ANNUAL
REPORT
2022
CORPORATE DIRECTORY
COMPANY
Kalium Lakes Limited (ABN: 98 613 656 643)
Directors
Stephen Dennis Non-Executive Director (Chairman)
Mark Sawyer Non-Executive Director
Brent Smoothy Non-Executive Director
Salvatore (Sam) Lancuba Non-Executive Director
Robert Adam Non-Executive Director
(appointed 12 October 2022)
Simon Wandke Non-Executive Director
(appointed 12 October 2022)
Company Secretaries
Sophie Raven
Jason Shaw
Chief Executive Officer
Len Jubber
Chief Financial Officer
Jason Shaw
Registered Office
& Principal Place of Business
Unit 1, 152 Balcatta Road
Balcatta WA 6021
PO Box 610
Balcatta WA 6914
Telephone: +61 8 9240 3200
Website & Email
www.kaliumlakes.com.au
info@kaliumlakes.com.au
Auditors
RSM Australia Partners
Level 32/2 The Esplanade, Perth WA 6000
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace, Perth WA 6000
Telephone: 1300 850 505
Telephone: +61 3 9415 4000
Solicitors
DLA Piper Australia
Level 21, 240 St Georges Terrace, Perth WA 6000
Thomson Geer
Level 27, 2 The Esplanade, Perth WA 6831
Home Exchange
Australian Securities Exchange
Level 40, Central Park, 152-158 St Georges Terrace,
Perth WA 6000
ASX Code
KLL
1
ANNUAL REPORT 2022
2
KALIUM LAKES LIMITED
Contents
Chairman’s Letter
4
CEO’s Message
6
Overview
8
Operating and Corporate Activities
14
Company Activities
22
Company Summary
27
Interests and Resources
28
Competent Persons Statement
36
and Compliance Statements
Directors’ Report
38
Corporate Governance Statement
56
Auditor’s Independence Declaration
57
Financial Report
58
Directors’ Declaration
100
Independent Auditor’s Report
101
Additional Information
106
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ANNUAL REPORT 2022
CHAIRMAN’S LETTER
Dear Shareholder
On behalf of the Board and Management, I am pleased
to present the 2022 Annual Report of Kalium Lakes
Limited.
During the 12 months since I last wrote my Chairman’s
Letter for the Company’s Annual Report, your company
has faced a number of challenges, ranging from the
ongoing impact of COVID-19 restrictions through to a
variety of commissioning and harvest salt supply
issues at the Beyondie SOP Project.
As a result of those unique and significant challenges
having been met and progressively addressed, the
Kalium Lakes’ Beyondie SOP Mine (“Beyondie”) is now
the only fully constructed and producing SOP mine in
Australia.
Longstanding shareholders understand that there
have been many operational, technical and financial
hurdles during the past eight years and yet, the
dedication and commitment needed to overcome each
of those challenges by those that work for our
company has been outstanding.
Despite Kalium Lakes becoming Australia’s first SOP
producer in October 2021, and the completion of
construction activities at Beyondie in December 2021,
a number of difficulties were encountered during the
commissioning process for the complex SOP
purification plant.
Those difficulties resulted in a revised ramp-up and
production schedule, with the commissioning
activities continuing up to and beyond the delivery of
the first commercial sale of Australian SOP in July 2022.
As a result of the delayed production profile, it was
also necessary for the Company to restructure its debt
arrangements and initiate a capital raise to fund
additional working capital at Beyondie.
You will be aware that Kalium Lakes recently
successfully completed that capital raise, which
included a share placement to raise $22 million,
together with $12 million raised through the
significantly oversubscribed Share Purchase Plan,
giving a total capital raise of $34 million.
At a global scale, the outlook for SOP fertiliser remains
strong with 2022 pricing at levels not seen for over a
decade as geopolitical tensions, weather, energy
prices and other macro factors influence supply and
demand.
I would like to thank our management team, led by
Rudolph van Niekerk in the first half of the financial
year and Len Jubber since December 2021, for their
dedicated effort to maintain the momentum for
Kalium Lakes. I would also like to thank the Directors
for their substantial contributions during a period of
intense activity.
The Company also welcomes Bob Adam and Simon
Wandke, who joined the Board as additional
independent non-executive directors on 12 October
2022. Bob and Simon’s blend of technical expertise,
strategic management roles and experience in public
company governance will complement and strengthen
the Kalium Lakes Board skill set.
On behalf of
the Board and
Management, I am
pleased to present
the 2022 Annual
Report of Kalium
Lakes Limited.
4
KALIUM LAKES LIMITED
Lastly, the Directors acknowledge and thank our
shareholders for your continued support. Everyone
working for the Company remains committed to
ensuring that Kalium Lakes operates efficiently and
sustainably into the future. I am sure I speak for
everyone in saying that we understand our purpose is
to deliver long term investment returns for all
stakeholders.
I encourage you to follow the development progress of
the Beyondie SOP Mine via our ASX announcements
and through Kalium Lakes’ website.
Yours faithfully
Stephen Dennis
CHAIRMAN
At a global scale,
the outlook for
SOP fertiliser
remains strong
with 2022 pricing
at levels not seen
for over a decade
as geopolitical
tensions,
weather, energy
prices and other
macro factors
influence supply
and demand.
5
ANNUAL REPORT 2022
CEO’S MESSAGE
There can be no doubt that the many challenges faced
by Kalium Lakes during this year have been both
complex and time consuming, but the Company is now
in a stronger position, as the sole Australian producer
of SOP, to ensure the long-term success of this business.
Kalium Lakes and its partners have always strived
to target that the Beyondie SOP Mine achieved
commercial production and then nameplate capacity
in a safe and sustainable manner, as rapidly as
possible.
2021/22 ASX Significant Announcement Timeline
Australia’s first Sulphate
of Potash produced
Completion of $50
million capital raising
Restructure of existing
debt arrangements
Construction
completed
SOP purification
plant rectification
works
Rigorous commissioning
process underway
Completed Feasibility Study
for expansion to production
target of 120ktpa
AUG-21
NOV-21
SEP-21
DEC-21
JAN-22
JUL-21
FEB-22
OCT-21
A critical milestone
came with the first
commercial sale of
SOP in July 2022.
This heralded the
start of the era
of domestic SOP
production
in Australia...
6
KALIUM LAKES LIMITED
Following the milestone of becoming Australia’s first
SOP producer in October 2021, the purification plant
commissioning challenges and the harvested
potassium salt (KTMS) supply issues experienced in
November and December 2021 highlighted the
challenges associated with starting up a new
operation, in a remote location, that was effectively
providing the cornerstone for a new Australian
industry.
The impact of stringent COVID-19 restrictions in
Western Australia, from early 2020 through to early
2022, also had a substantial impact on all facets of this
project. However, at the end of day, the interruptions
to the commissioning process provided the
opportunity to review previous assumptions and
re-assess the level of operational readiness across the
entire organisation.
A critical milestone came with the first commercial
sale of SOP in July 2022. This heralded the start of the
era of domestic SOP production in Australia for
distribution to the Australian and international
agricultural markets. This achievement would not have
been possible without the bankability and surety of
the offtake agreement with Kalium Lakes’
international partner, K+S, together with the strong
support of its local WA buyer, CSBP.
MAY-22
APR-22
JUL-22
AUG-22
MAR-22
SEP-22
OCT-22
JUN-22
Revised targeted
production ramp
up profile
Process design
validated
First commercial sales
of Beyondie SOP
SOP plant equipment
testing continues
Firm commitments for
$22m placement and
debt restructure
Capital raise complete,
$34m raised from
placement and Share
Purchase Plan
7
Similar levels of robust support were echoed by the
Company’s senior lenders during the discussions held
prior to the successful capital raising undertaken
during August 2022. The debt financing provided by
NAIF and KfW, as well as the technical support
arrangement and performance guarantee provided by
EBTEC, continue to reinforce Kalium Lakes’ position as
the industry leader in Australia.
We are proud to have now reached the point where the
Beyondie SOP Mine is fully constructed, incorporating
industry leading technology, and retains the potential
to be further expanded in a favourable potash market
environment.
The operational team can now focus on systematically
addressing the remaining bottlenecks in the pond
operations and plant, and progressively increasing
production. This anticipated ramp up in production is
set to take advantage of the current strong SOP pricing
environment globally, including as Australia’s only
producing SOP mine.
Our key immediate focus remains the delivery of
safe, sustainable operations which support local
Western Australian communities. This is by way of a
mining process that involves environmentally
friendly solar evaporation and which reduces, for
the first time, Australia’s reliance on imported SOP
fertiliser.
My personal thanks go to all employees, contractors
and consultants involved with Kalium Lakes, as we
strive to ensure the production and delivery of an
agronomically superior product to Australian
farmers, while at the same time delivering an
appropriate return to our shareholders.
Len Jubber
CHIEF EXECUTIVE OFFICER
ANNUAL REPORT 2022
SOP plant
restarted
following
shutdown
8
KALIUM LAKES LIMITED
Leading
market
position
Australia’s sole SOP
producer, set to capitalise
on domestic and
international demand
Buoyant
potash
market
High crop prices and
ongoing geo-political
tensions continuing to drive
attractive product pricing
OVERVIEW
Australia’s sole
Sulphate of
Potash producer.
8
KALIUM LAKES LIMITED
9
ANNUAL REPORT 2021/22
Integrated
production
operation
Initially targeting 80ktpa
and expanding to 120ktpa
fully integrated SOP
production target
Significant
potential
expansion upside
Detailed studies planned
to evaluate significant
potential future
value drivers
9
ANNUAL REPORT 2022
OVERVIEW
Kalium Lakes Beyondie Sulphate Of Potash Mine Location
GERALDTON
NEWMAN
PORT HEDLAND
MT MAGNET
KALGOORLIE
FREMANTLE
BEYONDIE
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KALIUM LAKES LIMITED
Kalium Lakes is a producer of premium
Sulphate of Potash fertiliser, focused on the
100% owned Beyondie SOP Mine in Western
Australia and producing SOP for domestic and
international sale.
Review of Operations
Beyondie SOP Mine Production Process
Sulphate of Potash (“SOP”) is a widely used agricultural
fertiliser with annual global consumption of
approximately seven million tonnes per annum. Prior
to Kalium Lakes’ first commercial production and sales,
Australia imported 100% of its SOP requirements from
overseas producers.
Ten Mile Lake and Lake Sunshine
Bores and
Trenches
Pond
systems
Pre-concentration
and piping
KTMS
harvest
1
2
3
11
Mineral Resource
& Ore Reserves
Brine Extraction &
pre-concentration
KTMS feed salt
production
Schoenite
conversion
Flotation
SOP
Production
SOP purification plant
Compaction
and logistics
Drying and
compaction
Storage and
transport
K2SO 4
OVERVIEW
ANNUAL REPORT 2022
4
5
Kalium Lakes produces SOP by extracting brine
(hypersaline water) from underground, then
evaporating the water to precipitate mixed potassium
salts (kanite type mixed salts, or “KTMS”) which are,
in turn, purified to produce the SOP fertiliser, as
illustrated in the flow diagram below:
OVERVIEW
STAGE 1
STAGE 2
SHIRE OF WILUNA
SHIRE OF MEEKATHARA
Can
ning Stock Ro
ute
The Beyondie footprint, covering
Stage 1 and Stage 2, provides the
resources and reserves for a 50 year
mine life at the production target of
120ktpa, plus significant potential for
expansion upside.
Gre
at
N
o
r
th
e
r
n
H
igh
w
a
y
Local Government Boundary
Mining Lease
Kalium Lakes Tenements
Gas Pipeline
Canning Stock Route
Stage 2
Stage 1
Pending Tenements
N
12
KALIUM LAKES LIMITED
Kalium Lakes holds rights to granted tenure of
approximately 1,844 square kilometres, as well as
further tenement applications covering approximately
217 square kilometres, as shown in the map on the
previous page.
The Company is currently completing commissioning
at Beyondie, based solely on Stage 1 of the mine which
covers 6,400 hectares or 22% of the 29,400 hectares of
total available lake surface area.
The remaining 23,000 hectares or 78% of the total
available lake surface area and palaeovalley sequence,
represents the next major phase. It is anticipated to
deliver considerable benefits in terms of increased
production volumes and potential extension to the life
of the mine.
SOP Mine Stages
The current 33.47 million tonne Total SOP Mineral
Resource includes both Stage 1 and Stage 2 (see map on
previous page).
The 4.89 Mt SOP Ore Reserve is related to Stage 1 only,
with this stage covering 35 kilometres in length and
including Ten Mile Lake (including Ten Mile West) and
Lake Sunshine.
Stage 2 is 180 kilometres in length and includes 12
lakes, with similar high grades to the Stage 1 lakes.
The total length of the palaeochannel running through
both Stages, represents a driving distance from Perth
to Busselton, in Western Australia.
OVERVIEW
13
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ANNUAL REPORT 2022
Stage 1
OPERATING AND CORPORATE ACTIVITIES
An announcement that
deliveries of SOP from the
Beyondie SOP Mine to local
WA fertiliser manufacturer
and distributor, CSBP
Fertilisers, had commenced
as part of the inaugural sale
under its offtake agreement
with K+S, was made on
31 July 2022.
The 2022 financial year was a challenging one for
Kalium Lakes as it was faced with a number of
significant issues during the commissioning phase of
the purification plant at the Company’s Beyondie SOP
Project.
In the first half of the year, Kalium Lakes completed a
feasibility study for an increase in its production
target from 90 ktpa to 120 ktpa as a new base case,
which was followed by an equity raising targeted to
fund the expansion.
In addition, the offtake agreement with K+S Asia Pacific
(“K+S”) was extended to cover increased production at
the 120 ktpa level and included improved payment
terms for the first three years to assist the Company
with its working capital needs.
With harvesting operations and the stockpiling of
potassium salt continuing, plant commissioning
activities saw completed plant modules progressively
handed over by the construction contractor. On 5
October 2021 the Company announced it had produced
its first batch of SOP at the required product
specification during the product commissioning
process.
Formal binding documentation to restructure the
Company’s debt facilities with its two senior lenders,
KfW and NAIF, was completed on 12 October 2021 with
the senior lenders also providing an additional short
term $20 million liquidity facility as a general-purpose
facility. The restructure included a condition that the
Company successfully complete an equity raise of at
least $47.1m, which the Company completed by way of
a two-tranche equity placement to raise $50 million at
an offer price of $0.18 per share. In addition, a Share
Purchase Plan offer was announced for eligible
shareholders which aimed to raise up to $10 million.
The successful completion of the equity placement
was announced on 14 October 2021, with the
placement significantly oversubscribed. The Share
Purchase Plan closed one month later and raised
approximately $7.59 million.
During November 2021 the Company provided a
commissioning update and noted that the operation of
the trenches and bore fields had been impacted during
late October because of silting and collapsing of
trench walls in several places, as well as unexpected
breakdowns of a few production bores. Product
commissioning had entered the final stages although
the process was trending slightly behind schedule and
using more of the harvested salts than anticipated.
The Annual General Meeting was held in Perth on
Tuesday 30 November 2021, with all resolutions as set
out in the Notice of Meeting voted on at the meeting
and passed by shareholders.
Following the decision of the Chief Executive Officer
and co-founder, Mr Rudolph van Niekerk, to step down
and move to the role of Project Director, Mr Leonard
Jubber was appointed as Chief Executive Officer of
Kalium Lakes, effective from 8 December 2021.
Mr Jubber is a mining engineer with broad operational
and corporate leadership experience and a track
record of successfully developing and operating
mining assets and businesses. He was previously
Managing Director and CEO of ASX-listed uranium
development company, Bannerman Energy Limited.
14
KALIUM LAKES LIMITED
The practical completion of the compaction plant
occurred in late December 2021 and marked the
completion of the construction contract with DRA
Pacific Pty Ltd. Dry commissioning of the compaction
plant commenced, with product commissioning
expected to commence when sufficient quantities of
standard grade SOP became available.
As certain later-stage plant commissioning issues had
been identified, the Company announced on 22
December 2021 that Mr Jubber had initiated a review of
the SOP purification plant operations. It was noted
that the restricted availability of resources and
logistical challenges in getting additional international
experts of the original equipment manufacturers on
site through COVID-19 restrictions had also
contributed to some of the challenges during
commissioning of specific plant equipment.
A month later, at the end of January 2022, the
Company released detailed information on the status
of borefield and trenching operations, brine
production, pond operations, the level of harvested
potassium salts, the purification plant and SOP
production to date.
On 1 March 2022, Kalium Lakes provided the market
with a further update on brine production and the 120
ktpa expansion bore drilling and brine supply
program. It advised that sufficient grades of harvested
potassium sales were expected to be accumulated to
coincide with the expected SOP purification plant
re-start leading to targeted commercial SOP sales
from July 2022. It was expected that an approximate
targeted production run rate of 80 ktpa of SOP would
be achieved by Q1 CY2023, with the targeted expansion
to a 120 ktpa run rate established by Q3 CY2024. As a
result of the revised production ramp-up schedule, the
Company advised that it had a requirement for further
external funding by Q3 CY2022 and had commenced
discussions with its financiers to address this
requirement.
15
OPERATING AND CORPORATE ACTIVITIES
ANNUAL REPORT 2022
OPERATING AND CORPORATE ACTIVITIES
At the end of May 2022, the Company reported that the
SOP plant process design had been validated, and
during April/May had produced approximately 400
tonnes of commercially saleable SOP. The SOP
purification plant commissioning was proceeding as
planned and ongoing discussions were being held with
debt providers, NAIF and KfW, on funding initiatives
that would be required by Q3 CY2022, as well as well as
with key offtake partner, K+S, regarding the
rescheduling of SOP deliveries.
At the beginning of July 2022, Kalium Lakes provided an
update advising that the first commercial sales had
been scheduled for later that month and that it had
achieved cumulative production of 1,000 tonnes of
commercially saleable SOP to 29 June 2022 (later
restated at 972 tonnes following completion of end of
month survey calculations at 30 June 2022).
Further testing of plant equipment was continuing and
the purification plant would undertake a shutdown in
August, with a restart anticipated for September 2022.
The Company also noted that late rain events in May
and June 2022 had filled trenches, pre-concentrator
ponds and evaporation ponds, causing delays in pond
salt precipitation due to longer evaporation periods.
An announcement that deliveries of SOP from the
Beyondie SOP Mine to local WA fertiliser manufacturer
and distributor, CSBP Fertilisers, had commenced as
part of the inaugural sale under its offtake agreement
with K+S, was made on 31 July 2022.
The next month, on 18 August 2022, Kalium Lakes
announced that it had received firm commitments
from investors for a two-tranche placement of fully
paid ordinary shares to raise $22 million (before costs)
(the “Placement”) at a price of $0.04 per share. The
Company announced that its largest shareholder,
Greenstone Resources and co-founder and director
Brent Smoothy, respectively committed to subscribe
for $8 million and $2 million under the Placement.
Also on 18 August 2022, the Company announced that it
had entered into formal binding documentation with
its senior lenders to restructure its existing debt
arrangements including (but not limited to) a deferral
of the commencement of all senior principal
repayments under the project finance term facilities
from March 2024 to March 2025, an extension to the
final maturity date for the project finance term
facilities to March 2040 and an extension to the
maturity date for the existing and undrawn $20 million
liquidity facility to January 2026.
