members

Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of meetings of members and all members are entitled to a notice of meeting. A meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of members is two shareholders.

The Company holds annual general meetings in accordance with the Corporations Act 2001 and the Listing Rules.

(iii)     Voting

Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company, each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a general meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to one vote only despite the number of members the person represents.

On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share.

(iv)     Changes to the Constitution

The Company’s Constitution can only be amended by a special resolution passed by at least three quarters of the members present and voting at a general meeting of the Company. At least 28 days’ written notice specifying the intention to propose the resolution as a special resolution must be given.

(v)      Listing Rules

Provided the Company remains admitted to the Official List of the ASX, then despite anything in its Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. The Company’s Constitution will be deemed to comply with the Listing Rules as amended from time to time.

14.     RESERVES

 

2018

2017

Note

$

$

Share-based payments reserve

14(b)

2,105,886

821,824

2,105,886

821,824

(a)        Nature and Purpose of Reserves

(i)         Share-based payments reserve

The share-based payments reserve is used to record the fair value of Unlisted Options, Performance Rights and Performance Shares issued by the Group.            

 

(b)        Movements in the share-based payments reserve during the past two years were as follows:

Number of Performance Rights

Number of Performance Shares

Number of
Unlisted Options

$

01-Jul-17

Opening Balance

4,100,000

22,500,000

2,500,000

821,824

23-Sep-17

Performance Rights forfeited

(1,000,000)

28-Nov-17

Issue of unlisted options

1,100,000

22-Dec-17

Issue of unlisted options

800,000

22-Dec-17

Issue of Performance Rights

2,300,000

Jul-17 to Jun-18

Share based payments expense

1,284,062

30-Jun-18

Closing balance

5,400,000

22,500,000

4,400,000

2,105,886

01-Jul-16

Opening Balance

22,500,000

2,705,443

240,848

22-Nov-16

Expiry of unlisted options

(205,443)

01-Mar-17

Issue of Performance Rights

3,000,000

09-Jun-17

Issue of Performance Rights

200,000

20-Jun-17

Issue of Performance Rights

1,000,000

30-Jun-17

Lapsed Performance Rights

(100,000)

Jul-16 to Jun-17

Share based payments expense

580,976

30-Jun-17

Closing balance

4,100,000

22,500,000

2,500,000

821,824

 

(c)        Terms and Conditions of Unlisted Options

The Unlisted Options are granted based upon the following terms and conditions:

·      Each Unlisted Option entitles the holder to the right to subscribe for one Ordinary Share upon the exercise of each Unlisted Option;

·      The Unlisted Options outstanding at the end of the financial year have the following exercise prices and expiry dates:

·             750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;

·             750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;

·             1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;

·             250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;

·             500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;

·             750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021; and

·             400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021.

·      The Unlisted Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being satisfied (if applicable);

·      Ordinary Shares issued on exercise of the Unlisted Options rank equally with the then Ordinary Shares of the Company;

·      Application will be made by the Company to ASX and to the AIM market of the London Stock Exchange for official quotation of the Ordinary Shares issued upon the exercise of the Unlisted Options;

·      If there is any reconstruction of the issued share capital of the Company, the rights of the Unlisted Option holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction; and

·      No application for quotation of the Unlisted Options will be made by the Company.

(d)        Terms and Conditions of Performance Shares

The Convertible Performance Shares (Performance Shares) were granted as part of the consideration to acquire Australia Salt Lake Potash Pty Ltd on the following terms and conditions:

·        Each Performance Share will convert into one Ordinary Share upon the satisfaction, prior to the Expiry Date, of the respective Milestone:

–      5,000,000 Performance Shares subject to Class A Milestone: The announcement by the Company to ASX of the results of a positive Pre-feasibility Study on all or part of the Project Licences;

–      7,500,000 Performance Shares subject to Class B Milestone: The announcement by the Company to ASX of the results of a positive Definitive Feasibility Study on all or part of the Project Licences; and

–      10,000,000 Performance Shares subject to Class C Milestone: The commencement of construction activities for a mining operation on all or part of the Project Licences (including the commencement of ground breaking for the construction of infrastructure and/or processing facilities) following a final investment decision by the Board as per the project development schedule and budget in accordance with the Definitive Feasibility Study, within five years from the date of issue.

·        Expiry Date means:

–      in relation to the Class A Performance Shares, 31 December 2018 (amended following Shareholder approval on 11 June 2018);

–      in relation to the Class B Performance Shares, 31 December 2019 (amended following Shareholder approval on 11 June 2018);

and

–      in relation to the Class C Performance Shares, 5 years from the date of issue (12 June 2020);

·        If the Milestone for a Performance Share is not met by the Expiry Date, the total number of the relevant class of Performance Shares will convert into one Ordinary Share per holder;

·        The Company shall allot and issue Ordinary Shares immediately upon conversion of the Performance Shares for no consideration;

·        Ordinary Shares issued on conversion of the Performance Shares rank equally with the then Ordinary Shares of the Company;

·        In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of securities of the Ordinary Shares, the Performance Shares shall be reconstructed, consolidated or divided in the same proportion as the Ordinary Shares are reconstructed, consolidated or divided and, in any event, in a manner which will not result in any additional benefits being conferred on the Performance Shareholders which are not conferred on the Ordinary Shareholders;

·        The Performance Shareholders shall have no right to vote, subject to the Corporations Act;

·        No application for quotation of the Performance Shares will be made by the Company; and

·        The Performance Shares are not transferable.

