ABN 98 117 085 748ASX/AIM: SO4 Level 9, BGC Centre 28 The Esplanade, Perth WA 6000, Australia Tel. +61 8 9322 6322Email: info@saltlakepotash.com.auSALTLAKEPOTASH.COM.AUSALT LAKE POTASH LTD ANNUAL REPORT 2017ANNUAL REPORT2017 CORPORATE DIRECTORYDIRECTORSMr Ian Middlemas – ChairmanMr Matthew SymeMr Bryn JonesMr Mark HohnenMr Mark PearceCOMPANY SECRETARYMr Sam CordinREGISTERED OFFICELevel 9, BGC Centre28 The EsplanadePerth WA 6000 AustraliaTelephone: +61 8 9322 6322Facsimile: +61 8 9322 6558LONDON OFFICEUnit 1, 38 Jermyn StreetLondon SW1Y 6DN United KingdomTelephone: +44 207 478 3900Facsimile: +44 207 434 4450WEBSITEwww.saltlakepotash.com.auSECURITIES EXCHANGE LISTINGAustralian Securities ExchangeASX Code: SO4 – Ordinary SharesLondon Stock Exchange (AIM)AIM Code: SO4 – Ordinary SharesNOMINATED ADVISERGrant Thornton UK LLP30 Finsbury SquareLondon EC2P 2YUSHARE REGISTRYAustraliaLink Market Services LimitedLevel 12, 680 George StreetSydney NSW 2000Telephone: +61 1300 554 474Facsimile: +61 2 9287 0303United KingdomComputershare Investor Services PlcPO Box 82The PavillionsBridgwater RoadBristol BS99 7NHTelephone: +44 870 889 3105AUDITORErnst & Young11 Mounts Bay Road Perth WA 6000BANKERSAustralia and New Zealand Banking Group LimitedCONTENTSDirectors’ Report 1Auditor’s Independence Declaration 19Consolidated Statement of Profit or Loss and other Comprehensive Income 20Consolidated Statement of Financial Position 21Consolidated Statement of Changes in Equity 22Consolidated Statement of Cash Flows 24Notes to and Forming Part of the Financial Statements 25Directors’ Declaration 52Independent Auditor’s Report 53Corporate Governance 58ASX Additional Information 59Disclaimers and Disclosure 64 DIRECTORS’ REPORT
The Directors of Salt Lake Potash Limited present their report on the Consolidated Entity consisting of Salt Lake
Potash Limited (Company or Salt Lake) and the entities it controlled at the end of, or during, the year ended 30
June 2017 (Consolidated Entity or Group).
DIRECTORS
The names of the Group's Directors in office at any time during the financial year or since the end of the financial
year are:
Mr Ian Middlemas
Mr Matthew Syme
Mr Jason Baverstock
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Chairman
Chief Executive Officer (CEO)
Executive Director (resigned 12 June 2017)
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 12 June 2017)
Unless otherwise stated, Directors held their office from 1 July 2016 until the date of this report.
DIRECTORS AND OFFICERS
Mr Ian Middlemas B.Com, CA
Chairman
Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a
Bachelor of Commerce degree. He worked for a large international Chartered Accounting firm before joining the
Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had extensive
corporate and management experience, and is currently a Director with a number of publicly listed companies in
the resources sector.
Mr Middlemas was appointed a Director of the Company on 21 January 2010 and Chairman on 29 August 2014.
During the three year period to the end of the financial year, Mr Middlemas has held directorships in Apollo Minerals
Limited (July 2016 – present), Cradle Resources Limited (May 2016 – present), Paringa Resources Limited
(October 2013 – present), Berkeley Energia Limited (April 2012 – present), Prairie Mining Limited (August 2011 –
present), Equatorial Resources Limited (November 2009 – present), Piedmont Lithium Limited (September 2009 –
present), Sovereign Metals Limited (July 2006 – present), Odyssey Energy Limited (September 2005 – present),
Syntonic Limited (April 2010 – June 2017) and Papillon Resources Limited (May 2011 – October 2014).
Mr Matthew Syme B.Com, CA
Chief Executive Officer
Mr Syme is a Chartered Accountant and an accomplished mining executive with over 27 years experience in senior
management roles in Australia and overseas. He was a Manager in a major international Chartered Accounting firm
before spending three years as an equities analyst in a large stockbroking firm. He was then Chief Financial Officer
of Pacmin Mining Limited, a successful Australian gold mining company.
Mr Syme has considerable experience in managing mining projects in a wide range of commodities and countries.
He most recently held the position of Managing Director of copper-gold developer Sierra Mining Limited, which was
acquired by RTG Mining Inc in early June 2014. Mr Syme was responsible for the acquisition of Sierra’s key Mabilo
Project in late 2011.
Prior to joining Sierra in 2010 he was Managing Director of Berkeley Resources Limited where he successfully
guided the acquisition and scoping studies of Berkeley’s Salamanca Uranium Project in Spain.
Mr Syme was appointed a Director of the Company on 9 April 2015 and CEO on 29 April 2016. During the three
year period to the end of the financial year, Mr Syme was a director of Sovereign Metals Limited (June 2014 – June
2016) and RTG Mining Inc. (June 2014 – September 2014).
Salt Lake Potash Limited ANNUAL REPORT 2017
1
DIRECTORS’ REPORT
(Continued)
DIRECTORS AND OFFICERS (Continued)
Mr Bryn Jones BAppSc, MMinEng, FAusIMM
Non-Executive Director
Mr Jones is a Chemical Engineer with over 20 years management experience in industrial processing in commercial
and mining operations around the world, including potash and phosphate projects.
Mr Jones was appointed a Director of the Company on 12 June 2017. During the three year period to the end of
the financial year, Mr Jones has held directorships in Uranium Equities Limited (September 2009 – present) and
Phosenergy Limited (July 2013 – present).
Mr Mark Hohnen
Non-Executive Director
Mr Hohnen has been involved in the mineral business since the late 1970s and has held a number of directorships
in both public and private companies. He was founding Chairman of Cape Mentelle and Cloudy Bay wines, as well
as the oil and coal company Anglo Pacific Resources Plc and was a director of AIM listed Kalahari Minerals Plc.
Mr Hohnen was appointed a Director of the Company on 19 February 2010. During the three year period to the end
of the financial year, Mr Hohnen has held directorships in Bacanora Minerals Limited (April 2016 – present), Boss
Resources Limited (April 2016 – present) and Mawson West Limited (March 2014 – January 2015).
Mr Mark Pearce B.Bus, CA, FCIS, FFin
Non-Executive Director
Mr Pearce is a Chartered Accountant and is currently a director of several listed companies that operate in the
resources sector. He has had considerable experience in the formation and development of listed resource
companies. Mr Pearce is also a Fellow of the Institute of Chartered Secretaries and Administrators and a Fellow
of the Financial Services Institute of Australasia.
Mr Pearce was appointed a Director of the Company on 29 August 2014. During the three year period to the end
of the financial year, Mr Pearce has held directorships in Apollo Minerals Limited (July 2016 – present), Prairie
(September 2009 – present), Equatorial
Mining Limited (August 2011 – present), Piedmont Lithium Limited
Resources Limited (November 2009 – present), Sovereign Metals Limited (July 2006 – present), Odyssey Energy
Limited (September 2005 – present) and Syntonic Limited (April 2010 – October 2016).
Mr Sam Cordin B.Com, CA
Company Secretary
Mr Cordin is a Chartered Accountant who commenced his career at a large international Chartered Accounting firm
and has since been involved with a number of exploration and development companies, including Berkeley Energia
Limited, Paringa Resources Limited and Sierra Mining Limited.
Mr Cordin was appointed Company Secretary of the Company on 13 November 2014.
2
Salt Lake Potash Limited ANNUAL REPORT 2017
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year consisted of the exploration and development of
resource projects. No significant change in nature of these activities occurred during the year.
OPERATING AND FINANCIAL REVIEW
Operations
The Company’s primary focus during the year continued to be the advancement of the Goldfield Salt Lakes Project
(GSLP), located in the Northern Goldfields of Western Australia. The Company’s aim is to construct a Pilot Plant
at the GSLP, intended to be the first salt-lake brine Sulphate of Potash (SOP) production operation in Australia.
Figure 1: Goldfields Salt Lake Project
Salt Lake Potash Limited ANNUAL REPORT 2017
3
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Operations (Continued)
Highlights
Highlights during, and subsequent to the end of, the financial year include:
• Completion of a positive Scoping Study
The Company completed a Scoping Study which confirmed the potential of the Lake Wells Project to produce
low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets. The Scoping
Study (accuracy ±30%) prepared by global engineering firm, Amec Foster Wheeler, and other international
experts, demonstrates excellent project fundamentals based on well-established solar evaporation and salt
processing techniques. Based on the positive results of the Scoping Study, the Company commenced work
for a Pre-Feasibility Study (PFS).
Lake Wells has the potential to be one of only five large scale salt lake SOP producers around the world and
the Project’s estimated cash production costs of A$185 per tonne (Stage 2) would be amongst the lowest in
the world.
The Scoping Study is based on a two stage development plan for Lake Wells:
-
-
Stage 1 is based on shallow trenching and bore production with 100% of brine feed drawn from the near
surface Measured Resource.
Stage 2 includes pumping additional brine from the deeper Inferred Resource, to increase production to
400,000 tpa of SOP.
All-in capital costs total A$268 million for the 400,000 tpa production scenario; amongst the lowest capital
intensity for any proposed potash project worldwide.
• Surface Aquifer Exploration Program
The Lake Wells surface aquifer exploration program was completed, comprising a total of 250 shallow test
pits and 10 test trenches. This work provides very high quality data for the hydrogeological model for the
surface aquifer of the Lake, giving the Company a high level of confidence about the potential brine production
from low cost surface trenching.
• Deeper Paleochannel Aquifer
The off-lake aircore drilling program, targeting the Lake Wells paleochannel, was completed successfully
intersecting Basal Paleochannel Sediments along the entire length of the paleochannel unit.
• Process Development Testwork
The Site Evaporation Trial (SET) at Lake Wells has now processed approximately 215 tonnes of brine and
produced 3.4 tonnes of harvest salts.
The Company continues a range of process development testwork to enhance the Lake Wells process model.
Raw brine or Lake Wells harvest salts have already produced substantial samples of SOP. Ongoing work at
SGS (Perth), Bureau Veritas (Perth) and Saskatchewan Research Council (Canada) continues to enhance
the process flowsheet and also produce further customer and testwork samples.
• Regional Lakes
A surface aquifer reconnaissance exploration program commenced at Lake Ballard with the mobilisation of
an amphibious excavator. The Company also completed further surface brine sampling and reconnaissance
work at Lake Ballard and Lake Irwin.
Initial evaporation testwork on Lake Ballard and Lake Irwin brine confirmed the suitability of harvest salts for
SOP production.
Next Steps
The Company’s primary focus is to construct a Pilot Plant at the GSLP, intended to be the first salt-lake brine
SOP production operation in Australia. While proceeding with the analysis of options to construct a 20-40,000
tpa SOP Pilot Plant at Lake Wells.
4
Salt Lake Potash Limited ANNUAL REPORT 2017
Corporate
• Successful Placement Raising $17.6 million: the Company completed a placement of 41,000,000 ordinary
shares to strategic and institutional investors in Australia and overseas, raising gross proceeds of $17.6
million.
Scoping Study
The Scoping Study (accuracy ±30%) prepared by global engineering firm, Amec Foster Wheeler, and other
international experts, demonstrates excellent project fundamentals based on well-established solar evaporation
and salt processing techniques. Based on the positive results of the Scoping Study, the Company commenced
work for a PFS.
Lake Wells has the potential to be one of only five large scale salt lake SOP producers around the world and the
Project’s estimated cash production costs of A$185 per tonne (Stage 2) would be amongst the lowest in the world.
The Project will produce SOP from hypersaline brine extracted from Lake Wells via trenches and a combination of
shallow and deep production bores. The extracted brine will be transported to a series of solar evaporation ponds
built on the Lake where selective evapo-concentration will precipitate potassium double salts in the final evaporation
stage. These potassium-rich salts will be mechanically harvested and processed into SOP in a crystallisation plant.
The final product will then be transported for sale to the domestic and international markets.
The Scoping Study is based on a two stage development plan for Lake Wells:
- Stage 1 is based on shallow trenching and bore production with 100% of brine feed drawn from the near surface
Measured Resource.
- Stage 2 also includes pumping additional brine from the deeper Inferred Resource, to increase production to
400,000 tpa of SOP.
Key Scoping Study results for Stage 1 and Stage 2:
Annual Production (tpa) – steady state
Capital Cost *
Operating Costs **
Stage 1
200,000
A$191m
A$241/t
Stage 2
400,000
A$39m
A$185/t
* Capital Costs based on an accuracy of -10%/+30% before contingencies and growth allowance but including Engineering,
Procurement and Construction Management (EPCM).
** Operating Costs based on an accuracy of ±30% including transportation & handling (FOB Esperance) but before royalties
and depreciation.
The Scoping Study is based on the Project’s Mineral Resource Estimate of 80-85 Mt of SOP in 9,691 GL of brine
at an average of 8.7 kg/m3 of K2SO4. The Mineral Resource Estimate includes Measured and Indicated Resources
of 26 Mt of SOP in the shallowest 20m of the Lake.
The Scoping Study has established the indicative costs of a two stage production operation, initially producing
200,000 tonnes per annum (tpa) and then 400,000 tpa of dried organic SOP. Stage 1 produces 200,000 tpa but
includes most of the capital works required for a 400,000 tpa operation. Stage 2 will commence after initial capex
is repaid by cashflow generated from the shallow Measured and Indicated Resource.