The debt restructure included the requirement that
the Company successfully complete an equity raise of
at least $20 million (net of costs) by 7 October 2022.
Completion of the Placement announced on the same
day enabled this requirement to be met.
In addition to the Placement, existing eligible
shareholders were offered the opportunity to subscribe
for shares under a Share Purchase Plan (“2022 SPP”) at
the Placement offer price of $0.04 per share, to raise up
to an additional $8 million (before costs).
On 13 September 2022, Kalium Lakes announced that
the SOP purification plant had restarted in-line with
the targeted schedule, following an approximate
four-week planned shutdown to perform key
rectification and optimisation works. Further
incremental plant optimisation was anticipated to
occur alongside normal plant operations during
coming months.
On 19 September 2022, Kalium Lakes announced that it
had received applications in excess of $8 million under
the 2022 SPP offer and, to accommodate the level of
demand, the Company had determined to increase the
size of the 2022 SPP offer to $12 million. The 2022 SPP
closed on 27 September 2022, with the Company
announcing on 30 September 2022 that it had been
oversubscribed, receiving eligible applications of $16.2
million, which was scaled back to $12 million (before
costs).
The second tranche of the Placement and the 2022 SPP
offers were subject to the Company obtaining
shareholder approval at a General Meeting which took
place on 3 October 2022 at which all resolutions were
passed.
16
KALIUM LAKES LIMITED
17
ANNUAL REPORT 2021/22
17
ANNUAL REPORT 2022
OPERATING AND CORPORATE ACTIVITIES
Key Corporate Developments
Board Additions
Robert (Bob) Adam
NON-EXECUTIVE DIRECTOR
(appointed 12 October 2022)
Bob is a senior executive with 40 years of
experience in the resources industry. Bob has
a proven record of achievement in project
development, management and operational
improvement. He has worked extensively in
West Africa with a demonstrable record of
success in multi-cultural and multi-lingual
environments. Previous roles include 11 years
leading an independent bauxite development
company operating in Guinea, Managing
Director of an international mining
consultancy, and a senior management role
with BHP Nickel West.
Bob has been involved in project developments
in Guinea, Ghana, Mali, Zambia, Tanzania,
Mauritania and Zimbabwe, principally in gold
but also copper and iron ore and is
an independent non-executive director of
Indiana Resources Limited.
Mr Adam is a member of the
Australian Institute of
Company Directors and
the Australasian Institute of
Mining and Metallurgy.
He also holds a Bachelor
of Science (Honours).
Simon Wandke
NON-EXECUTIVE DIRECTOR
(appointed 12 October 2022)
Simon has been leading multi-country strategy,
commercial development and implementation
for global mining and mineral assets for over 40
years. An accomplished C-suite leader and
current Non-Executive Director (Australia) and
Advisory Board member (USA), he has focused
his expertise in the resource sector on
maximizing value. He started his mining career in
BHP in 1981. He was most recently CEO of
ArcelorMittal Mining and has held senior
executive roles at Ferrexpo plc, Destra
Consulting Group and BHP with experience
leading international teams in Australia,
Indonesia, Hong Kong, Switzerland, United
Kingdom, Canada and the USA.
Simon is a graduate of the Australian Institute of
Company Directors with a diploma in Company
Directorship. He also holds a post graduate
diploma in Corporate
Finance from Swinburne
University as well as a B.A.
majoring in Psychology
and Marketing (Commerce)
from the University of
Melbourne.
18
KALIUM LAKES LIMITED
OPERATING AND CORPORATE ACTIVITIES
Key Corporate Developments
Management Changes
Len Jubber
CHIEF EXECUTIVE OFFICER
Len is a mining engineer with broad operational
and corporate leadership experience and a
track record of successfully developing and
operating mining assets and businesses. He
was previously Managing Director and CEO of
ASX-listed uranium development company,
Bannerman Energy Limited, for eight years.
Prior roles included Managing Director and CEO
of Perilya Limited, which was an ASX-listed zinc
and lead production company and Chief
Operating Officer of ASX-listed gold producer,
Oceana Gold Limited. He started his career with
Rio Tinto at the Rossing Uranium Mine in
Namibia. Mr Jubber is also a non-executive
director of Muriate of Potash (MOP)
development business, South Harz Potash
Limited.
19
Sophie Raven
COMPANY SECRETARY
Sophie is a lawyer and governance professional
who has extensive experience in corporate
governance and legal roles in Australia and
internationally.
During her career, Sophie has worked in legal
and company secretary roles for a variety of
ASX-listed and large private companies
operating across Australia, Africa, the USA, and
Europe, in the sulphate of potash (ASX: APC),
mining services, technology and manufacturing
sectors. She has also practiced as a corporate
and commercial lawyer in law firms and as
in-house legal counsel for more than twenty
years, focusing on general corporate law,
mergers and acquisitions, and investment
funds.
ANNUAL REPORT 2022
OPERATING AND CORPORATE ACTIVITIES
Key Corporate Developments
Management Changes
Jason Morin
GENERAL MANAGER OPERATIONS
Jason comes from a diverse background which
includes operational excellence consulting,
manufacturing heavy equipment, with the past
15 years spent in the resources sector.
Jason holds a Master of Business
Administration, qualifications in mining and
minerals engineering and was most recently WA
Manager of Mines for Alcoa and prior to that
General Manager Operations at St Barbara in
which he championed a transformation at the
Leonora Operations.
Jason is Canadian-born and has worked in
several countries such as Canada, France, USA,
Indonesia, Ireland, and Australia, having made
Perth his home for the past few years.
Ian Hind
MANAGER MARKETING & LOGISTICS
Ian has 25 years of international marketing,
shipping and logistics experience for bulk
mineral commodities including base metals,
mineral sands and other high value mineral
commodities for Australian mining companies.
Ian’s previous roles have included Vice
President – Marketing EMEAI for Iluka Resources
Limited and Marketing Manager for Western
Metals Ltd. Ian has worked in Belgium, India
and the U.A.E. and holds a Bachelor of Business
in Marketing and Communications.
20
KALIUM LAKES LIMITED
OPERATING AND CORPORATE ACTIVITIES
Key Corporate Developments
Management Changes
Helen Astill
GENERAL MANAGER – ESG
Helen is an environmental scientist with more
than 20 years’ experience in regulatory
approvals and impact assessments, HSE
management systems, and performance
reporting frameworks. She has worked across
several industry sectors, including mining,
energy and utilities.
Helen was previously HSE Manager at Jadestone
Energy, Quadrant Energy, and Environmental
Approvals Lead at Apache Energy. Helen started
her career with natural resource management
organisations including the WA Department of
Water, and the Swan River Trust, later working
with a number of proponents in bauxite mining.
Netra Goel
PROJECT DEVELOPMENT MANAGER
Netra is a mechanical engineer with over 20
years’ experience in design and development of
new projects, operational debottlenecking, due
diligence, solving complex technical issues in
bulk material handling and process plants and
developing professional teams and integrated
systems.
Netra’s previous roles include Engineering
Manager at Alcoa and Talison lithium project
and Group Leader (Director) of the WA Resource
Power and Industrial Division at AECOM.
21
ANNUAL REPORT 2022
Market Update
During the financial year, the potash market
experienced a period of volatility not seen in the
past decade.
In the September 2021 quarter, Western sanctions
against Belarus, which accounts for 11% of global
production of Muriate of Potash (“MOP”), saw MOP
prices increase to an average of ~US$585/tonne
FOB Europe, more than double the level seen in the
previous financial year. With around half of the world’s
SOP being produced from MOP (through the chemical-
based “Mannheim” production method), the higher
MOP price also resulted in an increase in SOP prices,
reaching an average of US$680/tonne FOB Europe.
During the December 2021 quarter, MOP prices only
increased slightly to an average of US$650/tonne FOB
Europe however, SOP prices grew strongly due to the
imposition of Chinese fertiliser export bans in October
2021 and at the end of December averaged ~US$850/
tonne FOB Europe.
The potash markets were relatively stable in the initial
weeks of the March 2022 quarter, but Russia’s invasion
of Ukraine on 24 February 2022 sent shockwaves
through potash markets. Russia, with an annual
production of 9 million tonnes per annum is the
world’s second largest producer of MOP, and their
combined production with Belarus accounts for close
to one-third of global production. As a result of these
globally significant geo-political events the average
MOP price had jumped to ~US$930/tonne FOB Europe.
Average SOP prices also increased to ~US$940/tonne
FOB Europe at the end of March 2022 with the margin
between SOP and MOP for Mannheim SOP producers
reduced to its lowest level in a decade.
MOP prices peaked at an average of US$ 970/tonne FOB
Europe in May 2022, before slowly falling as the impact
of sanctions proved to be less severe than expected.
SOP prices also peaked at US$ 1,170/tonne FOB Europe
in May 2022 and as MOP prices fell, so too did SOP
prices. By June 2022, the average MOP price was 167%
higher than in June 2021, while the SOP price was 120%
higher than a year earlier.
Subsequent to June 2022, both MOP and SOP prices
have continued to weaken due to lower seasonal
demand and buyer resistance to prices which still
remain significantly elevated relative to their historical
long-term averages.
COMPANY ACTIVITIES
22
KALIUM LAKES LIMITED
Deliveries of SOP from the Beyondie SOP Mine to local WA
fertiliser manufacturer and distributor, CSBP Fertilisers.
COMPANY ACTIVITIES
Finance
2021 Restructure of Existing Debt Arrangements
On 13 October 2021, Kalium Lakes Limited announced
that it had entered into formal binding documentation
with its two senior lenders, being KfW IPEX-Bank
(“KfW”) and the State of Western Australia, through the
Ministerial body corporate preserved and continued
pursuant to Section 5 of the Industry and Technology
Development Act 1988 (WA) (facilitated by the Northern
Australia Infrastructure Facility (“NAIF”)) in respect to
a restructure of its existing debt arrangements,
including the provision of an additional liquidity
facility for an aggregate of $20 million (“2021 Debt
Restructure”).
The 2021 Debt Restructure was foreshadowed in the
Company’s ASX announcement dated 18 August 2021
relating to the completion of the new base case
production target increase to 120 ktpa at the Beyondie
SOP Project. The key terms included a deferral of all
senior principal repayments for the first two years of
production until 31 March 2024 and a two-year
extension to the maturity date of the project finance
term facilities owed by its wholly owned subsidiary,
Kalium Lakes Potash Pty Ltd (“KLP”) until March 2033.
The 2021 Debt Restructure included a condition that
the Company successfully complete an equity raise by
3 January 2022 of at least $47.1m (net of costs) to fund
the expansion of the production target to 120 ktpa and
for working capital purposes.
2021 Successful Completion of $50 Million
Capital Raising
Kalium Lakes announced on 14 October 2021 that
it had successfully completed a bookbuild to raise
$50 million through a two-tranche placement of new
fully paid ordinary shares. The Offer was significantly
oversubscribed, receiving strong demand from existing
shareholders as well as new institutional investors.
In addition to the Offer, Kalium Lakes conducted a
share purchase plan, which raised $7.59 million.
The proceeds from the Offer were to be allocated to
fund the expansion of the Beyondie SOP Project to
the production target of 120 ktpa and provide working
capital during the ramp-up.
Kalium Lakes’ largest shareholder, Greenstone
Resources, committed to take up its rights to retain a
holding of 19.8% post the Offer and SPP under its anti-
dilution right (as announced to the ASX on 11 May 2020).
2022 Successful Completion of Debt Restructure and
$34 Million Capital Raising
On 18 August 2022 the Company announced that it
had received firm commitments from investors for a
two-tranche placement of fully paid ordinary shares to
raise $22 million (before costs) (the “2022 Placement”)
at a price of $0.04 per share. The Company announced
that its largest shareholder, Greenstone Resources,
and co-founder and director Brent Smoothy, had
respectively committed to subscribe for $8 million and
$2 million under the 2022 Placement.
Also on 18 August 2022, the Company announced that
it had entered into formal binding documentation
with its senior lenders to restructure its existing debt
arrangements (“2022 Debt Restructure”) including (but
not limited to) a deferral of the commencement of all
senior principal repayments under the project finance
term facilities owed by its wholly owned subsidiaries,
KLP and Kalium Lakes Infrastructure Pty Ltd (“KLI”)
from March 2024 to March 2025, an extension to the
final maturity date for these facilities to March 2040
and an extension to the maturity date for the existing
$20 million liquidity facility to January 2026. The 2022
Debt Restructure included the requirement that the
Company successfully completed an equity raise of
at least $20 million (net of costs) by 7 October 2022.
Completion of the 2022 Placement announced on the
same day (18 August 2022) enabled that requirement to
be met.
In addition to the 2022 Placement, existing eligible
shareholders were offered the opportunity to
subscribe for shares under a Share Purchase Plan
(“2022 SPP”) at the 2022 Placement offer price of
$0.04 per share, to raise up to an additional $8
million (before costs). An SPP shortfall offer was also
announced, which would allow the Company to accept
subscriptions from investors who wanted to subscribe
to make up any shortfall if total subscriptions for the
2022 SPP offer were below $8 million.
23
ANNUAL REPORT 2022
COMPANY ACTIVITIES
Later, on 19 September 2022, Kalium Lakes announced
that it had received applications in excess of $8
million under the 2022 SPP offer and, to accommodate
the level of demand, the Company had determined to
increase the size of the 2022 SPP offer to $12 million.
The 2022 SPP closed on 27 September 2022, with the
Company announcing on 30 September 2022 that it had
been oversubscribed, receiving eligible applications
of $16.2 million, which was scaled back to $12 million
(before costs).
Together the 2022 Placement and the 2022 SPP raised a
total of $34 million (before costs) for the Company.
The second tranche of the 2022 Placement and the
2022 SPP offers were subject to the Company obtaining
shareholder approval at a General Meeting and all
necessary resolutions were passed by shareholders at
the General Meeting held on 3 October 2022.
Transition to Beyondie SOP Mine
During the financial year the Beyondie Sulphate of
Potash Project transitioned from project development
into operations, in relation to activities in its ponds and
borefields, to become known as the Beyondie Sulphate
of Potash Mine. The SOP purification plant remained in
the commissioning phase as at 30 June 2022.
Financial Position
As at 30 June 2022, Kalium Lakes had approximately
$21.5 million cash and $179.1 million of drawn senior
debt facilities with NAIF and KfW. Undrawn debt
capacity is $2.4 million under Facility A, provided
by KfW, which is set aside for final commissioning
payments.
Following successful completion of the 2022 Debt
Restructure and capital raise referred to above on 7
October 2022, Kalium Lakes had approximately $35.9
million of cash and $187 million of drawn senior debt
facilities with NAIF and KfW. Undrawn debt capacity
is $2.4 million under Facility A, provided by KfW, which
is set aside for final commissioning payments and
$20 million under the Liquidity Facility provided by
NAIF and KfW. (Note: cash balances and drawn and
undrawn debt at 7 October 2022 as set out above
have been converted to their $A equivalents using the
currency exchange rates at that date).
Securities on Issue
The Company had 1,181,712,214 ordinary shares on
issue as at 30 June 2022. As at the date of this report
Kalium Lakes has 2,031,712,214 ordinary shares on
issue. The following is a list detailing other securities
on issue on issue, as at the date of this report:
•
17,677,493 nil exercise price options expiring
16 June 2023; and
•
5,000,000 options exercisable at $0.50 each,
expiring on 30 June 2025.
Dividends
The extent, timing and payment of any dividends in the
future will be determined by the Directors based on a
number of factors, including future earnings and the
financial performance and position of the Company at
that time.
24
KALIUM LAKES LIMITED
During the financial year
the Beyondie Sulphate of
Potash Project transitioned
from project development
into operations, in relation to
activities in its ponds
and borefields, to become
known as the Beyondie
Sulphate of Potash Mine.
The SOP purification
plant remained in the
commissioning phase
as at 30 June 2022.
25
ANNUAL REPORT 2022
COMPANY SUMMARY
Safety
At Kalium Lakes the safety, health and wellbeing of its
employees and contractors is of paramount
importance, where no task is so important that it
cannot be done safely. Personal health and safety
performance is considered integral to an efficient and
successful company.
Kalium Lakes also recognises that people are its
greatest asset and encourages a culture of innovation
and creativity in the way it does business.
Construction activities at the Beyondie SOP Project
decreased during this period as the project
transitioned into operational readiness.
Kalium Lakes continues to develop its Health Safety,
Environmental and Social Systems. Considerable
progress has been made in establishing an integrated
Risk Management process for tracking Hazard
Reporting, Risks and Actions, and as proactive
reporting increases these systems will continue to
grow and mature.
Construction activities at the Beyondie SOP Mine
decreased during the financial year as the project
transitioned into commissioning and operations. A
Lost Time Injury Frequency Rate of 6.72 was recorded
for the period.
Sustainability
Native Title and Heritage
Kalium Lakes recognises the importance of country,
law and culture to the Traditional Owners of the land
in which they operate. We recognise stakeholder
engagement is the basis for building strong,
constructive, and responsive relationships that are
essential for the successful management of our social
and environmental impacts. Through developing and
implementing an Indigenous Engagement Strategy,
Kalium Lakes is committed to engaging with and
fostering relationships with Indigenous People that
are inclusive, respectful and make a lasting and
positive contribution.
Kalium Lakes is committed in ensuring early and
transparent engagement and is actively working with
the relevant native title parties and traditional
knowledge holders to implement the Land Access
Agreements to support project development and
operations. Kalium Lakes also expects its managers to
be educated and active in fostering long-term
relationships with both Indigenous People and the
Community surrounding their operations. The
Company recognises that culturally significant sites
and issues may from time to time be identified on its
leases. Its management, employees, contractors and
associates undertake to comply with the requirements
of the Aboriginal Heritage Act 1972 and in accordance
with the Cultural Heritage Management Plans in
recognising and protecting these sites and places.
Ongoing communication and consultation remain key to
Kalium Lakes’s relationship with the Traditional Owners.
During the year the Company commissioned some
artwork from local groups, which is now displayed the
administration areas at the mine site. This original local
artwork is not only visually impressive it also plays an
important role in promoting cultural awareness at site.
26
KALIUM LAKES LIMITED
Kalium Lakes recognises the importance of country,
law and culture to the Traditional Owners of the land in
which they operate.
COMPANY SUMMARY
Environment
Kalium Lakes is committed to responsible
environmental management and environmental
performance as an essential attribute of a
sustainable, responsible, efficient, and
successful company. This will be achieved
through leadership, reliable environmental
management systems, cultivating a positive
environmental culture with employees and
contractors and ensuring rigorous control and
compliance over our activities.
Kalium Lakes completed a number of flora and
fauna surveys during the year to help gain a
better understanding of the biodiversity present
within the bounds of the mine site and its
surroundings. It is actively working to ensure
important conservation species are able to
continue flourishing in unison with SOP
production.
Community
Kalium Lakes strives to maintain integrity while
upholding positive and cooperative relationships
with its stakeholders. In doing so, it will
continually work to build trust and respect, as
well as ensuring that key stakeholders are
informed in a timely, open and transparent
manner. The Company will maintain a clear and
concise approach to consultation and
negotiations with landholders, adhere to
acceptable protocols that are endorsed by local
community representatives and establish
mutually beneficial long-term relationships,
employment and contracting opportunities as
part of a culturally aware workplace.
