ASX/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 2018 ANNUAL REPORTANNUAL REPORTGROW WITH US. CORPORATE DIRECTORYDIRECTORSMr Ian Middlemas – ChairmanMr Matthew Syme – CEOMr Bryn JonesMr Mark PearceCOMPANY SECRETARYMr Clint McGhieREGISTERED 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 LimitedDirectors’ Report 1Auditor’s Independence Declaration 23Consolidated Statement of Profit or Loss and other Comprehensive Income 24Consolidated Statement of Financial Position 25Consolidated Statement of Changes in Equity 26Consolidated Statement of Cash Flows 27Notes to and Forming Part of the Financial Statements 28Directors’ Declaration 54Independent Auditor’s Report 55Corporate Governance 60ASX Additional Information 61CONTENTS 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 2018 (Consolidated Entity or Group).
OPERATING AND FINANCIAL REVIEW
Operations
The Company’s aim is to develop the first salt-lake brine Sulphate of Potash (SOP) operation in Australia, starting
with a Demonstration Plant producing up to 50,000tpa of SOP, at the Goldfields Salt Lakes Project (GSLP) located
in the Northern Goldfields of Western Australia. The Company’s multi-lake portfolio, and the comprehensive
technical achievements to date, highlight the potential for a very economic, large scale and long term project.
Figure 1: Goldfields Salt Lake Project
Salt Lake Potash Limited ANNUAL REPORT 2018
1
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Operations (Continued)
Highlights
The Company has undertaken a significant level of work during the year across a range of disciplines and has
achieved a number of very important milestones, substantially progressing the Company’s aim is to develop the
first salt-lake SOP operation in Australia. Highlights during, and subsequent to the end of, the financial year
include:
LAKE WAY
MOU with Blackham Resources to access Lake Way
The Company entered into a Memorandum of Understanding (MOU) with Blackham Resources Limited
(Blackham) to investigate the potential development of a SOP operation based at Lake Way, near Wiluna.
Pursuant to the MOU with Blackham, the Company would construct an initial pond system to dewater
Blackham’s Williamson Pit, which contains approximately 1.2GL of super-saturated brine, with a very high
average SOP content of 25kg/m3. These Williamson Ponds would comprise approximately 1/3 of the total
Demonstration Plant pond area, and dewatering of the Williamson Pit offers a shorter development time
due to its very high grade and salt saturation.
Scoping Study for Low Capex, High Margin Demonstration Plant
The Company completed a Scoping Study on the development of a 50,000tpa SOP Demonstration Plant
at Lake Way that supports a low capex, highly profitable, staged development model, with total capital
costs of approximately A$49m and average cash operating costs (FOB) of approximately A$387/t.
The Demonstration Plant is intended to validate the technical and commercial viability of brine SOP
production from the GSLP, providing the basis to build a world class, low cost, long life SOP operation
across the 9 lakes in the GSLP.
LAKE WELLS
Process Testwork
The Company completed pilot scale crystalliser validation testwork at a leading crystalliser vendor in the
United States, processing approximately 400 kg of crystalliser feed salt (schoenite concentrate), produced
from previous Lake Wells development work at Saskatchewan Research Council (SRC). The testwork
successfully produced high quality SOP crystals, representative of a full scale plant product.
The Site Evaporation Trial (SET) at Lake Wells was decommissioned after completing over 18 months of
operation under site conditions and through all seasons. The SET processed approximately 412 tonnes
of brine and produced over 10 tonnes of harvest salts.
MOU with Australian Potash to study sharing infrastructure and other costs at Lake Wells
Subsequent to year end, the Company and Australian Potash Limited (ASX: APC) entered into a
Memorandum of Understanding and Co-operation Agreement to undertake a joint study of the potential
benefits of development cost sharing for each Company’s projects at Lake Wells.
The Company’s first Mining Lease at Lake Wells was granted subsequent to year end, a significant
milestone in the Projects development pathway.
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Salt Lake Potash Limited ANNUAL REPORT 2018
LAKE BALLARD
An initial surface aquifer exploration program was completed at Lake Ballard, comprising a total of 160
shallow test pits and 10 test trenches. This work provides preliminary data for the geological and
hydrological models for the surface aquifer of the Lake, as well as brine, geological and geotechnical
samples.
Subsequent to year end exploration drilling and excavation continued with a view to reporting an initial
JORC mineral resource estimate for the shall aquifer.
LAKE IRWIN
A surface aquifer exploration program was completed at Lake Irwin, comprising 56 shallow test pits and 5
test trenches. This work provides preliminary data for the geological and hydrological models of the surface
aquifer of the Lake, as well as brine, geological and geotechnical samples.
REGIONAL LAKES
The Company undertook initial surface brine sampling of the near surface aquifer and reconnaissance of
access and infrastructure at all remaining Lakes held under the GSLP.
GOLDFIELDS SALT LAKE PROJECT
First MOU for an Offtake Agreement with Mitsubishi
The Company executed its first MOU for an Offtake Agreement with Mitsubishi, for the sales and offtake
rights for up to 50% of the SOP production, from a Demonstration Plant at the GSLP, for distribution into
Asia and Oceania and potentially other markets.
World Class Scale Revealed with Initial Exploration Target Estimation
The Company released an initial estimate of Exploration Targets for eight of the nine lakes comprising the
Company’s GSLP. The ninth lake, Lake Wells, already having a Mineral Resource reported in accordance
with the JORC code.
The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained Sulphate of Potash
(SOP) with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt).
On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. The total playa area
of the lakes is approximately 3,312km2.
The potential quantity and grade of this Exploration Target is conceptual in nature. There has been
insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in
the estimation of a Mineral Resource.
Salt Lake Potash Limited ANNUAL REPORT 2018
3
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Operations (Continued)
Background
The Company is the owner of the Goldfields Salt Lakes Project (GSLP), which comprises nine large salt lakes in
the Northern Goldfields Region of Western Australia.
The GSLP has a number of important, favourable characteristics:
Very large paleochannel hosted brine aquifers, with chemistry amenable to evaporation of salts for SOP
production, extractable from both low-cost trenches and deeper bores;
Over 3,300km2 of playa surface, with in-situ clays suitable for low cost on-lake pond construction;
The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained Sulphate of Potash (SOP)
with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a
“drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. [The potential quantity and
grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a
Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource].
Excellent evaporation conditions;
Excellent access to transport, energy and other infrastructure in the Goldfields mining district;
Lowest quartile capex and opex potential based on the Lake Wells Scoping Study;
Clear opportunity to reduce transport costs by developing lakes closer to infrastructure and by capturing
economies of scale;
Multi-lake production offers operational flexibility, cost advantages and risk mitigation from localised weather
events;
The very high level of technical validation already undertaken at Lake Wells substantially applies to the other
lakes in the GSLP; and
Potential co-product revenues, particularly where transport costs are lowest.
The Company’s long term plan is to develop an integrated SOP operation of global scale, producing high quality
organic SOP from a number (or all) of the lakes within the GSLP, after confirming the technical and commercial
elements of the Project through construction and operation of a Demonstration Plant producing up to 50,000tpa of
SOP.
Demonstration Plant
The Company believes the advantages of the Demonstration Plant approach are:
While substantial salt-lake brine production of SOP is undertaken in China, Chile and the USA, it is new in
Australia and overseas production models need to be tested and adapted for Australian conditions.
Proof of concept for SOP production from salt-lake brines in Australia will substantially de-risk the full-scale
project, with commensurate improvement in financing costs and alternatives. While the Demonstration Plant
does not benefit from economies of scale, it will provide financiers and partners a very reliable cost basis for
larger scale, longer term operations, while still being low capex and high margin in its own right.
Refinement of design and costing of engineering elements at Demonstration Plant scale should result in
considerable time and cost savings at larger scale.
Market acceptance of a new product in conservative agricultural markets is best achieved progressively and
in conjunction with existing, established partner(s). It is important to establish Salt Lake’s product(s) as
premium, sustainable nutrients in the key long-term markets, and staged production increments are the best
way to achieve this objective.
A Demonstration Plant offers an accelerated pathway to initial production, with limited infrastructure
requirements and a faster, simpler approval process. The Demonstration Plant is intended to operate for 12-
24 months to establish parameters for larger scale production, and then be integrated into a larger operation.
The Company’s objective is to commence construction in 2018, harvesting first salts in 2019, and producing
first SOP in 2020.
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Salt Lake Potash Limited ANNUAL REPORT 2018
Lake Way
Salt Lake holds two Exploration Licences (one granted and one under application) covering most of Lake Way,
including the paleochannel defined by previous exploration. The Northern end of the Lake is largely covered by a
number of Mining Leases, held by Blackham Resources Limited (Blackham), the owner of the Wiluna Gold Mine.
The Company entered into a Memorandum of Understanding with Blackham in March 2018 to investigate the
development of an SOP operation on Blackham’s existing Mining Leases at Lake Way, including initially a 50,000tpa
Demonstration Plant.
Lake Way is located less than 15km south of Wiluna. The Wiluna region is an historic mining precinct dating back
to the late 19th century. It has been a prolific nickel and gold mining region with well developed, high quality
infrastructure in place.
The Goldfields Highway is a high quality sealed road permitted to carry quad road trains and passes 2km from the
Lake. The Goldfields Gas Pipeline is adjacent to SLP’s tenements, running past the eastern side of the Lake.
Scoping Study
In July 2018, the Company completed a Scoping Study on development of a 50,000tpa sulphate of potash (SOP)
Demonstration Plant at Lake Way that supports a low capex, highly profitable, staged development model.
The Demonstration Plant is supported by an Indicated and Measured Mineral Resource (drainable) within the
Blackham mining lease area totalling 500,000t (Stored Resource - 2Mt), a multiple of the resource required to
support a 50,000tpa Demonstration Plant for 2-3 years.