(e)        Terms and Conditions of Performance Rights

The Performance Rights are granted based upon the following terms and conditions:

·      Each Performance Right automatically converts into one Ordinary Share upon vesting of the Performance Right;

·      Each Performance Right is subject to performance conditions (as determined by the Board from time to time) which must be satisfied in order for the Performance Right to vest;

·      The Performance Rights have the following expiry dates:

–        1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018 (amended following Shareholder approval on 11 June 2018);

–        1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended following Shareholder approval on 11 June 2018);

–        1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and

–        1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.

·      Ordinary Shares issued on conversion of the Performance Rights rank equally with the then Ordinary Shares of the Company;

·      Application will be made by the Company to ASX AIM market of the London Stock Exchange for official quotation of the Ordinary Shares issued upon conversion of the Performance Rights;

·      If there is any reconstruction of the issued share capital of the Company, the rights of the Performance Right holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction; and

·      No application for quotation of the Performance Rights will be made by the Company.

15.     STATEMENT OF CASH FLOWS

(a)        Reconciliation of the Loss after Tax to the Net Cash Flows from Operations

 

2018

2017

$

$

Net loss for the year

(11,327,108)

(9,200,509)

Adjustment for non-cash income and expense items

Depreciation of plant and equipment  

75,031

37,088

Share based payment expense

1,284,062

580,976

Gain on disposal of controlled entity

(454,468)

Shares issued in lieu of fees

18,476

86,400

Change in operating assets and liabilities

(Increase)/decrease in trade and other receivables  

84,784

(173,475)

Increase in trade and other payables  

280,212

693,100

Increase in provisions

38,281

7,469

Net cash outflow from operating activities

(9,546,262)

(8,423,419)

 

 

16.     EARNINGS PER SHARE

30 June 2018

$

30 June 2017

$

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

Net loss attributable to the owners of the Company used in calculating basic and diluted earnings per share

(11,327,108)

(9,200,509)

 

 

Number of Shares
2018

Number of Shares
2017

Weighted average number of ordinary shares used in calculating basic and diluted earnings per share

175,043,958

139,217,150

 

(a)        Non-Dilutive Securities

As at balance date, 4,400,000 Unlisted Options (which represent 4,400,000 potential Ordinary Shares), 22,500,000 Performance Shares (which represent 22,500,000 potential Ordinary Shares) and 5,400,000 Performance Rights (which represent 5,400,000 potential Ordinary Shares) were considered non-dilutive as they would decrease the loss per share.

 

(b)        Conversions, Calls, Subscriptions or Issues after 30 June 2018

No securities have been issued since 30 June 2018.

There have been no other conversions to, calls of, or subscriptions for Ordinary Shares or issues of potential Ordinary Shares since the reporting date and before the completion of this financial report.

17.     RELATED PARTIES

(a)        Subsidiaries

% Equity Interest

Name

Country of Incorporation

2018
%

2017
%

Ultimate parent entity:

Salt Lake Potash Limited

Australia

Subsidiaries of Salt Lake Potash Limited

Australia Salt Lake Potash Pty Ltd (ASLP)

Australia

100

100

Subsidiary of ASLP

Piper Preston Pty Ltd

Australia

100

100

Peak Coal Pty Ltd

Australia

(i)

100

(i)      Peak Coal was deregistered in April 2018.

(b)        Ultimate Parent

Salt Lake Potash Limited is the ultimate parent of the Group.

(c)        Transactions with Related Parties

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Transactions with Key Management Personnel, including remuneration, are included at Note 18.

18.     KEY MANAGEMENT PERSONNEL

(a)        Details of Key Management Personnel

The KMP of the Group during or since the end of the financial year were as follows:

 

Directors

Mr Ian Middlemas                  Chairman

Mr Matthew Syme                   Chief Executive Officer

Mr Mark Pearce                       Non-Executive Director
Mr Bryn Jones                         Non-Executive Director

Mr Mark Hohnen                     Non-Executive Director (resigned 1 December 2017)

 

Other KMP

Mr David Maxton                     Chief Operating Officer (appointed 12 April 2018)

Mr Clint McGhie                      Chief Financial Officer and Company Secretary (appointed 10 August 2018)

Mr Grant Coyle                        Business Development Manager (appointed 16 July 2018)

Mr Sam Cordin                       Chief Financial Officer and Company Secretary (resigned 10 August 2018)

 

Unless otherwise disclosed, the KMP held their position from 1 July 2017 until the date of this report.

 

2018

2017

$

$

Short-term employee benefits

726,607

591,898

Post-employment benefits

49,875

52,928

Share-based payments

595,394

556,016

Total compensation

1,371,876

1,200,842

(b)        Loans from Key Management Personnel

No loans were provided to or received from Key Management Personnel during the year ended 30 June 2018 (2017: Nil).

(c)        Other Transactions

Apollo Group Pty Ltd, a Company of which Mr Mark Pearce is a Director and beneficial shareholder, was paid or is payable $150,000 (2017: $150,000) for the provision of serviced office facilities, corporate and administration services for the year ended 30 June 2018. The amount is based on a monthly retainer due and payable in advance, with no fixed term, and is able to be terminated by either party with one month’s notice. At 30 June 2018, $25,000 (2017: $12,500) was included as a current liability in the Statement of Financial Position.