Cultural Awareness Training is a key part of how
the Company operates and there is ongoing
interaction with the Traditional Owners aimed at
ensuring that this training is maintained and
continually improved.
Key Risks
The key risks for the Beyondie SOP Mine are set out in
the comprehensive list published on slides 41-46 of
the Equity Capital Raising Investor Presentation
announced to the ASX on 18 August 2022.
ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations
The Company has adopted comprehensive systems of
control and accountability as the basis for the
administration of corporate governance. The Board is
committed to administering the Company’s policies
and procedures with openness and integrity. To the
extent applicable, the Company has adopted the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations.
The Board considers that, due to the Company’s size
and nature, the current Board composition needed to
expand to deliver a cost effective and practical
method of directing and managing the Company. As
the Company’s activities develop in size, nature and
scope, the implementation of additional structures
and corporate governance policies will be reviewed.
The Company’s Corporate Governance Statement is
available on the Company’s website at:
www.kaliumlakes.com.au
27
ANNUAL REPORT 2022
INTERESTS AND RESOURCES
Beyondie Sulphate of Potash Mine (100% Owned): Tenement Interests
Tenement
Tenement Name
Holder
State
Status
Grant Date
Interest
Exploration Licences
E52/3956
Access Rd FW A
KLP
WA
Pending
TBA
100%
E52/3957
Access Rd FW B
KLP
WA
Pending
TBA
100%
E52/4038
Access Rd FW C
KLP
WA
Pending
TBA
100%
E69/4052
Kendenura Hill
KLP
WA
Pending
TBA
100%
E69/4098
Ten Mile Lake
KLP
WA
Pending
TBA
100%
E69/3306
Yanneri-Terminal
KLP
WA
Granted
17-3-2015
100%
E69/3309
10 Mile Beyondie-
KLP
WA
Granted
17-4-2015
100%
E69/3339
West Central
KLP
WA
Granted
22-6-2015
100%
E69/3340
White
KLP
WA
Granted
22-6-2015
100%
E69/3341
West Yanneri
KLP
WA
Granted
11-8-2015
100%
E69/3342
Aerodrome
KLP
WA
Granted
22-6-2015
100%
E69/3343
T Junction
KLP
WA
Granted
22-5-2015
100%
E69/3344
Northern
KLP
WA
Granted
22-5-2015
100%
E69/3345
Wilderness
KLP
WA
Granted
22-5-2015
100%
E69/3346
NE Beyondie
KLP
WA
Granted
11-8-2015
100%
E69/3347
10 Mile South
KLP
WA
Granted
11-8-2015
100%
E69/3348
North Yanneri-Terminal
KLP
WA
Granted
11-8-2015
100%
E69/3349
East Central
KLP
WA
Granted
22-6-2015
100%
E69/3351
Sunshine
KLP
WA
Granted
31-8-2015
100%
E69/3352
Beyondie Infrastructure
KLP
WA
Granted
31-8-2015
100%
E69/3594
10 Mile West
KLP
WA
Granted
26-07-2019
100%
28
KALIUM LAKES LIMITED
Tenement
Tenement Name
Holder
State
Status
Grant Date
Interest
Miscellaneous Licences
L52/162
Access Road
KLI
WA
Granted
30-3-2016
100%
L52/186
G N Hwy Access Road
KLI
WA
Granted
30-5-2018
100%
L52/187
Comms Tower 2
KLI
WA
Granted
30-5-2018
100%
L52/193
Kumarina FW 2
KLP
WA
Granted
13-8-2018
100%
L69/28
Access Road Diversion
KLI
WA
Granted
7-8-2018
100%
L69/29
Access Road Village
KLI
WA
Granted
7-8-2018
100%
L69/30
Comms Tower 1
KLI
WA
Granted
30-5-2018
100%
L69/31
Sunshine Access Road
KLP
WA
Granted
7-8-2018
100%
L69/32
10MS FW A
KLP
WA
Granted
14-8-2018
100%
L69/34
10MS FW B
KLP
WA
Granted
14-8-2018
100%
L69/35
10MS FW C
KLP
WA
Granted
17-12-2018
100%
L69/36
10MS FW D
KLP
WA
Granted
17-12-2018
100%
L69/38
Access Road “S” Bend
KLI
WA
Granted
30-1-2019
100%
L69/40
10 Mile Airstrip
KLI
WA
Granted
8-2-2019
100%
L69/41
10 Mile Village
KLI
WA
Granted
8-2-2019
100%
L69/46
10MS FW E
KLP
WA
Granted
8-2-2021
100%
L69/47
10MS FW F
KLP
WA
Granted
27-7-2021
100%
L69/48
10MS FW G
KLP
WA
Granted
27-7-2021
100%
L69/52
Ten Mile Expansion 1
KLP
WA
Granted
31-3-22
100%
L69/53
Ten Mile Expansion 2
KLP
WA
Granted
31-3-22
100%
L69/54
Sunshine Expansion 1
KLP
WA
Granted
31-3-22
100%
L69/55
Sunshine Expansion 2
KLP
WA
Granted
31-3-22
100%
L69/59
Sunshine Access Rd A
KLP
WA
Granted
15-7-22
100%
L69/60
Sunshine Access Rd B
KLP
WA
Granted
15-7-22
100%
L69/61
Sunshine Access Rd C
KLP
WA
Granted
15-7-22
100%
Mining Leases
M69/145
10 Mile
KLP
WA
Granted
6-6-2018
100%
M69/146
Sunshine
KLP
WA
Granted
6-6-2018
100%
M69/148
10 Mile West
KLP
WA
Granted
10-11-21
100%
Gas Pipeline
PL117
Gas Pipeline
KLI
WA
Granted
7-11-2018
100%
29
INTERESTS AND RESOURCES
ANNUAL REPORT 2022
INTERESTS AND RESOURCES
Dora / Blanche (100% Owned): Tenement Interests
Carnegie Potash Project (Joint Venture): Tenement Interests
Tenement
Tenement Name
Holder
State
Status
Grant Date
Interest
E45/4436
Dora
Rachlan
WA
Application
-
100%
E45/4437
Blanche
Rachlan
WA
Application
-
100%
Tenement
Tenement Name
Holder
State
Status
Grant Date
Interest
E38/2995
Carnegie East
Carnegie
Potash
WA
Granted
31-7-2015
70%
E38/2973
Carnegie Central
Rachlan
WA
Application
-
70%
E38/2982
Carnegie West
Rachlan
WA
Application
-
70%
E38/3295
Carnegie South West
KLP
WA
Application
-
70%
E38/3296
Carnegie South East
KLP
WA
Application
-
70%
E38/3297
Carnegie North
KLP
WA
Application
-
70%
The Company has applied for exploration licences that could, if granted, introduce the Dora/Blanche Prospect as a
new prospective area for potassium exploration.
The Carnegie Joint Venture (CJV) which is located approximately 220 kilometres east-north-east of Wiluna. The
CJV comprises one granted exploration licence (E38/2995) and five (5) exploration licence applications (E38/2973,
E38/2982, E38/3295, E38/5296 and E38/3297) covering a total area of approximately 3,040 square kilometres.
The CJV is a Joint Venture between Kalium Lakes (KLL, 70% Interest) and BCI Minerals (BCI, 30% interest). Under the
terms of the agreement BCI can earn up to a 50% interest in the CJV by predominantly sole- funding exploration
and development expenditure across several stages. KLL is the manager of the CJV.
Note: Kalium Lakes Potash Pty Ltd (KLP) entered into a declaration of trust with Rachlan Holdings Pty Ltd
(Rachlan) where Rachlan will hold for the benefit of KLP certain exploration licence applications and deal with the
applications as directed by KLP (including transferring title).
Note: Carnegie Potash Pty Ltd (Carnegie Potash) is a wholly owned subsidiary of Kalium Lakes Limited and is the
entity which holds Kalium Lakes’ interest in the CJV.
30
KALIUM LAKES LIMITED
Beyondie JORC Measured Mineral Resources at at 30 June 2022
Volume
(106 m3)
Total
Porosity
(-)
Brine
Volume
(106 m3)
Specific
Yield
(-)
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
Mg
Grade
(mg/L)
Mg
Mass
(Mt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(Mt)
Aquifer Type: Lake Surface Sediments
280
0.47
132
0.17
47
7,484
0.35
19,083
0.89
6,623
0.31
16.69
0.78
Aquifer Type: Alluvium
131
0.31
41
0.12
16
2,673
0.04
10,556
0.17
4,379
0.07
5.96
0.09
Aquifer Type: Palaeovalley Clay
936
0.36
333
0.06
58
4,745
0.28
14,482
0.85
4,129
0.24
10.58
0.62
Aquifer Type: Sand and Silcrete
265
0.33
87
0.21
55
5,633
0.31
17,353
0.95
5,080
0.28
12.56
0.69
Aquifer Type: Fractured and Weathered Sandstone
1,498
0.16
240
0.08
120
5,992
0.72
18,956
2.27
6,566
0.79
13.36
1.60
Aquifer Type: Fractured / Weathered Bedrock
916
0.24
220
0.10
89
5,466
0.48
15,334
1.36
5,866
0.52
12.19
1.08
Total Resources
4,025
1,051
384
5,675
2.18
16,883
6.49
5,739
2.21
12.66
4.86
Note: SOP grade calculated by multiplying Potassium (K) by a conversion factor of 2.23. Errors are due to rounding.
31
INTERESTS AND RESOURCES
ANNUAL REPORT 2022
INTERESTS AND RESOURCES
Beyondie JORC Indicated Mineral Resources at at 30 June 2022
Volume
(106 m3)
Total
Porosity
(-)
Brine
Volume
(106 m3)
Specific
Yield
(-)
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
Mg
Grade
(mg/L)
Mg
Mass
(Mt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(Mt)
Aquifer Type: Lake Surface Sediments
651
0.46
297
0.12
77
7,379
0.57
20,972
1.62
6,521
0.51
16.46
1.27
Aquifer Type: Lake Surface Leaching
N/a
N/a
N/a
N/a
80
5,373
0.43
16,986
1.36
3,632
0.29
11.98
0.96
Aquifer Type: Alluvium
1,335
0.35
467
0.13
167
5,119
0.85
13,494
2.25
4,082
0.68
11.41
1.91
Aquifer Type: Palaeovalley Clay
1,372
0.34
470
0.07
98
5,926
0.58
16,548
1.63
5,390
0.53
13.22
1.30
Aquifer Type: Sand and Silcrete
231
0.31
72
0.20
47
4,315
0.20
14,098
0.67
4,454
0.21
9.62
0.45
Aquifer Type: Fractured and Weathered Sandstone
3,494
0.17
587
0.08
280
6,241
1.74
16,984
4.75
6,026
1.68
13.92
3.89
Aquifer Type: Fractured / Weathered Bedrock
7,246
0.23
1,662
0.06
406
6,115
2.48
16,105
6.54
5,149
2.09
13.64
5.53
Total Resources
14,330
3,555
1,156
5,945
6.87
16,283
18.82
5,186
5.99
13.26
15.32
Note: SOP grade calculated by multiplying Potassium (K) by a conversion factor of 2.23. Errors are due to rounding.
32
KALIUM LAKES LIMITED
Beyondie JORC Inferred Mineral Resources at at 30 June 2022
Volume
(106 m3)
Total
Porosity
(-)
Brine
Volume
(106 m3)
Specific
Yield
(-)
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
Mg
Grade
(mg/L)
Mg
Mass
(Mt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(Mt)
Aquifer Type: Lake Surface Sediments
272
0.47
128
0.13
35
11,735
0.41
31,405
1.11
7,969
0.28
26.17
0.93
Aquifer Type: Alluvium
1,352
0.43
579
0.11
153
5,884
0.90
17,939
2.75
5,899
0.90
13.12
2.01
Aquifer Type: Palaeovalley Clay
14,508
0.35
5,086
0.03
466
5,898
2.75
17,929
8.35
6,171
2.87
13.15
6.12
Aquifer Type: Sand and Silcrete
608
0.31
190
0.21
128
5,435
0.70
16,611
2.13
5,569
0.71
12.12
1.55
Aquifer Type: Weathered / Fractured Bedrock
5,350
0.21
1,149
0.03
154
7,791
1.20
24,625
3.78
6,263
0.96
17.37
2.67
Total Resources
22,091
7,132
936
6,363
5.96
19,357
18.12
6,127
5.74
14.19
13.28
Note: SOP grade calculated by multiplying Potassium (K) by a conversion factor of 2.23. Errors are due to rounding.
33
INTERESTS AND RESOURCES
ANNUAL REPORT 2022
INTERESTS AND RESOURCES
Beyondie Exploration Target at at 30 June 2022
Maximum
Thickness
(m)
Coverage
(km2)
Volume
(106 m3)
Total
Porosity
(-)
Brine
Volume
(106 m3)
Specific
Yield
(-)
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
Mg
Grade
(mg/L)
Mg
Mass
(Mt)
K2SO4
(SOP)
Mass
(Mt)
Geological Layer: Alluvium
6
157
942
0.4
377
0.10
94
2,000
0.2
6,100
0.6
2,300
0.2
0.4
Geological Layer: Palaeovalley Clay
30
1,148
34,440
0.45
15,498
0.04
1,378
1,800
1.2
5,500
3.8
2,100
1.4
5.5
Geological Layer: Basal Sands
7
108
756
0.35
265
0.18
136
1,600
0.2
5,000
0.7
1,900
0.3
0.5
Geological Layer: Weathered Sandstone
10
253
2,530
0.15
380
0.06
152
3,500
0.5
10,500
1.6
4,200
0.6
1.2
Total - Lower Range Target
16,519
1,760
1,942
2.1
6.7
2.5
7.6
Geological Layer: Alluvium
12
157
1,884
0.5
942
0.18
339
3,500
1.2
9,600
3.3
3,900
1.3
2.6
Geological Layer: Palaeovalley Clay
50
1,148
57,400
0.55
31,570
0.06
3,444
3,300
7.6
9,100
20.9
3,700
8.5
25.3
Geological Layer: Palaeochannel Sand
15
108
1,620
0.45
729
0.25
405
3,200
1.0
8,700
2.6
3,500
1.1
2.9
Geological Layer: Weathered Sandstone
30
299
8,972
0.25
2,243
0.10
897
6,000
5.4
18,000
16.1
7,200
6.5
12.0
Total - Higher Range Target
35,484
5,085
3,782
15.2
42.9
17.4
42.9
* The BSOPM Exploration Target is based on a number of assumptions and limitations and is conceptual in nature.
There has been insufficient exploration to estimate a Mineral Resource for the Exploration Target. It is not an
indication of a Mineral Resource Estimate in accordance with the JORC Code (2012) and it is uncertain if future
exploration will result in the determination of a Mineral Resource.
Note: SOP grade calculated by multiplying Potassium (K) by a conversion factor of 2.23. Errors are due to rounding.
34
KALIUM LAKES LIMITED
INTERESTS AND RESOURCES
Beyondie JORC Proved Ore Reserves as at 30 June 2022
Beyondie Produced Ore Reserves to 30 June 2022
Beyondie JORC Probable Ore Reserves as at 30 June 2022
Beyondie JORC Ore Reserves Summary as at 30 June 2022
Aquifer Type
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(Mt)
Production Bores
114
6,207
0.70
17,945
2.02
13.8
1.56
Total Proved Ore Reserves
114
6,207
0.70
17,945
2.02
13.8
1.56
Bore ID
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(kt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(kt)
Extraction from Proved Ore Reserves
4.6
8,672
40.0
24,900
115.1
19.3
89.2
Extraction from Probable Ore Reserves
4.4
9,627
42.1
27,600
119.7
21.7
93.9
Total Extraction from Ore Reserves
9.0
9,137
82.1
26,242
234.8
20.5
183.1
Aquifer Type
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(Mt)
Lake Sediments
209
4,755
0.98
13,699
2.82
10.6
2.18
Production Bores
79
6,713
0.52
18,867
1.44
14.7
1.15
Total Probable Ore Reserves
288
5,290
1.50
15,111
4.26
11.7
3.33
Aquifer Type
Drainable
Brine
Volume
(106 m3)
K
Grade
(mg/L)
K
Mass
(Mt)
SO4
Grade
(mg/L)
SO4
Mass
(Mt)
K2SO4
(SOP)
Grade
(kg/m3)
K2SO4
(SOP)
Mass
(Mt)
Proved Ore Reserve
114
6,207
0.70
17,945
2.02
13.83
1.56
Probable Ore Reserve
288
5,290
1.50
15,111
4.26
11.72
3.33
Total Ore Reserve
402
5,551
2.20
15,917
6.28
12.32
4.89
Note: errors are due to rounding.
Note: errors are due to rounding. Abstracted tonnes are pre-recovery losses.
Note: errors are due to rounding.
Note: errors are due to rounding.
35
ANNUAL REPORT 2022
Competent Persons Statement
The information in this document that relates to the
Mineral Resource estimate, Ore Reserve estimate and
Exploration Target is based upon, and fairly
represents, information and supporting
documentation prepared and compiled by Mr Adam
Lloyd, a competent person who is an employee of
Kalium Lakes. Mr Lloyd is a Member of the Australian
Institute of Geoscientists and has sufficient
experience relevant to the style of mineralisation and
type of deposit under consideration and the activity
which is being undertaken to qualify as a Competent
Person for reporting of Mineral Resources, Ore
Reserves and Exploration Targets as defined in the
2012 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore
Reserves”. Certain information in this document is
extracted from the ASX announcement titled
“Feasibility Study Complete for new Base Case
Production Increase to 120ktpa at Beyondie SOP
Project” dated 18 August 2021 as modified and
supplemented by the investor presentation dated 26
July 2022, (together the “Announcements”) that relates
to the Mineral Resource estimate, Ore Reserve
estimate and Exploration Target and is based upon
information compiled by Mr Adam Lloyd.
Kalium Lakes confirms that it is not aware of any new
information or data that materially affects the
information included in the Announcements and, in
the case of the Mineral Resource estimate, Ore
Reserve estimate and Exploration Target, that all
material assumptions and technical parameters
underpinning the estimates in the Announcements
continue to apply and have not materially changed.
Kalium Lakes confirms that the form and context in
which the Competent Person’s findings are presented
have not materially been modified from the original
market announcement. Mr Lloyd consents to the
inclusion in this document of the matters based upon
his information in the form and context in which it
appears.
Cautionary Statement
The Company advises that, while the 120ktpa of SOP
production target is predominantly based on Ore
Reserves (53% of the production target is underpinned
by the Probable category of Ore Reserve and 24% is
underpinned by the Proved category) and Measured
and Indicated Mineral Resources which fall outside of
the Ore Reserves (13% of the production target), it is
also partly based on Inferred Mineral Resources (10%
of the production target) over the mine life. There is a
low level of geological confidence associated with
Inferred Mineral Resources and there is no certainty
that further exploration work will result in the
determination of Indicated Mineral Resources or that
the production target itself will be realised or that the
Inferred Mineral Resources will add to the economics
of the Beyondie SOP Mine. However, in preparation of
the production target and any associated financial
forecasts derived from the production target, each of
the modifying factors were considered. The Inferred
Mineral Resource is not a determining factor in project
viability and does not feature as a significant
proportion early in the mine plan. None of the
production target in years 0 to 11 of proposed
production at the Beyondie SOP Mine is from the
Inferred Mineral Resource category. The Company has
concluded that it has reasonable grounds for
disclosing a production target which includes an
amount of Inferred Mineral Resource material. The
estimated Ore Reserves and Mineral Resources
underpinning the production target have been
prepared by a Competent Person in accordance with
the requirements in the 2012 edition of the JORC Code.