Table 1: Key Scoping Study Outcomes
Capital Costs (-10% & +30%)
Total Capital Costs
Including:
- Temporary facilities
- EPCM
- Growth allowance (contingency)
Average Total Cash Cost (FOB) (+/- 30%)
Average Total Cash Cost (FOB)
Comprising:
- Mine Gate Opex
- Transport and handling
- Royalties
Forecast SOP Price:
Study Manager:
Average Annual Production:
Development Process
A$49m
A$0.4m
A$4.8m
A$6.3m
A$387/t
A$251/t
A$96/t
A$40/t
A$667/t (US$500/t)
Wood (formerly Amec Foster Wheeler)
50,000 tonnes of SOP
The Demonstration Plant is intended to validate the technical and commercial viability of brine SOP production from
the GSLP, providing the basis to build a world class, low cost, long life SOP operation across the 9 lakes in the
GSLP.
The Company has previously established that larger production volumes (400,000tpa) can result in operating costs
in the lowest cost quartile for SOP production globally*. This is principally a result of the economies of scale inherent
in the GSLP’s advantageous location in the Northern Goldfields mining district, mostly in the main cost centres of
transport, labour and power.
Salt Lake Potash Limited ANNUAL REPORT 2018
5
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Operations (Continued)
Pursuant to the MOU with Blackham, the Company will construct an initial pond system to dewater the Williamson
Pit, which contains approximately 1.2GL of super-saturated brine, with a very high average SOP content of 25kg/m3.
These Williamson Ponds will comprise approximately 1/3 of the total Demonstration Plant pond area, and
dewatering of the Williamson Pit offers a shorter development time due to its very high grade and saturation.
Process Testwork
The Company undertook a range of process development testwork to enhance the process model for both Lake
Way and Lake Wells.
A large scale, continuous Site Evaporation Trial (SET) at Lake Wells was successfully completed over 18 months
of operation under site conditions and through all seasons. The results of the SET are an Australian first and have
provided significant knowledge to the Company on the salt crystallisation pathway under site conditions in Australia.
The SET processed approximately 412 tonnes of Lake Wells brine and produced 10.3 tonnes of harvest salts. Site-
produced harvest salts have been used in a range of subsequent process development testwork programs.
The Company has used the harvest salts produced by the SET to perform comprehensive process development
testwork at Saskatchewan Research Council (SRC). Most recently, SRC completed locked cycle testwork that
validated the SysCAD process flowsheet and demonstrated that the process converges quickly to operate at steady
state.
In addition to locked cycle testing, 1,000kg of harvest salts from Lake Wells SET were processed by SRC to produce
approximately 350kg of the flotation concentrate (crystalliser feed salt) which was then provided to a globally
recognized crystalliser vendor for crystalliser testwork and equipment design. The tests generated samples with
large chrystal size, similar to full scale production, and allowed the vendor to refine the design and pricing of a key
process equipment item.
Building on the knowledge gained from the Lake Wells project, a staged engineering approach was used in the
process development for Lake Way, whereby initial evaporation modelling was undertaken followed by laboratory
tests and then field trials. The initial brine evaporation modelling, conducted by international solar pond experts,
Ad Infinitum, indicated that the predicted harvest salts produced at Lake Way are comparable to those produced at
Lake Wells (containing a mix of Halite, Kainite and Schoenite) and therefore suitable for conversion into SOP.
Laboratory evaporation tests were conducted by international laboratory and testing company, Bureau Veritas (BV),
to validate the evaporation model. BV completed a series of laboratory-scale brine evaporation trials at their Perth
facility, under simulated average Lake Way climate conditions. This testwork confirmed the modelled brine
evaporation pathways. Furthermore it demonstrated that the Williamson pit brine follows a similar evaporation
pathway to Lake Way lake brine with similar brine chemistry and salts produced. This indicates that the Williamson
Pit brine is a pre-concentrated version of the Lake Way brine, which provides the advantage of a large volume of
brine that is essentially accelerated in the evaporation pathway.
A range of process development testwork to provide and validate inputs to the Lake Way Scoping Study production
model was also undertaken, including field evaporation tests and metallurgical processing testwork on harvest salts.
The testwork incorporates brines from the Lake itself, as well as the super-concentrated brines from the Williamson
Pit.
The results of testwork undertaken to date support the Company’s aim to produce an organic premium SOP product
from the GSLP. Salt Lake continues to progress testwork to refine products in line with offtake partner expectations.
MOU for Offtake with Mitsubishi
The Company executed a MOU for an Offtake Agreement with Mitsubishi for the sales and offtake rights for up to
50% of the SOP production from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and
potentially other markets.
Salt Lake Potash is progressing its GSLP development strategy, initially involving construction of a Demonstration
Plant producing up to 50,000tpa of high quality SOP, with its plans to distribute production through a small number
of global distribution partnerships.
The Mitsubishi MOU is non-binding and sets out the key terms for a subsequent formal Offtake Agreement as the
Demonstration Plant is developed. As well as quantities and target markets, the MOU’s other terms include:
6
Salt Lake Potash Limited ANNUAL REPORT 2018
Market pricing and commission mechanisms;
Specifications and delivery parameters;
Mitsubishi to provide strategic advice on marketing within the region; and
The parties to continue discussions regarding funding requirements for the GSLP.
Mitsubishi Australia Limited is a wholly owned subsidiary of Mitsubishi Corporation. Mitsubishi is one of the world’s
largest trading and investment enterprises that develops and operates businesses across virtually every industry,
including industrial finance, energy, metals, machinery, chemicals, and daily living essentials. Its current activities
expand far beyond its traditional trading operations to include investments and business management in diverse
fields including natural resources development, manufacturing of industrial goods, retail, new energy, infrastructure,
finance and new technology-related businesses.
MOU with Australian Potash
In September 2018, Salt Lake entered into a Memorandum of Understanding and Co-operation Agreement with
Australian Potash Limited (ASX: APC) to undertake a joint study of the potential benefits of development cost
sharing for each Company’s project developments at Lake Wells.
The Companies’ substantial project holdings at Lake Wells are contiguous with many common infrastructure
elements, including access roads, proximity to the Leonora rail terminals, and potential power and fresh water
solutions. Both Companies anticipate substantial potential Capex and Opex benefits from some level of
infrastructure sharing, with further potential benefits arising from shared or common evaporation and salt processing
facilities.
The Companies have agreed to constitute a joint study team to carry out an initial assessment of the merits of
infrastructure cooperation. The team will also conduct a high-level review of potential benefits of upstream
operational synergies. A substantial part of the Study work will be outsourced to independent engineers and both
Companies intend to continue with their independent project developments in parallel with the Study.
The Company’s first Mining Lease at Lake Wells was granted in September 2018, a significant milestone in the
Projects development pathway.
Results of Operations
The net loss of the Consolidated Entity for the year ended 30 June 2018 was $11,327,108 (2017: net loss of
$9,200,509). This loss is mainly attributable to:
(i)
(ii)
(iii)
Exploration and evaluation expenses of $8,545,647 (2017: $7,717,231) which are attributable to the Group’s
accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to
the acquisition of the rights to explore and up to the successful completion of definitive feasibility studies for
each separate area of interest;
Non-cash share-based payment expenses of $1,284,062 (2017: $580,976) which are attributable to the
Group’s accounting policy of expensing the value (estimated using an option pricing model) of Incentive
Securities issued to key employees and consultants. The value is measured at grant date and recognised
over the period during which the option holders become unconditionally entitled to the options and/or rights;
and
Business development expenses of $1,110,578 (2017: $559,247) which are attributable to additional
business development and investor relations activities required to support the growth and development of
the Goldfields Salt Lakes Project, including travel costs associated with representing the Company at
international conferences and investor meetings.
Financial Position
As at the date of this report, the Company had working capital in excess of $4 million which includes cash and cash
equivalents.
At 30 June 2018, the Company had cash reserves of $5,709,446 (2017: $15,596,759).
At 30 June 2018, the Company had net assets of $7,019,989 (2017: $17,046,443), a decrease of 59% compared
with the previous year. This decrease is a result of the exploration and evaluation activity during the year, which
has been expensed as discussed in the results of operations section above.
Salt Lake Potash Limited ANNUAL REPORT 2018
7
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Business Strategies and Prospects for Future Financial Years
The objective of the Group is to create long-term shareholder value through the discovery, exploration and
development of its projects.
To date, the Group has not commenced production of any minerals. To achieve its objective, the Group currently
has the following business strategies and prospects:
(i) Complete a PFS for the Lake Way Demonstration Plant;
(ii) Commence construction of the Williamson Ponds at Lake Way and dewatering of Blackham’s Williamson Pit;
(iii) Commence construction of the on-lake infrastructure and Plant for the Lake Way Demonstration Plant;
(iv) Complete a PFS on the Lake Wells Project;
(v) Develop an organic premium SOP product in conjunction with offtake partners and potential customers; and
(vi) Continue additional exploration activities including drilling, test pumping and other testwork across the
Company’s multi lake portfolio.