19.     PARENT ENTITY DISCLOSURES

2018

2017

$

$

 

(a)        Financial Position

Assets

Current assets

5,929,459

15,738,697

Non-current assets

2,106,089

2,027,221

Total assets

8,035,548

17,765,918

Liabilities

Current liabilities

1,689,818

1,430,620

Non-current liabilities

38,992

Total liabilities

1,728,810

1,430,620

Equity

Contributed equity

123,501,153

123,484,561

Accumulated losses

(119,300,301)

(107,971,087)

Reserves

2,105,886

821,824

Total equity

6,306,738

16,335,298

(b)        Financial Performance

Loss for the year

(11,329,214)

(10,366,123)

Total comprehensive loss

(11,329,214)

(10,366,123)

 

(c)        Other information

 

The Company has not entered into any guarantees in relation to its subsidiaries.

 

Refer to Note 23 for details of contingent assets and liabilities.

20.     SHARE-BASED PAYMENTS

(a)        Recognised Share-based Payment Expense

From time to time, the Group provides incentive Unlisted Options and Performance Rights to officers, employees, consultants and other key advisors as part of remuneration and incentive arrangements. The number of options or rights granted, and the terms of the options or rights granted are determined by the Board. Shareholder approval is sought where required.

In the current and prior year, the Company has also granted shares in lieu of payments to a consultant in accordance with the terms of engagement.

During the past two years, the following equity-settled share-based payments have been recognised:

 

2018

2017

$

$

Expenses arising from equity-settled share-based payment transactions relating incentive options and performance rights

1,284,062

580,976

Expenses arising from equity-settled share-based payment transactions to suppliers and consultants

18,476

86,400

Total share-based payments recognised during the year

1,302,538

667,376

         

(b)        Summary of Unlisted Options and Performance Rights Granted as Share-based Payments

 

The following Unlisted Options and Performance Rights were granted as share-based payments during the past two years:

 

Series

Issuing Entity

Security Type

Number

Grant
Date

Expiry Date

Exercise Price

$

Grant Date Fair Value

$

2018

Series 20

Salt Lake Potash Limited

Options

250,000

22-Nov-17

30-Jun-21

0.40

0.284

Series 21

Salt Lake Potash Limited

Options

350,000

22-Nov-17

30-Jun-21

0.50

0.256

Series 22

Salt Lake Potash Limited

Options

500,000

22-Nov-17

30-Jun-21

0.60

0.233

Series 23

Salt Lake Potash Limited

Options

150,000

15-Dec-17

30-Jun-21

0.50

0.228

Series 24

Salt Lake Potash Limited

Options

250,000

15-Dec-17

30-Jun-21

0.60

0.207

Series 25

Salt Lake Potash Limited

Options

400,000

15-Dec-17

30-Jun-21

0.70

0.188

Series 26

Salt Lake Potash Limited

Rights

575,000

15-Dec-17

30-Jun-18

0.486

Series 27

Salt Lake Potash Limited

Rights

575,000

15-Dec-17

30-Jun-19

0.486

Series 28

Salt Lake Potash Limited

Rights

575,000

15-Dec-17

30-Jun-20

0.486

Series 29

Salt Lake Potash Limited

Rights

575,000

15-Dec-17

30-Jun-21

0.486

2017

Series 4

Salt Lake Potash Limited

Rights

550,000

30-Nov-16

30-Jun-18

0.506

Series 5

Salt Lake Potash Limited

Rights

550,000

30-Nov-16

30-Jun-19

0.506

Series 6

Salt Lake Potash Limited

Rights

550,000

30-Nov-16

30-Jun-20

0.506

Series 7

Salt Lake Potash Limited

Rights

550,000

30-Nov-16

30-Jun-21

0.506

Series 8

Salt Lake Potash Limited

Rights

200,000

07-Feb-17

30-Jun-18

0.543

Series 9

Salt Lake Potash Limited

Rights

200,000

07-Feb-17

30-Jun-19

0.543

Series 10

Salt Lake Potash Limited

Rights

200,000

07-Feb-17

30-Jun-20

0.543

Series 11

Salt Lake Potash Limited

Rights

200,000

07-Feb-17

30-Jun-21

0.543

Series 12

Salt Lake Potash Limited

Rights

50,000

08-Jun-17

30-Jun-18

0.428

Series 13

Salt Lake Potash Limited

Rights

50,000

08-Jun-17

30-Jun-19

0.428

Series 14

Salt Lake Potash Limited

Rights

50,000

08-Jun-17

30-Jun-20

0.428

Series 15

Salt Lake Potash Limited

Rights

50,000

08-Jun-17

30-Jun-21

0.428

Series 16

Salt Lake Potash Limited

Rights

250,000

08-Jun-17

30-Jun-18

0.412

Series 17

Salt Lake Potash Limited

Rights

250,000

08-Jun-17

30-Jun-19

0.412

Series 18

Salt Lake Potash Limited

Rights

250,000

08-Jun-17

30-Jun-20

0.412

Series 19

Salt Lake Potash Limited

Rights

250,000

08-Jun-17

30-Jun-21

0.412

(c)        Summary of Unlisted Options and Performance Rights Granted as Share-based Payments

 

The following table illustrates the number and weighted average exercise prices (WAEP) of Unlisted Options granted as share-based payments at the beginning and end of the financial year:

 

Unlisted Options

2018
Number

2018
WAEP

2017
Number

2017
WAEP

Outstanding at beginning of year

2,500,000

$0.51

2,705,443

$0.81

Granted by the Company during the year

1,900,000

$0.57

Forfeited/cancelled/lapsed/expired

(205,443)

$4.46

Outstanding at end of year

4,400,000

$0.53

2,500,000

$0.51

Exercisable at end of year

3,500,000

$0.51

1,500,000

$0.45

 

The outstanding balance of Unlisted Options as at 30 June 2018 is represented by:

·             750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;

·             750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;

·             1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;’

·             250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;

·             500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;

·             750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021; and

·             400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021.