No Exploration Target material has been included in
the production target or financial forecasts of the
Beyondie SOP Mine.
COMPETENT PERSONS STATEMENT AND COMPLIANCE STATEMENTS
36
KALIUM LAKES LIMITED
Additional Cautionary Statement
Regarding Forward-Looking Information
Certain information in this document refers to the
intentions of Kalium Lakes, but these are not intended
to be forecasts, forward looking statements or
statements about the future matters for the purposes
of the Corporations Act or any other applicable law.
The occurrence of the events in the future are subject
to risk, uncertainties and other actions that may cause
Kalium Lakes’ actual results, performance or
achievements to differ from those referred to in this
document. Accordingly, Kalium Lakes and its affiliates
and their directors, officers, employees and agents do
not give any assurance or guarantee that the
occurrence of these events referred to in the
document will actually occur as contemplated.
Statements contained in this document, including but
not limited to those regarding the possible or assumed
future costs, performance, dividends, returns,
revenue, exchange rates, potential growth of Kalium
Lakes, industry growth or other projections and any
estimated company earnings are or may be forward
looking statements. Forward-looking statements can
generally be identified by the use of words such as
‘project’, ‘foresee’, ‘plan’, ‘expect’, ‘aim’, ‘intend’,
‘anticipate’, ‘believe’, ‘estimate’, ‘may’, ‘should’, ‘will’ or
similar expressions. These statements relate to future
events and expectations and as such involve known
and unknown risks and significant uncertainties, many
of which are outside the control of Kalium Lakes.
Actual results, performance, actions and
developments of Kalium Lakes may differ materially
from those expressed or implied by the forward-
looking statements in this document. Such forward-
looking statements speak only as of the date of this
document.
There can be no assurance that actual outcomes will
not differ materially from these statements. To the
maximum extent permitted by law, Kalium Lakes and
any of its affiliates and their directors, officers,
employees, agents, associates and advisers:
•
disclaim any obligations or undertaking to release
any updates or revisions to the information to
reflect any change in expectations or assumption;
•
do not make any representation or warranty,
express or implied, as to the accuracy, reliability
or completeness of the information in this
document, or likelihood of fulfilment of any
forward-looking statement or any event or results
expressed or implied in any forward-looking
statement; and
•
disclaim all responsibility and liability for these
forward-looking statements (including, without
limitation, liability for negligence).
37
ANNUAL REPORT 2022
DIRECTORS’ REPORT
The Directors
present their report,
together with the
financial statements,
on the Consolidated
Entity (referred to
hereafter as the
‘Consolidated Entity”
or “Company”)
consisting of Kalium
Lakes Limited
and the entities it
controlled at the end
of, or during, the year
ended 30 June 2022.
Directors
The names of Directors who held office during or since
the end of the year1:
Stephen Dennis
Non-Executive Director / Chairman
Mark Sawyer
Non-Executive Director
Brent Smoothy
Non-Executive Director
Salvatore Lancuba
Non Executive Director
38
KALIUM LAKES LIMITED
1. This Directors Report is dated 23 September 2022 and
was included in the Annual Financial Report released
on the ASX on that date. Since that date two additional
non-executive directors (Robert Adam and Simon
Wandke) have joined the Board of Kalium Lakes as
detailed earlier in this Annual Report.
DIRECTORS’ REPORT
Directors’ Qualifications and Experience
The Directors’ qualifications and experience are set out below:
Stephen Dennis
NON-EXECUTIVE CHAIRMAN
(appointed Chairman 20 August 2020)
Qualification
BCOM BLL.B GDipAppFin(Finsia)
Experience and expertise
Mr Stephen Dennis has a career spanning more
than 35 years as an experienced and well-
regarded company director holding directorships
at several ASX listed resources companies.
Mr Dennis was previously the Managing Director
and Chief Executive Officer of CBH Resources
Limited and has also held senior management
positions at MIM Holdings Limited, Minara
Resources Limited, and Brambles Australia
Limited.
Other current Directorships
Rox Resources Limited, Marvel Gold Limited
Former Directorships (last 3 years)
Burgundy Diamonds Limited, Lead FX Inc, Heron
Resources Limited
Interest in shares as at the date of this report
2,611,112
Interest in options as at the date of this report
Nil
Mark Sawyer
NON-EXECUTIVE DIRECTOR
(appointed 1 May 2020)
Qualification
LL.B.
Experience and expertise
Mark Sawyer is a co-founder of Greenstone
Resources which he founded in 2013 after a
successful 16 year career in the resources sector.
Prior to establishing Greenstone, Mark was GM
and Co-Head Group Business Development at
Xstrata plc. Prior to Xstrata, he was a founder
and partner at Cutfield Freeman & Co, a
boutique advisory firm. Mark is a corporate
finance Solicitor by training.
Other current Directorships
Metro Mining Limited, Serabi Gold Plc, Rockcliff
Metals Corp.
Former Directorships (last 3 years)
Heron Resources Limited, North River
Resources Plc
Interest in shares as at the date of this report
Nil
Interest in options as at the date of this report
Nil
39
ANNUAL REPORT 2022
40
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Brent Smoothy
NON-EXECUTIVE DIRECTOR
(appointed 1 May 2020)
Experience and expertise
Brent Smoothy is a successful business owner
controlling multiple companies that undertake
pastoral, aviation, logistics, aggregate production
and construction activities in Australia.
Brent is a co-founder of the Company, who
retains pastoral leases in the Central and
Eastern Pilbara regions of Western Australia, a
broadacre cropping and cattle property in
Central Queensland and a helicopter aviation
business servicing the pastoral, mining and
government sectors.
Other current Directorships
Nil
Former Directorships (last 3 years)
Nil
Interest in shares as at the date of this report
81,843,097
Interest in performance rights as at the date
of this report
Nil
Interest in options as at the date of this report
Nil
Salvatore (Sam) Lancuba
NON-EXECUTIVE DIRECTOR
(appointed 14 October 2020)
Experience and expertise
Sam Lancuba is a chemical engineer with more
than 40 years’ experience in the global fertiliser
industry. During his career in the industry. Sam
has worked in areas of research and
development, process engineering,
manufacturing and management. Following 27
years at Incitec Pivot Limited, an ASX top 50
company, he moved to providing expert
consulting services for industry clients in
Australia, New Zealand, USA, South America,
Europe, India and China.
Sam currently advises fertiliser industry clients
in a range of areas including plant design and
maintenance, project management, project
evaluation and marketing strategies for fertiliser
products.
Other current Directorships
Nil
Former Directorships (last 3 years)
Nil
Interest in shares as at the date of this report
Nil
Interest in performance rights as at the date
of this report
Nil
Interest in options as at
the date of this report
Nil
Directors’ Qualifications and Experience
The Directors’ qualifications and experience are set out below:
40
KALIUM LAKES LIMITED
41
DIRECTORS’ REPORT
ANNUAL REPORT 2022
41
ANNUAL REPORT 2022
42
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
OFFICERS OF THE COMPANY
Leonard Jubber
Chief Executive Officer
Len Jubber (B.Eng, MBA) is a mining engineer with broad operational and corporate leadership experience and a
track record of developing and operating mining assets and businesses. He was previously Managing Director and
CEO of ASX-listed uranium development company, Bannerman Energy Limited, for eight years. Prior roles included
Managing Director and CEO of Perilya Limited, which was an ASX-listed zinc and lead production company and Chief
Operating Officer of ASX-listed gold producer, Oceana Gold Limited.
Mr Jubber started his career with Rio Tinto at the Rӧssing Uranium Mine in Namibia. He is also a Non-Executive
Director of Muriate of ASX-listed Potash (MOP) development company, South Harz Potash Limited.
Jason Shaw
Chief Financial Officer and Joint Company Secretary
Jason Shaw (BCom (Hons) MAcc, FCA) is a Chartered Accountant with more than 25 years’ experience. Prior to his
appointment at Kalium Lakes, he was Joint Group Chief Financial Officer and Chief Financial Officer, America at the
Chelsfield private property group. Jason has extensive knowledge of asset acquisition, development, management
and financing, as well as establishing and operating corporate financial and administration business systems. Prior to
Chelsfield, he held the senior finance executive role at Heytesbury, a private Australian family office with interests
including agribusiness and property.
Rudolph van Niekerk
Project Director
Rudolph van Niekerk (B.Eng. Mechanical GAICD) is a professional in the mining and resources industry with more
than 16 years’ experience in project and business management.
During his career Rudolph van Niekerk has held a range of different roles in the management of projects and
operations. His various responsibilities have included financial evaluation, risk review and management, project
management, development of capital and operating cost estimates, budget development and cost control, design
management, planning, reporting, contract administration, quality control, expediting, construction, commissioning,
production ramp-up and project hand-over to operations.
Sophie Raven
Joint Company Secretary
Ms Raven is a lawyer and governance professional who has extensive experience in corporate governance and legal
roles, both in Australia and internationally. During her career, Sophie has worked in legal and company secretary roles
for a variety of ASX listed and large private companies operating across Australia, Africa, the USA, and Europe, in the
mining, mining services, technology and manufacturing sectors. She has also practiced as a corporate and
commercial lawyer in law firms and as in-house legal counsel for more than twenty years, focusing on general
corporate law, mergers & acquisitions and investment funds.
43
DIRECTORS’ REPORT
ANNUAL REPORT 2022
MEETINGS OF DIRECTORS
The number of meetings for Kalium Lakes Limited held during the year and the number of meetings attended by each
Director was as follows:
Board
Risk and Audit
Committee
Remuneration and
Nomination Committee
Number of Meetings Held
30
2
1
Number of Meetings Attended:
Stephen Dennis
30
2
1
Mark Sawyer
29
2
1
Brent Smoothy
30
n/a
n/a
Salvatore Lancuba
30
2
1
All Directors were eligible to attend all Board Meetings held.
SHARE OPTIONS
As at the date of this report the following unlisted options were on issue:
Number under Option
Exercise Price
Expiry date
5,000,000
$0.50
30 June 2025
17,677,493
$0.00
16 June 2023
PERFORMANCE RIGHTS
As at the date of this report no performance rights were on issue.
SHARES ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS
12,218,987 shares were issued as a result of the exercise of options during the financial year.
There were no options or performance rights exercised into shares subsequent to the reporting date.
44
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Introduction
The Directors present the Remuneration Report for the Consolidated Entity for the year ended 30 June 2022. This
Remuneration Report forms part of the Directors’ Report in accordance with the requirements of the Corporations Act
2001 and its regulations. For the purposes of this report, Key Management Personnel (“KMP”) of the Consolidated
Entity are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company and the Consolidated Entity, directly or indirectly, including any Director (whether executive
or otherwise) of the Parent Entity.
Remuneration Policy
The remuneration policy has been designed to align KMP objectives with Shareholders’ interests and business
objectives by providing a fixed remuneration component and offering specific long-term incentives based on key
performance areas affecting the Consolidated Entity’s financial results. The Board believes that the remuneration
policy is appropriate and effective in its ability to attract and retain the best KMP to run and manage the Consolidated
Entity, as well as create goal congruence between Directors, Executives and Shareholders.
Key Management Personnel
The Board’s policy for determining the nature and amount of remuneration for KMP of the Consolidated Entity was in
place for the financial year ended 30 June 2022.
The KMP remuneration and reward framework has the below components:
•
base salary and other benefits; and
•
other remuneration such as superannuation, annual leave, and long service leave.
The combination of these comprises the KMP’s total remuneration.
Non-Executive Directors
The Board’s policy is to remunerate Non-Executive Directors based on market practices, duties and accountability.
Independent external advice is sought when required. The fees paid to Non-Executive Directors are reviewed
annually. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval
by Shareholders at the Annual General Meeting (“AGM”) or any other General Meeting of Shareholders. The
maximum aggregate amount of fees payable is currently $750,000.
Use of Remuneration Consultants
To ensure the Remuneration Committee is fully informed when making remuneration decisions, it may seek external
remuneration advice. The Company did not seek external remuneration advice in 2022.
Remuneration Report Approval at the 2022 Annual General Meeting
The remuneration report for the year ended 30 June 2022 will be put to shareholders for approval at the Company’s
AGM. The Company received 99.00% of votes cast for its Remuneration Report for the year ended 30 June 2021.
45
DIRECTORS’ REPORT
ANNUAL REPORT 2022
Share Trading by Directors and Executives
In May 2021 the Board of Directors adopted a comprehensive Corporate Governance Plan and within this plan (at
Schedule 7) the Securities Trading Policy sets out the Company’s policy on dealing in the securities of the Company,
as well as the securities of other entities, by its Directors, Officers, Employees and Contractors.
The Corporate Governance Plan can be accessed via the Company’s website via the Corporate Governance menu
tab (link: https://www.kaliumlakes.com.au/Corporate-Governance ).
A. Details of Remuneration
Short-term
benefits
Post-
employment
benefits
Share-based payments
30 June 2022
Cash salary,
bonuses, leave
cash out and
other benefits
$
Superannuation
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
Non-Executive Directors
Stephen Dennis
98,699
9,870
-
-
108,569
Brent Smoothy
67,000
6,700
-
-
73,700
Mark Sawyer
67,000
-
-
-
67,000
Salvatore Lancuba
67,000
6,700
-
-
73,700
Key Management Personnel
Leonard Jubber 1
266,734
15,598
-
-
282,332
Jason Shaw 2
288,846
23,568
-
-
312,414
Rudolph Van Niekerk 3
378,306
23,568
-
-
401,874
Total
1,233,584
86,004
-
-
1,319,588
1
Leonard Jubber appointed as Chief Executive Officer on 8 December 2021.
2
Jason Shaw appointed as Chief Financial Officer on 5 July 2021 and appointed as Company Secretary on 1
October 2021.
3
Rudolph van Niekerk stood down as Chief Executive Officer and was appointed Project Director on 8 December
2021.
46
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
Short-term
benefits
Post-
employment
benefits
Share-based payments
30 June 2021
Cash salary,
bonuses, leave
cash out and
other benefits
$
Superannuation
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
Non-Executive Directors
Malcolm Randall 1
26,250
2,494
-
-
28,744
Stephen Dennis 2
84,132
7,993
-
-
92,125
Dale Champion 3
46,083
4,378
-
-
50,461
Brent Smoothy
57,250
5,439
-
-
62,689
Mark Sawyer
47,500
-
-
-
47,500
Salvatore Lancuba 4
43,715
4,153
-
-
47,868
Executive Director
Brett Hazelden 5
346,281
5,424
-
-
351,705
Key Management Personnel
Rudolph Van Niekerk 6
347,755
23,686
-
-
371,441
Chris Achurch 7
24,970
1,425
-
-
26,395
Anthony Heitmann Beckmand 8
193,333
14,964
-
-
208,297
Total
1,217,269
69,956
-
-
1,287,225
1
Malcolm Randall stepped down from the role of Chairman and remained as Non-Executive Director on 20 August
2020. Malcolm Randall resigned as Non-Executive Director on 30 November 2020.
2
Stephen Dennis was appointed as Chairman on 20 August 2020.
3
Dale Champion resigned as Non-Executive Director on 30 April 2021.
4
Salvatore Lancuba was appointed as Non-Executive Director on 14 October 2020.
5
Brett Hazelden ceased his employment as the Managing Director and Chief Executive Officer on 24 July 2020.
6
Rudolph van Niekerk was appointed as Interim Chief Executive Officer on 24 July 2020 and Chief Executive Officer
on 6 October 2020.
7
Chris Achurch resigned as Chief Financial Officer on 31 July 2020.
8
Anthony Heitmann Beckmand was appointed as Chief Financial Officer on 29 September 2020 and resigned on
30 September 2021.
47
DIRECTORS’ REPORT
ANNUAL REPORT 2022
The proportion of remuneration linked to performance and the fixed proportion are as follows:
B. Service Agreements
The Company has entered into executive service agreements with the Chief Executive Officer and Chief Financial
Officer as detailed below:
The Board resolved to appoint Mr Jubber as Chief Executive Officer on 8 December 2021.
In respect to his employment as the Chief Executive Officer of the Company, the principal terms are as follows:
o
Total fixed annual salary of $500,000 inclusive of superannuation.
o
Mr Jubber will be eligible to receive an annual short term incentive, payable in equity or cash at Mr Jubber’s
election, with payment up to a maximum amount equal to 75% base salary.
o
Mr Jubber will be eligible to receive an annual long term incentive, payable in equity up to a maximum amount
equal to 100% of base salary, subject to achieving mutually agreed key performance indicators.
o
Mr Jubber may terminate the agreement by giving no less than six months notice in writing to the Company;
o
The Company may terminate the agreement (without cause) by giving no less than six months’ notice in
writing to Mr Jubber (or make payment in lieu of notice, unless the Company is terminating as a result of a
serious misconduct (or on other similar grounds by Mr Jubber, in which case no notice is required);
o
Mr Jubber is subject to non-compete restrictions during his employment and for a maximum period of nine
months following termination of his employment.
Fixed remuneration
At risk – STI
At risk - LTI
2022
2021
2022
2021
2022
2021
Non-Executive Directors
Stephen Dennis
100%
100%
-
-
-
-
Brent Smoothy
100%
100%
-
-
-
-
Mark Sawyer
100%
100%
-
-
-
-
Salvatore Lancuba
100%
100%
-
-
-
-
Malcolm Randall
-
100%
-
-
-
-
Dale Champion
-
100%
-
-
-
-
Executive Directors
Brett Hazelden
-
100%
-
-
-
-
Key Management Personnel
Leonard Jubber
100%
-
Jason Shaw
100%
-
Rudolph van Niekerk
100%
100%
-
-
-
-
Chris Achurch
-
100%
-
-
-
-
Anthony Heitmann Beckmand
-
100%
-
-
-
-
48
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
Mr Jason Shaw commenced employment as Chief Financial Officer on 5 July 2021.
In respect to his employment as the Chief Financial Officer of the Company, the principal terms are as follows:
o
An annual salary of $300,000 excluding superannuation at the commencement of his employment;
o
Mr Shaw may terminate the agreement by giving no less than four months’ notice in writing to the
Company;
o
The Company may terminate the agreement (without cause) by giving no less than four months’ notice in
writing to Mr Shaw (or make payment in lieu of notice, unless the Company is terminating as a result of a
serious misconduct (or on other similar grounds by Mr Shaw, in which case no notice is required); and
o
Mr Shaw is subject to non-compete restrictions during his employment and for a maximum period of nine
months following termination of his employment.
C. Share Based Compensation
No shares or options were issued to Directors and other Key Management Personnel as part of compensation during
the year ended 30 June 2022.