All of these activities are inherently risky and the Board is unable to provide certainty of the expected results of
these activities, or that any or all of these likely activities will be achieved. The material business risks faced by the
Group that could have an effect on the Group’s future prospects, and how the Group manages these risks, include:
The Company’s exploration properties may never be brought into production – The exploration for, and
development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately
developed into producing mines. To mitigate this risk, the Company will undertake systematic and staged
exploration and testing programs on its mineral properties and, subject to the results of these exploration programs,
the Company will then progressively undertake a number of technical and economic studies with respect to its
projects prior to making a decision to mine. However there can be no guarantee that the studies will confirm the
technical and economic viability of the Company’s mineral properties or that the properties will be successfully
brought into production;
The Company’s activities will require further capital – The exploration and any development of the Company’s
exploration properties will require substantial additional financing. Failure to obtain sufficient financing may result
in delaying or indefinite postponement of exploration and any development of the Company’s properties or even a
loss of property interest. There can be no assurance that additional capital or other types of financing will be
available if needed or that, if available, the terms of such financing will be favourable to the Company;
The Company’s licences may be subject to Native title and Aboriginal Heritage - There may be areas over
which legitimate common law and/or statutory Native Title rights of Aboriginal Australians exist. If Native Title rights
do exist, the ability of the Company to gain access to the Projects (through obtaining consent of any relevant
landowner), or to progress from the exploration phase to the development and mining phases of operations may
be adversely affected;
The Company has contractual rights in respect of the Mining Leases on which it plans to build a
Demonstration Plant at Lake Way – The Company entered into a Memorandum of Understanding with Blackham
in March 2018 that outlines the respective rights and obligations of both parties. The Demonstration Plant will initially
be based on Mining Leases held by Blackham and the ability of the Company to proceed with its plans at Lake Way
will be dependent on ongoing co-operation with Blackham. The parties intend to formalise arrangements in a Split
Commodity Agreement;
The Company’s activities are subject to Government regulations and approvals – Any material adverse
changes in government policies or legislation in Western Australia and Australia that affect mining, processing,
development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and
environmental issues may affect the viability and profitability of any planned development the GSLP. No assurance
can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be
applied in a manner which could adversely impact the Group’s mineral properties;
The Company may be adversely affected by fluctuations in commodity prices – The price of potash and other
commodities fluctuates widely and is affected by numerous factors beyond the control of the Company. Future
production, if any, from the Company’s mineral properties will be dependent upon the price of potash and other
commodities being adequate to make these properties economic. The Company currently does not engage in any
hedging or derivative transactions to manage commodity price risk. As the Company’s operations change, this
policy will be reviewed periodically going forward; and
8
Salt Lake Potash Limited ANNUAL REPORT 2018
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
2018
Cents
2017
Cents
(6.47)
(6.61)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:
(i)
(ii)
On 18 August 2017, the Company issued 42,000 shares to an advisor as part of their annual fees.
On 17 November 2017, the Company issued 1,100,000 incentive options to a key consultant as an incentive
to attract and retain their services.
(iii) On 1 December 2017, Mr Mark Hohnen retired as a Non-Executive Director of the Company.
(iv) On 22 December 2017, the Company issued 2,300,000 performance rights to key employees and
consultants of the Company pursuant to the Salt Lake Potash Limited Performance Rights Plan, and 800,000
incentive options to a key consultant as an incentive to attract and retain their services.
(v)
On 12 March 2018, the Company entered a Memorandum of Understanding (MOU) with Blackham
Resources Limited (Blackham) to investigate the potential development of a Sulphate of Potash (SOP)
operation based at Lake Way, near Wiluna. Under the MOU, the Company will acquire Blackham’s brine
rights and Blackham will acquire gold rights to the Company’s Lake Way holdings, with each company
retaining a royalty on their respective holdings.
(vi) On 9 April 2018, the Company announced that it had executed a Memorandum of Understanding with
Mitsubishi Australia Limited and Mitsubishi Corporation (Mitsubishi), setting out the basis for the first Offtake
Agreement for the Goldfields Salt Lakes Project. The formal Offtake Agreement will provide Mitsubishi with
sales and offtake rights for up to 50% of the Sulphate of Potash (SOP) production from a Demonstration
Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets.
SIGNIFICANT EVENTS AFTER BALANCE DATE
(i)
(ii)
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;
On 10 August 2018, the Company appointed Mr Clint McGhie as Company Secretary and Chief Financial
Officer following the resignation of Mr Sam Cordin; and
(iii) On 14 September 2018, the Company announced that it entered into a Memorandum of Understanding and
Co-operation Agreement with Australian Potash Limited (ASX: APC) to study the potentially very substantial
benefits of sharing infrastructure and other costs at Lake Wells.
Other than as noted above, as at the date of this report there are no matters or circumstances which have arisen
since 30 June 2018 that have significantly affected or may significantly affect:
the operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;
or
the state of affairs, in financial years subsequent to 30 June 2018, of the Consolidated Entity.
Salt Lake Potash Limited ANNUAL REPORT 2018
9
DIRECTORS’ REPORT
(Continued)
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.
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:
Current Directors
Mr Ian Middlemas
Mr Matthew Syme
Mr Mark Pearce
Mr Bryn Jones
Former Director
Mr Mark Hohnen
Chairman
Chief Executive Officer (CEO)
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned 1 December 2017)
Unless otherwise stated, Directors held their office from 1 July 2017 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 Constellation
Resources Limited (November 2017 – present), 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), and Syntonic Limited (April 2010 – June 2017).
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).
10
Salt Lake Potash Limited ANNUAL REPORT 2018
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 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), Constellation
Resources Limited (July 2016 – present), Prairie Mining Limited (August 2011 – present), Equatorial Resources
Limited (November 2009 – present), Sovereign Metals Limited (July 2006 – present), Odyssey Energy Limited
(September 2005 – present), Piedmont Lithium Limited (September 2009 – August 2018) and Syntonic Limited
(April 2010 – October 2016).
Mr Clint McGhie B.Com, CA, ACIS, FFin
Chief Financial Officer & Company Secretary
Mr McGhie is an experienced Chartered Accountant and Company Secretary who commenced his career at a large
international accounting firm and has since been involved with a number of ASX and AIM listed exploration and
development companies operating in the resources sector, including Apollo Minerals Limited, Berkeley Energia
Limited and Sovereign Metals Limited. Mr McGhie is also an Associate Member of the Governance Institute of
Australia (Chartered Secretary), and a Fellow of the Financial Services Institute of Australasia.
Mr McGhie was appointed Company Secretary of the Company on 10 August 2018.
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 and resigned on 10 August
2018.
Salt Lake Potash Limited ANNUAL REPORT 2018
11
DIRECTORS’ REPORT
(Continued)
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group's operations are subject to various environmental laws and regulations under the relevant government's
legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations
to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance audits or
inspections by relevant government authorities.
There have been no significant known breaches by the Group during the financial year.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
DIRECTORS' INTERESTS
As at the date of this report, the Directors' interests in the securities of the Company are as follows:
Mr Ian Middlemas
Mr Matthew Syme
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
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.
12
Salt Lake Potash Limited ANNUAL REPORT 2018
SHARE OPTIONS, PERFORMANCE SHARES AND PERFORMANCE RIGHTS
At the date of this report the following options and performance shares have been issued over unissued Ordinary
Shares of the Company:
750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;
250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;
500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;
750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021;
400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021;
5,000,000 ‘Class A’ Performance Shares expiring on or before 31 December 2018;
7,500,000 ‘Class B’ Performance Shares on or before 31 December 2019;
10,000,000 ‘Class C’ Performance Shares on or before 12 June 2020;
1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018;
1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019;
1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
During the year ended 30 June 2018, no Ordinary Shares have been issued as a result of the exercise of Unlisted
Options, and no Ordinary Shares have been issued as a result of the conversion of Performance Shares or Rights.
Subsequent to year end and until the date of this report, no Ordinary Shares have been issued as a result of the
exercise of Unlisted Options.
Salt Lake Potash Limited ANNUAL REPORT 2018
13
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 Mark Pearce
Mr Bryn Jones
Mr Mark Hohnen
Other KMP
Mr David Maxton
Mr Clint McGhie
Mr Grant Coyle
Mr Sam Cordin
Chairman
Chief Executive Officer (CEO)
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned 1 December 2017)
Chief Operating Officer (appointed 12 April 2018)
Chief Financial Officer and Company Secretary (appointed 10 August 2018)
Business Development Manager (appointed 16 July 2018)
Chief Financial Officer and Company Secretary (resigned 10 August 2018)
Unless otherwise disclosed, the KMP held their position from 1 July 2017 until the date of this report.
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.
14
Salt Lake Potash Limited ANNUAL REPORT 2018
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 2018 financial year, Mr Sam Cordin,
Company Secretary, was paid a bonus of $20,000 amounting to 80% of the annual discretionary bonus payable to
him. No formal decision in respect to any other bonuses for the 2018 year have been made by the Board, and
accordingly, no bonuses are payable as at 30 June 2018.
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 current and prior financial year, Performance Rights were granted to certain KMP and other employees
and contractors with certain performance conditions that reward of key staff upon the achievements of strategic
goals 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.
Salt Lake Potash Limited ANNUAL REPORT 2018
15
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
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. No incentive options were issued to KMP in the 2018
financial year.
The Company prohibits executives from entering into arrangements to limit their exposure to Incentive Options
granted as part of their remuneration package.
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 (2017: $36,000) and fees for Non-Executive Directors’ are
presently set at $20,000 per annum (2017: $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.
16
Salt Lake Potash Limited ANNUAL REPORT 2018
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
2018
Directors
Mr Ian Middlemas
Mr Matthew Syme
Mr Mark Hohnen 1
Mr Mark Pearce
Mr Bryn Jones 2
Other KMP
Mr David Maxton 3
Mr Clint McGhie 4
Mr Grant Coyle 5
Mr Sam Cordin 6
Total
Salary &
fees
$
36,000
250,000
8,452
20,000
160,574
65,000
-
-
150,000
690,026
Cash
Incentive
Payments
$
Non
Cash
Benefits7
$
Post-
employment
benefits
$
Share-
based
payments
$
Perfor-
mance
related
%
Total
$
-
-
-
-
-
-
-
-
20,000
-
-
-
36,000
-
16,581
23,750
392,097
682,428
57%
-
-
-
-
-
-
-
-
1,900
1,900
6,175
-
-
-
8,452
29,749
51,649
33,991
196,465
-
58%
17%
-
-
-
71,175
-
-
-
-
-
16,150
139,557
325,707
49%
20,000
16,581
49,875
595,394 1,371,876
Notes:
1 Mr Hohnen resigned 1 December 2017.
2 Mr Jones received Director fees of $20,000 and consulting fees of $140,574 for additional services provided to the Company.