Salt Lake Potash Limited ANNUAL REPORT 2017
5
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Operations (Continued)
Key Assumptions and Inputs of the Scoping Study
Maximum Study Accuracy Variation
Stage
Life of Mine (LOM)
Annual Production (steady state) tonnes
Portion of Production Target – Measured & Indicated
Portion of Production Target – Inferred
Mining Method (Extraction)
Trenches (km)
Shallow Bores (number)
Deep Bores (number)
Mining Method (Extraction (volume))
Trenches (m3/h)
Shallow Bores (m3/h)
Deep Bores (m3/h)
Total Volume
Evaporation Ponds
Area (ha)
Recovery of Potassium from feed brine
Recovery of Sulphate from feed brine
Plant
Operating time (h/a)
Operating Costs * (±30%)
Minegate (A$/t)
Transport (A$/t)
Total (A$/t)
Capital Costs (-10%/+30%)
Direct
Indirect
Growth Allowance
Total Capital
* Before Royalties and Depreciation
+/- 30%
Stage 1
20 years
200,000
100%
0%
+/- 30%
Stage 2
400,000
70%
30%
107
4
-
3,074
576
-
3,650
2,990
70%
18%
157
4
34
4,521
576
2,203
7,300
3,170
70%
18%
7,600
7,600
$165.74
$75.10
$240.84
A$160.7m
A$30.5m
A$32.5m
A$223.7m
$110.00
$75.10
$185.10
A$32.0m
A$6.8m
A$5.1m
A$43.9m
The Scoping Study results highlight the benefits of Lake Wells’ location in the Northern Goldfields, with excellent
access to gas and transportation infrastructure. Total Capex of A$268 million for 400,000 tpa of SOP is amongst
the lowest capital intensity of any proposed potash project worldwide.
Opportunities have been identified to further optimise capital and operating costs through equipment lease
financing, further operational refinements and partnerships. The Company will also continue to investigate potential
additional revenue streams for the project.
6
Salt Lake Potash Limited ANNUAL REPORT 2017
Results of Operations
The net loss of the Consolidated Entity for the year ended 30 June 2017 was $9,200,509 (2016: net loss of
$4,645,028). This loss is mainly attributable to:
(i)
(ii)
(iii)
Exploration and evaluation expenses of $7,717,231 (2016: $3,191,159) which are attributable to the Group’s
accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to
the acquisition of the rights to explore and up to the successful completion of definitive feasibility studies for
each separate area of interest;
Non-cash share-based payment expenses of $580,976 (2016: $163,448) which are attributable to the
Group’s accounting policy of expensing the value (estimated using an option pricing model) of Incentive
Securities issued to key employees and consultants. The value is measured at grant date and recognised
over the period during which the option holders become unconditionally entitled to the options and/or rights;
and
Business development expenses of $994,979 (2016: $365,354) which are attributable to additional business
development and investor relations activities required to support the growth and development of the Lake
Wells Project, including travel costs associated with representing the Company at international conferences
and investor meetings.
Financial Position
As at the date of this report, the Company had working capital in excess of $14 million which includes cash and
cash equivalents.
At 30 June 2017, the Company had cash reserves of $15,596,759 (2016: $7,498,285).
At 30 June 2017, the Company had net assets of $17,046,443 (2016: $9,397,552), an increase of 81% compared
with the previous year. This increase is consistent with the increase in cash reserves following the completion of
the placement raising $17.6 million, which is offset by the total comprehensive loss for the year of $9.6 million.
Business Strategies and Prospects for Future Financial Years
The objective of the Group is to create long-term shareholder value through the discovery, exploration and
development of its projects.
To date, the Group has not commenced production of any minerals. To achieve its objective, the Group currently
has the following business strategies and prospects:
(i)
(ii)
Complete a PFS on the Lake Wells Project;
Continue additional exploration activites including drilling,test pumping and other testwork; and
(iii)
Continue a comprehensive field evaporation trial to optimise the definition of evaporation ponds and design.
All of these activities are inherently risky and the Board is unable to provide certainty of the expected results of
these activities, or that any or all of these likely activities will be achieved. The material business risks faced by the
Group that could have an effect on the Group’s future prospects, and how the Group manages these risks, include:
The Company’s exploration properties may never be brought into production – The exploration for, and
development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately
developed into producing mines. To mitigate this risk, the Company will undertake systematic and staged
exploration and testing programs on its mineral properties and, subject to the results of these exploration programs,
the Company will then progressively undertake a number of technical and economic studies with respect to its
projects prior to making a decision to mine. However there can be no guarantee that the studies will confirm the
technical and economic viability of the Company’s mineral properties or that the properties will be successfully
brought into production;
Salt Lake Potash Limited ANNUAL REPORT 2017
7
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Business Strategies and Prospects for Future Financial Years (Continued)
The Company’s activities will require further capital – The exploration and any development of the Company’s
exploration properties will require substantial additional financing. Failure to obtain sufficient financing may result
in delaying or indefinite postponement of exploration and any development of the Company’s properties or even a
loss of property interest. There can be no assurance that additional capital or other types of financing will be
available if needed or that, if available, the terms of such financing will be favourable to the Company;
The Company’s exploration licence may be subject to Native title and Aboriginal Heritage - There may be
areas over which legitimate common law and/or statutory Native Title rights of Aboriginal Australians exist. If Native
Title rights do exist, the ability of the Company to gain access to the Projects (through obtaining consent of any
relevant landowner), or to progress from the exploration phase to the development and mining phases of operations
may be adversely affected;
The Company may be adversely affected by fluctuations in commodity prices – The price of potash and other
commodities fluctuates widely and is affected by numerous factors beyond the control of the Company. Future
production, if any, from the Company’s mineral properties will be dependent upon the price of potash and other
commodities being adequate to make these properties economic. The Company currently does not engage in any
hedging or derivative transactions to manage commodity price risk. As the Company’s operations change, this
policy will be reviewed periodically going forward; and
Global financial conditions may adversely affect the Company’s growth and profitability – Many industries,
including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the
current financial market turmoil include contraction in credit markets resulting in a widening of credit risk,
devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a
lack of market liquidity. Due to the current nature of the Company’s activities, a slowdown in the financial markets
or other economic conditions may adversely affect the Company’s growth and ability to finance its activities. If these
increased levels of volatility and market turmoil continue, the Company’s activities could be adversely impacted and
the trading price of the Company’s shares could be adversely affected.
EARNINGS PER SHARE
Basic and diluted loss per share
2017
Cents
2016
Cents
(6.61)
(4.13)
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group's operations are subject to various environmental laws and regulations under the relevant government's
legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations
to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance audits or
inspections by relevant government authorities.
There have been no significant known breaches by the Group during the financial year.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:
(i)
On 29 August 2016, the Company announced the results from a Scoping Study on the Lake Wells project
which confirmed its potential to produce low cost SOP by solar evaporation of lake brines for domestic and
international fertiliser markets;
8
Salt Lake Potash Limited ANNUAL REPORT 2017
(ii)
On 21 April 2017, Amec Foster Wheeler were appointed to prepare an analysis of the alternatives for the
Company to construct a Pilot Plant at the GSLP.
(iii) On 12 June 2017, the Company appointed Mr Bryn Jones as a Non-Executive Director. Mr Jason Baverstock
resigned as Executive Director.
(iv) On 20 June 2017, the Company completed a placement of 41,000,000 Shares at A$0.43 each to institutional
and sophisticated investors in Australia and overseas to raise A$17,630,000 (before costs).
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 18 August 2017, the Company issued 42,000 shares to an advisor as part of their annual fees.
Other than as noted above, as at the date of this report there are no matters or circumstances which have arisen
since 30 June 2017 that have significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2017, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2017, of the Consolidated Entity;
or
the state of affairs, in financial years subsequent to 30 June 2017, of the Consolidated Entity.
DIRECTORS' INTERESTS
As at the date of this report, the Directors' interests in the securities of the Company are as follows:
Mr Ian Middlemas
Mr Matthew Syme
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Interest in securities at the date of this report
Ordinary Shares1
Incentive Options 2
Performance Rights 3
11,000,000
4,500,000
5,033,218
4,000,000
-
-
2,500,000
-
-
-
-
2,000,000
-
200,000
200,000
Notes:
1 Ordinary Shares means fully paid Ordinary Shares in the capital of the Company.
2 Incentive Options means an unlisted share option to subscribe for one Ordinary Share in the capital of the Company.
3 Performance Rights means Performance Rights issued by the Company that convert to one Ordinary Share in the capital of
the Company upon satisfaction of various performance conditions.
SHARE OPTIONS, PERFORMANCE SHARES AND PERFORMANCE RIGHTS
At the date of this report the following options and performance shares have been issued over unissued Ordinary
Shares of the Company:
•
•
•
•
•
•
•
•
•
•
750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;
5,000,000 ‘Class A’ Performance Shares on or before 12 June 2018;
7,500,000 ‘Class B’ Performance Shares on or before 12 June 2019;
10,000,000 ‘Class C’ Performance Shares on or before 12 June 2020;
1,025,000 Performance Rights subject to the PFS Milestone expiring on 30 June 2018;
1,025,000 Performance Rights subject to the BFS Milestone expiring on 30 June 2019;
1,025,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
1,025,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
During the year ended 30 June 2017, no Ordinary Shares have been issued as a result of the exercise of Unlisted
Options, and no Ordinary Shares have been issued as a result of the conversion of Performance Shares or Rights.
Subsequent to year end and until the date of this report, no Ordinary Shares have been issued as a result of the
exercise of Unlisted Options.
Salt Lake Potash Limited ANNUAL REPORT 2017
9
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED)
This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration
of Key Management Personnel (KMP) of the Group.
Details of Key Management Personnel
Details of the KMP of the Group during or since the end of the financial year are set out below:
Directors
Mr Ian Middlemas
Mr Matthew Syme
Mr Jason Baverstock
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Other KMP
Mr Sam Cordin
Chairman
Chief Executive Officer (CEO)
Executive Director (resigned 12 June 2017)
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 12 June 2017)
Chief Financial Officer and Company Secretary
Unless otherwise disclosed, the KMP held their position from 1 July 2016 until the date of this report.
Remuneration Policy
The Group’s remuneration policy for its KMP has been developed by the Board taking into account the size of the
Group, the size of the management team for the Group, the nature and stage of development of the Group’s current
operations, and market conditions and comparable salary levels for companies of a similar size and operating in
similar sectors. In addition to considering the above general factors, the Board has also placed emphasis on the
following specific issues in determining the remuneration policy for KMP:
(a)
the Group is currently focused on undertaking exploration, appraisal and development activities;
(b)
risks associated with developing resource companies whilst exploring and developing projects; and
(c) other than profit which may be generated from asset sales, the Company does not expect to be undertaking
profitable operations until sometime after the commencement of commercial production on any of its projects.
Executive Remuneration
The Group’s remuneration policy is to provide a fixed remuneration component and a performance based
component (short term incentive and long term incentive). The Board believes that this remuneration policy is
appropriate given the considerations discussed in the section above and is appropriate in aligning executives’
objectives with shareholder and business objectives.
Fixed Remuneration
Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other
non-cash benefits. Non-cash benefits may include provision of car parking and health care benefits.
Fixed remuneration is reviewed annually by the Board. The process consists of a review of company and individual
performance, relevant comparative remuneration externally and internally and, where appropriate, external advice
on policies and practices.
Performance Based Remuneration – Short Term Incentive
Some executives are entitled to an annual cash incentive payment upon achieving various key performance
indicators (“KPI’s”), as set by the Board. Having regard to the current size, nature and opportunities of the Company,
the Board has determined that these KPI’s will include measures such as successful commencement and/or
completion of exploration activities (e.g. commencement/completion of exploration programs within budgeted
timeframes and costs), establishment of government relationship (e.g. establish and maintain sound working
relationships with government and officialdom), development activities (e.g. completion of infrastructure studies and
commercial agreements), corporate activities (e.g. recruitment of key personnel and representation of the company
at international conferences) and business development activities (e.g. corporate transactions and capital raisings).
These measures were chosen as the Board believes they represent the key drivers in the short and medium term
success of the Project’s development. On an annual basis, subsequent to year end, the Board assesses
performance against each individual executive’s KPI criteria. During the 2017 financial year, no bonuses were
approved, paid, or are payable.
10
Salt Lake Potash Limited ANNUAL REPORT 2017
Performance Based Remuneration – Long Term Incentive
The Group has adopted a long-term incentive plan (“LTIP”) comprising the “Salt Lake Potash Performance Rights
Plan” (the “Plan”) to reward KMP and key employees for long-term performance. Shareholders approved the Plan
at the Company Annual General Meeting of Shareholders on 30 November 2016.
The Plan provides for the issuance of performance rights (“Performance Rights”) which, upon satisfaction of the
relevant performance conditions attached to the Performance Rights, will result in the issue of an Ordinary Share
for each Performance Right. Performance Rights are issued for no consideration and no amount is payable upon
conversion thereof.
To achieve its corporate objectives the Company needs to attract and retain its key staff, whether employees or
contractors. Grants made to eligible participants under the Plan will assist with the Company's employment strategy
and will:
(a)
(b)
(c)
(d)
enable the Company to recruit, incentivise and retain KMP and other eligible employees to assist with the
completion of feasibility studies for the GSLP to achieve the Company’s strategic objectives;
link the reward of eligible employees with the achievement of strategic goals and the long term performance
of the Company;
align the financial interests of eligible participants of the proposed Plan with those of Shareholders; and
provide incentives to eligible employees of the Plan to focus on superior performance that creates
Shareholder value.
Performance Rights granted under the Plan to eligible participants will be linked to the achievement by the Company
of certain performance conditions as determined by the Board from time to time. These performance conditions
must be satisfied in order for the Performance Rights to vest. The Performance Rights also vest where there is a
change of control of the Company. Upon Performance Rights vesting, Ordinary Shares are automatically issued for
no consideration. If a performance condition of a Performance Right is not achieved by the expiry date then the
Performance Right will lapse.
During the financial year, Performance Rights were granted to certain KMP and other employees and contractors
with certain performance conditions in relation to the Company’s SOP Projects including: (a) completion of a positive
PFS; (b) completion of a positive DFS; (c) commencement of construction activities; and (d) achievement of steady
state production level.
In addition, the Board may issue incentive options where appropriate to some executives as a key component of
the incentive portion of their remuneration, in order to attract and retain the services of the executives and to provide
an incentive linked to the performance of the Company. The Board considers that each executive’s experience in
the resources industry will greatly assist the Company in progressing its projects to the next stage of development
and the identification of new projects. As such, the Board believes that the number of incentive securities (either
options or rights) granted to executives is commensurate to their value to the Company.