 

The following table illustrates the number and weighted average exercise prices (WAEP) of Performance Rights granted as share-based payments at the beginning and end of the financial year:

 

Performance Rights

2018
Number

2018
WAEP

2017
Number

2017
WAEP

Outstanding at beginning of year

4,100,000

Granted by the Company during the year

2,300,000

4,200,000

Forfeited/cancelled/lapsed/expired

(1,000,000)

(100,000)

Outstanding at end of year

5,400,000

4,100,000

 

The outstanding balance of Performance Rights as at 30 June 2018 is represented by:

·            1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018 (amended following Shareholder approval on 12 June 2018);

·            1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended following Shareholder approval on 12 June 2018);

·            1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and

·            1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.

 

(d)        Weighted Average Remaining Contractual Life

At 30 June 2018, the weighted average remaining contractual life of Unlisted Options on issue that had been granted as share-based payments was 2.39 years (2017: 2.93 years) and of Performance Rights on issue that had been granted as share-based payments was 1.75 years (2017: 2.5 years).

(e)        Range of Exercise Prices

At 30 June 2018, the range of exercise prices of Unlisted Options on issue that had been granted as share-based payments was $0.40 to $0.70 (2017: $0.40 to $0.60). Performance Rights have no exercise price.

(f)         Weighted Average Fair Value

The weighted average fair value of Unlisted Options granted as share-based payments by the Group during the year ended 30 June 2018 was $0.231 (2017: nil) and of Performance Rights granted as share-based payments was $0.486 (2017: $0.496).

 

(g)        Option and Performance Right Pricing Models

 

The fair value of the equity-settled share options granted is estimated as at the date of grant using the Binomial option valuation model taking into account the terms and conditions upon which the Unlisted Options were granted. The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to issuance).

 

The table below lists the inputs to the valuation model used for share options and Performance Rights granted by the Group in the current and prior year:

 

2018

 

Inputs

Series 20

Series 21

Series 22

Series 23

Series 24

Series 25

Options

Exercise price

0.40

0.50

0.60

0.50

0.60

0.70

Grant date share price

0.50

0.50

0.50

0.465

0.465

0.465

Dividend yield 1

Volatility 2

70%

70%

70%

70%

70%

70%

Risk-free interest rate

1.99%

1.99%

1.99%

2.16%

2.16%

2.16%

Grant date

22-Nov-17

22-Nov-17

22-Nov-17

15-Dec-17

15-Dec-17

15-Dec-17

Expiry date

30-Jun-21

30-Jun-21

30-Jun-21

30-Jun-21

30-Jun-21

30-Jun-21

Expected life of option 3

3.61

3.61

3.61

3.54

3.54

3.54

Fair value at grant date

0.284

0.256

0.233

0.228

0.207

0.188

Notes:

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

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

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

 

Inputs

Series 26

Series 27

Series 28

Series 29

Performance Rights

Exercise price

Grant date share price

$0.465

$0.465

$0.465

$0.465

Grant date

15-Dec-17

15-Dec-17

15-Dec-17

15-Dec-17

Expiry date

30-Jun-18 3

30-Jun-19 4

30-Jun-20

30-Jun-21

Expected life of right 1

0.5 years

1.5 years

2.5 years

3.5 years

Fair value at grant date 2

$0.486

$0.486

$0.486

$0.486

Notes:

1   The expected life of the Performance Rights is based on the expiry date of the performance rights as there is limited track record of the early conversion of performance rights.

2    The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to issuance).

3    Subsequent to grant, the expiry date was amended to 31 December 2018 following Shareholder approval on 11 June 2018. This has no impact on the fair value of the securities, however the period that the expense is being recognised over has been modified.

4    Subsequent to grant, the expiry date was amended to 31 December 2019 following Shareholder approval on 11 June 2018. This has no impact on the fair value of the securities, however the period that the expense is being recognised over has been modified.

 

2017

 

Inputs

Series 4

Series 5

Series 6

Series 7

Exercise price

Grant date share price

$0.51

$0.51

$0.51

$0.51

Grant date

30-Nov-16

30-Nov-16

30-Nov-16

30-Nov-16

Expiry date

30-Jun-18

30-Jun-19

30-Jun-20

30-Jun-21

Expected life of right 1

1.6 years

2.6 years

3.6 years

4.6 years

Fair value at grant date 2

$0.506

$0.506

$0.506

$0.506

 

Inputs

Series 8

Series 9

Series 10

Series 11

Exercise price

Grant date share price

$0.53

$0.53

$0.53

$0.53

Grant date

07-Feb-17

07-Feb-17

07-Feb-17

07-Feb-17

Expiry date

30-Jun-18

30-Jun-19

30-Jun-20

30-Jun-21

Expected life of right 1

1.3 years

2.3 years

3.3 years

4.3 years

Fair value at grant date 2

$0.577

$0.577

$0.577

$0.577

 