3 Mr Maxton was appointed Chief Operating Officer effective 12 April 2018.
4 Mr McGhie was appointed Company Secretary and Chief Financial Officer effective 10 August 2018.
5 Mr Coyle was appointed Business Development Manager effective 16 July 2018.
6 Mr Cordin resigned 10 August 2018.
7 Non-cash benefits include life insurance premiums paid for Mr Syme.
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
Benefits
$
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.
Salt Lake Potash Limited ANNUAL REPORT 2018
17
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Options and Performance Rights Granted to KMP
There were no Incentive Options issued to KMP during the financial year. Details of Performance Rights granted
by the Company to each KMP of the Group during the financial year are as follows:
2018
Rights 1
Grant Date
Expiry Date
Exercise
Price
$
Grant Date
Fair Value 1
$
No.
Granted
No. Vested
At 30 June
2018
Other KMP
Mr Sam Cordin
Mr Sam Cordin
Mr Sam Cordin
Mr Sam Cordin
Rights
Rights
Rights
Rights
15-Dec-17 30-Jun-18 6
15-Dec-17 30-Jun-19 7
15-Dec-17
30-Jun-20
15-Dec-17
30-Jun-21
-
-
-
-
$0.486
50,000
$0.486
50,000
$0.486
50,000
$0.486
50,000
- 2
- 3
- 4
- 5
Notes:
1 For details on the valuation of the Performance Rights, including models and assumptions used, please refer to Note 20 to the financial statements.
2 Each Performance Right converts into one Ordinary Share of Salt Lake Potash Limited upon satisfaction of the Pre-Feasibility Study performance
condition.
3 Each Performance Right converts into one Ordinary Share of Salt Lake Potash Limited upon satisfaction of the Definitive Feasibility Study
performance condition.
4 Each Performance Right converts into one Ordinary Share of Salt Lake Potash Limited upon satisfaction of the Construction performance
condition.
5 Each Performance Right converts into one Ordinary Share of Salt Lake Potash Limited upon satisfaction of the Production performance condition.
6 Following Shareholder approval on 11 June 2018, the expiry date was extended to 31 December 2018. The closing share price on 11 June 2018
was $0.54. There was no impact on the fair value of the securities, however the period that the expense is being recognised over has been
modified.
7 Following Shareholder approval on 11 June 2018, the expiry date was extended to 31 December 2019. The closing share price on 11 June 2018
was $0.54. There was no impact on the fair value of the securities, however the period that the expense is being recognised over has been
modified.
Details of the values of Incentive Options and Performance Rights (Securities) granted, exercised or lapsed for
each KMP of the Group during the 2018 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
$
$
$
$
%
97,160
97,160
-
-
-
-
31,215
31,215
10%
2018
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.
During the 2018 financial year, 1,000,000 Incentive Options held by Mr Matthew Syme vested and nil Performance
Rights held by KMP vested.
18
Salt Lake Potash Limited ANNUAL REPORT 2018
Equity instruments held by KMP
Options and Performance Rights holdings of Key Management Personnel
Held at
1 July 2017
Granted as
Remuner-
ation
Options
Exercised/Rights
Converted
Net Other
Change
Held at
30 June
2018
Vested
and
exercise-
able at 30
June 2018
2018
Directors
Mr Ian Middlemas
-
Mr Matthew Syme
4,500,000
-
-
-
-
-
-
200,000
200,000
600,000
200,000
5,500,000
200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,500,000 2,500,000
-1
200,000
200,000
800,000
-
-
-
-
5,700,000 2,500,000
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Other KMP
Mr Sam Cordin
Total
Notes:
1 At date of resignation.
Ordinary Shareholdings of Key Management Personnel
Held at
1 July 2017
Granted as
Remuneration
Options
Exercised/
Rights
Converted
Net Other
Change
Held at
30 June 2018
11,000,000
4,500,000
5,033,218
4,000,000
-
400,000
24,933,218
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,000,000
4,500,000
5,033,2181
4,000,000
-
400,000
24,933,218
2018
Directors
Mr Ian Middlemas
Mr Matthew Syme
Mr Mark Hohnen
Mr Mark Pearce
Mr Bryn Jones
Other KMP
Mr Sam Cordin
Notes:
1 At date of resignation.
Employment Contracts with Directors and KMP
Mr Matthew Syme, Chief Executive Officer, is an employee of the Company. The contract has a rolling annual term
and may be terminated by the Company by giving three months’ notice. No amount is payable in the event of
termination for cause. Mr Syme receives a fixed remuneration component of $250,000 per annum plus statutory
superannuation and a discretionary annual bonus of up to $150,000 to be paid upon the successful completion of
key performance indicators as determined by the Board.
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 one 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 2018
19
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Employment Contracts with Directors and KMP (Continued)
Mr David Maxton, Chief Operating Officer, is an employee of the Company. The contract has a rolling two year term
and may be terminated by the Company by giving three months’ notice. No amount is payable in the event of
termination for cause. Mr Maxton receives a fixed remuneration component of $300,000 per annum plus statutory
superannuation and a discretionary annual bonus of up to $50,000 to be paid upon the successful completion of
key performance indicators as determined by the Board.
Mr Clint McGhie, Chief Financial Officer and Company Secretary, is an employee of the Company. The contract
had a rolling annual term and may be terminated by the Company by giving three months’ notice. No amount is
payable in the event of termination for cause. Mr McGhie receives a fixed remuneration component of $220,000
per annum plus statutory superannuation and a discretionary annual bonus of up to $30,000 to be paid upon the
successful completion of key performance indicators as determined by the Board.
Mr Grant Coyle, Business Development Manager, is an employee of the Company. The contract has a rolling annual
term and may be terminated by the Company by giving three months’ notice. No amount is payable in the event of
termination for cause. Mr Coyle receives a fixed remuneration component of $175,000 per annum plus statutory
superannuation and a discretionary annual bonus of up to $50,000 to be paid upon the successful completion of
key performance indicators as determined 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 2018
(2017: 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 (2017: $150,000) for the provision of serviced office facilities, corporate and administration
services for the year ended 30 June 2018. The amount is based on a monthly retainer due and payable in advance,
with no fixed term, and is able to be terminated by either party with one month’s notice. At 30 June 2018, $25,000
(2017: $12,500) was included as a current liability in the Statement of Financial Position.
End of Remuneration Report
20
Salt Lake Potash Limited ANNUAL REPORT 2018
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 Matthew Syme
Mr Mark Pearce
Mr Bryn Jones
Mr Mark Hohnen
Board Meetings
Number eligible to attend
Number attended
1
1
1
1
1
1
1
-
1
-
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
The Company has indemnified the directors of the Company for costs incurred, in their capacity as a director, for
which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of liability and the amount of the premium.
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
2018
$
8,188
8,188
2017
$
5,000
5,000
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 2018
21
DIRECTORS’ REPORT
(Continued)
CORPORATE GOVERNANCE
The Statement of Corporate Governance Practices is set out in a separate section of the Company’s 2018 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 2018 has been received and can be found
on page 23 of the Directors' Report.
Signed in accordance with a resolution of the Directors.
MATTHEW SYME
CEO
28 September 2018
22
Salt Lake Potash Limited ANNUAL REPORT 2018
AUDITOR'S INDEPENDENCE DECLARATION
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Salt Lake
Potash Limited
As lead auditor for the audit of Salt Lake Potash Limited for the financial year ended
30 June 2018, I declare to the best of my knowledge and belief, there have been:
a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit
b) No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Salt Lake Potash Limited and the entities it controlled during the
financial year.
Ernst & Young
T S Hammond
Partner
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:SLP:008
Salt Lake Potash Limited ANNUAL REPORT 2018
23
(cid:3)
(cid:3)
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Finance income
Other income
Exploration and evaluation expenses
Corporate and administrative expenses
Business development expenses
Share based payment expense
Loss before tax
Income tax expense
Loss for the year
30 June
2018
30 June
2017
Notes
$
$
3
4
5
6
238,208
456,709
123,477
604,468
(8,545,647)
(7,717,231)
(1,081,738)
(1,071,000)
(1,110,578)
(559,247)
(1,284,062)
(580,976)
(11,327,108)
(9,200,509)
-
-
(11,327,108)
(9,200,509)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences reclassified to profit or loss
on disposal of controlled entity
Other comprehensive loss for the year, net of tax
-
-
(454,468)
(454,468)
Total comprehensive loss for the year
(11,327,108)
(9,654,977)
Basic and diluted loss per share attributable to the ordinary equity
holders of the company (cents per share)
16
(6.47)
(6.61)
The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the
accompanying notes.