Incentive options granted to executives generally have exercise prices at or above the market share price at the
time of agreement. As such, incentive options granted to executives will generally only be of benefit if the executives
perform to the level whereby the value of the Company increases sufficiently to warrant exercising the incentive
options granted. Other than service-based vesting conditions, there are generally no additional performance criteria
on the incentive options granted to executives, as given the speculative nature of the Company’s activities and the
small management team responsible for its running, it is considered the performance of the executives and the
performance and value of the Company are closely related. During the 2016 financial year, the Company issued
incentive options to Mr Matthew Syme as part of his remuneration as CEO. No incentive options were issued in the
2017 financial year.
The Company prohibits executives from entering into arrangements to limit their exposure to Incentive Options
granted as part of their remuneration package.
Salt Lake Potash Limited ANNUAL REPORT 2017
11
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Non-Executive Director Remuneration
The Board’s policy is for fees to Non-Executive Directors to be no greater than market rates for comparable
companies for time, commitment and responsibilities. Given the current size, nature and risks of the Company,
Unlisted Options may also be used to attract and retain Non-Executive Directors. The Board determines payments
to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and
accountability. Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders at a General Meeting. Director’s fees paid to Non-Executive Directors accrue on a daily basis. Fees
for Non-Executive Directors are not linked to the performance of the economic entity. However, to align Directors’
interests with shareholder interests, the Directors are encouraged to hold shares in the Company and given the
current size, nature and opportunities of the Company, Non-Executive Directors may receive Unlisted Options or
Performance Rights in order to secure and retain their services.
Fees for the Chairman are presently $36,000 per annum (2016: $36,000) and fees for Non-Executive Directors’ are
presently set at $20,000 per annum (2016: $20,000). These fees cover main board activities only. Only Non-
Executive Directors may receive additional remuneration for other services provided to the Company, including but
not limited to, membership of committees. The Company prohibits executives entering into arrangements to limit
their exposure to Unlisted Options and Performance Rights granted as part of their remuneration package.
Relationship between Remuneration of KMP and Shareholder Wealth
During the Company’s exploration and development phases of its business, the Board anticipates that the Company
will retain earnings (if any) and other cash resources for the exploration and development of its resource projects.
Accordingly, the Company does not currently have a policy with respect to the payment of dividends and returns of
capital. Therefore there was no relationship between the Board’s policy for determining, or in relation to, the nature
and amount of remuneration of KMP and dividends paid and returns of capital by the Company during the current
and previous four financial years.
The Board did not determine, and in relation to, the nature and amount of remuneration of the KMP by reference to
changes in the price at which shares in the Company traded between the beginning and end of the current and the
previous four financial years. Discretionary annual cash incentive payments are based upon achieving various non-
financial key performance indicators as detailed under “Performance Based Remuneration – Short Term Incentive”
and are not based on share price or earnings. However, as noted above, certain KMP may receive Unlisted Options
in the future which generally will be of greater value to KMP if the value of the Company’s shares increases
sufficiently to warrant exercising the Unlisted Options.
Relationship between Remuneration of KMP and Earnings
As discussed above, the Company is currently undertaking exploration and development activities, and does not
expect to be undertaking profitable operations (other than by way of material asset sales, none of which is currently
planned) until sometime after the successful commercialisation, production and sales of commodities from one or
more of its projects. Accordingly the Board does not consider earnings during the current and previous four financial
years when determining, and in relation to, the nature and amount of remuneration of KMP.
12
Salt Lake Potash Limited ANNUAL REPORT 2017
Emoluments of Directors and Executives
Details of the nature and amount of each element of the emoluments of each Director and KMP of Salt Lake Potash
Limited are as follows:
Short-term Incentives
2017
Directors
Mr Ian Middlemas
Mr Matthew Syme
Mr Jason Baverstock 1
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones 2
Other KMP
Mr Sam Cordin 3
Total
Salary &
fees
$
36,000
250,000
112,500
20,000
20,000
5,926
137,500
581,926
Cash
Incentive
Payments
$
Non
Cash
Benefits4
$
Post-
employment
benefits
$
Share-
based
payments
$
Perfor-
mance
related
%
Total
$
-
-
-
-
-
-
-
-
-
9,972
-
-
-
-
-
3,420
23,750
10,687
-
1,900
109
-
39,420
-
477,494
761,216
63%
-
-
123,187
20,000
-
-
22,305
44,205
50%
-
6,035
-
13,062
56,217
206,779
27%
9,972
52,928
556,016 1,200,842
Notes:
1 Mr Baverstock resigned 12 June 2017.
2 Mr Jones was appointed 12 June 2017. Mr Jones received Directors fees of $1,154 and consulting fees of $4,772 for additional services provided
to the Company.
3 Effective 1 August 2016, Mr Cordin was employed by the Company as Chief Financial Officer and Company Secretary. Prior to 1 August 2016,
Mr Cordin provided services as the Company Secretary through a services agreement with Apollo Group Pty Ltd (‘Apollo’).
4 Non-cash benefits include life insurance premiums paid for Mr Syme.
Short-term Incentives
2016
Directors
Mr Ian Middlemas
Mr Matthew Syme 1
Mr Jason Baverstock
Mr Mark Hohnen
Mr Mark Pearce
Other KMP
Mr Sam Cordin 2
Total
Salary &
fees
$
36,000
194,834
125,000
20,000
20,000
-
395,834
Cash
Incentive
Payments
$
Non
Cash
Benefits
$
Post-
employment
benefits
$
Share-
based
payments
$
Perfor-
mance
related
%
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,420
5,542
11,875
-
1,900
-
-
39,420
-
163,448
363,824
45%
-
-
-
-
136,875
20,000
21,900
-
-
-
-
-
22,737
163,448
582,019
Notes:
1 Mr Syme was appointed as CEO on 29 April 2016. Prior to Mr Syme’s appointment as CEO, Mr Syme acted as a Non-Executive Director receiving
Directors fees of $16,667 and consulting fees of $135,500 for additional services provided to the Company.
2 Prior to 1 August 2016, Mr Cordin provided services as the Company Secretary through a services agreement with Apollo. During the 2016 year,
Apollo was paid, or was payable, $210,000 for the provision of a fully serviced office and administrative, accounting and company secretarial
services to the Group.
Salt Lake Potash Limited ANNUAL REPORT 2017
13
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Options and Performance Rights Granted to KMP
Details of Incentive Options and Performance Rights granted by the Company to each KMP of the Group during
the financial year are as follows:
Options/
Rights(i)
Grant Date Expiry Date
Exercise
Price
$
Grant Date
Fair Value(i)
$
No.
Granted(ii)
No. Vested
At 30 June
2017
2017
Director
Matthew Syme
Rights
30-Nov-16 30-Jun-18
Matthew Syme
Matthew Syme
Matthew Syme
Rights
Rights
Rights
30-Nov-16 30-Jun-19
30-Nov-16 30-Jun-20
30-Nov-16 30-Jun-21
Mark Pearce
Rights
30-Nov-16 30-Jun-18
Mark Pearce
Mark Pearce
Mark Pearce
Other KMP
Rights
Rights
Rights
30-Nov-16 30-Jun-19
30-Nov-16 30-Jun-20
30-Nov-16 30-Jun-21
Sam Cordin
Rights
07-Feb-17 30-Jun-18
Sam Cordin
Sam Cordin
Sam Cordin
Rights
Rights
Rights
07-Feb-17 30-Jun-19
07-Feb-17 30-Jun-20
07-Feb-17 30-Jun-21
-
-
-
-
-
-
-
-
-
-
-
-
$0.506
500,000
$0.506
500,000
$0.506
500,000
$0.506
500,000
$0.506
$0.506
$0.506
$0.506
50,000
50,000
50,000
50,000
$0.577
150,000
$0.577
150,000
$0.577
150,000
$0.577
150,000
-
-
-
-
-
-
-
-
-
-
-
-
Notes:
(i)
(ii)
For details on the valuation of the Performance Rights, including models and assumptions used, please refer to Note 20 to the financial
statements.
Each Performance Right converts into one Ordinary Share of Salt Lake Potash Limited upon satisfaction of various performance conditions
(including Pre-Feasibility Study, Definitive Feasibility Study, Construction and Production Milestones).
Details of the values of Incentive Options and Performance Rights (Securities) granted, exercised or lapsed for
each KMP of the Group during the 2017 financial year are as follows:
Securities
Granted
Value at
Grant Date 1
Securities
Exercised
Value at
Exercise Date
Securities
Lapsed
Value at
Time of
Lapse
Value of
Securities
included in
Remuneration for
the Period
Percentage of
Remuneration
for the Period that
Consists of
Securities
$
$
$
$
%
1,012,394
101,239
346,020
1,459,653
-
-
-
-
-
-
-
-
432,712
22,305
56,217
511,234
63%
50%
27%
2017
Directors
Matthew Syme
Mark Pearce
Other KMP
Mr Sam Cordin
Total
Notes:
1 For details on the valuation of the Performance Rights, including models and assumptions used, please refer to Note 20 of the financial
statements.
14
Salt Lake Potash Limited ANNUAL REPORT 2017
Equity instruments held by KMP
Options and Performance Shares holdings of Key Management Personnel
Held at
1 July 2016
Granted as
Remuner-
ation
Options
Exercised/Rights
Converted
Net Other
Change
Held at
30 June
2017
Vested
and
exercise-
able at 30
June 2017
2017
Directors
Mr Ian Middlemas
-
-
Mr Matthew Syme
2,500,000 2,000,000
Mr Jason Baverstock
7,650,000
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Other KMP
Mr Sam Cordin
-
-
-
-
200,0002
200,000
-
-
600,000
Total
10,350,000 3,800,000
Notes:
1 At date of resignation.
2 At date of appointment.
Ordinary Shareholdings of Key Management Personnel
-
-
-
-
-
-
-
-
-
-
-
4,500,000 1,500,000
-
- 7,650,0001
-
-
-
-
-
200,000
200,000
600,000
-
-
-
-
-
- 14,150,000 1,500,000
Held at
1 July 2016
Granted as
Remuneration
Options
Exercised/
Rights
Converted
Net Other
Change
Held at
30 June 2017
2017
Directors
Mr Ian Middlemas
11,000,000
Mr Matthew Syme
Mr Jason Baverstock
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Other KMP
Mr Sam Cordin
Notes:
1 At date of resignation.
2 At date of appointment.
4,500,000
5,100,000
5,033,218
4,000,000
-2
400,000
30,033,218
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,000,000
4,500,000
5,100,0001
5,033,218
4,000,000
-
400,000
30,033,218
Employment Contracts with Directors and KMP
Mr Matthew Syme, Chief Executive Officer, has a letter of appointment with the Company dated 29 April 2016. The
contract specifies the duties and obligations to be fulfilled by the Chief Executive Officer. The contract has a rolling
annual term and may be terminated by the Company by giving 3 months notice. No amount is payable in the event
of termination for neglect or incompetence in regards to the performance of duties. The contract provides for an
annual salary of $250,000 plus superannuation and insurance benefits.
Mr Bryn Jones, Non-Executive Director, has a consulting agreement with the Company dated 18 April 2016, which
provides for a consultancy fee at the rate of $1,500 per day for management and technical services provided by Mr
Jones. Either party may terminate the agreement without penalty or payment by giving 1 months’ notice. In addition,
Mr Jones also receives the fixed remuneration component of $20,000 per annum plus superannuation as previously
set by the Board for Non-Executive Directors.
Salt Lake Potash Limited ANNUAL REPORT 2017
15
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Employment Contracts with Directors and KMP (Continued)
Mr Sam Cordin, Chief Financial Officer and Company Secretary, has a contract of employment with the Company
dated 1 August 2016. The contract specifies the duties and obligations to be fulfilled by the Chief Financial Officer
and Company Secretary. The contract has a rolling annual term and may be terminated by the Company by giving
3 months notice. No amount is payable in the event of termination for gross negligence or incompetence in regard
to performance of duties. Mr Cordin receives a fixed remuneration component of $150,000 per annum and a
discretionary bonus of up to $25,000 per annum to be paid upon Mr Cordin achieving key performance indicators,
as agreed by the Board.
Loans from Key Management Personnel
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2017
(2016: Nil).
Other Transactions
Apollo Group Pty Ltd, a Company of which Mr Mark Pearce is a Director and beneficial shareholder, was paid or is
payable $150,000 (2016: $210,000) for the provision of serviced office facilities, company secretarial, corporate
and administration services for the year ended 30 June 2017. The amount is based on a monthly retainer due and
payable in advance, with no fixed term, and is able to be terminated by either party with one month’s notice. At 30
June 2017, $12,500 (2016: $20,000) was included as a current liability in the Statement of Financial Position.
End of Remuneration Report
16
Salt Lake Potash Limited ANNUAL REPORT 2017
DIRECTORS' MEETINGS
The number of meetings of Directors held during the year and the number of meetings attended by each Director
was as follows (there were no Board committees during the financial year):
Mr Ian Middlemas
Mr Mark Hohnen
Mr Jason Baverstock
Mr Matthew Syme
Mr Mark Pearce
Mr Bryn Jones
Board Meetings
Number eligible to attend
Number attended
2
2
2
2
2
-
2
2
2
2
2
-
There were no Board committees during the financial year. The Board as a whole currently performs the functions
of an Audit Committee, Risk Committee, Nomination Committee, and Remuneration Committee, however this will
be reviewed should the size and nature of the Company’s activities change.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company has paid a premium in respect of insuring the directors and officers of the
Company and the Group. The insurance contract prohibits disclosure of the premium or the nature of liabilities
insured against under the policy.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the Consolidated Group and any other payments
arising from liabilities incurred by the officers in connection with such proceedings. This does not include such
liabilities that arise from conduct involving a wilful breach of duty by the officers or improper use by the officers of
their position or of information to gain advantage for themselves or someone else or to cause detriment to the
Company. It is not possible to apportion the premium between amounts relating to the insurance against legal
costs and those relating to other liabilities.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the end of the financial year.