Inputs

Series 12

Series 13

Series 14

Series 15

Exercise price

Grant date share price

$0.43

$0.43

$0.43

$0.43

Grant date

08-Jun-17

08-Jun-17

08-Jun-17

08-Jun-17

Expiry date

30-Jun-18

30-Jun-19

30-Jun-20

30-Jun-21

Expected life of right 1

1.1 years

2.1 years

3.1 years

4.1 years

Fair value at grant date 2

$0.431

$0.431

$0.431

$0.431

 

Inputs

Series 16

Series 17

Series 18

Series 19

Exercise price

Grant date share price

$0.41

$0.41

$0.41

$0.41

Grant date

08-Jun-17

08-Jun-17

08-Jun-17

08-Jun-17

Expiry date

30-Jun-18

30-Jun-19

30-Jun-20

30-Jun-21

Expected life of right 1

1.0 years

2.0 years

3.0 years

4.0 years

Fair value at grant date 2

$0.431

$0.431

$0.431

$0.431

Notes:

1   The expected life of the Performance Rights is based on the expiry date of the performance rights as there is limited track record of the early conversion of performance rights.

2    The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to issuance).

21.     AUDITORS’ REMUNERATION

The auditor of Salt Lake Potash Limited is Ernst and Young.

 

2018

2017

$

$

25,000

25,000

8,188

5,000

33,188

30,000

 

22.     FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(a)        Overview

The Group’s principal financial instruments comprise receivables, payables, finance leases, cash and short-term deposits. The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and interest rate risk.

This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have been no significant changes since the previous financial year to the exposure or management of these risks.

The Group manages its exposure to key financial risks in accordance with the Group’s financial risk management policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new project) and policies are revised as required. The overall objective of the Group’s financial risk management policy is to support the delivery of the Group’s financial targets whilst protecting future financial security.

Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows, the Group does not enter into derivative transactions to mitigate the financial risks. In addition, the Group’s policy is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the Group’s operations change, the Directors will review this policy periodically going forward.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board reviews and agrees policies for managing the Group’s financial risks as summarised below.

 

(b)        Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other receivables.

There are no significant concentrations of credit risk within the Group. The carrying amount of the Group’s financial assets represents the maximum credit risk exposure, as represented below:

 

2018

2017

$

$

Financial assets

Cash and cash equivalents

5,709,446

15,596,759

Trade and other receivables

227,273

300,058

5,936,719

15,896,817

 

With respect to credit risk arising from cash and cash equivalents, the Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Where possible, the Group invests its cash and cash equivalents with banks that are rated the equivalent of investment grade and above. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

The Group does not have any significant customers and accordingly does not have significant exposure to bad or doubtful debts.

Trade and other receivables comprise interest accrued and GST refunds due. Where possible the Consolidated Entity trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. At 30 June 2018, none (2017 none) of the Group’s receivables are past due.

(c)        Liquidity Risk

 

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board’s approach to managing liquidity is to ensure, as far as possible, that the Group will always have sufficient liquidity to meet its liabilities when due. At 30 June 2018 and 2017, the Group had sufficient liquid assets to meet its financial obligations.

The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There are no netting arrangements in respect of financial liabilities.

≤6 Months

$

6-12 Months
$

1-5 Years

$

≥5 Years

$

Total

$

2018
Group

Financial Liabilities

Finance lease

5,914

5,915

38,992

50,821

Trade and other payables

1,620,527

1,620,527

1,626,441

5,915

38,992

1,671,348

2017
Group

Financial Liabilities

Finance lease

5,914

5,914

50,821

62,649

Trade and other payables

1,348,791

1,348,791

1,354,705

5,914

50,821

1,411,440

(d)        Interest Rate Risk

 

The Group does not have any long-term borrowing or long term deposits, which would expose it to significant cash flow interest rate risk.

The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.

(e)        Capital Management

The Group defines its Capital as total equity of the Group, being $7,019,989 as at 30 June 2018 (2017: $17,046,443). The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while financing the development of its projects through primarily equity based financing. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Given the stage of development of the Group, the Board’s objective is to minimise debt and to raise funds as required through the issue of new shares.

The Group is not subject to externally imposed capital requirements.

There were no changes in the Group’s approach to capital management during the year. During the next 12 months, the Group will continue to explore project financing opportunities, primarily consisting of additional issues of equity.

(f)         Fair Value

The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:

·      Level 1 – the fair value is calculated using quoted prices in active markets.

·      Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

·      Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

At 30 June 2018 and 30 June 2017, the carrying value of the Group’s financial assets and liabilities approximate their fair value.

23.     CONTINGENT ASSETS AND LIABILITIES

(i)         Contingent Assets

 

As at the date of this report, no contingent assets had been identified in relation to the 30 June 2018 financial year.

 

(ii)        Contingent Liability

 

As at the date of this report, no contingent liabilities had been identified in relation to the 30 June 2018 financial year.

24.     COMMITMENTS

Management have identified the following material commitments for the consolidated group as at 30 June 2018 and 30 June 2017:

 

2018

2017

$

$

Exploration commitments

Within one year

1,896,500

1,061,000

Later than one year but not later than five years

1,896,500

1,061,000

25.     EVENTS SUBSEQUENT TO BALANCE DATE

(i)         Announced the results from a Scoping Study on the Lake Wells project which confirmed its potential to produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets; and

(ii)        On 10 August 2018, the Company appointed Mr Clint McGhie as Company Secretary and Chief Financial Officer following the resignation of Mr Sam Cordin.