24
Salt Lake Potash Limited ANNUAL REPORT 2018
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2018
Notes
30 June 2018
$
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
7
8
9
10
11
12
5,709,446
227,273
5,936,719
535,344
2,276,736
2,812,080
8,748,799
15,596,759
300,058
15,896,817
303,511
2,276,736
2,580,247
18,477,064
1,620,527
1,348,791
11,829
57,462
13,011
19,181
Total Current Liabilities
1,689,818
1,380,983
Non-Current Liabilities
Finance lease
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
38,992
38,992
49,638
49,638
1,728,810
1,430,621
7,019,989
17,046,443
13
14
123,501,153
2,105,886
123,484,561
821,824
(118,587,050)
(107,259,942)
7,019,989
17,046,443
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Salt Lake Potash Limited ANNUAL REPORT 2018
25
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Contributed
Equity
Share-
Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Balance at 1 July 2017
123,484,561
821,824
$
$
Net loss for the year
Total comprehensive loss for the year
Shares issued in lieu of fees
Share issue costs
-
-
18,476
(1,884)
-
-
-
-
Share based payment expense
- 1,284,062
$
-
-
-
-
-
-
Accumulated
Losses
Total Equity
$
$
(107,259,942)
17,046,443
(11,327,108)
(11,327,108)
(11,327,108)
(11,327,108)
-
-
-
18,476
(1,884)
1,284,062
Balance at 30 June 2018
123,501,153 2,105,886
-
(118,587,050)
7,019,989
Balance at 1 July 2016
106,761,669
240,848
454,468
(98,059,433)
9,397,552
Net loss for the year
Exchange differences reclassified to profit or
loss on disposal of controlled entity
Total comprehensive loss for the year
-
-
-
Shares issued in lieu of fees
Share placement
Share issue costs
86,400
17,630,000
(993,508)
-
-
-
-
-
-
Share based payment expense
-
580,976
Balance at 30 June 2017
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
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
26
Salt Lake Potash Limited ANNUAL REPORT 2018
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash flows from operating activities
Payments to suppliers and employees
Exploration investment scheme received
R&D tax incentive
Interest received
Note
30 June
2018
$
30 June
2017
$
(10,275,823)
(8,657,842)
30,000
456,709
242,852
120,000
-
114,423
Net cash outflow from operating activities
15(a)
(9,546,262)
(8,423,419)
Cash flows from investing activities
Payments for property, plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Lease payments
Transaction costs from issue of shares
Net cash inflow/(outflow) from financing activities
(256,890)
(256,890)
(162,675)
(162,675)
-
17,630,000
(11,829)
(72,332)
(84,161)
-
(945,448)
16,684,552
Net increase/(decrease) in cash and cash equivalents held
(9,887,313)
8,098,458
Net foreign exchange differences
-
16
Cash and cash equivalents at the beginning of the year
15,596,759
7,498,285
Cash and cash equivalents at the end of the year
15(b)
5,709,446
15,596,759
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Salt Lake Potash Limited ANNUAL REPORT 2018
27
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in preparing the financial report of Salt Lake Potash Limited (Salt Lake
or Company) and its consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2018 are
stated to assist in a general understanding of the financial report.
Salt Lake is a Company limited by shares incorporated and domiciled in Australia whose shares are publicly traded
on the Australian Securities Exchange (ASX), and the AIM Market (AIM) of the London Stock Exchange.
The financial report of the Group for the year ended 30 June 2018 was authorised for issue in accordance with a
resolution of the Directors on 26 September 2018.
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with Australian
Accounting Standards (“AASBs”) and other authoritative pronouncements of the Australian Accounting Standards
Board (“AASB”) and the Corporations Act 2001. The Group is a for-profit entity for the purposes of preparing the
consolidated financial statements.
The financial report has been prepared on a historical cost basis. The financial report is presented in Australian
dollars.
Going concern
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of
business.
For the year ended 30 June 2018, the Consolidated Entity incurred a net loss of $11,327,108 (2017: $9,654,977)
and experienced net cash outflows from operating and investing activities of $9,821,628 (2017: $8,586,094). As at
30 June 2018, the Group had cash and cash equivalents of $5,709,446 (2017: $15,596,759) and net current assets
of $4,246,901 (2017: $14,515,834).
The Company has recently completed a successful Scoping Study for the Lake Way Demonstration Plant and is
currently in the process of finalising parameters for the Pre-Feasibility Study and construction of holding ponds to
dewater Blackham’s Williamson Pit. The Scoping Study on the development of a 50,000tpa sulphate of potash
(SOP) Demonstration Plant at Lake Way supports a low capex, highly profitable, staged development model. In
order to continue to progress the Demonstration Plant at Lake Way and ongoing studies for the wider GSLP, the
Company will be required to raise additional capital during the current financial year.
Based on the successful results of the Scoping Study and having previously raised funds for the GSLP, the Directors
are confident that they will be able to raise additional capital as and when required to continue to fund operations.
In addition, the Directors have been involved in a number of recent successful capital raisings for other listed
resource companies, and accordingly, they are satisfied that they will be able to raise additional capital when
required to enable the Consolidated Entity to meet its obligations as and when they fall due, and accordingly,
consider that it is appropriate to prepare the financial statements on the going concern basis.
Should the Consolidated Entity be unable to raise additional capital as and when required, the Consolidated Entity
would need to reduce operational expenditure to continue as a going concern. In the event that the Consolidated
Entity is unable to achieve the matters referred to above, uncertainty would exist that may cast doubt on the ability
of the Consolidated Entity to continue as a going concern.
These consolidated financial statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary
should the Consolidated Entity be unable to continue as a going concern.
(b) Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board.
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
AASB that are relevant to its operations and effective for the current annual reporting period.
New and revised standards and amendments thereof and interpretations effective for the current reporting period
that are relevant to the Group include:
28
Salt Lake Potash Limited ANNUAL REPORT 2018
AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for
Unrealised Losses which clarify that the existence of a deductible temporary difference depends solely on a
comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not
effected by possible future changes in the carrying amount or expected manner of recovery of the asset;
AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to
AASB 107 which amend existing presentation and disclosure requirements to evaluate changes in liabilities
arising from financing activities, including both changes arising from cash flows and non-cash changes; and
AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2016-2016
Cycle which clarify the existing disclosure requirements and scope of AASB 12 Disclosure of Interest in
Other Entities to apply to interests that are classified as held for sale or distribution.
The adoption of these new and revised standards has not resulted in any significant changes to the Group's
accounting policies or to the amounts reported for the current or prior periods.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective have not been adopted by the Group for the annual reporting period ended 30 June 2018. Those which
may be relevant to the Group are set out in the table below.
Standard/Interpretation
Application date
of standard
AASB 9 Financial Instruments, and relevant amending standards
1 January 2018
Application
date for
Group
1 July 2018
AASB 15 Revenue from Contracts with Customers, and relevant amending standards
1 January 2018
1 July 2018
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and
Measurement of Share-based Payment Transactions
1 January 2018
1 July 2018
AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
1 January 2018
1 July 2018
AASB 16 Leases
1 January 2019
1 July 2019
Management has reviewed the requirements of these accounting standards and has assessed that these will not
have any significant impact on the Group's financial statements based on the following:
At 30 June 2018, the Group’s only financial assets and liabilities are cash, receivables, finance lease and
payables for which no significant measurement changes have been introduced under AASB 9. The
changes to the impairment model are not anticipated to have an impact on the Group as receivables are
primarily comprised of GST and interest;
The Group does not currently have any revenue contracts and accordingly AASB 15 is not expected to
have an impact on the Group’s results; and
The Group’s main operating lease is for office space, currently at a cost of $10,170 per month. Under
AASB 16, an asset (the right to use the leased item) and a financial liability to pay rentals will be
recognised. AASB 16 will not apply to short term contracts of less than 12 months.
(c)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at
30 June 2018 and the results of all subsidiaries for the year then ended.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an
entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Company.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-
consolidated from the date that control ceases. Intercompany transactions and balances, income and expenses
and profits and losses between Group companies, are eliminated.
Salt Lake Potash Limited ANNUAL REPORT 2018
29
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less.
(e)
Trade and Other Receivables
Trade receivables are recognised and carried at the original invoice amount less a provision for any uncollectable
debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts
are written-off as incurred.
Short term receivables from related parties are recognised and carried at the nominal amount due and are interest
free.
(f)
(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%
2018
2017
30
Salt Lake Potash Limited ANNUAL REPORT 2018
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at
each financial year end.
(iii) Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
(h) Exploration and Development Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method.
Exploration and evaluation expenditure encompasses expenditures incurred by the Group in connection with the
exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as
tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets
are measured at cost at recognition and are recorded as an asset if:
a.
the rights to tenure of the area of interest are current; and
b.
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploitation of the area of interest, or alternatively, by its sale; and
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation expenditure incurred by the Group subsequent to acquisition of the rights to explore is
expensed as incurred, up to costs associated with the preparation of a feasibility study.
(i)
Impairment
Capitalised exploration costs are reviewed each reporting date to establish whether an indication of impairment
exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to
determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and
transferred to development properties, and then amortised over the life of the reserves associated with the area of
interest once mining operations have commenced. Recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of
the respective areas of interest.
(i)
Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts
payable are normally settled within 60 days. Payables are carried at amortised cost.
(j)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(k) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable.
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial assets.
Salt Lake Potash Limited ANNUAL REPORT 2018
31
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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.
32
Salt Lake Potash Limited ANNUAL REPORT 2018
(o) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows.
(p) Acquisition of Assets
A group of assets may be acquired in a transaction which is not a business combination. In such cases the cost of
the group is allocated to the individual identifiable assets (including intangible assets that meet the definition of and
recognition criteria for intangible assets in AASB 138) acquired and liabilities assumed on the basis of their relative
fair values at the date of purchase.
(q)
Impairment of Non-Current Assets
The Group assesses at each reporting date whether there is an indication that a non-current asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an
estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs
of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets and the asset's value in use
cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the
cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds
its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation
charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a
systematic basis over its remaining useful life.
(r)
Issued and Unissued Capital
Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
(s)
Foreign Currencies
(i)
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars
which is the Company's functional and presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Salt Lake Potash Limited ANNUAL REPORT 2018
33
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(s)
Foreign Currencies (Continued)
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)
34
Salt Lake Potash Limited ANNUAL REPORT 2018
2.
SEGMENT INFORMATION
The Consolidated Entity operates in one operating segment and one geographical segment, being mineral
exploration in Australia. This is the basis on which internal reports are provided to the Directors for assessing
performance and determining the allocation of resources within the Consolidated Entity.
3.
FINANCE INCOME
Interest income
4.
OTHER INCOME
Gain on disposal of controlled entity1
Exploration Incentive Scheme
R&D tax incentive
Notes:
Note
2018
$
2017
$
238,208
238,208
123,477
123,477
Note
2018
$
-
-
456,709
456,709
2017
$
454,468
150,000
-
604,468
1 During the 2017 year, the Company sold its United States subsidiary, Golden Eagle Uranium, for a nominal amount which resulted in a gain on
disposal of A$454,468 relating to prior exchange differences on translation of Golden Eagle Uranium that have been transferred from the foreign
currency translation reserve.