NON-AUDIT SERVICES
Non-audit services provided by our auditors, Ernst and Young and related entities, are set out below. The Directors
are satisfied that the provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act. The nature and scope of each type of non-audit service provided means
that auditor independence was not compromised.
Tax and other advisory services
2017
$
5,000
5,000
2016
$
21,773
21,773
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section
237 of the Corporations Act 2001.
Salt Lake Potash Limited ANNUAL REPORT 2017
17
DIRECTORS’ REPORT
(Continued)
CORPORATE GOVERNANCE
The Statement of Corporate Governance Practices is set out in a separate section of the Company’s 2017 Annual
Report and discloses the Company’s main corporate governance practices throughout the financial year.
AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration for the year ended 30 June 2017 has been received and can be found
on page 19 of the Directors' Report.
Signed in accordance with a resolution of the Directors.
MATTHEW SYME
CEO
29 September 2017
18
Salt Lake Potash Limited ANNUAL REPORT 2017
AUDITOR'S INDEPENDENCE DECLARATION
Salt Lake Potash Limited ANNUAL REPORT 2017
19
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Finance income
Other income
Exploration and evaluation expenses
Corporate and administrative expenses
Business development expenses
Impairment of exploration and evaluation assets
Loss before tax
Income tax expense
Loss for the year
30 June
2017
$
30 June
2016
$
Notes
3
4
6
123,477
604,468
72,946
-
(7,717,231)
(3,191,159)
(1,216,244)
(867,999)
(994,979)
(365,354)
-
(293,462)
(9,200,509)
(4,645,028)
-
-
(9,200,509)
(4,645,028)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences reclassified to profit or loss
on disposal of controlled entity
Exchange differences on translation of foreign operations
Other comprehensive income/(loss) for the year, net of tax
(454,468)
-
(454,468)
-
14,873
14,873
Total comprehensive loss for the year
(9,654,977)
(4,630,155)
Basic and diluted loss per share attributable to the ordinary equity
holders of the company (cents per share)
16
(6.61)
(4.13)
The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the
accompanying notes.
20
Salt Lake Potash Limited ANNUAL REPORT 2017
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2017
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation expenditure
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Finance lease
Provisions
Total Current Liabilities
Non-Current Liabilities
Finance lease
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Notes
30 June 2017
$
30 June 2016
$
7
8
9
10
11
12
13
14
15,596,759
300,058
15,896,817
303,511
2,276,736
2,580,247
7,498,285
126,583
7,624,868
115,275
2,276,736
2,392,011
18,477,064
10,016,879
1,348,791
13,011
19,181
1,380,983
49,638
49,638
607,615
-
11,712
619,327
-
-
1,430,621
619,327
17,046,443
9,397,552
123,484,561
106,761,669
821,824
695,316
(107,259,942)
(98,059,433)
17,046,443
9,397,552
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Salt Lake Potash Limited ANNUAL REPORT 2017
21
DIRECTORS’ REPORT
(Continued)
2
2
S
a
l
t
L
a
k
e
P
o
t
a
s
h
L
m
i
i
t
e
d
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
7
CONSOLIDATED
Balance at 1 July 2016
Net loss for the year
Exchange differences reclassified to profit or loss on disposal of
controlled entity
Total comprehensive loss for the year
Transactions with owners, recorded directly in equity
Shares issued in lieu of fees
Share placement
Share issue costs
Share based payment expense
Balance at 30 June 2017
Contributed
Equity
$
Share-
Based
Payment
Reserve
$
Foreign Currency
Translation Reserve
Accumulated
Losses
$
$
Total Equity
$
106,761,669
240,848
454,468
(98,059,433)
9,397,552
-
-
-
86,400
17,630,000
(993,508)
-
-
-
-
-
-
-
580,976
123,484,561
821,824
-
(9,200,509)
(9,200,509)
(454,468)
-
(454,468)
(454,468)
(9,200,509)
(9,654,977)
-
-
-
-
-
-
-
-
-
86,400
17,630,000
(993,508)
580,976
(107,259,942)
17,046,443
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
1
7
O
F
C
H
A
N
G
E
S
I
N
E
Q
U
T
Y
I
I
C
O
N
S
O
L
D
A
T
E
D
S
T
A
T
E
M
E
N
T
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
22
Salt Lake Potash Limited ANNUAL REPORT 2017
CONSOLIDATED
At 1 July 2015
Net loss for the year
Exchange differences arising during the year – continuing
operations
Total comprehensive income/(loss) for the year
Transactions with owners, recorded directly in equity
Shares issued in lieu of fees
Share placement
Share issue costs
Share based payment expense
Balance at 30 June 2016
Contributed
Equity
$
Share-
Based
Payment
Reserve
$
Foreign Currency
Translation Reserve
Accumulated
Losses
$
$
Total Equity
$
98,440,152
77,400
439,595
(93,414,405)
5,542,742
-
-
-
35,124
8,888,000
(601,607)
-
-
-
-
-
-
-
163,448
-
(4,645,028)
(4,645,028)
14,873
14,873
-
14,873
(4,645,028)
(4,630,155)
-
-
-
-
-
-
-
-
35,124
8,888,000
(601,607)
163,448
9,397,552
I
C
O
N
S
O
L
D
A
T
E
D
S
T
A
T
E
M
E
N
T
F
O
R
T
H
E
Y
E
A
R
E
N
D
E
D
3
0
J
U
N
E
2
0
1
7
O
F
C
H
A
N
G
E
S
I
N
E
Q
U
T
Y
I
(
C
o
n
t
i
n
u
e
d
)
106,761,669
240,848
454,468
(98,059,433)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
7
S
a
l
t
L
a
k
e
P
o
t
a
s
h
L
m
i
i
t
e
d
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
7
2
3
Salt Lake Potash Limited ANNUAL REPORT 2017
23
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash flows from operating activities
Payments to suppliers and employees
Exploration investment scheme received
Interest received
Note
30 June
2017
$
30 June
2016
$
(8,657,842)
(3,906,492)
120,000
114,423
-
66,335
Net cash outflow from operating activities
15(a)
(8,423,419)
(3,840,157)
Cash flows from investing activities
Payments for property, plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs from issue of shares
Net cash inflow from financing activities
(162,675)
(162,675)
(120,456)
(120,456)
17,630,000
(945,448)
16,684,552
8,888,000
(601,607)
8,286,393
Net increase in cash and cash equivalents held
8,098,458
4,325,780
Net foreign exchange differences
Cash and cash equivalents at the beginning of the year
16
7,498,285
Cash and cash equivalents at the end of the year
15(b)
15,596,759
142
3,172,363
7,498,285
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Salt Lake Potash Limited ANNUAL REPORT 2017
24
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in preparing the financial report of Salt Lake Potash Limited (Salt Lake
or Company) and its consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2017 are
stated to assist in a general understanding of the financial report.
Salt Lake is a Company limited by shares incorporated and domiciled in Australia whose shares are publicly traded
on the Australian Securities Exchange (ASX), and the AIM Market (AIM) of the London Stock Exchange.
The financial report of the Group for the year ended 30 June 2017 was authorised for issue in accordance with a
resolution of the Directors on 27 September 2017.
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with Australian
Accounting Standards (“AASBs”) and other authoritative pronouncements of the Australian Accounting Standards
Board (“AASB”) and the Corporations Act 2001. The Group is a for-profit entity for the purposes of preparing the
consolidated financial statements.
The financial report has been prepared on a historical cost basis. The financial report is presented in Australian
dollars.
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of
business.
(b) Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board.
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
AASB that are relevant to its operations and effective for the current annual reporting period.
New and revised standards and amendments thereof and interpretations effective for the current reporting period
that are relevant to the Group include:
•
•
•
AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of
Depreciation and Amortisation which clarify the principle in AASB 116 Property, Plant and Equipment and
AASB 138 Intangible Assets that revenue reflects a pattern of economic benefits that are generated from
operating a business (of which the asset is part) rather than the economic benefits that are consumed
through use of the asset;
AASB 2015-1 Amendments to Australian Accounting Standards - Annual Improvements to Australian
Accounting Standards 2012–2014 Cycle which clarify certain requirements in AASB 5 Non-current Assets
Held for Sale and Discontinued Operations, AASB 7 Financial Instruments: Disclosures, AASB 119
Employee Benefits, and AASB 134 Interim Financial Reporting; and
AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to
AASB 101 which amends AASB 101 Presentation of Financial Statements to clarify existing presentation
and disclosure requirements and to ensure entities are able to use judgement when applying the Standard
in determining what information to disclose, where and in what order information is presented in their
financial statements
The adoption of these new and revised standards has not resulted in any significant changes to the Group's
accounting policies or to the amounts reported for the current or prior periods. The Group has not early adopted
any other standard, interpretation or amendment that has been issued but is not yet effective.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective have not been adopted by the Group for the annual reporting period ended 30 June 2017. Those which
may be relevant to the Group are set out in the table below. The adoption of these standards is not expected to
have a significant impact on the Group's financial statements.
25
Salt Lake Potash Limited ANNUAL REPORT 2017
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Statement of Compliance (Continued)
Standard/Interpretation
Application
date of
standard
Application
date for
Group
AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative:
Amendments to AASB 107
1 January
2017
1 July 2017
AASB 9 Financial Instruments, and relevant amending standards
AASB 15 Revenue from Contracts with Customers, and relevant amending standards
1 January
2018
1 January
2018
1 July 2018
1 July 2018
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and
Measurement of Share-based Payment Transactions
1 January
2018
1 July 2018
AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
AASB 16 Leases
(c)
Principles of Consolidation
1 January
2018
1 January
2019
1 July 2018
1 July 2019
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at
30 June 2017 and the results of all subsidiaries for the year then ended.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an
entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Company.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-
consolidated from the date that control ceases. Intercompany transactions and balances, income and expenses
and profits and losses between Group companies, are eliminated.
(d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less.
(e)
Trade and Other Receivables
Trade receivables are recognised and carried at the original invoice amount less a provision for any uncollectable
debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts
are written-off as incurred.
Short term receivables from related parties are recognised and carried at the nominal amount due and are interest
free.
26
Salt Lake Potash Limited ANNUAL REPORT 2017
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f)
(i)
Investments and Other Financial Assets
Classification
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or
available-for-sale investments, as appropriate. When financial assets are recognised initially they are measured at
fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction
costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and
appropriate, re-evaluates this designation at each financial year-end.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They arise when the Group provides money, goods or services directly to a debtor with no
intention of selling the receivable. They are included in current assets, except for those with maturities greater than
twelve months after the reporting date which are classified as non-current assets. Loans and receivables are
included in receivables in the statement of financial position.
Loans and receivables are carried at amortised cost using the effective interest rate method.
(ii)
Impairment
Collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts that are known to be
uncollectible are written off when identified. An impairment allowance is recognised when there is objective
evidence that the Consolidated Entity will not be able to collect the receivable. Financial difficulties of the debtor,
default payments or debts more than 60 days overdue are considered objective evidence of impairment. The
amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future
cash flows, discounted at the original effective interest rate.
(g) Property, Plant and Equipment
(i)
Recognition and measurement
All classes of property, plant and equipment are measured at historical cost.
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing
the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and
maintenance are recognised in the Statement of Profit or Loss and other Comprehensive Income as incurred.
(ii)
Depreciation and Amortisation
Depreciation is provided on a straight line basis on all property, plant and equipment.
Major depreciation and amortisation periods are:
Plant and equipment:
22%- 40%
22%- 40%
2017
2016
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at
each financial year end.
(iii) Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
Salt Lake Potash Limited ANNUAL REPORT 2017
27
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Exploration and Development Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method.
Exploration and evaluation expenditure encompasses expenditures incurred by the Group in connection with the
exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as
tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets
are measured at cost at recognition and are recorded as an asset if:
a.
the rights to tenure of the area of interest are current; and
b.
at least one of the following conditions is also met:
•
•
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploitation of the area of interest, or alternatively, by its sale; and
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation expenditure incurred by the Group subsequent to acquisition of the rights to explore is
expensed as incurred, up to costs associated with the preparation of a feasibility study.
(i)
Impairment
Capitalised exploration costs are reviewed each reporting date to establish whether an indication of impairment
exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to
determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and
transferred to development properties, and then amortised over the life of the reserves associated with the area of
interest once mining operations have commenced. Recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of
the respective areas of interest.
(i)
Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts
payable are normally settled within 60 days. Payables are carried at amortised cost.
(j)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(k) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable.
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial assets.
28
Salt Lake Potash Limited ANNUAL REPORT 2017
(l)
Income Tax
The income tax expense for the period is the tax payable on the current period's taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively
enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable
temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary
differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised
in relation to these temporary differences if they arose on goodwill or in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same taxation
authority.
Tax consolidation
Salt Lake Potash Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax
liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately
assumed by the Company. The current tax liability of each group entity is then subsequently assumed by the
Company. The tax consolidated group has entered a tax sharing agreement whereby each company in the Group
contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax
consolidated group.
(m) Employee Entitlements
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be settled within 12 months have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits expected to be
settled more later than 12 months after the year end have been measured at the present value of the estimated
future cash outflows to be made for those benefits.
(n) Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to members of the Company for
the reporting period, after excluding any costs of servicing equity, by the weighted average number of Ordinary
Shares of the Company, adjusted for any bonus issue.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential Ordinary Shares and the effect on revenues and expenses of conversion to
Ordinary Shares associated with dilutive potential Ordinary Shares, by the weighted average number of Ordinary
Shares and dilutive Ordinary Shares adjusted for any bonus issue.
Salt Lake Potash Limited ANNUAL REPORT 2017
29
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows.
(p) Acquisition of Assets
A group of assets may be acquired in a transaction which is not a business combination. In such cases the cost of
the group is allocated to the individual identifiable assets (including intangible assets that meet the definition of and
recognition criteria for intangible assets in AASB 138) acquired and liabilities assumed on the basis of their relative
fair values at the date of purchase.
(q)
Impairment of Non-Current Assets
The Group assesses at each reporting date whether there is an indication that an non-current asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes
an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less
costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in
use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the
cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds
its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation
charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a
systematic basis over its remaining useful life.