Other than as above, as at the date of this report there are no matters or circumstances which have arisen since 30 June 2018 that have significantly affected or may significantly affect:

·           the operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;

·           the results of those operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity; or

·           the state of affairs, in financial years subsequent to 30 June 2018, of the Consolidated Entity.

 

ASX ADDITIONAL INFORMATION

1.     TWENTY LARGEST HOLDERS OF LISTED SECURITIES 

The names of the twenty largest holders of listed securities as at 31 August 2018 are listed below:

 

Name

Number of
Ordinary Shares

Percentage of Ordinary Shares

COMPUTERSHARE CLEARING PTY LTD

43,433,570

24.81

ARREDO PTY LTD

11,000,000

6.28

CITICORP NOMINEES PTY LIMITED

8,804,536

5.03

PERSHING AUSTRALIA NOMINEES PTY LTD

8,016,017

4.58

HOWITT MGMT PTY LTD

4,620,000

2.64

HOPETOUN CONSULTING PTY LTD

4,500,000

2.57

MR MARK STUART SAVAGE

3,600,000

2.06

AWJ FAMILY PTY LTD

3,020,000

1.73

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

3,006,923

1.72

J P MORGAN NOMINEES AUSTRALIA LIMITED

2,720,100

1.55

AROIDA INVESTMENTS PTY LTD

2,439,636

1.39

MR NEIL DAVID IRVINE

2,307,493

1.32

AEGEAN CAPITAL PTY LTD

2,237,749

1.28

MR TERRY PATRICK COFFEY & HAWKES BAY NOMINEES LIMITED

2,230,064

1.27

BELL POTTER NOMINEES LTD

2,018,721

1.15

ROSEBERRY HOLDINGS PTY LTD

2,000,000

1.14

APOLLO GROUP PTY LTD

2,000,000

1.14

SUNSET CAPITAL MANAGEMENT PTY LTD

1,800,000

1.03

VYNBEN PTY LTD

1,725,498

0.99

D GRAY & CO PTY LTD

1,610,000

0.92

Total Top 20

113,090,307

64.60

Others

61,959,289

35.40

Total Ordinary Shares on Issue

175,049,596

100.00

2.     DISTRIBUTION OF EQUITY SECURITIES 

An analysis of numbers of holders of listed securities by size of holding as at 31 August 2018 is listed below:

 

Ordinary Shares

Distribution

Number of
Shareholders

Number of
Ordinary Shares

1 – 1,000

1,101

300,105

1,001 – 5,000

399

1,031,382

5,001 – 10,000

157

1,222,564

10,001 – 100,000

326

13,141,101

More than 100,000

140

159,354,444

Totals

2,123

175,049,596

 

There were 1,135 holders of less than a marketable parcel of Ordinary Shares.

3.     VOTING RIGHTS

 See Note 13(b) of the Notes to the Financial Statements.

4.     SUBSTANTIAL SHAREHOLDERS 

Substantial holders who have notified the Company in accordance with section 671B of the Corporations Act 2001are as follows:

 

Distribution

Number of
Ordinary Shares

Lombard Odier Asset Management (Europe) Limited

17,071,000

Arredo Pty Ltd

11,000,000

5.     UNQUOTED SECURITIES 

Performance Shares

Performance Shares Subject to Pre-Feasibility Study Milestone (Class A) expiring

Performance Shares Subject to Definitive Feasibility Study Milestone (Class B) expiring

Performance Shares Subject to Construction Milestone (Class C) expiring

Holder

31-Dec-18

31-Dec-19

12-Jun-20

JBJF Management Pty Ltd

1,700,000

2,550,000

3,400,000

Mr Aharon Arakel & Mrs Ida Arakel

1,650,000

2,475,000

3,300,000

Howitt MGMT Pty Ltd

1,540,000

2,310,000

3,080,000

Others (less than 20%)

110,000

165,000

220,000

Total

5,000,000

7,500,000

10,000,000

Total holders

4

4

4

 

Unlisted Options

Unlisted Options exercisable
at $0.40

Unlisted Options exercisable
at $0.50

Unlisted Options exercisable
at $0.60

Unlisted Options exercisable
at $0.40

Unlisted Options exercisable
at $0.50

Unlisted Options
exercisable
at $0.60

Unlisted Options
exercisable
at $0.70

Holder

29-Apr-19

29-Apr-20

29-Apr-21

30-Jun-21

30-Jun-21

30-Jun-21

30-Jun-21

Hopetoun Consulting Pty Ltd

750,000

750,000

1,000,000

JJB Advisory Limited

250,000

350,000

500,000

Mr Sapan Ghai

100,000

150,000

250,000

Mr Hannes Huster

100,000

150,000

Others (less than 20%)

50,000

Total

750,000

750,000

1,000,000

250,000

500,000

750,000

400,000

Total holders

1

1

1

1

3

3

2

As at 31 August 2018, there are 5,400,000 Performance Rights issued under an employee incentive scheme.

6.     ON-MARKET BUYBACK 

There is currently no on-market buyback program for any of Salt Lake Potash Limited’s listed securities.