5.
EXPENSES
Note
2018
$
2017
$
(a)
Depreciation included in statement of comprehensive
income
Depreciation of plant and equipment
9
75,031
37,088
(b)
Employee benefits expense (including KMP)
Salaries and wages
Superannuation expense
Share-based payment expense
Total employment expenses included in profit or loss
20
1,942,801
1,342,932
176,466
1,284,062
126,503
580,976
3,403,329
2,050,411
Salt Lake Potash Limited ANNUAL REPORT 2018
35
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
6.
INCOME TAX
(a)
Recognised in the statement of comprehensive income
Current income tax
Current income tax benefit in respect of the current year
Deferred income tax
Deferred income tax
Income tax expense reported in the statement of Profit or Loss and other
Comprehensive income
2018
$
2017
$
-
-
-
-
-
-
(b)
Reconciliation between tax expense and accounting loss
before income tax
Accounting loss before income tax
(11,327,108)
(9,200,509)
At the domestic income tax rate of 27.5% (2017: 27.5%)
(3,114,955)
(2,530,140)
Expenditure not allowable for income tax purposes
Income not assessable for income tax purposes
Adjustment in respect of current income tax of previous years
Deferred tax assets not brought to account
Income tax expense/(benefit) reported in the statement of Profit or Loss
and other Comprehensive income
(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
36
Salt Lake Potash Limited ANNUAL REPORT 2018
511,763
(125,595)
(3,447)
2,732,234
-
2018
$
280,752
(124,979)
-
2,374,367
-
2017
$
4,833
43,209
(48,042)
-
6,110
43,209
(49,319)
-
21,813
243,070
9,183,494
(48,042)
7,200
341,543
6,368,677
(49,319)
(9,400,335)
(6,668,101)
-
-
The benefit of deferred tax assets not brought to account will only be brought to account if:
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Group in realising the benefit.
Deferred tax assets have not been recognised in respect to tax losses because it is not probable that future taxable
profit will be available against which the Group can utilise the benefits.
(d)
Tax Consolidation
The Company and its wholly-owned Australian resident entities have formed a tax consolidated group and are
therefore taxed as a single entity. The head entity within the tax consolidated group is Salt Lake Potash Limited.
7.
CASH AND CASH EQUIVALENTS
Cash on hand and at bank
Deposit on call
8.
TRADE AND OTHER RECEIVABLES
Accrued interest
GST and other receivables
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
2018
$
2017
$
1,596,390
4,113,056
15,524,703
72,056
5,709,446
15,596,759
2018
$
17,572
209,701
227,273
2017
$
22,216
277,842
300,058
2018
$
2017
$
652,644
(117,300)
345,780
(42,269)
535,344
303,511
303,511
306,864
(75,031)
115,275
225,324
(37,088)
535,344
303,511
Salt Lake Potash Limited ANNUAL REPORT 2018
37
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
9.
PROPERTY, PLANT AND EQUIPMENT (Continued)
Finance Leases
The carrying value of plant and equipment held under finance leases at 30 June 2018 was $55,857 (2017: $64,036).
Additions during the year include $Nil (2017: $64,036) of plant and equipment under finance lease.
10. EXPLORATION AND EVALUATION EXPENDITURE
(a)
Areas of Interest
SOP Project
Carrying amount at end of year, net of impairment1
(b)
Reconciliation
Carrying amount at start of year
Impairment losses
Carrying amount at end of year net of impairment 1
Note
2018
$
2017
$
2,276,736
2,276,736
2,276,736
2,276,736
2,276,736
2,276,736
-
-
2,276,736
2,276,736
Notes:
1 The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development
and commercial exploitation or sale of the respective areas of interest.
SOP Project
Salt Lake holds a number of large salt lake brine projects (Projects) in Western Australia and the Northern Territory,
each having potential to produce highly sought after Sulphate of Potash (SOP) for domestic and international
fertiliser markets.
11. TRADE AND OTHER PAYABLES
Trade creditors
Accrued expenses
2018
$
2017
$
1,483,554
1,250,959
136,973
97,832
1,620,527
1,348,791
Terms and conditions of the above financial liabilities:
Trade payables are non-interest bearing and are normally settled on 30-day terms.
12. PROVISIONS
2018
$
57,462
57,462
2017
$
19,181
19,181
Statutory employee benefits
38
Salt Lake Potash Limited ANNUAL REPORT 2018
13. CONTRIBUTED EQUITY
30 June 2018
$
30 June 2017
$
Share Capital
175,049,596 (30 June 2017: 175,007,596) Ordinary Shares
123,501,153
123,484,561
123,501,153
123,484,561
(a) Movements in Ordinary Shares During the Past Two Years Were as Follows:
01-Jul-17
18-Aug-17
Opening Balance
Share issue 1
Jul-17 to Jun-18
Share issue costs
30-Jun-18
Closing balance
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
Notes:
1 Shares issued to a key consultant of the Company in lieu of fees.
Number of
Ordinary
Shares
Issue
Price
$
$
175,007,596
123,484,561
42,000
-
0.44
-
18,476
(1,884)
175,049,596
123,501,153
133,827,596
- 106,761,669
180,000
30,700,000
10,300,000
-
175,007,596
0.48
0.43
0.43
86,400
13,201,000
4,429,000
-
(993,508)
- 123,484,561
Salt Lake Potash Limited ANNUAL REPORT 2018
39
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(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.
40
Salt Lake Potash Limited ANNUAL REPORT 2018
14. RESERVES
Share-based payments reserve
(a)
(i)
Nature and Purpose of Reserves
Share-based payments reserve
Note
14(b)
2018
$
2,105,886
2,105,886
2017
$
821,824
821,824
The share-based payments reserve is used to record the fair value of Unlisted Options, Performance Rights and
Performance Shares issued by the Group.
(b) Movements in the share-based payments reserve during the past two years were as follows:
Number of
Performance
Rights
Number of
Performance
Shares
Number of
Unlisted
Options
$
Opening Balance
4,100,000
22,500,000
2,500,000
821,824
01-Jul-17
23-Sep-17
28-Nov-17
22-Dec-17
22-Dec-17
Performance Rights forfeited
(1,000,000)
Issue of unlisted options
Issue of unlisted options
-
-
Issue of Performance Rights
2,300,000
-
-
-
-
-
-
1,100,000
800,000
-
-
-
-
-
-
1,284,062
Jul-17 to Jun-18 Share based payments expense
-
30-Jun-18
Closing balance
5,400,000
22,500,000
4,400,000
2,105,886
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
(c)
Terms and Conditions of Unlisted Options
The Unlisted Options are granted based upon the following terms and conditions:
Each Unlisted Option entitles the holder to the right to subscribe for one Ordinary Share upon the exercise of
each Unlisted Option;
The Unlisted Options outstanding at the end of the financial year have the following exercise prices and expiry
dates:
750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;
250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;
500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;
750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021; and
400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021.
Salt Lake Potash Limited ANNUAL REPORT 2018
41
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
14. RESERVES (Continued)
(c)
Terms and Conditions of Unlisted Options (Continued)
The Unlisted Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being
satisfied (if applicable);
Ordinary Shares issued on exercise of the Unlisted Options rank equally with the then Ordinary Shares of the
Company;
Application will be made by the Company to ASX and to the AIM market of the London Stock Exchange for
official quotation of the Ordinary Shares issued upon the exercise of the Unlisted Options;
If there is any reconstruction of the issued share capital of the Company, the rights of the Unlisted Option
holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the
reconstruction; and
No application for quotation of the Unlisted Options will be made by the Company.
(d)
Terms and Conditions of Performance Shares
The Convertible Performance Shares (Performance Shares) were granted as part of the consideration to acquire
Australia Salt Lake Potash Pty Ltd on the following terms and conditions:
Each Performance Share will convert into one Ordinary Share upon the satisfaction, prior to the Expiry Date,
of the respective Milestone:
-
-
-
5,000,000 Performance Shares subject to Class A Milestone: The announcement by the Company to ASX
of the results of a positive Pre-feasibility Study on all or part of the Project Licences;
7,500,000 Performance Shares subject to Class B Milestone: The announcement by the Company to ASX
of the results of a positive Definitive Feasibility Study on all or part of the Project Licences; and
10,000,000 Performance Shares subject to Class C Milestone: The commencement of construction
activities for a mining operation on all or part of the Project Licences (including the commencement of
ground breaking for the construction of infrastructure and/or processing facilities) following a final
investment decision by the Board as per the project development schedule and budget in accordance with
the Definitive Feasibility Study, within five years from the date of issue.
Expiry Date means:
-
in relation to the Class A Performance Shares, 31 December 2018 (amended following Shareholder
approval on 11 June 2018);
in relation to the Class B Performance Shares, 31 December 2019 (amended following Shareholder
approval on 11 June 2018);
and
in relation to the Class C Performance Shares, 5 years from the date of issue (12 June 2020);
-
-
If the Milestone for a Performance Share is not met by the Expiry Date, the total number of the relevant class
of Performance Shares will convert into one Ordinary Share per holder;
The Company shall allot and issue Ordinary Shares immediately upon conversion of the Performance Shares
for no consideration;
Ordinary Shares issued on conversion of the Performance Shares rank equally with the then Ordinary Shares
of the Company;
In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of
securities of the Ordinary Shares, the Performance Shares shall be reconstructed, consolidated or divided in
the same proportion as the Ordinary Shares are reconstructed, consolidated or divided and, in any event, in
a manner which will not result in any additional benefits being conferred on the Performance Shareholders
which are not conferred on the Ordinary Shareholders;
The Performance Shareholders shall have no right to vote, subject to the Corporations Act;
No application for quotation of the Performance Shares will be made by the Company; and
The Performance Shares are not transferable.