(r)
Issued and Unissued Capital
Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
(s)
Foreign Currencies
(i)
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars
which is the Company's functional and presentation currency.
30
Salt Lake Potash Limited ANNUAL REPORT 2017
(ii)
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Exchange differences arising on the translation of monetary items are recognised in the Statement Profit or Loss
and other Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment
hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the other
Comprehensive Income.
(iii)
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group's
presentation currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
items of equity are translated at the historical exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign
currency translation reserve in the statement of financial position. These differences are recognised in the
Statement of Profit or Loss and other Comprehensive Income in the period in which the operation is disposed.
(t)
Share-Based Payments
Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These
share-based payments are measured at the fair value of the equity instrument at the grant date. Fair value is
determined using the Binomial option pricing model. Further details on how the fair value of equity-settled share
based payments has been determined can be found in Note 20.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on
the Company's estimate of equity instruments that will eventually vest. At each reporting date, the Company revises
its estimate of the number of equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment
to the share based payments reserve.
Equity-settled share-based payments may also be provided as consideration for the acquisition of assets. Where
Ordinary Shares are issued, the transaction is recorded at fair value based on the quoted price of the Ordinary
Shares at the date of issue. The acquisition is then recorded as an asset or expensed in accordance with accounting
standards.
(u) Use and Revision of Accounting Estimates, Judgements and Assumptions
The preparation of the financial report requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if
the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the financial statements are
described in the following notes:
•
•
Exploration and Evaluation Expenditure (Note 10)
Share-Based Payments (Note 20)
Salt Lake Potash Limited ANNUAL REPORT 2017
31
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
2.
SEGMENT INFORMATION
The Consolidated Entity operates in one segment, being mineral exploration. This is the basis on which internal
reports are provided to the Directors for assessing performance and determining the allocation of resources within
the Consolidated Entity.
(a)
Reconciliation of non-current assets by geographical location
Australia
United States of America
Non-Current Assets for this purpose consist of exploration and evaluation assets.
(b)
Reconciliation of revenues by geographical location
Australia
United States of America
Revenues for this purpose consist of interest income.
3.
FINANCE INCOME
Interest income
4.
OTHER INCOME
Gain on disposal of controlled entity1
Exploration Incentive Scheme
Notes:
Note
Note
2017
$
2016
$
2,580,736
-
2,580,736
2,392,011
-
2,392,011
2017
$
123,477
-
123,477
2017
$
123,477
123,477
2017
$
454,468
150,000
604,468
2016
$
72,946
-
72,946
2016
$
72,946
72,946
2016
$
-
-
-
1 During the year, the Company sold its United States subsidiary, Golden Eagle Uranium, for a nominal amount which resulted in a gain on disposal
of A$454,468 relating to prior exchange differences on translation of Golden Eagle Uranium that have been transferred from the foreign currency
translation reserve.
32
Salt Lake Potash Limited ANNUAL REPORT 2017
5.
EXPENSES
Note
2017
$
2016
$
(a)
Depreciation included in statement of comprehensive
income
Depreciation of plant and equipment
9
37,088
15,469
(b)
Employee benefits expense (including KMP)
Salaries and wages
Superannuation expense
Share-based payment expense
Total employment expenses included in profit or loss
6.
INCOME TAX
20
1,342,932
126,503
580,976
2,050,411
504,684
45,057
163,448
713,189
(a)
Recognised in the statement of comprehensive income
Current income tax
Current income tax benefit in respect of the current year
Deferred income tax
Deferred income tax on discontinued operations
Income tax expense reported in the statement of Profit or Loss and other
Comprehensive income
2017
$
2016
$
-
-
-
-
-
-
(b)
Reconciliation between tax expense and accounting loss
before income tax
Accounting loss before income tax
(9,200,509)
(4,645,028)
At the domestic income tax rate of 27.5% (2016: 30%)
(2,530,140)
(1,393,509)
Expenditure not allowable for income tax purposes
Income not assessable for income tax purposes
Deferred tax assets not brought to account
Income tax expense/(benefit) reported in the statement of Profit or Loss
and other Comprehensive income
280,752
(124,979)
2,374,366
64,977
(4,019)
1,332,550
-
-
Salt Lake Potash Limited ANNUAL REPORT 2017
33
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
(c)
Deferred Tax Assets and Liabilities
Deferred income tax at 30 June relates to the following:
Deferred Tax Liabilities
Accrued income
Exploration and evaluation assets
Deferred tax assets used to offset deferred tax liabilities
Deferred Tax Assets
Accrued expenditure
Capital allowances
Tax losses available for offset against future taxable income
Deferred tax assets used to offset deferred tax liabilities
Deferred tax assets not brought to account
2017
$
2016
$
6,109
43,209
(49,319)
-
3,949
-
(3,949)
-
7,200
341,543
6,368,677
(49,319)
32,613
167,121
4,525,636
(3,949)
(6,668,101)
(4,721,421)
-
-
The benefit of deferred tax assets not brought to account will only be brought to account if:
•
•
•
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Group in realising the benefit.
Deferred tax assets have not been recognised in respect to tax losses because it is not probable that future taxable
profit will be available against which the Group can utilise the benefits.
(d)
Tax Consolidation
The Company and its wholly-owned Australian resident entities have formed a tax consolidated group and are
therefore taxed as a single entity. The head entity within the tax consolidated group is Salt Lake Potash Limited.
34
Salt Lake Potash Limited ANNUAL REPORT 2017
7.
CASH AND CASH EQUIVALENTS
Cash on hand and at bank
Deposit on call
8.
TRADE AND OTHER RECEIVABLES
Accrued interest
GST and other receivables
Other assets
9.
PROPERTY, PLANT AND EQUIPMENT
(a)
Plant and Equipment
Gross carrying amount - at cost
Accumulated depreciation
Carrying amount at end of year, net of accumulated
depreciation
(b)
Reconciliation
Carrying amount at beginning of year, net of accumulated
depreciation
Additions
Depreciation charge
Carrying amount at end of year, net of accumulated
depreciation
Finance Leases
2017
$
2016
$
15,524,703
72,056
15,596,759
1,478,285
6,020,000
7,498,285
2017
$
22,216
277,842
-
2016
$
13,162
99,713
13,708
300,058
126,583
2017
$
2016
$
345,780
(42,269)
130,744
(15,469)
303,511
115,275
115,275
225,324
(37,088)
10,288
120,456
(15,469)
303,511
115,275
The carrying value of plant and equipment held under finance leases at 30 June 2017 was $64,036 (2016: nil).
Additions during the year include $64,036 (2016: nil) of plant and equipment under finance lease.
Salt Lake Potash Limited ANNUAL REPORT 2017
35
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
10. EXPLORATION AND EVALUATION EXPENDITURE
(a)
Areas of Interest
SOP Project
Golden Eagle Uranium Project
Carrying amount at end of year, net of impairment1
(b)
Reconciliation
Carrying amount at start of year
Impairment losses 2
Exchange differences on translation of foreign operations
Carrying amount at end of year net of impairment 1
Note
2017
$
2016
$
2,276,736
2,276,736
-
-
2,276,736
2,276,736
2,276,736
-
-
2,555,915
(293,462)
14,283
2,276,736
2,276,736
Notes:
1 The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development
and commercial exploitation or sale of the respective areas of interest.
2 Impairment of the carrying value of Golden Eagle Uranium. During the 2017 financial year the Company disposed of its interest
in the project for a nominal amount.
SOP Project
Salt Lake holds a number of large salt lake brine projects (Projects) in Western Australia, South Australia and the
Northern Territory, each having potential to produce highly sought after Sulphate of Potash (SOP) for domestic and
international fertiliser markets.
Golden Eagle Uranium Project
During the year, the Company sold its United States subsidiary, Golden Eagle Uranium LLC, for a nominal amount
which resulted in a gain on disposal of A$454,468 relating to prior exchange differences on translation of Golden
Eagle Uranium that have been transferred from the foreign currency translation reserve. The Golden Eagle Uranium
and Vanadium Project held nine U.S. Department of Energy Uranium/Vanadium Mining Leases, covering
22.7 km2 located in the Uravan Mineral Belt, Colorado USA.
11. TRADE AND OTHER PAYABLES
Trade creditors
Accrued expenses
2017
$
1,250,959
97,832
1,348,791
2016
$
377,775
229,840
607,615
Terms and conditions of the above financial liabilities:
− Trade payables are non-interest bearing and are normally settled on 30-day terms.
− Other payables are non-interest bearing and have an average term of six months.
36
Salt Lake Potash Limited ANNUAL REPORT 2017
12. PROVISIONS
Statutory employee benefits
13. CONTRIBUTED EQUITY
Share Capital
175,007,596 (30 June 2016: 133,827,596) Ordinary Shares
2017
$
19,181
19,181
2016
$
11,712
11,712
30 June 2017
$
30 June 2016
$
123,484,561
106,761,669
123,484,561
106,761,669
(a) Movements in Ordinary Shares During the Past Two Years Were as Follows:
01-Jul-16
09-Sep-16
02-May-17
21-Jun-17
Opening Balance
Share issue 1
Share placement
Share placement
Jul-16 to Jun-17
Share issue costs
30-Jun-17
Closing balance
01-Jul-15
09-Jul-15
31-Mar-16
4-Apr-16
7-Jun-16
Opening Balance
Share issue 1
Share placement
Share placement
Share placement
Jul-15 to Jun-16
Share issue costs
30-Jun-16
Closing balance
Notes:
1 Shares issued to a key consultant of the Company in lieu of fees.
Number of
Ordinary
Shares
Issue
Price
$
$
133,827,596
180,000
30,700,000
10,300,000
-
175,007,596
- 106,761,669
0.48
0.43
0.43
86,400
13,201,000
4,429,000
-
(993,508)
- 123,484,561
105,802,596
-
98,440,152
250,000
0.1405
35,124
16,250,000
9,925,000
1,600,000
-
133,827,596
0.32
0.32
0.32
5,200,000
3,176,000
512,000
-
(601,607)
- 106,761,669
Salt Lake Potash Limited ANNUAL REPORT 2017
37
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
13. CONTRIBUTED EQUITY (Continued)
(b)
Rights Attaching to Ordinary Shares:
The rights attaching to fully paid Ordinary Shares (Ordinary Shares) arise from a combination of the Company's
Constitution, statute and general law.
Ordinary Shares issued following the exercise of Unlisted Options in accordance with Note 14(c) or Performance
Shares in accordance with Note 14(d) or Performance Rights in accordance with Note 14(e) will rank equally in all
respects with the Company's existing Ordinary Shares.
Copies of the Company's Constitution are available for inspection during business hours at the Company's
registered office. The clauses of the Constitution contain the internal rules of the Company and define matters such
as the rights, duties and powers of its shareholders and directors, including provisions to the following effect (when
read in conjunction with the Corporations Act 2001 or the listing rules of the ASX and AIM (Listing Rules)).
(i)
Shares
The issue of shares in the capital of the Company and options over unissued shares by the Company is under the
control of the Directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any
special class of shares.
(ii) Meetings of Members
Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the
Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of
meetings of members and all members are entitled to a notice of meeting. A meeting may be held in two or more
places linked together by audio-visual communication devices. A quorum for a meeting of members is two
shareholders.
The Company holds annual general meetings in accordance with the Corporations Act 2001 and the Listing Rules.
(iii)
Voting
Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company,
each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of
members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter
present has one vote. However, where a person present at a general meeting represents personally or by proxy,
attorney or representative more than one member, on a show of hands the person is entitled to one vote only
despite the number of members the person represents.
On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for each partly
paid share determined by the amount paid up on that share.
(iv) Changes to the Constitution
The Company's Constitution can only be amended by a special resolution passed by at least three quarters of the
members present and voting at a general meeting of the Company. At least 28 days' written notice specifying the
intention to propose the resolution as a special resolution must be given.
(v)
Listing Rules
Provided the Company remains admitted to the Official List of the ASX, then despite anything in its Constitution, no
act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the
Listing Rules. The Company's Constitution will be deemed to comply with the Listing Rules as amended from time
to time.
38
Salt Lake Potash Limited ANNUAL REPORT 2017
14. RESERVES
Share-based payments reserve
Foreign currency translation reserve
(a)
(i)
Nature and Purpose of Reserves
Share-based payments reserve
Note
2017
$
14(b)
821,824
-
821,824
2016
$
240,848
454,468
695,316
The share-based payments reserve is used to record the fair value of Unlisted Options, Performance Rights and
Performance Shares issued by the Group.
(ii)
Foreign Currency Translation Reserve
Exchange differences arising on translation of foreign controlled entities are taken to the foreign currency translation
reserve, as described in Note 1(s). The reserve is recognised in the Statement of Profit or Loss and other
Comprehensive Income when the net investment is disposed of.
(b) Movements in the share-based payments reserve during the past two years were as follows:
Number of
Performance
Rights
Number of
Performance
Shares
Number of
Unlisted
Options
$
01-Jul-16
22-Nov-16
01-Mar-17
09-Jun-17
20-Jun-17
30-Jun-17
Opening Balance
Expiry of unlisted options
Issue of Performance Rights
Issue of Performance Rights
Issue of Performance Rights
Lapsed Performance Rights
-
-
3,000,000
200,000
1,000,000
(100,000)
Jul-16 to Jun-17 Share based payments expense
-
22,500,000
2,705,443
240,848
-
-
-
-
-
-
(205,443)
-
-
-
-
-
-
-
-
-
-
580,976
30-Jun-17
Closing balance
4,100,000
22,500,000
2,500,000
821,824
01-Jul-15
03-Jun-16
Opening Balance
Issue of Incentive Options
Jul-15 to Jun-16 Share based payments expense
30-Jun-16
Closing balance
-
-
-
-
22,500,000
205,443
77,400
-
-
2,500,000
-
-
163,448
22,500,000
2,705,443
240,848
(c)
Terms and Conditions of Unlisted Options
The Unlisted Options are granted based upon the following terms and conditions:
• Each Unlisted Option entitles the holder to the right to subscribe for one Ordinary Share upon the exercise of
each Unlisted Option;
•
•
The Unlisted Options outstanding at the end of the financial year have the following exercise prices and expiry
dates:
•
•
•
750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020; and
1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021.