Additional Information
The earnings of the Consolidated Entity for the five financial years to 30 June 2022 are summarised below:
2022
2021
2020
2019
2018
Revenue ($)
41,058
7,525,648
638,559
1,705,960
4,261,759
EBITDA ($)
(24,334,788)
298,745
(18,146,182)
(11,469,093)
(10,696,683)
EBIT (S)
(27,027,299)
(623,273)
(18,892,617)
(11,885,909)
(10,900,473)
Loss after income tax
(36,547,723)
(623,273)
(18,892,617)
(11,762,018)
(10,757,324)
The factors that are considered to affect total shareholders return (“TSR”) are summarised below:
Share price at financial
year end ($)
0.061
0.245
0.145
0.59
0.54
Total dividends declared
(cents per share)
-
-
-
-
-
Basic earnings / (loss) per
share (cents per share)
(3.45)
(0.07)
(4.71)
(6.15)
(6.95)
Additional disclosures relating to Key Management Personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of Key
Management Personnel of the Consolidated Entity, including their personally related parties, is set out below:
49
DIRECTORS’ REPORT
ANNUAL REPORT 2022
Name
Balance at the
start of the
year
Received as
part of
remuneration
Additions
Disposals
/ other
Balance at the
end of the
year
Stephen Dennis 1
2,333,334
-
277,778
-
2,611,112
Brent Smoothy
81,843,097
-
-
-
81,843,097
Rudolph van Niekerk 2
18,084,741
-
-
-
18,084,741
Mark Sawyer
-
-
-
-
-
Leonard Jubber 3
-
-
100,000
-
100,000
Jason Shaw 4
-
-
100,000
-
100,000
Anthony Heitmann Beckmand 5
-
-
-
-
-
Total
102,261,172
-
477,778
-
102,738,950
1
Stephen Dennis was appointed as Chairman on 20 August 2020.
2
Rudolph van Niekerk stood down as Chief Executive Officer and commenced as Project Director on 8
December 2021.
3
Leonard Jubber appointed at Chief Executive Officer on 8 December 2021.
4
Jason Shaw appointed as Chief Financial Officer on 5 July 2021.
5
Anthony Heitmann Beckmand stood down as Chief Financial Officer on 30 September 2021.
Option holding
No options over ordinary shares in the Company were held during the financial year by any Director and other
members of Key Management Personnel of the Consolidated Entity, including their personally related parties.
Performance rights holding
The number of performance shares in the Company held during the financial year by each Director and other
members of Key Management Personnel of the Consolidated Entity, including their personally related parties, is set
out below:
Name
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Brent Smoothy
7,300,000
-
-
(7,300,000)
-
Rudolph van Niekerk
600,000
-
-
(600,000)
-
Brett Hazelden
2,100,000
-
-
(2,100,000)
-
Antony Heitmann Beckmand 1
1,000,000
-
-
(1,000,000)
-
Total
11,000,000
-
-
(11,000,000)
-
1
Mr Antony Heitmann Beckmand commenced as Chief Financial Officer with the Company on 9 November
2020 and on 9 June 2021 he gave notice that he would resign from the Company with effect on 30
September 2021. As a result of the cessation of his employment, on 30 September 2021 all of his
performance rights were cancelled.
50
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
Other transactions with Key Management Personnel and their related parties
Payments of $5,140,185 were made during the financial year to K19 Mining Pty Ltd (a Director-related entity of Mr
Brent Smoothy) (“K19”) for the construction of ponds, harvesting and haulage of harvested and waste salts. The
current trade payable balance as at 30 June 2022 was $1,271,787.
All transactions were made on normal commercial terms and conditions and at market rates.
As part of the senior debt restructure completed by the Consolidated Entity with its senior lenders on 12 October 2021,
the existing founders’ royalty holders of the Company, being Kalium Corporate Pty Ltd as Trustee for the Kalium
Founders Unit Trust and Greenstone Resources II (Australia) Holdings L.P. (both of whom are related parties of the
Company), agreed to subordinate and defer the payment of their royalties over the tenements at Ten Mile Lake, Lake
Sunshine and Lake Carnegie until the debt principal repayments to the Consolidated Entity’s senior lenders begin on
31 March 2024 and that all such royalties accrued before that date are deferred until the senior lenders’ deferred debt
is repaid. In consideration for the deferral of the royalty payments the Consolidated Entity agreed to grant a further
royalty over the tenements at Ten Mile West to the existing founders’ royalty holders on the same terms as their
existing royalties (being 1.9% of gross revenue).
This concludes the remuneration report, which has been audited.
51
DIRECTORS’ REPORT
ANNUAL REPORT 2022
PRINCIPAL ACTIVITIES
The principal activity of the Consolidated Entity is the exploration and mining of mineral resources.
REVIEW OF RESULTS
The loss after tax for the year ended 30 June 2022 was $36,547,723 (2021: $623,273 loss).
CORPORATE
The 2022 financial year was one of mixed fortunes for Kalium Lakes as it was faced with a number of significant
issues during the commissioning phase of the purification plant at the Company’s Beyondie SOP Project.
In the first half of the year, Kalium Lakes completed a feasibility study for an increase in its production target from 90
ktpa to 120 ktpa as a new base case, which was followed by an equity raising targeted to fund the expansion.
In addition, the offtake agreement with K+S Asia Pacific (“K+S”) was extended to cover increased production at the
120 ktpa level and included improved payment terms for the first three years to assist the Company with its working
capital needs.
With harvesting operations and the stockpiling of potassium salt continuing, plant commissioning activities saw
completed plant modules progressively handed over by the construction contractor. On 5 October 2021 the Company
announced it had produced its first batch of SOP at the required product specification during the product
commissioning process.
Formal binding documentation to restructure the Company’s debt facilities with its two senior lenders, KfW and NAIF,
was completed on 12 October 2021 with the senior lenders also providing an additional short term $20 million liquidity
facility as a general-purpose facility. The restructure included a condition that the Company successfully complete an
equity raise of at least $47.1m, which the Company completed by way of a two-tranche equity placement to raise $50
million at an offer price of $0.18 per share. In addition, a Share Purchase Plan offer was announced for eligible
shareholders which aimed to raise up to $10 million.
The successful completion of the equity placement was announced on 14 October 2021, with the placement
significantly oversubscribed. The Share Purchase Plan closed one month later and raised approximately $7.59 million.
During November 2021 the Company provided a commissioning update and noted that the operation of the trenches
and bore fields had been impacted during late October because of silting and collapsing of trench walls in several
places, as well as unexpected breakdowns of a few production bores. Product commissioning had entered the final
stages although the process was trending slightly behind schedule and using more of the harvested salts than
anticipated.
The Annual General Meeting was held in Perth on Tuesday 30 November 2021, with all resolutions as set out in the
Notice of Meeting voted on at the meeting and passed by shareholders.
52
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
Following the decision of the Chief Executive Officer and co-founder, Mr Rudolph van Niekerk, to step down and move
to the role of Project Director, Mr Leonard Jubber was appointed as Chief Executive Officer of Kalium Lakes, effective
from 8 December 2021.
Mr Jubber is a mining engineer with broad operational and corporate leadership experience and a track record of
successfully developing and operating mining assets and businesses. He was previously Managing Director and CEO
of ASX-listed uranium development company, Bannerman Energy Limited.
The practical completion of the compaction plant occurred in late December 2021 and marked the completion of the
construction contract with DRA Pacific Pty Ltd. Dry commissioning of the compaction plant commenced, with product
commissioning expected to commence when sufficient quantities of standard grade SOP became available.
As certain later-stage plant commissioning issues had been identified, the Company announced on 22 December
2021 that Mr Jubber had initiated a review of the SOP purification plant operations. It was noted that the restricted
availability of resources and logistical challenges in getting additional international experts of the original equipment
manufacturers on site through COVID-19 restrictions had also contributed to some of the challenges during
commissioning of specific plant equipment.
A month later, at the end of January 2022, the Company released detailed information on the status of borefield and
trenching operations, brine production, pond operations, the level of harvested potassium salts, the purification plant
and SOP production to date.
On 1 March 2022, Kalium Lakes provided the market with a further update on brine production and the 120 ktpa
expansion bore drilling and brine supply program. It advised that sufficient ‘start-up grade’ harvested potassium salts
were expected to be accumulated to coincide with the expected SOP purification plant re-start leading to targeted
commercial SOP sales from July 2022. It was expected that an approximate production run rate of 80 ktpa of SOP
would be achieved by Q1 CY2023, with the targeted expansion to a 120 ktpa run rate established by Q3 CY2024. As
a result of the revised production ramp-up schedule, the Company advised that it had a requirement for further
external funding by Q3 CY2022 and had commenced discussions with its financiers to address this requirement.
At the end of May 2022, the Company reported that the SOP plant process design had been validated, and during
April/May had produced approximately 400 tonnes of commercially saleable SOP. The SOP purification plant
commissioning was proceeding as planned and ongoing discussions were being held with debt providers, NAIF and
KfW, on funding initiatives that would be required by Q3 CY2022, as well as well as with key offtake partner, K+S,
regarding the rescheduling of SOP deliveries.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the financial year the Consolidated Entity transitioned the Beyondie Sulphate of Potash (“SOP”) Mine
(“BSOPM”) from project development into operations in relation to activities in its ponds and borefields. The SOP
purification plant remained in the commissioning phase as at 30 June 2022.
53
DIRECTORS’ REPORT
ANNUAL REPORT 2022
LIKELY DEVELOPMENTS AND EXPECTECTED RESULTS OF OPERATIONS
The Consolidated Entity intends to continue its development of the Beyondie SOP Mine, for which commissioning of
the SOP purification and compaction plant continues as at the date of this report. In addition, the Consolidated Entity
will continue to progress the development of the Carnegie Project, in accordance with the terms of its joint venture
agreement.
ENVIRONMENTAL REGULATIONS
The Consolidated Entity is subject to and is compliant with all aspects of environmental regulation of its exploration
and mining activities. The Directors are not aware of any environmental law that is not being complied with.
DIVIDENDS
No dividends were paid during the financial year and no recommendation has been made as to payment of dividends.
EVENTS SUBSEQUENT TO REPORTING DATE
No matter or circumstance has arisen since the end of the financial year, which will significantly affect, or may
significantly affect, the state of affairs or operations of the reporting entity in future financial periods other than the
following:
At the beginning of July 2022, Kalium Lakes provided an update advising that the first commercial sales had been
scheduled for later that month and that it had achieved cumulative production of 1,000 tonnes of commercially
saleable SOP to 29 June 2022. Further testing of plant equipment was continuing and the purification plant would
undertake a shutdown in August, with a restart anticipated for September. The Company also noted that late rain
events in May and June 2022 had filled trenches, pre-concentrator ponds and evaporation ponds, causing delays
in pond salt precipitation due to longer evaporation periods.
An announcement that deliveries of SOP from the Beyondie SOP Mine to local WA fertiliser manufacturer and
distributor, CSBP Fertilisers (CSBP), had commenced as part of the inaugural sale under its offtake agreement with
K+S, was made on 31 July 2022.
The next month, on 18 August 2022, Kalium Lakes announced that it had received firm commitments from investors
for a two-tranche placement of fully paid ordinary shares to raise $22 million (before costs) (the “Placement”) at a price
of $0.04 per share. The Company announced that its largest shareholder, Greenstone Resources and co-founder and
director Brent Smoothy, respectively committed to subscribe for $8 million and $2 million under the Placement.
In addition to the Placement, existing eligible shareholders were offered the opportunity to subscribe for shares under
a Share Purchase Plan (“SPP”) at the Placement offer price of $0.04 per share, to raise up to an additional $8 million
(before costs). An SPP shortfall offer was also announced, which would allow the Company to accept subscriptions
from investors who wanted to subscribe to make up any shortfall if total subscriptions for the SPP offer were below $8
million. The second tranche of the Placement and the SPP offers are subject to the Company obtaining shareholder
approval at a General Meeting scheduled to be held on 3 October 2022.
54
KALIUM LAKES LIMITED
DIRECTORS’ REPORT
Also on 18 August 2022, the Company announced that it had entered into formal binding documentation with its senior
lenders to restructure of its existing debt arrangements including (but not limited to) a deferral of the commencement
of all senior principal repayments under the project finance term facilities from March 2024 to March 2025, an
extension to the final maturity date for the project finance term facilities to March 2040 and an extension to the maturity
date for the existing $20 million liquidity facility to January 2026.
The debt restructure is subject to the requirement that the Company successfully completes an equity raise of at least
$20 million (net of costs) by 7 October 2022. Completion of the Placement announced on the same day enables this
requirement to be met.
On 13 September 2022, Kalium Lakes announced that the SOP purification plant had restarted in-line with the
targeted schedule, following an approximate four-week planned shutdown to perform key rectification and optimisation
works. Further incremental plant optimisation was anticipated to occur alongside normal plant operations during
coming months.
On 19 September 2022, Kalium Lakes announced that, it had received applications in excess of $8 million under the
SPP offer and, to accommodate the level of demand, the Company had determined to increase the size of the SPP
offer to $12 million.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a
Director or executive, for which they may be held personally liable, except where there is a lack of good faith. During
the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company
has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 29 to the financial statements.
55
DIRECTORS’ REPORT
ANNUAL REPORT 2022
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 29 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
•
none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards
Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making
capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA PARTNERS
There are no officers of the Company who are former partners of RSM Australia Partners.
AUDITOR’S DECLARATION OF INDEPENDENCE
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this Directors' report.
AUDITOR
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
_________________
Stephen Dennis - Chairman
23 September 2022
56
KALIUM LAKES LIMITED
CORPORATE GOVERNANCE STATEMENT
The Board of Directors is responsible for the corporate governance of Kalium Lakes Limited (the Company). The Board
of Directors has established a corporate governance framework which follows the recommendations as set out in the
ASX Corporate Governance Council’s Principles and Recommendations 3rd edition (“Principles and
Recommendations”).
The Company has followed each recommendation where the Board has considered the recommendation to be an
appropriate benchmark for the Company's corporate governance practices. Where the Company's corporate
governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption
of the recommendation. In compliance with the "if not, why not" reporting regime, where the Company's corporate
governance practices do not follow a recommendation, the Board has explained its reasons for not following the
recommendation and disclosed what, if any, alternative practices the Company has adopted instead of those in the
recommendation.
The Company’s corporate governance framework can be viewed on the Company’s website:
www.kaliumlakes.com.au
57
ANNUAL REPORT 2022
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Kalium Lakes Limited for the year ended 30 June 2022, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
Any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
AIK KONG TING
Dated: 23 September 2022
Partner
58
KALIUM LAKES LIMITED
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Note
30 June 2022
$
30 June 2021
$
Revenue
Other income
5
41,058
7,525,648
Expenditure
Accounting and audit fees
29
(140,500)
(96,230)
Depreciation and amortisation expense
6
(2,692,511)
(922,018)
Directors and executive remuneration
32
(1,319,588)
(1,287,225)
Employee expenses
(1,424,088)
(1,037,607)
Finance costs
(9,520,424)
-
Foreign currency gain/(loss)
(8,755,607)
-
Legal fees
(603,706)
(1,002,469)
Operating expenses
7
(8,281,296)
-
Share based payment (credit)/expense
8
93,750
(93,750)
Other expenses
9
(3,944,811)
(3,709,622)
Loss before tax
(36,547,723)
(623,273)
Income tax expense
10
-
-
Net loss for the year from operations
(36,547,723)
(623,273)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
-
-
Total comprehensive loss for the year
(36,547,723)
(623,273)
Loss attributable to:
Owners of the parent
(36,547,723)
(623,273)
Total comprehensive loss attributable to:
Owners of the parent
(36,547,723)
(623,273)
Basic and diluted loss per share (cents)
28
(3.45)
(0.07)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
59
ANNUAL REPORT 2022
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022
Note
30 June 2022
$
30 June 2021
$
ASSETS
Current Assets
Cash and cash equivalents
11
21,512,780
34,206,120
Trade and other receivables
12
358,383
1,033,898
Other assets
13
2,112,287
211,627
Inventory and raw materials
14
4,524,848
-
Total Current Assets
28,508,298
35,451,645
Non-Current Assets
Property, plant and equipment
15
3,372,790
15,956,872
Capital work in progress
16
168,065,199
258,756,965
Mine properties - in development
17
-
17,023,986
Mine properties – in production
18
165,027,311
-
Collateral for bank guarantees
19
610,000
610,000
Right-of-use assets
20
50,435
96,265
Total Non-Current Assets
337,125,735
292,444,088
Total Assets
365,634,033
327,895,733
LIABILITIES
Current Liabilities
Trade and other payables
21
5,590,408
8,528,610
Lease liabilities
22
-
50,000
Borrowings
23
-
6,238,670
Provisions
24
606,288
337,691
Total Current Liabilities
6,196,696
15,154,971
Non-Current Liabilities
Borrowings
23
179,080,406
159,152,664
Provisions
24
18,055,533
13,681,710
Total Non-Current Liabilities
197,135,939
172,834,374
Total Liabilities
203,332,635
187,989,345
NET ASSETS
162,301,398
139,906,388
EQUITY
Contributed equity
25
243,613,489
184,670,756
Reserves
26
7,071,356
8,271,356
Accumulated losses
27
(88,383,447)
(53,035,724)
TOTAL EQUITY
162,301,398
139,906,388
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
60
KALIUM LAKES LIMITED
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022
Contributed
equity
$
Reserves
$
Accumulated
losses
$
Total
$
Balance at 1 July 2020
179,614,646
8,271,356
(52,412,451)
135,473,551
Loss for the year
-
-
(623,273)
(623,273)
Other comprehensive income
-
-
-
-
Total comprehensive loss for the year
-
-
(623,273)
(623,273)
Transactions with owners in their
capacity as owners:
Shares issued during the year
5,135,535
-
-
5,135,535
Security issue expenses
(79,425)
-
-
(79,425)
Balance at 30 June 2021
184,670,756
8,271,356
(53,035,724)
139,906,388
Balance at 1 July 2021
184,670,756
8,271,356
(53,035,724)
139,906,388
Loss for the year
-
-
(36,547,723)
(36,547,723)
Other comprehensive income
-
-
-
-
Total comprehensive loss for the year
-
-
(36,547,723)
(36,547,723)
Transactions with owners in their
capacity as owners:
Shares issued during the year
61,292,587
-
-
61,292,587
Security issue expenses
(2,349,854)
-
-
(2,349,854)
Lapse of performance rights
-
(1,200,000)
1,200,000
-
Share based payments
-
-
-
-
Balance at 30 June 2022
243,613,489
7,071,356
(88,383,447)
162,301,398
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
61
ANNUAL REPORT 2022
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022
Note
30 June 2022
$
30 June 2021
$
OPERATING ACTIVITIES
Receipts from customers/others
34,806
133,491
Interest received
10,592
64,706
Payments to suppliers and employees
(23,194,960)
(7,607,695)
Net cash used in operating activities
30
(23,149,562)
(7,409,498)
INVESTING ACTIVITIES
Collateral given for bank guarantee
-
(610,000)
Payments for mine development
(37,758,097)
(132,785,149)
Interest paid
(5,316,333)
-
Payment for site and exploration expenditure
(787,276)
(131,635)
Payments for property, plant and equipment
(1,914,134)
(430,833)
Net cash used in investing activities
(45,775,840)
(133,957,617)
FINANCING ACTIVITIES
Proceeds from issue of shares
59,459,738
3,045,811
Share issue transaction costs
(2,349,854)
(79,424)
Proceeds from borrowings
4,526,484
118,645,188
Transaction costs related to borrowings
(5,220,513)
(194,908)
Repayment of borrowings
-
(411,419)
Repayment of lease liabilities
(50,000)
(55,020)
Net cash provided by financing activities
56,365,855
120,950,228
Net decrease in cash and cash equivalents
(12,559,547)
(20,416,887)
Cash and cash equivalents at beginning of the financial year
34,206,120
54,623,007
Effects of currency translation on cash and cash equivalent
(133,793)
-
Cash and cash equivalents at the end of the financial
year
11
21,512,780
34,206,120
The above consolidated statement of changes in cash flow should be read in conjunction with the accompanying
notes.