42
Salt Lake Potash Limited ANNUAL REPORT 2018
(e)
Terms and Conditions of Performance Rights
The Performance Rights are granted based upon the following terms and conditions:
Each Performance Right automatically converts into one Ordinary Share upon vesting of the Performance
Right;
Each Performance Right is subject to performance conditions (as determined by the Board from time to time)
which must be satisfied in order for the Performance Right to vest;
The Performance Rights have the following expiry dates:
-
-
-
-
1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018 (amended
following Shareholder approval on 11 June 2018);
1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended
following Shareholder approval on 11 June 2018);
1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
Ordinary Shares issued on conversion of the Performance Rights rank equally with the then Ordinary Shares
of the Company;
Application will be made by the Company to ASX AIM market of the London Stock Exchange for official
quotation of the Ordinary Shares issued upon conversion of the Performance Rights;
If there is any reconstruction of the issued share capital of the Company, the rights of the Performance Right
holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the
reconstruction; and
No application for quotation of the Performance Rights will be made by the Company.
15. STATEMENT OF CASH FLOWS
(a)
Reconciliation of the Loss after Tax to the Net Cash Flows from Operations
Net loss for the year
(11,327,108)
(9,200,509)
2018
$
2017
$
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 of fees
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Increase in provisions
75,031
1,284,062
-
18,476
37,088
580,976
(454,468)
86,400
84,784
280,212
38,281
(173,475)
693,100
7,469
Net cash outflow from operating activities
(9,546,262)
(8,423,419)
Salt Lake Potash Limited ANNUAL REPORT 2018
43
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(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 2018
$
30 June 2017
$
(11,327,108)
(9,200,509)
Number of Shares
2018
Number of Shares
2017
Weighted average number of ordinary shares used in
calculating basic and diluted earnings per share
175,043,958
139,217,150
(a)
Non-Dilutive Securities
As at balance date, 4,400,000 Unlisted Options (which represent 4,400,000 potential Ordinary Shares), 22,500,000
Performance Shares (which represent 22,500,000 potential Ordinary Shares) and 5,400,000 Performance Rights
(which represent 5,400,000 potential Ordinary Shares) were considered non-dilutive as they would decrease the
loss per share.
(b)
Conversions, Calls, Subscriptions or Issues after 30 June 2018
No securities have been issued since 30 June 2018.
There have been no other conversions to, calls of, or subscriptions for Ordinary Shares or issues of potential
Ordinary Shares since the reporting date and before the completion of this financial report.
17. RELATED PARTIES
(a)
Subsidiaries
Name
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
(i) Peak Coal was deregistered in April 2018.
Country of
Incorporation
Australia
Australia
Australia
Australia
(b)
Ultimate Parent
Salt Lake Potash Limited is the ultimate parent of the Group.
(c)
Transactions with Related Parties
% Equity Interest
2018
%
2017
%
100
100
-(i)
100
100
100
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.
44
Salt Lake Potash Limited ANNUAL REPORT 2018
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 Mark Pearce
Mr Bryn Jones
Mr Mark Hohnen
Other KMP
Mr David Maxton
Mr Clint McGhie
Mr Grant Coyle
Mr Sam Cordin
Chairman
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned 1 December 2017)
Chief Operating Officer (appointed 12 April 2018)
Chief Financial Officer and Company Secretary (appointed 10 August 2018)
Business Development Manager (appointed 16 July 2018)
Chief Financial Officer and Company Secretary (resigned 10 August 2018)
Unless otherwise disclosed, the KMP held their position from 1 July 2017 until the date of this report.
Short-term employee benefits
Post-employment benefits
Share-based payments
Total compensation
(b)
Loans from Key Management Personnel
2018
$
726,607
49,875
595,394
2017
$
591,898
52,928
556,016
1,371,876
1,200,842
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2018
(2017: Nil).
(c)
Other Transactions
Apollo Group Pty Ltd, a Company of which Mr Mark Pearce is a Director and beneficial shareholder, was paid or is
payable $150,000 (2017: $150,000) for the provision of serviced office facilities, corporate and administration
services for the year ended 30 June 2018. The amount is based on a monthly retainer due and payable in advance,
with no fixed term, and is able to be terminated by either party with one month’s notice. At 30 June 2018, $25,000
(2017: $12,500) was included as a current liability in the Statement of Financial Position.
Salt Lake Potash Limited ANNUAL REPORT 2018
45
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
19. PARENT ENTITY DISCLOSURES
(a)
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
(b)
Financial Performance
Loss for the year
Total comprehensive loss
(c)
Other information
2018
$
2017
$
5,929,459
2,106,089
8,035,548
15,738,697
2,027,221
17,765,918
1,689,818
1,430,620
38,992
-
1,728,810
1,430,620
123,501,153
123,484,561
(119,300,301)
(107,971,087)
2,105,886
6,306,738
821,824
16,335,298
(11,329,214)
(10,366,123)
(11,329,214)
(10,366,123)
The Company has not entered into any guarantees in relation to its subsidiaries.
Refer to Note 23 for details of contingent assets and liabilities.
20. SHARE-BASED PAYMENTS
(a)
Recognised Share-based Payment Expense
From time to time, the Group provides incentive Unlisted Options and Performance Rights to officers, employees,
consultants and other key advisors as part of remuneration and incentive arrangements. The number of options or
rights granted, and the terms of the options or rights granted are determined by the Board. Shareholder approval is
sought where required.
In the current and prior year, the Company has also granted shares in lieu of payments to a consultant in accordance
with the terms of engagement.
46
Salt Lake Potash Limited ANNUAL REPORT 2018
During the past two years, the following equity-settled share-based payments have been recognised:
2018
$
2017
$
Expenses arising from equity-settled share-based payment transactions
relating incentive options and performance rights
1,284,062
580,976
Expenses arising from equity-settled share-based payment transactions to
suppliers and consultants
Total share-based payments recognised during the year
18,476
1,302,538
86,400
667,376
(b)
Summary of Unlisted Options and Performance Rights Granted as Share-based Payments
The following Unlisted Options and Performance Rights were granted as share-based payments during the past
two years:
Series
Issuing Entity
Security
Type
Number
Grant
Date
Expiry
Date
Exercise
Price
Grant Date
Fair Value
$
$
2018
Series 20 Salt Lake Potash Limited
Options
250,000
22-Nov-17
30-Jun-21
Series 21 Salt Lake Potash Limited
Options
350,000
22-Nov-17
30-Jun-21
Series 22 Salt Lake Potash Limited
Options
500,000
22-Nov-17
30-Jun-21
Series 23 Salt Lake Potash Limited
Options
150,000
15-Dec-17
30-Jun-21
Series 24 Salt Lake Potash Limited
Options
250,000
15-Dec-17
30-Jun-21
Series 25 Salt Lake Potash Limited
Options
400,000
15-Dec-17
30-Jun-21
0.40
0.50
0.60
0.50
0.60
0.70
Series 26 Salt Lake Potash Limited
Rights
575,000
15-Dec-17
30-Jun-18
Series 27 Salt Lake Potash Limited
Rights
575,000
15-Dec-17
30-Jun-19
Series 28 Salt Lake Potash Limited
Rights
575,000
15-Dec-17
30-Jun-20
Series 29 Salt Lake Potash Limited
Rights
575,000
15-Dec-17
30-Jun-21
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.284
0.256
0.233
0.228
0.207
0.188
0.486
0.486
0.486
0.486
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 2018
47
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(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
granted as share-based payments at the beginning and end of the financial year:
Unlisted Options
Outstanding at beginning of year
Granted by the Company during the year
2018
Number
2,500,000
1,900,000
2018
WAEP
$0.51
$0.57
2017
Number
2,705,443
-
Forfeited/cancelled/lapsed/expired
-
-
(205,443)
Outstanding at end of year
Exercisable at end of year
4,400,000
3,500,000
$0.53
$0.51
2,500,000
1,500,000
2017
WAEP
$0.81
-
$4.46
$0.51
$0.45
The outstanding balance of Unlisted Options as at 30 June 2018 is represented by:
750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;’
250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;
500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;
750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021; and
400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021.
The following table illustrates the number and weighted average exercise prices (WAEP) of Performance Rights
granted as share-based payments at the beginning and end of the financial year:
Performance Rights
Outstanding at beginning of year
2018
Number
4,100,000
Granted by the Company during the year
2,300,000
Forfeited/cancelled/lapsed/expired
Outstanding at end of year
(1,000,000)
5,400,000
2018
WAEP
-
-
-
-
2017
Number
-
4,200,000
(100,000)
4,100,000
2017
WAEP
-
-
-
-
The outstanding balance of Performance Rights as at 30 June 2018 is represented by:
1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018 (amended
following Shareholder approval on 12 June 2018);
1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended
following Shareholder approval on 12 June 2018);
1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
(d) Weighted Average Remaining Contractual Life
At 30 June 2018, the weighted average remaining contractual life of Unlisted Options on issue that had been granted
as share-based payments was 2.39 years (2017: 2.93 years) and of Performance Rights on issue that had been
granted as share-based payments was 1.75 years (2017: 2.5 years).
(e)
Range of Exercise Prices
At 30 June 2018, the range of exercise prices of Unlisted Options on issue that had been granted as share-based
payments was $0.40 to $0.70 (2017: $0.40 to $0.60). Performance Rights have no exercise price.
48
Salt Lake Potash Limited ANNUAL REPORT 2018
(f) Weighted Average Fair Value
The weighted average fair value of Unlisted Options granted as share-based payments by the Group during the
year ended 30 June 2018 was $0.231 (2017: nil) and of Performance Rights granted as share-based payments
was $0.486 (2017: $0.496).
(g)
Option and Performance Right Pricing Models
The fair value of the equity-settled share options granted is estimated as at the date of grant using the Binomial
option valuation model taking into account the terms and conditions upon which the Unlisted Options were granted.