7.     EXPLORATION INTERESTS 

Summary of Exploration and Mining Tenements held as at 31 August 2018

Project

Status

License Number

Area       (km2)

Interest

 (%)

Western Australia

Lake Wells

Granted

E38/2710

192.2

100%

Granted

E38/2821

131.5

100%

Granted

E38/2824

198.2

100%

Granted

E38/3055

298.8

100%

Granted

E38/3056

3.0

100%

Granted

E38/3057

301.9

100%

Granted

E38/3124

39.0

100%

Granted

L38/262

113.0

100%

Granted

L38/263

28.6

100%

Granted

L38/264

32.6

100%

Granted

E38/3247

350.3

100%

Application

M38/1278

87.5

100%

Lake Way

Granted

E53/1878

217.0

100%

Application

E53/1897

77.5

100%

Lake Ballard

Granted

E29/912

607.0

100%

Granted

E29/913

73.2

100%

Granted

E29/958

30.0

100%

Granted

E29/1011

68.2

100%

Granted

E29/1020

9.3

100%

Granted

E29/1021

27.9

100%

Granted

E29/1022

43.4

100%

Lake Marmion

Granted

E29/1000

167.4

100%

Granted

E29/1001

204.6

100%

Granted

E29/1002

186.0

100%

Granted

E29/1005

68.2

100%

Lake Irwin

Granted

E37/1233

203.0

100%

Granted

E39/1892

203.0

100%

Granted

E38/3087

139.2

100%

Granted

E37/1261

107.3

100%

Granted

E38/3113

203.0

100%

Granted

E39/1955

118.9

100%

Granted

E37/1260

203.0

100%

Granted

E39/1956

110.2

100%

Lake Minigwal

Granted

E39/1893

246.2

100%

Granted

E39/1894

158.1

100%

Granted

E39/1962

369.0

100%

Granted

E39/1963

93.0

100%

Granted

E39/1964

99.0

100%

Granted

E39/1965

89.9

100%

Lake Noondie

Granted

E57/1062

217.0

100%

Granted

E57/1063

217.0

100%

Granted

E57/1064

55.8

100%

Granted

E57/1065

120.9

100%

Granted

E36/932

108.5

100%

Lake Barlee

Granted

E77/2441

173.6

100%

Granted

E30/495

217.0

100%

Granted

E30/496

217.0

100%

Lake Raeside

Granted

E37/1305

155.0

100%

Lake Austin

Application

E21/205

117.8

100%

Application

E21/206

192.2

100%

Application

E58/529

213.9

100%

Application

E58/530

217.0

100%

Application

E58/531

96.1

100%

Lake Moore

Application

E59/2340

217.0

100%

Application

E59/2341

217.0

100%

Application

E59/2342

217.0

100%

Application

E59/2343

201.5

100%

Application

E59/2344

217.0

100%

Application

E70/5195

124.0

100%

Northern Territory

Lake Lewis

Granted

EL 29787

146.4

100%

Granted

EL 29903

125.1

100%

8.     MINERAL RESOURCES STATEMENT 

Salt Lake’s Mineral Resource Statement as at 30 June 2018 is grouped by deposit, all of which form part of the Lake Wells SOP in Western Australia. To date, no Ore Reserves have been reported for these deposits. Subsequent to 30 June 2018, the Company reported a Mineral Resource Estimate for Lake Way.  The Lake Way Mineral Resource does not form part of this statement.

Governance

The Company engages external consultants and Competent Persons (as determined pursuant to the JORC Code 2012) to prepare and estimate the Mineral Resources. Management and the Board review these estimates and underlying assumptions for reasonableness and accuracy. The results of the Mineral Resource estimates are then reported in accordance with the requirements of the JORC Code 2012 and other applicable rules (including ASX Listing Rules).

Where material changes occur during the year to the project, including the project’s size, title, exploration results or other technical information, previous resource estimates and market disclosures are reviewed for completeness.

The Company reviews its Mineral Resources as at 30 June each year. A revised Mineral Resource estimate will be prepared as part of the annual review process where a material change has occurred in the assumptions or data used in previously reported Mineral Resources. However, there are circumstances where this may not be possible (e.g. an ongoing drilling programme), in which case a revised Mineral Resource estimate will be prepared and reported as soon as practicable.

Results of Annual Review

In November 2015, the Company reported its maiden JORC Mineral Resource estimate for the Lake Wells Project, totalling 29 million tonnes (Mt) of Sulphate of Potash (SOP) with approximately 80% in the ‘Measured’ category with excellent brine chemistry of 4,009 mg/L Potassium (K), 19,175 mg/L (SO4). The resource was calculated only on the upper 16 metres of the Lake, with mineralisation remaining open at depth across most of the Lake.

In February 2016, an expanded Mineral Resource Estimate (MRE) was calculated at Lake Wells totalling 80-85 million tonnes of SOP. This represents an additional 51-56 Mt of Inferred Resource calculated in the strata below the previously reported shallow Resource of 29 Mt.

During the year ended 30 June 2018, the Company continued exploration and development activities for Lake Wells including surface aquifer characterisation (test pits and trenches), deep aquifer exploration, long term pump testing, evaporation pond trials and process testwork.

In addition, in March 2018, the Company released an initial estimate of Exploration Targets for eight of the nine lakes comprising the GSLP. The ninth lake, Lake Wells (as discussed above) already has a Mineral Resource reported in accordance with the JORC code.