62
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
1.
Corporate information
This annual report covers Kalium Lakes Limited (the “Company”), a Company incorporated in Australia, and the
entities it controlled at the end of, or during, the year ended 30 June 2022 (the “Consolidated Entity”). The
presentation currency of the Consolidated Entity is Australian Dollars (“$”). A description of the Consolidated Entity’s
operations is included in the review and results of operations in the Directors’ report. The Directors’ report is not part
of the financial statements. The Company is a for-profit entity limited by shares and incorporated in Australia whose
shares are traded under the ASX code “KLL”.
2.
Significant accounting policies
Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
New Accounting Standards and Interpretations not yet mandatory or early adopted.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory have not been early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2022.
The Consolidated Entity has not yet assessed the impact of these new or amended Accounting Standards and
Interpretations.
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 asset and the settlement of liabilities in the ordinary course of business.
As disclosed in this report, for the full year, the Group incurred a net loss of $36.5 million and had net cash outflows
from operating and investing activities of $23.1 million and $45.7 million respectively for the year ended 30 June 2022.
The Group has unrestricted cash reserves of $18.8 million, net current assets of $22.3 million and net assets of $162.3
million as at 30 June 2022.
The Directors believe that it is reasonably foreseeable that the going concern basis of preparation of the financial
report remains appropriate, after consideration of the following factors:
o
The Consolidated Entity agreed to a debt restructure subsequent to the financial year end in August 2022 with
its senior lenders that will defer the commencement of principal repayments on term loan facilities until March
63
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2025 and extend the maturity of these facilities 5-7 years to March 2040.
o
The maturity date of the liquidity facility (currently undrawn) has also been extended to 1 January 2026. The
terms of the debt restructure will allow access to the $20 million liquidity facility on the condition that additional
equity funds of $20 million (net of costs) are raised on or before 7 October 2022. This condition will be met by
the raising of equity by way of a two tranche placement detailed below.
o
The Company conducted an equity capital raising in August 2022 whereby commitments were received for
$22m ($20.5m net of costs), by way of a two tranche placement (“Placement”). The second tranche is subject
to approval by shareholders at the Company’s forthcoming General Meeting on 3 October 2022.
o
The Company also announced a Share Purchase Plan (“SPP”) at the time of the Placement, to raise up to $8
million. The SPP has received subscriptions in excess of $8 million and as a result, on 19 September 2022
the Company announced that the maximum size of the SPP would be increased to $12 million. The SPP is
also subject to approval by shareholders at the Company’s forthcoming General Meeting on 3 October 2022.
o
The Placement and the SPP together will fund additional working capital during ramp-up of the Beyondie SOP
Mine and assist in the expansion of the mine to the targeted 120ktpa production run rate, targeted to be
achieved by Q3 CY2024.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through
other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative
financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated
Entity only. Supplementary information about the parent entity is disclosed in note 31.
64
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Kalium Lakes Limited
('Company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year then ended. Kalium
Lakes Limited and its subsidiaries together are referred to in these financial statements as the 'Consolidated Entity'.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an
entity when the Consolidated Entity 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. Subsidiaries are fully
consolidated from the date on which control is transferred to the Consolidated Entity. They are de-consolidated from
the date that control ceases.
Intercompany transactions and balances between entities in the Consolidated Entity are eliminated. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the
Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the
consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even
if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Kalium Lakes Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
65
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Consolidated Entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified
as non-current.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the assets, and obligations for the liabilities, relating to the arrangement. The Consolidated Entity has recognised its
share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the
financial statements under the appropriate classifications.
Exploration, evaluation and development expenditure
Exploration and evaluation are written off as incurred. The Consolidated Entity’s policy is that such costs will only be
carried forward when development of the area indicates that recoupment will occur or where activities in the area have
reached an advanced stage which permits reasonable assessment of the existence of economically recoverable
reserves.
Exploration, evaluation and development costs comprise acquisition costs, direct exploration and evaluation costs and
an appropriate portion of related overhead expenditure but do not include general overhead expenditure which has no
direct connection with a particular area of interest.
Revenue received from the sale or disposal of product, materials or services during the exploration and evaluation
phase of operation is offset against expenditure in respect of the area of interest concerned.
66
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
When an area of interest is abandoned or the Directors decide that it is not commercially viable, any accumulated
costs in respect of that area are written off in the financial period the decision is made. Each area of interest is also
reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be
recoverable in the future. Restoration costs arising from exploration activities are provided for at the time of the
activities which give rise to the need for restoration.
3.
Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year at the respective notes.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the Consolidated Entity based on known information. This consideration extends to the nature of the
supply chain, staffing and geographic regions in which the Consolidated Entity operates. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which may impact the Consolidated Entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
4.
Operating segments
The Consolidated Entity has considered the requirements of AASB 8 – Operating Segments and has identified its
operating segments based on the internal reports that are reviewed and used by the board of Directors (chief
operating decision makers) in assessing performance and determining the allocation of resources.
The Consolidated Entity operates as a single segment being the exploration for and development of minerals in
Australia.
The Consolidated Entity is domiciled in Australia. All revenue from external parties is generated from Australia only
and all assets are located in Australia only.
Accounting policy:
Operating segments are presented using the 'management approach', where the information presented is on the
same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
67
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
5.
Other income
Accounting policy:
Interest
Interest revenue is recognised as interest accrues.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
6.
Depreciation and amortisation expense
The increase in depreciation was a result of depreciation commencing on $165,027,311 of mine properties in
production which were transferred from capital work in progress, mine properties in development and rehabilitation
assets during the year ended 30 June 2022.
Key Estimate and Assumption: Unit-of-production method of depreciation/amortisation
The Group uses the unit-of-production basis when depreciating/amortising life of mine specific assets which results in
a depreciation/amortisation change proportionate to the depletion of the anticipated remaining life of mine production.
Each asset’s economic life, which is assessed annually, has due regard to both its physical life limitations and to
present assessments of the economically recoverable mine plan. These calculations require the use of estimates and
assumptions.
30 June 2022
$
30 June 2021
$
Foreign exchange gain - realised
16,455
842,975
Foreign exchange gain - unrealised
-
6,484,476
Other income
14,011
133,491
Interest income
10,592
64,706
Other income
41,058
7,525,648
30 June 2022
$
30 June 2021
$
Depreciation – Property, plant and equipment
1,183,959
817,742
Depreciation – Mine properties
1,407,702
-
Amortisation – Right of use
100,850
104,276
Depreciation and amortisation expense
2,692,511
922,018
68
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
7.
Operating expenses
8.
Share based payment
1
The performance rights lapsed on 14 April 2022 when the member of management resigned.
Accounting policy:
Share based payments
The Consolidated Entity provides benefits to employees (including Directors and Consultants) of the Consolidated
Entity and other service providers or strategic equity partners in the form of share-based payment transactions,
whereby employees or other parties render services or provide goods in exchange for shares or rights over shares
(“equity-settled transactions”). The cost of these equity-settled transactions with employees is measured by reference
to the fair value at the date at which they are granted. The fair value is determined using an option pricing method. In
valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the
price of the shares of the Company (“market conditions”). The cost of equity-settled transactions is recognised in the
statement of profit or loss and other comprehensive income, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects:
•
The extent to which the vesting period has expired; and
•
The number of awards that, in the opinion of the Directors of the Consolidated Entity, will ultimately vest. This
opinion is formed based on the best available information at reporting date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
30 June 2022
$
30 June 2021
$
Total operating expenses incurred
21,012,078
-
Capitalised operating costs
(9,414,877)
-
Inventory movement
(3,315,905)
-
Operating expenses
8,281,296
-
30 June 2022
$
30 June 2021
$
Issue of performance rights to management
-
93,750
Performance rights cancelled 1
(93,750)
-
Share based payment (credit)/expense
(93,750)
93,750
69
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is conditional upon a market condition. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a modification of the original award, as described in the previous
paragraph. Where shares are issued at a discount to fair value either by reference to the current market price or by
virtue of the Consolidated Entity providing financing for the share purchase on favourable terms, the value of the
discount is considered a share-based payment. The dilutive effect, if any, of outstanding options is reflected as
additional share dilution in the computation of earnings per share.
9.
Other expenses
30 June 2022
$
30 June 2021
$
Bank charges
11,118
207,153
Compliance fees
226,551
139,300
Travel expenses
-
31,616
Insurance
1,410,185
1,371,588
Subscriptions and licenses
10,606
254,240
Site and exploration expenditure
-
100,019
Other consultants
1,276,373
318,942
Head office and administration
1,009,978
1,286,764
Other expenses
3,944,811
3,709,622
70
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
10.
Income tax expense
A reconciliation between the income tax expense and the product of accounting profit before income tax multiplied by
the Consolidated Entity’s applicable income tax rate is as follows:
A potential deferred tax asset, attributable to tax losses carried forward, amounts to approximately $16,750,814 (2021:
$11,460,424) and has not been brought to account at reporting date because the Directors do not believe it is
appropriate to regard realisation of the deferred tax asset as probable at this point in time. This benefit will only be
obtained if:
•
the Consolidated Entity derives future assessable income of a nature and of an amount sufficient to enable
the benefit from the deductions for the loss incurred;
•
the Consolidated Entity continues to comply with the conditions for deductibility imposed by law; and
•
no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit from the
deductions for the loss incurred.
Accounting policy:
Income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax assets and liabilities
are recognised for all taxable temporary differences:
•
Except for deferred income tax liabilities arising from the initial recognition of an asset or liability in a
transaction that is not a business combination and at the time of the transaction affects neither the accounting
profit nor taxable profit or loss; and
30 June 2022
$
30 June 2021
$
Loss before Income tax
(36,547,723)
(623,273)
Prima facie benefit on operating loss at 25% (2021: 26%)
9,136,931
162,051
Non allowable expenditure
(20,076)
(1,822)
Unrecognised deferred tax assets attributable to tax losses
(9,116,855)
(156,423)
Income tax expense
-
-
Tax losses available
67,003,257
44,078,556
71
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
•
In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures except where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
•
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
reporting date and are recognised to the extent that it has become probable that future taxable profit will allow
the deferred income tax to be recovered. Deferred income tax assets and liabilities are measured at the tax
rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Income taxes
relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax
assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and
the same taxation authority.
Kalium Lakes Limited (the ‘head-entity’) and its wholly owned Australian subsidiaries have formed an income
tax consolidated group under the tax consolidation regime. The head-entity and each subsidiary in the tax
consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated
group has applied the “separate taxpayer within group” approach in determining the appropriate amount of
taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the currently tax
liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits
assumed from each subsidiary in the tax consolidated group.
Goods and services and sales tax
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST) except:
•
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of the asset or as part of an item of expense; or
•
for receivables and payables which are recognised inclusive of GST.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
72
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
11.
Cash and cash equivalents
1
Restricted funds relate to cash set aside for future debt service repayments to the senior lenders to the
Beyondie SOP Project.
Accounting policy:
Cash and cash equivalents include cash on hand and in the bank, and other short-term deposits. Bank overdrafts are
shown separately in current liabilities on the Statement of Financial Position. For the purposes of the Statement of
Cash Flows, cash and cash equivalents as defined above are net of outstanding bank overdrafts.
12.
Trade and other receivables
Accounting policy:
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The Company has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on
days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Allowance for expected credit losses
The Consolidated Entity has not recognised any loss (2021: $Nil) in respect of expected credit losses for the year
ended 30 June 2022
30 June 2022
$
30 June 2021
$
Cash at bank
18,823,926
31,710,582
Restricted funds 1
2,688,854
2,495,538
Cash and cash equivalents
21,512,780
34,206,120
30 June 2022
$
30 June 2021
$
GST refundable
358,383
913,826
Fuel rebate
-
120,072
Trade and other receivables
358,383
1,033,898
73
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
13.
Other assets
14.
Inventory and raw materials
Accounting policy:
Kainite Type Mixed Salt (KTMS)
KTMS is potassium based feed salt harvested from evaporation ponds and used to feed the purification plant.
Stockpiles are physically measured or estimated and stated at the lower of weighted average cost and net realisable
value. Costs include direct material, direct labour and overhead expenditure which is directly related to the production
of KTMS.
Finished goods
Finished Goods includes the stockpile of Sulphate of Potash, measured or estimated and stated at the lower of
weighted average and net realisable value. Costs include direct material, direct labour and overhead expenditure
which is directly related to the production of Sulphate of Potash as well as the input of the costs from the KTMS feed.
Consumables
Warehouse stores and consumables are stated at the lowest of weighted average cost and net realisable value. Cost
comprises purchase and delivery costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
necessary to make the sale.
30 June 2022
$
30 June 2021
$
Prepayments
2,112,287
211,627
Other assets
2,112,287
211,627
30 June 2022
$
30 June 2021
$
KTMS
2,474,590
-
Finished goods
1,224,356
-
Consumables
825,902
-
Inventory and raw materials
4,524,848
-
74
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Key Estimate and Assumption: Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. Costs
incurred in or benefits of the productive process are accumulated as stockpiles and product inventory. Net realisable
value tests are performed at least annually and represent the estimated future sales price of the product based on
prevailing SOP prices, less estimated costs to complete production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the potassium
grade of the stockpile based on assay data, and the estimated recovery percentage based on the expected
processing method. Stockpile tonnages are verified by periodic surveys.
Although the quantity of recoverable potassium is reconciled by comparing the grades of the stockpile to the quantities
of SOP actually produced (metallurgical balancing), the nature of the process inherently limits the ability to precisely
monitor recoverability levels. As a result the metallurgical balancing process is constantly monitored and the
engineering estimates are refined based on actual results over time.
15.
Property, plant and equipment
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Exploration &
mining
equipment
Office
equipment
Motor
vehicles
Rehabilit-
ation asset
Computer
software
Total
$
$
$
$
$
$
Balance at
30 June 2020
2,082,229
49,222
408,734
4,166,074
121,886
6,828,145
Additions
384,143
42,607
112,420
9,515,636
9,440
10,064,246
Disposal
(117,777)
-
-
-
-
(117,777)
Depreciation expense
(639,300)
(29,926)
(116,914)
-
(31,602)
(817,742)
Balance at
30 June 2021
1,709,295
61,903
404,240
13,681,710
99,724
15,956,872
Additions
1,893,627
100,584
182,644
104,732
2,281,587
Transfer to mine
properties
-
-
-
(13,681,710)
-
(13,681,710)
Depreciation expense
(940,124)
(48,384)
(149,651)
-
(45,800)
(1,183,959)
Balance at
30 June 2022
2,662,798
114,103
437,233
-
158,656
3,372,790
75
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Accounting policy:
Property, plant and equipment
Property, plant and equipment is recorded at historical cost less accumulated depreciation and any impairment. The
carrying value of assets are reviewed for impairment at the reporting date. An asset is immediately written down to its
recoverable amount if the carrying value of the asset exceeds its estimated recoverable amount. The depreciation
rates per annum for each class of fixed asset are as follows:
Exploration and mining equipment
20%
Office equipment
33%
Motor vehicles
20%
Computer software
20%
Subsequent expenditure relating to an item of property, plant and equipment, that has already been recognised, is
added to the carrying amount of the asset if the recognition criteria are met. All assets are depreciated over their
anticipated useful lives, up to their residual values using a straight-line depreciation basis. These useful lives are
determined on the day of capitalisation and are re-assessed annually by Management.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Impairment
The carrying values of plant and equipment and capital work in progress are reviewed for impairment when events or
changes in circumstances indicate the carrying value may not be recoverable or at least on an annual basis. For an
asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs. If any such indication exists and where the carrying values exceed the
estimated recoverable amounts, the assets or cash generating units are written down to their recoverable amount.
76
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
16.
Capital work in progress
17.
Mine properties in development
During the financial year, the construction of brine supply and ponds, village accommodation, access road and gas
pipeline & power station were considered to have been completed and ready for use. An amount of $141,488,667 in
relation to these assets were transferred to mine properties in production.
The purification plant remained in commissioning as at 30 June 2022. As a result, $161,971,219 of purification plant,
including $8,775,202 allocated from mine properties in development and $2,008,039 of rehabilitation assets in relation
to the purification plant are reported as capital work in progress. During the year commencement of the expansion to
the 120ktpa production target commenced and a total of $6,093,980 has been reported as capital work in progress.
Key estimate and assumption: Production start date
The Group assesses the stage of each mine under construction to determine when a mine moves into the production
stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction
project, such as the complexity of a plant and its location. The Group considers various relevant criteria to assess
when the mine and the processing plant is substantially complete, ready for its intended use. At this time, any costs
capitalised to ‘mine properties - in development’ or ‘capital work in progress’ are reclassified to ‘mine properties – in
production’ and ‘property, plant and equipment’. Some of the criteria will include, but are not limited, to the following:
o
Availability of the plant;
o
Completion of a reasonable period of testing of the mine plant and equipment;
o
Ability to produce SOP in saleable form (within specifications); and
o
Ability to sustain ongoing production of SOP at commercial rates of production.
30 June 2022
$
30 June 2021
$
120 ktpa expansion target
6,093,980
-
Purification plant
161,971,219
72,468,500
Brine supply and ponds
-
47,261,101
Village accommodation
-
10,129,146
Access road
-
5,579,460
Gas pipeline & power station
-
37,603,718
Owner’s costs
-
69,111,616
Non process infrastructure
-
15,175,111
Other infrastructure
-
1,428,313
Capital work in progress
168,065,199
258,756,965
30 June 2022
$
30 June 2021
$
Mine properties in development
-
17,023,986
77
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
When a mine construction project moves into the production stage, the capitalisation of certain mine construction
costs ceases and costs are either regarded as inventory or expensed, except for costs that qualify for capitalisation
relating to mine properties asset additions or improvements, mine development or mineable reserve development. It is
also at this point that depreciation/amortisation commences.
Accounting policy:
Capital work in progress and Mine properties in development
When proven mineral reserves are determined and development is sanctioned, capitalised exploration and evaluation
expenditure is reclassified as capital work in progress. All subsequent development expenditure is capitalised and
classified as capital work in progress, provided commercial viability conditions continue to be satisfied.
The Consolidated Entity may use funds sourced from external parties to finance the acquisition and development of
assets and operations. Finance costs are expensed as incurred, except where they relate to the financing of
construction or development of qualifying assets. Borrowing costs directly attributable to acquiring or constructing a
qualifying asset are capitalised during the development phase. On completion of development, all assets included in
capital work in progress are reclassified as either property, plant and equipment or mine properties – in production and
depreciation commences.
Key Estimate and Assumption: Mine properties - in development and Capital work in progress
These costs are capitalised to the extend they are expected to be recouped through the successful exploitation of the
related mining leases. Once production commences, these costs are transferred to property, plant and equipment and
mine properties – in production, as appropriate.
78
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
18.