The Unlisted Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being
satisfied (if applicable);
• Ordinary Shares issued on exercise of the Unlisted Options rank equally with the then Ordinary Shares of the
Company;
Salt Lake Potash Limited ANNUAL REPORT 2017
39
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
14. RESERVES (Continued)
(c)
Terms and Conditions of Unlisted Options (Continued)
• Application will be made by the Company to ASX and to the AIM market of the London Stock Exchange for
official quotation of the Ordinary Shares issued upon the exercise of the Unlisted Options;
•
If there is any reconstruction of the issued share capital of the Company, the rights of the Unlisted Option
holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the
reconstruction; and
• No application for quotation of the Unlisted Options will be made by the Company.
(d)
Terms and Conditions of Performance Shares
The Convertible Performance Shares (Performance Shares) were granted as part of the consideration to acquire
Australia Salt Lake Potash Pty Ltd on the following terms and conditions:
•
Each Performance Share will convert into one Ordinary Share upon the satisfaction, prior to the Expiry Date,
of the respective Milestone:
-
-
-
5,000,000 Performance Shares subject to Class A Milestone: The announcement by the Company to ASX
of the results of a positive Pre-feasibility Study on all or part of the Project Licences, within three years
from the date of issue;
7,500,000 Performance Shares subject to Class B Milestone: The announcement by the Company to ASX
of the results of a positive Definitive Feasibility Study on all or part of the Project Licences, within four
years from the date of issue; and
10,000,000 Performance Shares subject to Class C Milestone: The commencement of construction
activities for a mining operation on all or part of the Project Licences (including the commencement of
ground breaking for the construction of infrastructure and/or processing facilities) following a final
investment decision by the Board as per the project development schedule and budget in accordance with
the Definitive Feasibility Study, within five years from the date of issue.
Expiry Date means:
-
-
-
in relation to the Class A Performance Shares, 3 years from the date of issue (12 June 2018);
in relation to the Class B Performance Shares, 4 years from the date of issue (12 June 2019); and
in relation to the Class C Performance Shares, 5 years from the date of issue (12 June 2020);
If the Milestone for a Performance Share is not met by the Expiry Date, the total number of the relevant class
of Performance Shares will convert into one Ordinary Share per holder;
The Company shall allot and issue Ordinary Shares immediately upon conversion of the Performance Shares
for no consideration;
Ordinary Shares issued on conversion of the Performance Shares rank equally with the then Ordinary Shares
of the Company;
In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of
securities of the Ordinary Shares, the Performance Shares shall be reconstructed, consolidated or divided in
the same proportion as the Ordinary Shares are reconstructed, consolidated or divided and, in any event, in
a manner which will not result in any additional benefits being conferred on the Performance Shareholders
which are not conferred on the Ordinary Shareholders;
The Performance Shareholders shall have no right to vote, subject to the Corporations Act;
No application for quotation of the Performance Shares will be made by the Company; and
The Performance Shares are not transferable.
•
•
•
•
•
•
•
•
40
Salt Lake Potash Limited ANNUAL REPORT 2017
(e)
Terms and Conditions of Performance Rights
The Performance Rights are granted based upon the following terms and conditions:
• Each Performance Right automatically converts into one Ordinary Share upon vesting of the Performance
Right;
• Each Performance Right is subject to performance conditions (as determined by the Board from time to time)
which must be satisfied in order for the Performance Right to vest;
•
The Performance Rights have the following expiry dates:
-
-
1,025,000 Performance Rights subject to the PFS Milestone expiring on 30 June 2018;
1,025,000 Performance Rights subject to the BFS Milestone expiring on 30 June 2019;
1,025,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
1,025,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
• Ordinary Shares issued on conversion of the Performance Rights rank equally with the then Ordinary Shares
-
-
of the Company;
• Application will be made by the Company to ASX AIM market of the London Stock Exchange for official
quotation of the Ordinary Shares issued upon conversion of the Performance Rights;
•
If there is any reconstruction of the issued share capital of the Company, the rights of the Performance Right
holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the
reconstruction; and
• No application for quotation of the Performance Rights will be made by the Company.
15. STATEMENT OF CASH FLOWS
(a)
Reconciliation of the Loss after Tax to the Net Cash Flows from Operations
Net loss for the year
Adjustment for non-cash income and expense items
Depreciation of plant and equipment
Share based payment expense
Gain on disposal of controlled entity
Shares issued in lieu
Unrealised foreign exchange (loss)/gain
Impairment losses
Change in operating assets and liabilities
(Increase)/Decrease in trade and other receivables
Increase in trade and other payables
Increase/(Decrease) in provisions
2017
$
2016
$
(9,200,509)
(4,645,028)
37,088
580,976
(454,468)
86,400
-
-
(173,475)
693,100
7,469
15,469
163,448
-
35,124
448
293,462
(71,211)
356,419
(16,519)
Net cash outflow from operating activities
(8,423,419)
(3,840,157)
(b)
Reconciliation of Cash
Cash at bank and on hand
Deposits on call
15,524,703
72,056
15,596,759
1,478,285
6,020,000
7,498,285
Salt Lake Potash Limited ANNUAL REPORT 2017
41
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
16. EARNINGS PER SHARE
The following reflects the income and share data used in the
calculations of basic and diluted earnings per share:
Net loss attributable to the owners of the Company used in
calculating basic and diluted earnings per share
30 June 2017
$
30 June 2016
$
(9,200,509)
(4,645,028)
Number of Shares
2017
Number of Shares
2016
Weighted average number of ordinary shares used in
calculating basic and diluted earnings per share
139,217,150
112,565,903
(a)
Non-Dilutive Securities
As at balance date, 2,500,000 Unlisted Options (which represent 2,500,000 potential Ordinary Shares), 22,500,000
Performance Shares (which represent 22,500,000 potential Ordinary Shares) and 4,100,000 Performance Rights
(which represent 4,100,000 potential Ordinary Shares) were considered non-dilutive as they would decrease the
loss per share.
(b)
Conversions, Calls, Subscriptions or Issues after 30 June 2017
Since 30 June 2017, the Company has issued the following securities:
•
42,000 Ordinary Shares were issued, refer to Note 25.
Other than as outlined above, there have been no other conversions to, calls of, or subscriptions for Ordinary Shares
or issues of potential Ordinary Shares since the reporting date and before the completion of this financial report.
17. RELATED PARTIES
(a)
Subsidiaries
Name
Country of
Incorporation
% Equity Interest
2017
%
2016
%
Ultimate parent entity:
Salt Lake Potash Limited
Subsidiaries of Salt Lake Potash Limited
Australia Salt Lake Potash Pty Ltd (ASLP)
Subsidiary of ASLP
Piper Preston Pty Ltd
Peak Coal Pty Ltd
Wildhorse GE Holding Inc
Subsidiary of Wildhorse GE Holdings Inc
Golden Eagle Uranium LLC
Australia
Australia
Australia
Australia
USA
USA
100
100
100
-
-
100
100
100
100
100
(i) During the year, the Company disposed of its USA operation. The holding companies were dormant.
(b)
Ultimate Parent
Salt Lake Potash Limited is the ultimate parent of the Group.
(c)
Transactions with Related Parties
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note.Transactions with Key Management
Personnel, including remuneration, are included at Note 18.
42
Salt Lake Potash Limited ANNUAL REPORT 2017
18. KEY MANAGEMENT PERSONNEL
(a)
Details of Key Management Personnel
The KMP of the Group during or since the end of the financial year were as follows:
Directors
Mr Ian Middlemas
Mr Matthew Syme
Mr Jason Baverstock
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Other KMP
Mr Sam Cordin
Chairman
Chief Executive Officer
Executive Director (resigned 12 June 2017)
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 12 June 2017)
Chief Financial Officer and Company Secretary
Unless otherwise disclosed, the KMP held their position from 1 July 2016 until the date of this report.
Short-term employee benefits
Post-employment benefits
Share-based payments
Total compensation
(b)
Loans from Key Management Personnel
2017
$
591,898
52,928
556,016
1,200,842
2016
$
395,834
22,737
163,448
582,019
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2017
(2016: Nil).
(c)
Other Transactions
Apollo Group Pty Ltd, a Company of which Mr Mark Pearce is a Director and beneficial shareholder, was paid or is
payable $150,000 (2016: $210,000) for the provision of serviced office facilities, company secretarial, corporate
and administration services for the year ended 30 June 2017. The amount is based on a monthly retainer due and
payable in advance, with no fixed term, and is able to be terminated by either party with one month’s notice. At 30
June 2017, $12,500 (2016: $20,000) was included as a current liability in the Statement of Financial Position.
Salt Lake Potash Limited ANNUAL REPORT 2017
43
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
19. PARENT ENTITY DISCLOSURES
(a)
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
(b)
Financial Performance
Loss for the year
Total comprehensive income/(loss)
(c)
Other information
2017
$
2016
$
15,738,697
2,027,221
17,765,918
7,607,069
2,406,661
10,013,730
1,430,620
1,430,620
616,178
616,178
123,484,561
106,761,669
(107,971,087)
(97,604,964)
821,824
16,335,298
240,847
9,397,552
(10,366,123)
(10,366,123)
(4,956,874)
(4,956,874)
The Company has not entered into any guarantees in relation to its subsidiaries.
Refer to Note 23 for details of contingent assets and liabilities.
20. SHARE-BASED PAYMENTS
(a)
Recognised Share-based Payment Expense
From time to time, the Group provides incentive Unlisted Options and Performance Rights to officers, employees,
consultants and other key advisors as part of remuneration and incentive arrangements. The number of options or
rights granted, and the terms of the options or rights granted are determined by the Board. Shareholder approval is
sought where required.
In the current year, the Company has also granted shares in lieu of payments to trade creditors for outstanding
balances.
44
Salt Lake Potash Limited ANNUAL REPORT 2017
During the past two years, the following equity-settled share-based payments have been recognised:
2017
$
2016
$
Expenses arising from equity-settled share-based payment transactions
relating incentive options
Expenses arising from equity-settled share-based payment transactions to
creditors and consultants
Total share-based payments recognised during the year
580,976
163,448
86,400
667,376
35,124
198,572
(b)
Summary of Unlisted Options and Performance Rights Granted as Share-based Payments
The following Incentive Options and Performance Rights were granted as share-based payments during the past
two years:
Series
Issuing Entity
Security
Type
Number
Grant
Date
Expiry
Date
Exercise
Price
Grant Date
Fair Value
$
$
2016
Series 1
Salt Lake Potash Limited
Options
750,000
03-Jun-16
29-Apr-19
Series 2
Salt Lake Potash Limited
Options
750,000
03-Jun-16
29-Apr-20
Series 3
Salt Lake Potash Limited
Options
1,000,000
03-Jun-16
29-Apr-21
0.40
0.50
0.60
2017
Series 4
Salt Lake Potash Limited
Rights
550,000
30-Nov-16
30-Jun-18
Series 5
Salt Lake Potash Limited
Rights
550,000
30-Nov-16
30-Jun-19
Series 6
Salt Lake Potash Limited
Rights
550,000
30-Nov-16
30-Jun-20
Series 7
Salt Lake Potash Limited
Rights
550,000
30-Nov-16
30-Jun-21
Series 8
Salt Lake Potash Limited
Rights
200,000
07-Feb-17
30-Jun-18
Series 9
Salt Lake Potash Limited
Rights
200,000
07-Feb-17
30-Jun-19
Series 10 Salt Lake Potash Limited
Rights
200,000
07-Feb-17
30-Jun-20
Series 11 Salt Lake Potash Limited
Rights
200,000
07-Feb-17
30-Jun-21
Series 12 Salt Lake Potash Limited
Series 13 Salt Lake Potash Limited
Series 14 Salt Lake Potash Limited
Series 15 Salt Lake Potash Limited
Rights
Rights
Rights
Rights
50,000
08-Jun-17
30-Jun-18
50,000
08-Jun-17
30-Jun-19
50,000
08-Jun-17
30-Jun-20
50,000
08-Jun-17
30-Jun-21
Series 16 Salt Lake Potash Limited
Rights
250,000
08-Jun-17
30-Jun-18
Series 17 Salt Lake Potash Limited
Rights
250,000
08-Jun-17
30-Jun-19
Series 18 Salt Lake Potash Limited
Rights
250,000
08-Jun-17
30-Jun-20
Series 19 Salt Lake Potash Limited
Rights
250,000
08-Jun-17
30-Jun-21
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.190
0.204
0.217
0.506
0.506
0.506
0.506
0.543
0.543
0.543
0.543
0.428
0.428
0.428
0.428
0.412
0.412
0.412
0.412
Salt Lake Potash Limited ANNUAL REPORT 2017
45
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
20. SHARE-BASED PAYMENTS (Continued)
(c)
Summary of Unlisted Options and Performance Rights Granted as Share-based Payments
The following table illustrates the number and weighted average exercise prices (WAEP) of Unlisted Options and
Performance Rights granted as share-based payments at the beginning and end of the financial year:
Unlisted Options/performance rights
Outstanding at beginning of year
Granted by the Company during the year
Forfeited/cancelled/lapsed/expired
Outstanding at end of year
Exercisable at end of year
2017
Number
2,705,443
4,200,000
(305,443)
6,600,000
1,500,000
2017
WAEP
$0.81
2016
Number
205,443
-
2,500,000
$4.46
$0.19
$0.45
-
2,705,443
955,443
2016
WAEP
$4.46
$0.51
-
$0.81
$0.81
The outstanding balance of options and performance rights as at 30 June 2017 is represented by:
•
•
•
•
•
•
•
750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;
1,025,000 Performance Rights subject to the PFS Milestone expiring on 30 June 2018;
1,025,000 Performance Rights subject to the BFS Milestone expiring on 30 June 2019;
1,025,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
1,025,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
(d) Weighted Average Remaining Contractual Life
At 30 June 2017, the weighted average remaining contractual life of Unlisted Options and Performance Rights on
issue that had been granted as share-based payments was 2.93 years (2016: 3.66 years).