The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained SOP, with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP.  The total playa area of the lakes is approximately 3,312km2. The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

As a result of the annual review of the Company’s Mineral Resources, there has been no change to the Mineral Resources reported for the Lake Wells Project in February 2016 as at 30 June 2018.

Total Mineral Resource Estimate

Classification

Geological Unit

Bulk Volume

(Million m3)

Porosity

Brine Volume

(Million m3)

Average SOP1(K2SO4) Concentration (kg/m3)

K2SO4Tonnage

(Mt)

Measured

Playa Lake Sediments

5,427

0.464

2,518

8.94

23

Indicated

Playa Lake Sediments

775

0.464

359

8.49

3

Inferred

Playa Lake Sediments (Islands)

1,204

0.464

558

5.34

3

Inferred

Paleovalley Sediment

10,600

0.40

4,240

9.07

38

Inferred

Fractured Siltstone Aquifer

6,717

0.22-.30

1,478 – 2,015

8.79

13-18

Competent Person Statement – Mineral Resource Statement

The information in this Mineral Resource Statement that relates to Mineral Resources is based on, and fairly represents, information compiled by Mr Ben Jeuken, a Competent Person, who is a member Australian Institute of Mining and Metallurgy. 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’.

Mr Jeuken has approved the Mineral Resource Statement as a whole and consents to its inclusion in the form and context in which it appears. 

9.       COMPETENT PERSONS STATEMENTS

The information in this report that relates to the Lake Way Mineral Resource is extracted from the report entitled ‘Scoping Study for Low Capex, High Margin Demonstration Plant at Lake Way’ dated 31 July 2018. This announcement is available to view on www.saltlakepotash.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 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. 

The information in this report that relates to the Lake Wells Mineral Resource is extracted from the reports entitled ‘Lake Wells Resource Increased by 193% to 85Mt of SOP’ dated 22 February 2016 and ‘Significant Maiden SOP Resource of 29Mt at Lake Wells’ dated 11 November 2015. These announcements are available to view on www.saltlakepotash.com.au. The information in the original ASX Announcements 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. 

The information in this report that relates to Exploration Targets is extracted from the report entitled ‘Exploration Targets Reveal World Class Scale Potential’ dated 28 March 2018 The information in the original ASX Announcement that related to Exploration Targets or Mineral Resources is based on information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy. 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’. Mr Jeuken consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company 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.

 

10.     PRODUCTION TARGET 

The Lake Way Demonstration Plant Production Target stated in this report is based on the Company’s Scoping Study as released to the ASX on 31 July 2018. 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 ASX Announcement released on 31 July 2018. The Company confirms that the material assumptions underpinning the Production Target referenced in the 31 July 2018 release continue to apply and have not materially changed.

The Lake Wells Production Target stated in this report is based on the Company’s Scoping Study as released to the ASX on 29 August 2016. 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 ASX Announcement released on 29 August 2016. The Company confirms that the material assumptions underpinning the Production Target referenced in the 29 August 2016 release continue to apply and have not materially changed.

 

11.     FORWARD LOOKING STATEMENTS

This report contains ‘forward-looking information’ that is based on the Company’s expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to pre-feasibility and definitive feasibility studies, the Company’s business strategy, plans, development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘potential’, ‘likely’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘would’, ‘could’, ‘should’, ‘scheduled’, ‘will’, ‘plan’, ‘forecast’, ‘evolve’ and similar expressions. Persons reading this news release are cautioned that such statements are only predictions, and that the Company’s actual future results or performance may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in Schedule 2 of the Company’s Notice of General Meeting and Explanatory Memorandum dated 8 May 2015.

 

The full version of the 2018 Annual Report is available on the Company’s website at www.saltlakepotash.com.au

Salt Lake Potash #SO4 Appendix 5B Quarterly Report

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

30 June 2018

Consolidated statement of cash flows

Current quarter $A’000

Year to date              (12 months)
$A’000

1.

Cash flows from operating activities

1.1

Receipts from customers

1.2

Payments for

(1,143)

(5,930)

(a)   exploration & evaluation

(b)   development

(c)   production

(d)   staff costs

(628)

(2,553)

(e)   administration and corporate costs

(264)

(790)

1.3

Dividends received (see note 3)

1.4

Interest received

48

242

1.5

Interest and other costs of finance paid

1.6

Income taxes paid

1.7

Research and development refunds

457

1.8

Other (provide details if material)
– Business Development

– GST refunds (paid)

– Exploration Incentive Scheme

(385)

(50)

(989)

11

30

1.9

Net cash from / (used in) operating activities

(2,422)

(9,522)

2.

Cash flows from investing activities

(168)

(290)

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

(168)

(290)

3.

Cash flows from financing activities

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

(75)

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

(75)

4.

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

8,300

15,597

4.1

Cash and cash equivalents at beginning of period

4.2

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

(2,422)

(9,522)

4.3

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

(168)

(290)

4.4

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

(75)

4.5

Effect of movement in exchange rates on cash held

4.6

Cash and cash equivalents at end of period

5,711

5,711

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

1,711

2,300

5.2

Call deposits

4,000

6,000

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)

5,711

8,300

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

(207)

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 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

1,200

9.2

Development

9.3

Production

9.4

Staff costs

650

9.5

Administration and corporate costs

200

9.6

Other (provide details if material)
– Business Development


150

9.7

Total estimated cash outflows

2,200

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 Table 3

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 July 2018

(Director/Company secretary)

Print name:       Sam Cordin

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.
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