Mine properties - in production
Accounting policy:
Mine properties – in production represents expenditure in respect of exploration, evaluation, feasibility and pre-
production operating costs incurred by the Consolidated Entity previously accumulated and carried forward in capital
work in progress and mine properties under development in relation to areas of interest in which mining has now
commenced. Mine properties – in production are stated at cost, less accumulated amortisation and accumulated
impairment losses. These assets were depreciated by the unit-of-production method from 1 October 2021.
Rehabilitation asset and the corresponding provision is discounted to its net present value and amortisation is charged
using the units-of-production method. Amortisation and corresponding finance charges incurred in the unwinding of
the provision will be recognised in the profit or loss.
Key Estimate and Assumption: Impairment of non-financial assets
The Consolidated Entity assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the Consolidated Entity and to the
particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is
determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of
key estimates and assumptions.
The carrying values of non-current assets are reviewed for impairment when indicators of impairment exist or changes
in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the
cash-generating unit (‘CGU’) to which the asset belongs and where the carrying values exceed the estimated
recoverable amount, the assets or CGU are written down to their recoverable amount.
Brine
supply &
ponds
Rehabilit-
ation
assets
Access
Road
Airstrip
Camp
Facilities
Gas
pipeline &
power
station
Total
$
$
$
$
$
$
$
Balance at
1 July 2021
-
-
-
-
-
-
-
Transfer
90,000,516
13,681,710
6,331,986
989,646
11,181,772
41,898,241
164,083,871
Additions
-
2,351,142
-
-
-
-
2,351,142
Depreciation
(698,265)
(198,934)
(53,517)
(8,364)
(94,506)
(354,116)
(1,407,702)
Balance at
30 June 2022
89,302,251
15,833,918
6,278,469
981,282
11,087,266
41,544,125
165,027,311
79
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The recoverable amount of an asset is the greater of the fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset.
Determination of mineral resources and ore reserves
The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates
and provisions for decommissioning and restoration. The information in this report as it relates to ore reserves,
mineral resources or mineralisation is reported in accordance with the AusIMM “Australian Code for reporting of
Identified Mineral Resources and Ore Reserves”. The information has been prepared by or under supervision of
competent persons as identified by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are
valid at the time of estimation which may change significantly when new information becomes available. Changes in
the forecast prices of commodities, exchange rates, production costs, ore grades and/or recovery rates may change
the economic status of reserves and may, ultimately, result in the reserves being restated.
The relevant CGU for Consolidated Entity is the Beyondie SOP mine.
Impairment of mine properties – in production, capital work in progress and property, plant and equipment
The future recoverability of capitalised mine properties, capital work in progress and property, plant and equipment is
dependent on a number of key factors including; SOP prices, discount rates used in determining the estimated
discounted cash flows of CGUs, foreign exchange rates, the level of proved and probable reserves and measured,
indicated and inferred mineral resources included in the determination of fair value less cost to dispose (‘fair value’),
future technological changes which could impact the cost of mining, and future legal changes (including changes to
environmental restoration obligations).
Fair value is estimated based on discounted cash flows using market-based commodity price and exchange
assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital
requirements, based on CGU life of mine (‘LOM’) plans. The Consolidated Entity considers this valuation approach to
be consistent with the approach taken by market participants.
In determining the fair value of CGUs, future cash flows were discounted using rates based on the Consolidated
Entity’s estimated weighted average cost of capital. When it is considered appropriate to do so, an additional premium
is applied with regard to the geographic location and nature of the CGU. Life of mine operating and capital cost
assumptions are based on the Consolidated Entity’s latest budget and LOM plans. Operating cost assumptions reflect
the expectation that costs will, over the long term, have a degree of positive correlation to the prevailing commodity
price assumptions.
Key assumptions for this review:
SOP price (US$ per tonne): US$500/tonne to US$1,000/tonne
80
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Commodity prices are estimated with reference to forecasts provided by market analysts. The rates applied to the
valuation have regard to observable market data.
Discount rate: 8.5%
In determining the fair value of the CGU, the future cash flows were discounted using rates based on the consolidated
entity’s estimated weighted average cost of capital, with an additional premium applied having regard to the
geographic location of the CGU (where applicable).
Operating and capital costs:
Life-of-mine operating and capital cost assumptions are based on the Consolidated Entity’s latest budget and LOM
operating plans. Operating cost assumptions reflect the expectation that costs will, over the long term, have a degree
of positive correlation to the prevailing commodity price and exchange rate assumptions.
Sensitivity analysis:
Any variation in the key assumptions used to determine fair value would result in a change of the assessed fair value.
It is estimated that changes in the key assumptions would have the following approximate impact on the fair value of
the CGU that has been subject to impairment testing:
Increase
$000
Decrease
$000
Change of:
SOP price by 10%
106,900
(120,000)
Discount rate by 10%
(40,100)
38,900
Changes in the SOP price and Discount rate assumption above are assumed to move in isolation, while other
assumptions are held constant.
81
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
19.
Collateral for bank guarantees
30 June 2022
$
30 June 2021
$
Collateral for bank guarantees1
610,000
610,000
Collateral for bank guarantees
610,000
610,000
1
Collateral for bank guarantees is cash set aside to cover bank guarantees issued by the Consolidated Entity’s
bankers in relation to energy access service contracts.
20.
Right-of-use assets
30 June 2022
$
30 June 2021
$
Head office space - right-of-use
200,541
200,541
Less: Accumulated depreciation
(150,106)
(104,276)
Right-of use-assets
50,435
96,265
Accounting policy:
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing
the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever the shorter. Where the Company expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over the estimated useful life. Right-of-use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
The Company has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
82
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
21.
Trade and other payables
30 June 2022
$
30 June 2021
$
Accounts payable
4,096,147
5,582,672
Other payables
1,045,334
125,964
Accrued expenses
448,927
2,819,974
Trade and other payables
5,590,408
8,528,610
Accounting policy:
Trade and other payable amounts represent liabilities for goods and services provided to the entity prior to the end of
the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are
not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
22.
Lease liabilities
Accounting policy:
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do
depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount
of the right-of-use asset is fully written down.
23.
Borrowings
30 June 2022
$
30 June 2021
$
Head office space - lease liabilities
-
50,000
Lease liabilities
-
50,000
Current Borrowings
30 June 2022
$
30 June 2021
$
Loan from KfW
-
2,234,800
Loan from KfW/Euler Hermes
-
2,026,670
Loan from NAIF
-
1,977,200
Current Borrowings
-
6,238,670
83
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Accounting policy:
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
The total debt facilities are as follows (all secured and pledged against the assets of the Consolidated Entity):
Non-current Borrowings
30 June 2022
$
30 June 2021
$
Loan from KfW
51,604,012
43,698,522
Loan from KfW/Euler Hermes
50,276,859
43,140,295
Loan from NAIF
72,513,621
68,104,883
174,394,492
154,943,700
Interest on loan from KfW
1,390,228
1,273,007
Interest on loan from KfW/Euler Hermes
1,094,735
812,459
Interest on loan from NAIF
1,486,379
1,486,378
Commitment fees on loan from KfW/Euler Hermes
714,572
637,120
4,685,914
4,208,964
Non-current Borrowings
179,080,406
159,152,664
Lender
Borrower
Facility Limit
(Ccy)
Undrawn (Ccy)
Undrawn (AUD)
Maturity Date 4
KfW / Euler
Hermes
Kalium Lakes Potash
(Facility A) 1
EUR €32,487,268
EUR €1,562,980
AUD $2,372,103
31 March 2033 3
KfW
Kalium Lakes Potash
(Facility B) 2
USD $37,000,000
-
-
31 March 2033 3
NAIF
Kalium Lakes Potash
(Facility C)
AUD $26,000,000
-
-
31 March 2033 3
NAIF
Kalium Lakes
Infrastructure
AUD $48,000,000
-
-
31 March 2036
KfW
Kalium Lakes Potash
(Liquidity Facility A) 4
USD $8,000,000
USD $8,000,000
AUD $10,000,000
31 July 2022
NAIF
Kalium Lakes Potash
(Liquidity Facility B) 4
AUD $10,000,000
AUD $10,000,000
AUD $10,000,000
31 July 2022
AUD $22,372,103
84
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
1
Facility A has an EUR denominated facility limit. The unused facility has been converted to AUD at the 30
June 2022 AUD:EUR spot rate of 0.6589. When a loan is drawn down it is immediately converted into USD
at the EUR:USD spot rate in existence at the time of the drawdown, with interest accruing in USD. The
USD loan balance is the aggregate amount of all drawdowns converted from EUR to USD at the respective
EUR:USD spot rates at the date of drawing.
2
Facility B is a USD denominated loan facility. The USD facility limit, loan balance and unused facility has
been converted to AUD at the 30 June 2022 AUD:USD spot rate of 0.6889
3
Following the debt restructure with the senior lenders which was completed on 12 October 2021, the
principal repayments for the KLP Facilities A, B, C and the KLI Facility were deferred for two years and, as
of the financial year end, were scheduled to commence on 31 March 2024. As of the financial year end, the
maturity dates for the KLP Facilities A, B and C are 31 March 2033 and for the KLI Facility the maturity date
is 31 March 2036.
4
As part of the debt restructure with the senior lenders which was completed on 12 October 2021, the senior
lenders provided a liquidity facility which is a general purpose facility that is available to be used for short-
term working capital purposes. The liquidity facility is divided into Liquidity Facility A provided by KfW for
USD $8 million, and Liquidity Facility B provided by NAIF for AUS $10 million. The KfW Liquidity Facility A,
whilst a USD denominated facility, is subject to being drawn for the same AUD equivalent as the NAIF
Liquidity Facility B and as such its AUD equivalent facility limit is stated above at AUD $10 million. The
maturity date of these facilities, as of the financial year end, was 31 July 2022, with pre-requisites to
drawdown related to the Consolidated Entity demonstrating to its senior lenders that it has a financing
solution in place for the revised ramp up to the production target of 120 ktpa.
The weighted average interest rate on drawn amounts across all facilities as at the financial year end is 4.15% per
annum.
24.
Provisions
Accounting policy:
Short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Current Provisions – Employee benefits
30 June 2022
$
30 June 2021
$
Employee entitlements
606,288
337,691
Current Provisions
606,288
337,691
85
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are measured at the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Accounting policy:
Provisions
A provision has been made for the anticipated costs for future rehabilitation of land explored or mined. Provisions are
recognised when the Consolidated Entity has a present (legal or constructive) obligation as a result of a past event, it
is probable the Consolidated Entity will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. The amount recognised as a provision has been based on technical advice provided by an
external expert and is the best estimate of the consideration required to settle the present obligation at the reporting
date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material,
provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting
from the passage of time is recognised as a finance cost.
Key Estimate and Assumption: Rehabilitation provision
A provision has been made for the anticipated costs for future rehabilitation of land explored or mined. The
Consolidated Entity's mining and exploration activities are subject to various laws and regulations governing the
protection of the environment. The Consolidated Entity recognises management's best estimate for asset retirement
obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods
could differ materially from the estimates. Additionally, future changes to environmental laws and regulations could
affect the carrying amount of this provision.
Non-current Provisions – Provision for rehabilitation
30 June 2022
$
30 June 2021
$
Opening balance
13,681,710
4,166,074
Additional provision required
4,373,823
9,515,636
Non-current Provisions
18,055,533
13,681,710
86
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
25.
Contributed equity
Accounting policy:
Share capital
Ordinary shares are classified as equity. Share capital represents the nominal value of shares that have been issued.
Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income
tax benefits. Accumulated losses include all current and prior period retained profits. Dividend distributions payable to
equity shareholders are included in ‘other liabilities’ when the dividends have been approved in a general meeting
prior to the reporting date. All transactions with owners of the parent are recorded separately within equity.
30 June 2022
Shares
30 June 2021
Shares
30 June 2022
$
30 June 2021
$
Ordinary shares – fully paid
1,181,712,214
839,161,349
243,613,489
184,670,756
Movements in ordinary share capital
Date
Shares
Issue price
$
Balance
1 July 2020
802,257,785
179,614,646
Issue of shares to contractors 1
09 Jul 2020
13,931,488
0.150
2,089,724
Issue of shares under contingent placement
09 Jul 2020
20,305,409
0.150
3,045,811
Exercise of options by contractors
04 Sep 2020
2,666,667
-
-
Share issue costs
(79,425)
Balance
30 June 2021
839,161,349
184,670,756
Issue of shares under capital raising
19 Oct 2021
174,341,902
0.180
31,381,542
Issue of shares under capital raising
2 Nov 2021
35,448,435
0.180
6,380,718
Issue of shares under share purchase plan
18 Nov 2021
42,148,389
0.180
7,586,710
Issue of shares under capital raising
3 Dec 2021
78,393,152
0.180
14,110,767
Issue of shares to contractors 1
7 Feb 2022
12,218,987
0.150
1,832,848
Share issue costs
(2,349,852)
Balance
30 June 2022
1,181,712,214
243,613,489
1
Shares issued to contractors for work performed on the Beyondie SOP Project have been capitalised on the
Consolidated Statement of Financial Position as non-current assets
87
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
26.
Reserves
As at 30 June 2022, the following unlisted options were on issue:
Number under Option
Exercise Price
Expiry date
5,000,000
$0.50
30 June 2025
17,677,493
$0.00
16 June 2023
30 June 2022
$
30 June 2021
$
Performance rights reserve
-
1,200,000
Options reserve
7,071,356
7,071,356
Reserves
7,071,356
8,271,356
Movements in options reserve
Number
$
Balance at 30 June 2020
41,826,668
7,071,356
Exercise of options by contractors on 7 September 2020
(2,666,667)
-
Cancellation of options
(1,000,000)
-
Balance at 30 June 2021
38,160,001
7,071,356
Cancellation of options
(3,263,521)
-
Exercise of options by contractors on 7 February 2022
(12,218,987)
-
Balance at 30 June 2022
22,677,493
7,071,356
Movement in performance rights reserve
Number
$
Balance at 30 June 2020
10,000,000
1,200,000
Issue of performance rights
2,250,000
-
Balance at 30 June 2021
12,250,000
1,200,000
Cancellation of performance rights
(12,250,000)
(1,200,000)
Balance at 30 June 2022
-
-
88
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
27.
Accumulated losses
28.
Loss per share
Accounting policy:
Earnings per share
Basic earnings per share (“EPS”) is calculated as net profit/(loss) attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary
shares, adjusted for any bonus element. Diluted EPS is calculated as net profit or loss attributable to members of the
parent divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for
any bonus element. The diluted EPS was not calculated as the consolidated entity has incurred a net loss for the
current and prior year. The weighted average number of shares was based on the consolidated weighted average
number of shares in the reporting period. The net profit or loss attributable to members of the parent is adjusted for:
o
Costs of servicing equity (other than dividends) and preference share dividends;
o
The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
o
Other non-discretionary changes in revenue or expenses during the period that would result from the dilution
of potential ordinary shares.
30 June 2022
$
30 June 2021
$
Accumulated losses at the beginning of the financial year
(53,035,724)
(52,412,451)
Transfer from performance rights reserve (refer note 26)
1,200,000
-
Loss after income tax expense for the year
(36,547,723)
(623,273)
Accumulated losses at the end of the financial year
(88,383,447)
(53,035,724)
30 June 2022
$
30 June 2021
$
Loss after income tax
(36,547,723)
(623,273)
Loss after income tax attributable to the owners of Kalium Lakes
Limited used in calculating diluted earnings per share
(36,547,723)
(623,273)
Basic loss per share
(3.45)
(0.07)
Diluted loss per share
(3.45)
(0.07)
Number
Number
Weighted average number of ordinary shares used in calculating basic
loss per share
1,060,272,969
837,950,677
89
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
29.
Auditor’s remuneration
30.
Reconciliation of cashflows from operating activities
30 June 2022
$
30 June 2021
$
Audit and review of the financial report
113,000
70,000
Technical advice services
-
26,230
Auditor’s remuneration
113,000
96,230
30 June 2022
$
30 June 2021
$
Loss after income tax expense for the year
(36,547,723)
(623,273)
Adjustments for:
Depreciation
2,692,511
922,018
Share based payment (credit)/expense
(93,750)
93,750
Finance costs
9,520,424
-
Realised current translation losses/(gains)
(16,455)
-
Unrealised currency translation losses/(gains)
8,755,607
(6,484,476)
Other items
-
(1,294,026)
Change in operating assets and liabilities:
Trade & other receivables
675,515
349,220
Trade & other payables
(2,864,895)
(501,594)
Inventories and raw materials
(5,556,860)
-
Employee benefits expense
286,064
128,883
Net cash used in operating activities
(23,149,562)
(7,409,498)
90
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
31.
Parent entity information
Set out below is the supplementary information about the parent entity.
30 June 2022
$
30 June 2021
$
Statement of profit or loss and other comprehensive income
Loss after income tax 1
(74,313,229)
(4,432,837)
Total comprehensive loss
(74,313,229)
(4,432,837)
Statement of financial position
Total current assets
6,552,386
3,998,092
Total assets
162,638,417
140,226,094
Total current liabilities
(337,019)
(319,706)
Total liabilities
(337,019)
(319,706)
Net assets
162,301,398
139,906,388
Guarantees
Kalium Lakes Limited is a guarantor under the KLP Facility Agreement, KLI Facility Agreement, Security Trust Deed,
Intercreditor Deed, Liquidity Facility Agreement, and the Offtake Agreement.
Other commitments and contingencies
Kalium Lakes Limited has no other commitments and contingencies.
Plant and equipment commitments
Kalium Lakes Limited has no commitments to acquire property, plant and equipment.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
except for the following:
o
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
o
Investments in joint ventures are accounted for at cost, less any impairment, in the parent entity.
o
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may
be an indicator of an impairment of the investment.
1
Loss for parent entity largely due to write-down of $70.7 million to align the parent entity net assets to the
Consolidated Entity net assets.
91
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
32.
Key Management Personnel disclosure
The aggregate compensation made to Key Management Personnel of the Consolidated Entity is set out below:
30 June 2022
$
30 June 2021
$
Short-term employee benefits
1,233,584
1,217,269
Post-employment benefits
86,004
69,956
Total compensation
1,319,588
1,287,225
33.
Related party transactions
Parent entity
Kalium Lakes Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 35.
Key Management Personnel
Disclosures relating to Key Management Personnel are set out in note 32 and the remuneration report included in the
Directors' report.
The following transactions occurred with related parties:
30 June 2022
$
30 June 2021
$
Payment for services:
Payment for construction services from K19 Mining Pty Ltd
(Director related entity of Brent Smoothy) 1
5,140,185
3,031,106
Payment for construction services from Smoothy Cattle Co Pty Ltd
(Director related entity of Brent Smoothy) 2 & 3
-
5,455,602
Payment for employee services from Tanya Hazelden (Director related
entity of Brett Hazelden)
-
40,608
5,140,185
8,527,316
1
K19 Mining Pty Ltd and Smoothy Cattle Co Pty Ltd are Director related entities of Brent Smoothy. The
companies were engaged in the construction works, harvesting and haulage of harvested and waste salts for
the Beyondie SOP Mine.
2
Smoothy Cattle Co Pty Ltd (Director related entity of Brent Smoothy) was engaged in the construction and
maintenance works of pond roads and the airstrip.
3
Smoothy Cattle Co Pty Ltd was awarded the sub-contractor works under the FIRM Construction Pty Ltd
contract. Amounts paid during the prior year to FIRM Construction Pty Ltd disclosed above relate to work
performed by Smoothy Cattle Co Pty Ltd.