(e)
Range of Exercise Prices
At 30 June 2017, the range of exercise prices of Unlisted Options on issue that had been granted as share-based
payments was $0.40 to $0.60 (2016: $0.40 to $6.00).
(f) Weighted Average Fair Value
The weighted average fair value of Incentive Options and Performance Rights granted as share-based payments
by the Group during the year ended 30 June 2017 was $0.496 (2016: $0.205).
(g)
Option and Performance Right Pricing Models
The fair value of the equity-settled share options granted is estimated as at the date of grant using the Binomial
option valuation model taking into account the terms and conditions upon which the options were granted. The fair
value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being
the five day volume weighted average share price prior to issuance).
46
Salt Lake Potash Limited ANNUAL REPORT 2017
The table below lists the inputs to the valuation model used for share options and Performance Rights granted by
the Group in the current and prior year:
Inputs
Exercise price
Grant date share price
Dividend yield 1
Volatility 2
Risk-free interest rate
Grant date
Expiry date
Expected life of option 3
Fair value at grant date
Series 1
Series 2
Series 3
0.40
0.330
-
100%
1.59%
03-Jun-16
29-Apr-19
2.90
0.190
0.50
0.330
-
100%
1.59%
03-Jun-16
29-Apr-20
3.91
0.204
0.60
0.330
-
100%
1.77%
03-Jun-16
29-Apr-21
4.91
0.217
Notes:
1 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
2 The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
3 The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise
of options.
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of option 3
Fair value at grant date
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of option 3
Fair value at grant date
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of option 3
Fair value at grant date
Series 4
Series 5
Series 6
Series 7
-
$0.51
30-Nov-16
30-Jun-18
1.6 years
$0.506
-
$0.51
30-Nov-16
30-Jun-19
2.6 years
$0.506
-
$0.51
30-Nov-16
30-Jun-20
3.6 years
$0.506
-
$0.51
30-Nov-16
30-Jun-21
4.6 years
$0.506
Series 8
Series 9
Series 10
Series 11
-
$0.53
07-Feb-17
30-Jun-18
1.3 years
$0.577
-
$0.53
07-Feb-17
30-Jun-19
2.3 years
$0.577
-
$0.53
07-Feb-17
30-Jun-20
3.3 years
$0.577
-
$0.53
07-Feb-17
30-Jun-21
4.3 years
$0.577
Series 12
Series 13
Series 14
Series 15
-
$0.43
08-Jun-17
30-Jun-18
1.1 years
$0.431
-
$0.43
08-Jun-17
30-Jun-19
2.1 years
$0.431
-
$0.43
08-Jun-17
30-Jun-20
3.1 years
$0.431
-
$0.43
08-Jun-17
30-Jun-21
4.1 years
$0.431
Salt Lake Potash Limited ANNUAL REPORT 2017
47
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
20. SHARE-BASED PAYMENTS (Continued)
(g)
Option and Performance Right Pricing Models (Continued)
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of option 3
Fair value at grant date
Series 16
Series 17
Series 18
Series 19
-
$0.41
08-Jun-17
30-Jun-18
1.0 years
$0.431
-
$0.41
08-Jun-17
30-Jun-19
2.0 years
$0.431
-
$0.41
08-Jun-17
30-Jun-20
3.0 years
$0.431
-
$0.41
08-Jun-17
30-Jun-21
4.0 years
$0.431
Notes:
1 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
2 The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
3 The expected life of the options and performance rights is based on the expiry date of the options and performance rights as
there is limited track record of the early exercise or conversion of options and performance rights.
21. AUDITORS’ REMUNERATION
The auditor of Salt Lake Potash Limited is Ernst and Young.
Amounts received or due and receivable by Ernst and Young for:
an audit or review of the financial report of the entity and any other
entity in the consolidated group
tax and other advisory services
2017
$
2016
$
25,000
5,000
30,000
25,000
21,773
46,773
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(a)
Overview
The Group's principal financial instruments comprise receivables, payables, finance leases, cash and short-term
deposits. The main risks arising from the Group's financial instruments are credit risk, liquidity risk and interest rate
risk.
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have
been no significant changes since the previous financial year to the exposure or management of these risks.
The Group manages its exposure to key financial risks in accordance with the Group's financial risk management
policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new project) and
policies are revised as required. The overall objective of the Group's financial risk management policy is to support
the delivery of the Group's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows,
the Group does not enter into derivative transactions to mitigate the financial risks. In addition, the Group's policy
is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the
Group's operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing the Group's financial risks as summarised below.
(b)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other
receivables.
48
Salt Lake Potash Limited ANNUAL REPORT 2017
There are no significant concentrations of credit risk within the Group. The carrying amount of the Group's financial
assets represents the maximum credit risk exposure, as represented below:
Financial assets
Cash and cash equivalents
Trade and other receivables
2017
$
15,596,759
300,058
15,896,817
2016
$
7,498,285
126,583
7,624,868
With respect to credit risk arising from cash and cash equivalents, the Group's exposure to credit risk arises from
default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Where
possible, the Group invests its cash and cash equivalents with banks that are rated the equivalent of investment
grade and above. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and
the aggregate value of transactions concluded is spread amongst approved counterparties.
The Group does not have any significant customers and accordingly does not have significant exposure to bad or
doubtful debts.
Trade and other receivables comprise interest accrued and GST refunds due. Where possible the Consolidated
Entity trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing
basis with the result that the Group’s exposure to bad debts is not significant. At 30 June 2017, none (2016 none)
of the Group’s receivables are past due.
(c)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meet its liabilities when due. At 30 June 2017 and 2016, the Group had sufficient liquid assets to meet its financial
obligations.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There
are no netting arrangements in respect of financial liabilities.
≤6 Months
$
6-12
Months
$
1-5 Years
≥5 Years
Total
$
$
$
2017
Group
Financial Liabilities
Finance lease
Trade and other payables
2016
Group
Financial Liabilities
Trade and other payables
(d)
Interest Rate Risk
5,914
5,914
50,821
1,348,791
1,354,705
-
-
5,914
50,821
607,615
607,615
-
-
-
-
-
-
-
-
-
62,649
1,348,791
1,411,440
607,615
607,615
The Group does not have any long-term borrowing or long term deposits, which would expose it to significant cash
flow interest rate risk.
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
Salt Lake Potash Limited ANNUAL REPORT 2017
49
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(f)
Capital Management
The Group defines its Capital as total equity of the Group, being $17,046,443 as at 30 June 2017 (2016:
$9,397,552). The Group manages its capital to ensure that entities in the Group will be able to continue as a going
concern while financing the development of its projects through primarily equity based financing. The Board's policy
is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Given the stage of development of the Group, the Board's objective is to minimise
debt and to raise funds as required through the issue of new shares.
The Group is not subject to externally imposed capital requirements.
There were no changes in the Group's approach to capital management during the year. During the next 12 months,
the Group will continue to explore project financing opportunities, primarily consisting of additional issues of equity.
(g)
Fair Value
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
•
•
•
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable
market data.
At 30 June 2017 and 30 June 2016, the carrying value of the Group’s financial assets and liabilities approximate
their fair value.
23. CONTINGENT ASSETS AND LIABILITIES
(i)
Contingent Assets
As at the date of this report, no contingent assets had been identified in relation to the 30 June 2017 financial year.
(ii)
Contingent Liability
As at the date of this report, no contingent liabilities had been identified in relation to the 30 June 2017 financial
year.
24. COMMITMENTS
Management have identified the following material commitments for the consolidated group as at 30 June 2017 and
30 June 2016:
Exploration commitments
Within one year
Later than one year but not later than five years
2017
$
2016
$
1,061,000
890,000
-
-
1,061,000
890,000
50
Salt Lake Potash Limited ANNUAL REPORT 2017
25.
EVENTS SUBSEQUENT TO BALANCE DATE
On 18 August 2017, the Company issued 42,000 shares to an advisor as part of their annual fees.
Other than as above, as at the date of this report there are no matters or circumstances which have arisen since
30 June 2017 that have significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2017, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2017, of the Consolidated Entity;
or
the state of affairs, in financial years subsequent to 30 June 2017, of the Consolidated Entity.
Salt Lake Potash Limited ANNUAL REPORT 2017
51
DIRECTORS DECLARATION
In accordance with a resolution of the Directors of Salt Lake Potash Limited:
1.
In the opinion of the Directors:
(a)
the attached financial statements, notes and the additional disclosures included in the Directors'
report designated as audited, are in accordance with the Corporations Act 2001, including:
(i)
(ii)
section 296 (compliance with accounting standards and Corporations Regulations 2001); and
section 297 (gives a true and fair view of the financial position as at 30 June 2017 and of the
performance for the year ended on that date of the consolidated group); and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
2.
3.
The attached financial statements are in compliance with International Financial Reporting Standards, as
stated in note 1(b) to the financial statements.
The Directors have been given a declaration required by section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2017.
On behalf of the Board
MATTHEW SYME
CEO
29 September 2017
52
Salt Lake Potash Limited ANNUAL REPORT 2017
INDEPENDENT AUDITORS REPORT
53
Salt Lake Potash Limited ANNUAL REPORT 2017
INDEPENDENT AUDITORS REPORT (Continued)
54
Salt Lake Potash Limited ANNUAL REPORT 2017
Salt Lake Potash Limited ANNUAL REPORT 2017
55
INDEPENDENT AUDITORS REPORT (Continued)
56
Salt Lake Potash Limited ANNUAL REPORT 2017
Salt Lake Potash Limited ANNUAL REPORT 2017
57
CORPORATE GOVERANCE
INDEPENDENT AUDITORS REPORT (Continued)
The Company believes corporate governance is a critical pillar on which business objectives and, in turn,
shareholder value must be built. The Board of Salt Lake has adopted a suite of charters and key corporate
governance documents which articulate the policies and procedures followed by the Company.
These documents are available
the Company’s website,
www.saltlakepotash.com.au/corporate/corporate-governance/.These documents are reviewed at least annually to
address any changes in governance practices and the law.
the Corporate Governance section of
in
The Company’s 2017 Corporate Governance Statement, which is current as at 30 June 2017 and has been
approved by the Company’s Board, explains how Salt Lake complies with the ASX Corporate Governance Council’s
‘Corporate Governance Principles and Recommendations – 3rd Edition’ in relation to the year ended 30 June 2017.
The Corporate Governance Statement is available in the Corporate Governance section of the Company’s website,
www.saltlakepotash.com.au/corporate/corporate-governance/ and will be lodged with ASX (and other exchanges
the Company has a listing on) together with an Appendix 4G at the same time that this Annual Report is lodged.
In addition to the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations
– 3rd Edition’ the Board has taken into account a number of important factors in determining its corporate
governance policies and procedures; including the:
•
•
•
•
•
•
•
•
relatively simple operations of the Company, which currently only undertakes mineral exploration and
development activities;
cost verses benefit of additional corporate governance requirements or processes;
size of the Board;
Board’s experience in the resources sector;
organisational reporting structure and number of reporting functions, operational divisions and
employees;
relatively simple financial affairs with limited complexity and quantum;
relatively small market capitalisation and economic value of the entity; and
direct shareholder feedback.
58
Salt Lake Potash Limited ANNUAL REPORT 2017
ASX ADDITIONAL INFORMATION
DISCLAIMERS AND DISCLOSURES
1.
TWENTY LARGEST HOLDERS OF LISTED SECURITIES
The names of the twenty largest holders of listed securities as at 31 August 2017 are listed below:
Name
Computershare Clearing Pty Ltd
Arredo Pty Ltd
Pershing Australia Nominees Pty Ltd
Vynben Pty Ltd
Howitt MGMT Pty Ltd
Hopetoun Consulting Pty Ltd
HSBC Custody Nominees (Australia) Limited
JBJF Management Pty Ltd
Mr Mark Stuart Savage
Pershing Australia Nominees Pty Ltd
Aroida Investments Pty Ltd
Aegean Capital Pty Ltd
Roseberry Holdings Pty Ltd
Apollo Group Pty Ltd
Mr Aharon Arakel & Mrs Ida Arakel
Mr Terry Patrick Coffey & Hawkes Bay Nominees Limited
Cantori Pty Ltd
Sunset Capital Management Pty Ltd
J P Morgan Nominees Australia Limited
Mr Neil David Irvine
Total Top 20
Others
Total Ordinary Shares on Issue
Number of
Ordinary Shares
48,974,252
11,000,000
5,716,017
5,025,498
4,620,000
4,500,000
4,436,364
4,100,000
3,600,000
2,875,000
2,726,511
2,492,749
2,000,000
2,000,000
1,950,000
1,930,064
1,872,432
1,800,000
1,745,038
1,700,000
115,063,925
59,985,671
175,049,596
Percentage of
Ordinary Shares
27.98
6.28
3.27
2.87
2.64
2.57
2.53
2.34
2.06
1.64
1.56
1.42
1.14
1.14
1.11
1.10
1.07
1.03
1.00
0.97
65.73
34.27
100.00
2.
DISTRIBUTION OF EQUITY SECURITIES
An analysis of numbers of holders of listed securities by size of holding as at 31 August 2017 is listed below:
Distribution
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
Totals
Ordinary Shares
Number of
Shareholders
Number of
Ordinary Shares
1,137
379
151
291
141
2,099
304,986
936,386
1,192,405
11,173,817
161,442,002
175,049,596
There were 1,176 holders of less than a marketable parcel of Ordinary Shares.
3.
VOTING RIGHTS
See Note 14(b) of the Notes to the Financial Statements.
Salt Lake Potash Limited ANNUAL REPORT 2017
59
DISCLAIMERS AND DISCLOSURES (Continued)
ASX ADDITIONAL INFORMATION (Continued)
4.
SUBSTANTIAL SHAREHOLDERS
Substantial holders who have notified the Company in accordance with section 671B of the Corporations Act 2001
are as follows:
Distribution
Lombard Odier Asset Management (Europe) Limited
Arredo Pty Ltd
5.