92
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Receivables from and payables to related parties
30 June 2022
$
30 June 2021
$
Current payables:
Payment for construction services and haulage of harvested & waste
salt from K19 Mining Pty Ltd (Director related entity of Brent Smoothly)
1,271,787
644,396
Payment for construction services from Smoothy Cattle Co Pty Ltd
(Director related entity of Brent Smoothy)
-
261,996
1,271,787
906,392
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Other transactions with related parties
As part of the senior debt restructure completed by the Consolidated Entity with senior lenders on 12 October 2021,
the existing founders’ royalty holders of the Company, being Kalium Corporate Pty Ltd as Trustee for the Kalium
Founders Unit Trust and Greenstone Resources II (Australia) Holdings L.P. (both of whom are related parties of the
Company), agreed to subordinate and defer the payment of their royalties over the tenements at Ten Mile Lake, Lake
Sunshine and Lake Carnegie until the debt principal repayments to the Consolidated Entity’s senior lenders begin on
31 March 2024 and that all such royalties accrued before that date are deferred until the senior lenders’ deferred debt
is repaid. In consideration for the deferral of the royalty payments the Consolidated Entity agreed to grant a further
royalty over the tenements at Ten Mile West to the existing founders’ royalty holders on the same terms as their
existing royalties (being 1.9% of gross revenue).
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
34.
Financial instruments
The Consolidated Entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk
and interest rate risk), credit risk and liquidity risk. The Consolidated Entity's overall risk management program
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Consolidated Entity. The Consolidated Entity uses derivative financial instruments such as forward
foreign exchange contracts and options to hedge certain risk exposures. Derivatives are exclusively used for hedging
purposes, i.e. not as trading or other speculative instruments. The Consolidated Entity uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of
interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of
93
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
investment portfolios to determine market risk. The risks to which the Consolidated Entity is exposed are described
below.
Credit risk
Credit risk arises from the financial assets of the Consolidated Entity, which comprise cash and cash equivalents and
trade and other receivables. Exposure to credit risk relating to financial assets arises from the potential non-
performance by counterparties of contractual obligations that could lead to a financial loss to the Consolidated Entity.
The Consolidated Entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the Consolidated Entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Liquidity Risk
Vigilant liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and
payable. The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves and available
borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of
financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal
cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying
amount in the statement of financial position.
30 June 2022
$
30 June 2021
$
Unused at the reporting date
Senior lender debt facilities
22,372,104
7,351,720
94
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Consolidated Entity is exposed to interest rate movements through term
deposits and online savers at fixed and variable rates of between 0.2% and 1% per annum, dependent on market
rates on the day of investment and the length of the investment. The following table sets out the variable interest
bearing and fixed interest-bearing financial instruments of the Consolidated Entity:
30 June 2022
Weighted
average
interest rate
1 year or less
Between 1 and
5 years
Over 5 years
Remaining
contractual
maturities
%
$
$
$
$
Non-derivates
Non-interest bearing
Trade payables
-
4,096,147
-
-
4,096,147
Other payables
-
1,045,334
-
-
1,045,334
Lease liability
-
-
-
-
-
Interest bearing
Senior debt
4.15%
-
45,486,773
133,593,633
179,080,406
Total non-derivatives
5,141,481
45,486,773
133,593,633
184,221,887
30 June 2021
Weighted
average
interest rate
1 year or less
Between 1 and
5 years
Over 5 years
Remaining
contractual
maturities
%
$
$
$
$
Non-derivates
Non-interest bearing
Trade payables
5,582,672
-
-
5,582,672
Other payables
-
125,964
-
-
125,964
Lease liability
-
50,000
-
-
50,000
Interest bearing
Senior debt
3.10%
6,238,670
62,637,378
96,515,306
165,391,354
Total non-derivatives
11,997,306
62,637,378
96,515,306
171,149,990
95
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The following table illustrates the estimated sensitivity to a 1% increase and decrease to fixed, variable interest rate
fluctuations.
The Consolidated Entity is also exposed to interest rate risk arising from long-term borrowings. Borrowings obtained at
variable rates expose the Consolidated Entity to interest rate risk. Borrowings obtained at fixed rates expose the
Consolidated entity to fair value risk.
The Consolidated Entity’s bank loans outstanding, totalling $179,080,406 (2021: $165,391,334), are principal and
interest payment loans. Of these, $105,080,406 (2021: $93,822,892) are variable rate interest loans and $74,000,000
(2021: $71,568,462 ) are fixed rate interest loans. An official increase/decrease in interest rates of 100 (2021: 100)
basis points would have an adverse/favourable effect on profit before tax of $1,050,804 (2021: $938,228) per annum.
The percentage change is based on the expected volatility of interest rates using market data and analysts’ forecasts.
Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations. Foreign exchange risk arises from future commercial
transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity’s
functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
The Consolidated Entity has no forward foreign exchange contracts and options at the reporting date.
Accounting policy
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based on
both the business model within which such assets are held and the contractual cash flow characteristics of the
financial asset unless, an accounting mismatch is being avoided.
Financial assets
Year end
Variable interest
$
Cash and cash equivalents
30 June 2022
21,512,780
Cash and cash equivalents
30 June 2021
34,206,120
Impact on pre-tax profit
Year end
Interest rates
+1%
Interest rates
– 1%
Cash and cash equivalents
30 June 2022
215,128
(215,128)
Cash and cash equivalents
30 June 2021
342,016
(342,061)
96
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and
the Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading,
where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative;
or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or
loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Consolidated
Entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial
recognition.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the loss
allowance depends upon the Consolidated Entity’s assessment at the end of each reporting period as to whether the
financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or effort to obtain.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised
within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
35.
Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly owned
subsidiaries in accordance with the accounting policy described in the notes to the financial statements.
Incorporation
% of Equity Interest
30 June 2022
%
30 June 2021
%
Kalium Lakes Potash Pty Ltd
Australia
100
100
Kalium Lakes Infrastructure Pty Ltd
Australia
100
100
Carnegie Potash Pty Ltd
Australia
100
100
Magnesium Lakes Pty Ltd 1
Australia
100
100
1
Magnesium Lakes Pty Ltd was dormant at the reporting date.
97
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
36.
Contingent liabilities and assets
The Consolidated Entity has no contingent liabilities and assets as at 30 June 2022 (2021: Nil).
37.
Commitments
38.
Interests in joint operations
On 1 March 2017, the Consolidated Entity and BC Potash Pty Ltd announced that the companies had entered into a
joint operation over Kalium’s 100% owned Carnegie Project.
The Carnegie Joint Operation (CJO) is focussed on the exploration and development of the Carnegie Potash Project
(CPP) in Western Australia, which is located approximately 220 kilometres east-north-east of Wiluna. The CJO
comprises one granted exploration licence and five exploration licence applications, covering a total area of
approximately 3,081 square kilometres.
Under the terms of the agreement BC Potash Pty Ltd can earn up to a 50% interest in the CJO by predominantly sole-
funding exploration and development expenditure across several stages.
Kalium Lakes Potash Pty Ltd is the manager of the CJO and will leverage its existing Intellectual Property to fast-track
work. The CJO Companies have endorsed proceeding to a staged Pre-Feasibility Study, with an initial focus on
securing tenure and access to all required tenements.
30 June 2022
$
30 June 2021
$
Committed at the reporting date but not recognised as liabilities,
payable:
Rental, rates and expenditure commitments relating to tenements
2,473,016
2,696,232
90ktpa project
4,358,080
42,848,243
120ktpa expansion
11,246,878
-
Total committed at the reporting date
18,077,974
45,544,475
Non-contractual at the reporting date:
90ktpa project
4,909,921
-
120ktpa expansion
29,373,809
-
Total non- contractual at the reporting date
34,283,730
-
98
KALIUM LAKES LIMITED
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The Consolidated Entity has recognised its share of jointly held assets, liabilities, revenues and expenses of joint
operations. These have been incorporated in the financial statements under the appropriate classifications.
Kalium Lakes Limited ownership interest is set out below:
39.
Events after reporting date
No matter or circumstance has arisen since the end of the financial year, which will significantly affect, or may
significantly affect, the state of affairs or operations of the reporting entity in future financial periods other than the
following:
At the beginning of July 2022, Kalium Lakes provided an update advising that the first commercial sales had been
scheduled for later that month and that it had achieved cumulative production of 1,000 tonnes of commercially
saleable SOP to 29 June 2022. Further testing of plant equipment was continuing and the purification plant would
undertake a shutdown in August, with a restart anticipated for September. The Company also noted that late rain
events in May and June 2022 had filled trenches, pre-concentrator ponds and evaporation ponds, causing delays
in pond salt precipitation due to longer evaporation periods.
An announcement that deliveries of SOP from the Beyondie SOP Mine to local WA fertiliser manufacturer and
distributor, CSBP Fertilisers (CSBP), had commenced as part of the inaugural sale under its offtake agreement with
K+S, was made on 31 July 2022.
The next month, on 18 August 2022, Kalium Lakes announced that it had received firm commitments from investors
for a two-tranche placement of fully paid ordinary shares to raise $22 million (before costs) (the “Placement”) at a price
of $0.04 per share. The Company announced that its largest shareholder, Greenstone Resources and co-founder and
director Brent Smoothy, respectively committed to subscribe for $8 million and $2 million under the Placement.
In addition to the Placement, existing eligible shareholders were offered the opportunity to subscribe for shares under
a Share Purchase Plan (“SPP”) at the Placement offer price of $0.04 per share, to raise up to an additional $8 million
(before costs). An SPP shortfall offer was also announced, which would allow the Company to accept subscriptions
from investors who wanted to subscribe to make up any shortfall if total subscriptions for the SPP offer were below $8
million. The second tranche of the Placement and the SPP offers are subject to the Company obtaining shareholder
approval at a General Meeting scheduled to be held on 3 October 2022.
Incorporation
% of Equity Interest
30 June 2022
%
30 June 2021
%
Carnegie Joint Operation
Australia
70%
70%
99
ANNUAL REPORT 2022
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Also on 18 August 2022, the Company announced that it had entered into formal binding documentation with its senior
lenders to restructure of its existing debt arrangements including (but not limited to) a deferral of the commencement
of all senior principal repayments under the project finance term facilities from March 2024 to March 2025, an
extension to the final maturity date for the project finance term facilities to March 2040 and an extension to the
maturity date for the existing $20 million liquidity facility to January 2026.
The debt restructure is subject to the requirement that the Company successfully completes an equity raise of at least
$20 million (net of costs) by 7 October 2022. Completion of the Placement announced on the same day enables this
requirement to be met.
On 13 September 2022, Kalium Lakes announced that the SOP purification plant had restarted in-line with the
targeted schedule, following an approximate four-week planned shutdown to perform key rectification and optimisation
works. Further incremental plant optimisation was anticipated to occur alongside normal plant operations during
coming months.
On 19 September 2022, Kalium Lakes announced that, it had received applications in excess of $8 million under the
SPP offer and, to accommodate the level of demand, the Company had determined to increase the size of the SPP
offer to $12 million.
100
KALIUM LAKES LIMITED
FINANCIAL REPORT
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
a. the financial statements and notes are in accordance with the Corporations Act 2001;
b. comply with Accounting Standards;
c. are in accordance with International Financial Reporting Standards issued by the International
Accounting Standards Board, as stated in Note 2 to the financial statements; and
d. give a true and fair view of the financial position as at 30 June 2022 and of the performance for the
year ended on that date of the Company and the Consolidated Entity;
The Chief Executive Officer and Chairman have each declared that:
a. the financial records of the Company for the financial year have been properly maintained in
accordance with s 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with the Accounting Standards; and
c. the financial statements and notes for the financial year give a true and fair view;
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
This declaration is signed in accordance with a resolution of the Board of Directors.
____________________
Stephen Dennis
Chairman
23 September 2022
101
ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
KALIUM LAKES LIMITED
Opinion
We have audited the financial report of Kalium Lakes Limited (Company) and its subsidiaries (Group), which
comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the audit of the financial report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (Code) that are relevant to our audit of the financial report
in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
102
KALIUM LAKES LIMITED
INDEPENDENT AUDITOR’S REPORT
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed this matter
Impairment of Group’s Beyondie Sulphate of Potash cash-generating unit - Refer to Note 15, 16 and 18 in the
financial statements
As prescribed by AASB 136 Impairment of Assets, the
Group performs impairment assessment when events
or changes in circumstances occur in respect of
production of Sulphate of Potash from the Beyondie
Sulphate of Potash mine cash-generating unit (CGU).
The carrying value of the Group’s non-current assets,
which includes property, plant and equipment, mine
properties and capital work-in-progress as disclosed
in the consolidated statement of financial position at
30 June 2022.
Impairment indicators were identified during the year
ended 30 June 2022 in respect of the Group’s CGU
requiring management to perform an impairment
assessment in accordance with AASB 136 Impairment
of Assets.
Management’s assessment of the recoverability of
these non-current assets is performed using a value in
use model that involved significant judgements,
assumptions and estimates used in determining the
recoverable amount of the CGU.
The value in use model is based on expected future
cash flows, which are inherently uncertain, and are
affected by a number of factors as set out in the life-
of-mine model, including reserves and production
estimates, economic factors such as discount rate,
sulphate of potash price, estimate of operating
expenditure, foreign currency exchange rate and
future capital expenditure.
Management concluded that impairment of the CGU
was not required for the year ended 30 June 2022.
We determined this area to be a key audit matter due
to the significant account balances and the level of
management estimates and judgement involved in the
preparation of the impairment model to support the
carrying values as discussed above.
Our audit procedures included:
• Assessing
management’s
determination
of
allocating the non-current assets to a single CGU
based on the nature of the Group’s business and
the manner in which results are monitored and
reported;
•
Assessing the appropriateness of the value-in-use
model prepared by management;
•
Challenging
the
reasonableness
of
key
assumptions used in the value in use model,
including the:
-
Future production levels and operations
expenditure;
-
Future commodity prices and exchange
rates;
-
Estimated capital expenditure;
-
Discount rate applied; and
-
Life of Mine model;
•
Checking the mathematical accuracy of the value
in use model and reconciling input data to
supporting evidence, such as approved budgets
and considering the reasonableness of these
budgets;
•
Reviewing sensitivity analyses to consider the
impact
of
changes
in
key
judgements,
assumptions and estimates on the recoverable
amount and the impact on the impairment
assessment of the CGU; and
•
Assessing the appropriateness of the disclosures
in the financial statements.
103
ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
Key audit matter
How our audit addressed this matter
Provision for rehabilitation - Refer to Note 24 in the financial statements
As a result of the Group’s past activities, there is an
obligation to rehabilitate and restore mine sites. As at
30 June 2022, the Group has brought to account a
provision for rehabilitation of $18,055,533.
We considered this to be a key audit matter due to the
significant management judgement and estimates
involved in assessing the provision for rehabilitation
including:
• Determination of costs to be incurred in future
years and its timing;
• Complexity involved in the quantification of the
provision based on areas disturbed; and
• The methodology used to calculate the provision
amount to ensure compliance with Australian
Accounting Standards.
Our audit procedures included:
• Obtaining an understanding of the process
involved in the determination of the provision;
• Checking the mathematical accuracy of the model
used to calculate the provision;
• Reviewing the reasonableness of the inflation
rate, discount rate and timing of the rehabilitation
cashflows assumptions used in the model;
• Reviewing areas of disturbances on a sample
basis by agreeing to supporting documents;
• Reviewing the reasonableness of the estimated
costs performed by management expert;
• Ensuring the movement in the provision has been
accounted for in accordance with Australian
Accounting Standards; and
• Assessing the appropriateness of the disclosures
in the financial statements.
Other information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2022 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
104
KALIUM LAKES LIMITED
INDEPENDENT AUDITOR’S REPORT
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the Directors' Report for the year ended 30 June 2022.
In our opinion, the Remuneration Report of Kalium Lakes Limited, for the year ended 30 June 2022, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
AIK KONG TING
Dated: 23 September 2022
Partner
105
ANNUAL REPORT 2022
INDEPENDENT AUDITOR’S REPORT
105
ANNUAL REPORT 2022
ADDITIONAL INFORMATION
ADDITIONAL INFORMATION FOR PUBLIC LISTED COMPANIES
Issued Securities as at 30 June 2022
Quoted on ASX
Unlisted
Total
Fully Paid Ordinary Shares
1,181,712,214
-
1,181,712,214
$0.00 unlisted options expiring 16/6/23
17,677,493
17,677,493
$0.50 unlisted options expiring 30/6/25
5,000,000
5,000,000
Total
1,181,712,214
22,677,493
1,204,389,707
Distribution of Listed Ordinary Fully Paid Shares as at 30 June 2022
Spread
of
Holdings
Number of
Holders
Number of Units
% Issued Capital
1
-
1,000
243
88,736
0.01%
1,001
-
5,000
1,653
5,254,774
0.44%
5,001
-
10,000
1,333
10,627,044
0.90%
10,001
-
100,000
4,023
157,091,882
13.29%
100,001
-
and over
1,473
1,008,649,778
85.36%
Total
8,725
1,181,712,214
100%
Top 20 Listed Ordinary Fully Paid Shareholders as at 30 June 2022
Rank
Shareholder
Shares Held
% Issued Capital
1.
GREENSTONE RESOURCES II (AUSTRALIA) HOLDINGS L P
152,886,533
12.94%
2.
GREENSTONE MANAGEMENT (DELAWARE) II LLC
78,673,124
6.66%
3.
KUMARINA HOLDINGS PTY LTD
39,839,800
3.37%
4.
BIGA NOMINEES PTY LTD
22,922,679
1.94%
5.
KUMARINA HOLDINGS PTY LTD
20,598,155
1.74%
6.
THOMAS CHUTE ELLIS + SALLY ANNE ELLIS
19,199,159
1.62%
7.
MR PHILIPPUS RUDOLPH VAN NIEKERK + MRS JEAN-MARIE VAN
NIEKERK
15,831,741
1.34%
8.
DRA PACIFIC PTY LTD
12,218,987
1.03%
9.
HISHENK PTY LTD
10,600,000
0.90%
10.
CITICORP NOMINEES PTY LIMITED
10,405,085
0.88%
11.
MR STACEY RADFORD
10,230,323
0.87%
12.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
8,800,033
0.74%
13.
KUMARINA HOLDINGS PTY LTD
8,450,142
0.72%
14.
MNA FAMILY HOLDINGS PTY LTD
8,200,000
0.69%
15.
WILLOUGHBY CAPITAL PTY LTD
8,000,000
0.68%
16.
VALDARNO PTY LTD
7,306,040
0.62%
17.
PS SUPER NOMINEE PTY LIMITED
7,245,278
0.61%
18.
MR KENNETH JOSEPH HALL
6,226,769
0.53%
19.
KUMARINA HOLDINGS PTY LTD
6,000,000
0.51%
20.
BNP PARIBAS NOMINEES PTY LTD
5,414,658
0.46%
Total
459,048,506
38.85%
106
KALIUM LAKES LIMITED
107
ANNUAL REPORT 2022
ABN: 98 613 656 643
Unit 1 152 Balcatta Road
Balcatta WA 6021
+61 (0)8 9240 3200
www.kaliumlakes.com.au