UNQUOTED SECURITIES
Number of
Ordinary Shares
13,541,000
11,000,000
Performance Shares
Subject to Pre-Feasibility
Study Milestone (Class A)
expiring
12-Jun-18
Performance Shares
Subject to Definitive
Feasibility Study
Milestone (Class B)
expiring
12-Jun-19
Performance Shares
Subject to Construction
Milestone (Class C)
expiring
12-Jun-20
1,700,000
1,650,000
1,540,000
110,000
5,000,000
4
2,550,000
2,475,000
2,310,000
165,000
7,500,000
4
3,400,000
3,300,000
3,080,000
220,000
10,000,000
4
Holder
JBJF Management Pty Ltd
Mr Aharon Arakel & Mrs Ida Arakel
Howitt MGMT Pty Ltd
Others (less than 20%)
Total
Total holders
6.
ON-MARKET BUY BACK
There is currently no on-market buyback program for any of Salt Lake Potash Limited's listed securities.
60
Salt Lake Potash Limited ANNUAL REPORT 2017
7.
EXPLORATION INTERESTS
Summary of Exploration and Mining Tenements
As at 31 August 2017, the Company holds the following interests in the listed tenements:
Project
Status
License Number
Area
(km2)
Term
Grant Date
Date of
First
Relinquish-
ment
Interest
(%)
31-Aug-17
Western Australia
Lake Wells
Central
South
North
Outer East
Single Block
Outer West
North West
West
East
South West
South
South Western
Lake Ballard
West
East
North
South
South East
South
South
South
Lake Irwin
West
Central
East
North
Central East
South
North West
South West
Lake Minigwal
West
East
Central
Central East
South
South West
Lake Way
Central
South
Lake Marmion
North
Central
South
West
Lake Noondie
North
Central
South
West
Lake Barlee
North
Central
South
Lake Raeside
North
Northern Territory
Lake Lewis
South
North
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Granted
Granted
Granted
Granted
Granted
Application
Granted
Application
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
E38/2710
E38/2821
E38/2824
E38/3055
E38/3056
E38/3057
E38/3124
L38/262
L38/263
L38/264
L38/287
E38/3247
E29/912
E29/913
E29/948
E29/958
E29/1011
E29/1020
E29/1021
E29/1022
E37/1233
E39/1892
E38/3087
E37/1261
E38/3113
E39/1955
E37/1260
E39/1956
E39/1893
E39/1894
E39/1962
E39/1963
E39/1964
E39/1965
E53/1878
E53/1897
E29/1000
E29/1001
E29/1002
E29/1005
E57/1062
E57/1063
E57/1064
E57/1065
E49/495
E49/496
E77/2441
192.2
131.5
198.2
298.8
3.0
301.9
39.0
113.0
28.6
32.6
95.8
350.3
607.0
73.2
94.5
30.0
68.2
9.3
27.9
43.4
203.0
203.0
139.2
107.3
203.0
118.9
203.0
110.2
246.2
158.1
369.0
93.0
99.0
89.9
217.0
77.5
167.4
204.6
186.0
68.2
217.0
217.0
55.8
120.9
217.0
220.1
173.6
Application
E37/1305
155.0
5 years
5 years
5 years
5 years
5 years
5 years
5 years
20 years
20 years
20 years
-
-
5 years
5 years
5 years
5 years
5 years
-
-
-
5 years
5 years
5 years
5 years
5 years
5 years
-
-
5 years
5 years
5 years
5 years
5 years
-
05-Sep-12
19-Nov-13
04-Nov-13
16-Oct-15
16-Oct-15
16-Oct-15
30-Nov-16
3-Feb-17
3-Feb-17
3-Feb-17
-
-
10-Apr-15
10-Apr-15
22-Sep-15
20-Jan-16
11-Aug-17
-
-
-
08-Mar-16
23-Mar-16
23-Mar-16
14-Oct-16
14-Oct-16
14-Oct-16
-
-
01-Apr-16
01-Apr-16
8-Nov-16
8-Nov-16
8-Nov-16
-
4-Sep-17
18-Nov-18
3-Nov-18
16-Oct-20
16-Oct-20
16-Oct-20
29-Nov-21
2-Feb-38
2-Feb-38
2-Feb-38
-
-
10-Apr-20
10-Apr-20
21-Sep-20
19-Jan-21
10-Aug-22
-
-
-
07-Mar-21
22-Mar-21
22-Mar-21
13-Oct-21
13-Oct-21
13-Oct-21
-
-
31-Mar-21
31-Mar-21
7-Nov-21
7-Nov-21
7-Nov-21
-
5 years
-
12-Oct-16
-
11-Oct-21
-
5 years
5 years
5 years
5 years
03-Apr-17
03-Apr-17
15-Aug-17
11-Jul-17
02-Apr-22
02-Apr-22
14-Aug-22
10-Jul-22
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Granted
Granted
EL 29787
EL 29903
146.4
125.1
6 years
6 years
08-Jul-13
21-Feb-14
7-Jul-19
20-Feb-19
100%
100%
Salt Lake Potash Limited ANNUAL REPORT 2017
61
DISCLAIMERS AND DISCLOSURES (Continued)
ASX ADDITIONAL INFORMATION (Continued)
8.
MINERAL RESOURCES STATEMENT
Mineral Resource Statement as at 30 June 2017 is grouped by deposit, all of which form part of the Lake Wells
SOP in Western Australia. To date, no Ore Reserves have been reported for these deposits.
Governance
The Company engages external consultants and Competent Persons (as determined pursuant to the JORC Code
2012) to prepare and estimate the Mineral Resources. Management and the Board review these estimates and
underlying assumptions for reasonableness and accuracy. The results of the Mineral Resource estimates are then
reported in accordance with the requirements of the JORC Code 2012 and other applicable rules (including ASX
Listing Rules).
Where material changes occur during the year to the project, including the project’s size, title, exploration results or
other technical information, previous resource estimates and market disclosures are reviewed for completeness.
The Company reviews its Mineral Resources as at 30 June each year. A revised Mineral Resource estimate will be
prepared as part of the annual review process where a material change has occurred in the assumptions or data
used in previously reported Mineral Resources. However, there are circumstances where this may not be possible
(e.g. an ongoing drilling programme), in which case a revised Mineral Resource estimate will be prepared and
reported as soon as practicable.
Results of Annual Review
In November 2015, the Company reported its maiden JORC Mineral Resource estimate for the Lake Wells Project,
totalling 29 million tonnes (Mt) of Sulphate of Potash (SOP) with approximately 80% in the ‘Measured’ category
with excellent brine chemistry of 4,009 mg/L Potassium (K), 19,175 mg/L (SO4). The resource was calculated only
on the upper 16 metres of the Lake, with mineralisation remaining open at depth across most of the Lake.
In February 2016, an expanded Mineral Resource Estimate (MRE) was calculated at Lake Wells totaling 80-85
million tonnes of SOP. This represents an additional 51-56 Mt of Inferred Resource calculated in the strata below
the previously reported shallow Resource of 29 Mt.
During the year ended 30 June 2017, the Company continue exploration activites including drilling,test pumping
and other testwork at Lake Wells.
As a result of the annual review of the Company’s Mineral Resources, there has been no change to the Mineral
Resources reported for the Lake Wells Project in February 2016.
Total Mineral Resource Estimate
Classification
Geological Unit
Measured
Playa Lake Sediments
Indicated
Playa Lake Sediments
Inferred
Playa Lake Sediments
(Islands)
Bulk
Volume
(Million m3)
5,427
775
1,204
Porosity
Brine Volume
(Million m3)
Average SOP1
(K2SO4)
Concentration
(kg/m3)
K2SO4
Tonnage
(Mt)
0.464
0.464
0.464
2,518
359
558
8.94
8.49
5.34
9.07
8.79
8.74
23
3
3
38
13-18
80-85
Inferred
Paleovalley Sediment
10,600
0.40
4,240
Inferred
Fractured Siltstone Aquifer
6,717
0.22-.30
1,478 - 2,015
Total
24,723
9,691
Note: 1) Conversion factor to K to SOP (K2SO4 equivalent) is 2.23
Lake Wells Project – Mineral Resource Estimate (JORC 2012)
62
Salt Lake Potash Limited ANNUAL REPORT 2017
8.
MINERAL RESOURCES STATEMENT (Continued)
Competent Person Statement – Mineral Resource Statement
The information in this Mineral Resource Statement that relates to Mineral Resources is based on, and fairly
represents, information compiled by Mr Ben Jeuken, a Competent Person, who is a member Australian Institute of
Mining and Metallurgy. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting
company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the
2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Mr Jeuken has approved the Mineral Resource Statement as a whole and consents to its inclusion in the form and
context in which it appears.
Salt Lake Potash Limited ANNUAL REPORT 2017
63
DISCLAIMERS AND DISCLOSURES
Cautionary Statement and Important Information
The information in the Report that relates to the Scoping Study is extracted from the report entitled ‘Scoping Study Confirms
Potential Confirms Lake Wells Potential’ dated 29 August 2016 (Scoping Study Announcement). The announcement is available
to view on www.saltlakepotash.com.au. The Scoping Study has been prepared and reported in accordance with the requirements
of the JORC Code (2012) and relevant ASX Listing Rules.
The primary purpose of the Scoping Study is to establish whether or not to proceed to a Pre-Feasibility Study (“PFS”) and has
been prepared to an accuracy level of ±30%, the Scoping Study results should not be considered a profit forecast or production
forecast. As defined by the JORC Code, a “Scoping Study is an order of magnitude technical and economic study of the potential
viability of Mineral Resources. It includes appropriate assessments of realistic assumed Modifying Factors together with any other
relevant operational factors that are necessary to demonstrate at the time of reporting that progress to a Pre-Feasibility Study can
be justified.” (Emphasis added)
The Modifying Factors included in the JORC Code have been assessed as part of the Scoping Study, including mining (brine
extraction), processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and government factors.
The Company has received advice from appropriate experts when assessing each Modifying Factor.
Following an assessment of the results of the Scoping Study, the Company has formed the view that a PFS is justified for the
Lake Wells project, which it will now commence. The PFS will provide the Company with a more comprehensive assessment of
a range of options for the technical and economic viability of the Lake Wells project.
The Company has concluded it has a reasonable basis for providing any of the forward looking statements included in this
announcement and believes that it has a reasonable basis to expect that the Company will be able to fund its stated objective of
completing a PFS for the Lake Wells project. All material assumptions on which the forecast financial information is based are set
out in the Scoping Study Announcement.
In accordance with the ASX listing rules, the Company advises the Scoping Study referred to in the Scoping Study Announcement
is based on lower-level technical and preliminary economic assessments, and is insufficient to support estimation of Ore Reserves
or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping
Study will be realised.
Production Target
The Production Target stated in this Report is based on the Company’s Scoping Study for the Lake Wells Project as released to
the ASX on 29 August 2016. The information in relation to the Production Target that the Company is required to include in a
public report in accordance with ASX Listing Rule 5.16 was included in the Company’s ASX Announcement released on 29 August
2016. The Company confirms that the material assumptions underpinning the Production Target referenced in the 29 August 2016
release continue to apply and have not materially changed.
The Production Target referred to in this Report and the Scoping Study Announcement is based on 100% Measured Mineral
Resources for Stage 1 and 70% Measured Mineral Resources and 30% Inferred Mineral Resources for Stage 2. 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 Measured or Indicated Mineral Resources or that the production target or preliminary economic
assessment will be realised.
Forward Looking Statements
This presentation contains ‘forward-looking information’ that is based on the Company’s expectations, estimates and projections
as of the date on which the statements were made. This forward-looking information includes, among other things, statements
with respect to pre-feasibility and definitive feasibility studies, the Company’s business strategy, plans, development, objectives,
performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources, results of
exploration and related expenses. Generally, this forward-looking information can be identified by the use of forward-looking
terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘potential’, ‘likely’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘would’,
‘could’, ‘should’, ‘scheduled’, ‘will’, ‘plan’, ‘forecast’, ‘evolve’ and similar expressions. Persons reading this news release are
cautioned that such statements are only predictions, and that the Company’s actual future results or performance may be
materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may
cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed
or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks,
uncertainties and other factors set out herein, including but not limited to the risk factors set out in Schedule 2 of the Company’s
Notice of General Meeting and Explanatory Memorandum dated 8 May 2015.
64
Salt Lake Potash Limited ANNUAL REPORT 2017
Competent Persons Statement
The information in the Report that relates to the Scoping Study is extracted from the report entitled ‘Scoping Study Confirms
Potential Confirms Lake Wells Potential’ dated 29 August 2016. The announcement
to view on
www.saltlakepotash.com.au. The information in the original announcement that relates to processing, infrastructure and cost
estimation are based on and fairly represents information compiled or reviewed by Mr Zeyad El-Ansary, who is a Competent
Person as a member of the Australasian Institute of Mining and Metallurgy. Mr Zeyad El-Ansary has 9 years’ experience relevant
to the activities undertaken for preparation of these report sections and is a employed by Amec Foster Wheeler. Mr Zeyad El-
Ansary consents to the inclusion in the report/press release of the matters based on their information in the form and context in
which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement. The Company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcement.
is available
The information in this Report that relates to Mineral Resources for Lake Wells, is extracted from the reports entitled ‘Lake Wells
Resource Increased By 193 Percent to 85Mt of SOP’ dated 22 February 2016 and ‘Significant Maiden SOP Resource of 29Mt at
Lake Wells’ dated 11 November 2015 and is available to view on the Company’s website www.saltlakepotash.com.au. The
information in the original ASX Announcement that related to Exploration Results for Lake Wells based on information compiled
by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy. Mr Jeuken is employed by Groundwater Science
Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined
in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Jeuken consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The Company confirms that it is not aware of any new information or data that materially affects the information included in the
original market announcement. The Company confirms that the form and context in which the Competent Person’s findings are
presented have not been materially modified from the original market announcement.
Salt Lake Potash Limited ANNUAL REPORT 2017
65
ABN 98 117 085 748ASX/AIM: SO4 Level 9, BGC Centre 28 The Esplanade, Perth WA 6000, Australia Tel. +61 8 9322 6322Email: info@saltlakepotash.com.auSALTLAKEPOTASH.COM.AUSALT LAKE POTASH LTD ANNUAL REPORT 2017ANNUAL REPORT2017