The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share
price (being the five day volume weighted average share price prior to issuance).
The table below lists the inputs to the valuation model used for share options and Performance Rights granted by
the Group in the current and prior year:
2018
Inputs
Options
Series 20
Series 21
Series 22
Series 23
Series 24
Series 25
Exercise price
Grant date share price
Dividend yield 1
Volatility 2
Risk-free interest rate
0.40
0.50
-
70%
1.99%
0.50
0.50
-
70%
1.99%
0.60
0.50
-
70%
1.99%
0.50
0.465
-
70%
2.16%
0.60
0.465
-
70%
2.16%
0.70
0.465
-
70%
2.16%
Grant date
22-Nov-17
22-Nov-17
22-Nov-17
15-Dec-17
15-Dec-17
15-Dec-17
Expiry date
Expected life of option 3
Fair value at grant date
30-Jun-21
30-Jun-21
30-Jun-21
30-Jun-21
30-Jun-21
30-Jun-21
3.61
0.284
3.61
0.256
3.61
0.233
3.54
0.228
3.54
0.207
3.54
0.188
Notes:
1 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
2 The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
3 The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise
of options.
Inputs
Performance Rights
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of right 1
Fair value at grant date 2
Series 26
Series 27
Series 28
Series 29
-
$0.465
15-Dec-17
30-Jun-18 3
0.5 years
$0.486
-
$0.465
15-Dec-17
30-Jun-19 4
1.5 years
$0.486
-
$0.465
15-Dec-17
30-Jun-20
2.5 years
$0.486
-
$0.465
15-Dec-17
30-Jun-21
3.5 years
$0.486
Notes:
1 The expected life of the Performance Rights is based on the expiry date of the performance rights as there is limited track
record of the early conversion of performance rights.
2 The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being
the five day volume weighted average share price prior to issuance).
3 Subsequent to grant, the expiry date was amended to 31 December 2018 following Shareholder approval on 11 June 2018.
This has no impact on the fair value of the securities, however the period that the expense is being recognised over has been
modified.
4 Subsequent to grant, the expiry date was amended to 31 December 2019 following Shareholder approval on 11 June 2018.
This has no impact on the fair value of the securities, however the period that the expense is being recognised over has been
modified.
Salt Lake Potash Limited ANNUAL REPORT 2018
49
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
20. SHARE-BASED PAYMENTS (Continued)
(g)
Option and Performance Right Pricing Models (Continued)
2017
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of right 1
Fair value at grant date 2
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of right 1
Fair value at grant date 2
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of right 1
Fair value at grant date 2
Inputs
Exercise price
Grant date share price
Grant date
Expiry date
Expected life of right 1
Fair value at grant date 2
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
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 expected life of the Performance Rights is based on the expiry date of the performance rights as there is limited track
record of the early conversion of performance rights.
2 The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being
the five day volume weighted average share price prior to issuance).
50
Salt Lake Potash Limited ANNUAL REPORT 2018
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
2018
$
25,000
8,188
33,188
2017
$
25,000
5,000
30,000
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(a)
Overview
The Group's principal financial instruments comprise receivables, payables, finance leases, cash and short-term
deposits. The main risks arising from the Group's financial instruments are credit risk, liquidity risk and interest rate
risk.
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have
been no significant changes since the previous financial year to the exposure or management of these risks.
The Group manages its exposure to key financial risks in accordance with the Group's financial risk management
policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new project) and
policies are revised as required. The overall objective of the Group's financial risk management policy is to support
the delivery of the Group's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows,
the Group does not enter into derivative transactions to mitigate the financial risks. In addition, the Group's policy
is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the
Group's operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing the Group's financial risks as summarised below.
(b)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other
receivables.
There are no significant concentrations of credit risk within the Group. The carrying amount of the Group's financial
assets represents the maximum credit risk exposure, as represented below:
Financial assets
Cash and cash equivalents
Trade and other receivables
2018
$
2017
$
5,709,446
15,596,759
227,273
300,058
5,936,719
15,896,817
With respect to credit risk arising from cash and cash equivalents, the Group's exposure to credit risk arises from
default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Where
possible, the Group invests its cash and cash equivalents with banks that are rated the equivalent of investment
grade and above. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and
the aggregate value of transactions concluded is spread amongst approved counterparties.
Salt Lake Potash Limited ANNUAL REPORT 2018
51
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(Continued)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(b)
Credit Risk (Continued)
The Group does not have any significant customers and accordingly does not have significant exposure to bad or
doubtful debts.
Trade and other receivables comprise interest accrued and GST refunds due. Where possible the Consolidated
Entity trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing
basis with the result that the Group’s exposure to bad debts is not significant. At 30 June 2018, none (2017 none)
of the Group’s receivables are past due.
(c)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meet its liabilities when due. At 30 June 2018 and 2017, the Group had sufficient liquid assets to meet its financial
obligations.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There
are no netting arrangements in respect of financial liabilities.
≤6 Months
$
6-12
Months
$
1-5 Years
≥5 Years
Total
$
$
$
2018
Group
Financial Liabilities
Finance lease
Trade and other payables
2017
Group
Financial Liabilities
Finance lease
Trade and other payables
(d)
Interest Rate Risk
5,914
5,915
38,992
1,620,527
1,626,441
-
-
5,915
38,992
5,914
5,914
50,821
1,348,791
1,354,705
-
-
5,914
50,821
-
-
-
-
-
-
50,821
1,620,527
1,671,348
62,649
1,348,791
1,411,440
The Group does not have any long-term borrowing or long term deposits, which would expose it to significant cash
flow interest rate risk.
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
(e)
Capital Management
The Group defines its Capital as total equity of the Group, being $7,019,989 as at 30 June 2018 (2017:
$17,046,443). The Group manages its capital to ensure that entities in the Group will be able to continue as a going
concern while financing the development of its projects through primarily equity based financing. The Board's policy
is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Given the stage of development of the Group, the Board's objective is to minimise
debt and to raise funds as required through the issue of new shares.
The Group is not subject to externally imposed capital requirements.
There were no changes in the Group's approach to capital management during the year. During the next 12 months,
the Group will continue to explore project financing opportunities, primarily consisting of additional issues of equity.
52
Salt Lake Potash Limited ANNUAL REPORT 2018
(f)
Fair Value
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable
market data.
At 30 June 2018 and 30 June 2017, the carrying value of the Group’s financial assets and liabilities approximate
their fair value.
23. CONTINGENT ASSETS AND LIABILITIES
(i)
Contingent Assets
As at the date of this report, no contingent assets had been identified in relation to the 30 June 2018 financial year.
(ii)
Contingent Liability
As at the date of this report, no contingent liabilities had been identified in relation to the 30 June 2018 financial
year.
24. COMMITMENTS
Management have identified the following material commitments for the consolidated group as at 30 June 2018 and
30 June 2017:
Exploration commitments
Within one year
Later than one year but not later than five years
2018
$
2017
$
1,896,500
1,061,000
-
-
1,896,500
1,061,000
25. EVENTS SUBSEQUENT TO BALANCE DATE
(i)
(ii)
Announced the results from a Scoping Study on the Lake Wells project which confirmed its potential to
produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets;
and
On 10 August 2018, the Company appointed Mr Clint McGhie as Company Secretary and Chief Financial
Officer following the resignation of Mr Sam Cordin.
Other than as above, as at the date of this report there are no matters or circumstances which have arisen since
30 June 2018 that have significantly affected or may significantly affect:
the operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;
or
the state of affairs, in financial years subsequent to 30 June 2018, of the Consolidated Entity.
Salt Lake Potash Limited ANNUAL REPORT 2018
53
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 2018 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 2018.
On behalf of the Board
MATTHEW SYME
CEO
28 September 2018
54
Salt Lake Potash Limited ANNUAL REPORT 2018
INDEPENDENT AUDITORS REPORT
(cid:3)
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Salt Lake Potash Limited
Opinion
We have audited the financial report of Salt Lake Potash Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to
the financial statements, including a summary of significant accounting policies, and the Directors'
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018
and of its consolidated financial performance for the year ended on that date
b)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to Note 1(a) in the financial report, which indicates that in order for the Group to
continue to progress both the Demonstration Plant at Lake Way and ongoing studies for the wider
Goldfields Salt Lakes Project, the Company will be required to raise additional capital. These events or
conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability
to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined the matters described below to be the key audit matters to be
communicated in our report. For each matter below, our description of how our audit addressed the
matter is provided in that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:SLP:007
Salt Lake Potash Limited ANNUAL REPORT 2018
55
(cid:3)
INDEPENDENT AUDITORS REPORT (Continued)
(cid:3)
(cid:3)
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
1. Exploration and evaluation assets
Why significant
How our audit addressed the KAM
As disclosed in Note 10 as at 30 June 2018, the Group
held exploration and evaluation expenditure assets of
$2,276,736.
The carrying value of exploration and evaluation
expenditure assets are assessed for impairment by the
Group when facts and circumstances indicate that the
exploration and evaluation assets may exceed their
recoverable amount.
The determination as to whether there are any
indicators to require an exploration and evaluation asset
to be assessed for impairment, involves a number of
judgements including whether the Group has tenure, will
be able to perform ongoing expenditure and whether
there is sufficient information for a decision to be made
that the area of interest is not commercially viable.
During the year, the Group determined that there had
been no indicators of impairment.
In performing our procedures, we:
• Considered the Group’s right to explore in the relevant
exploration area, which included obtaining and assessing
supporting documentation such as license agreements and
correspondence with relevant government agencies
• Considered the Group’s intention to carry out further exploration
and evaluation activity in the relevant exploration area, which
included an assessment of the Group’s cash flow forecast model
and discussions with senior management as to the intentions
and strategy of the Group
• Assessed recent exploration and evaluation activity in the
relevant licence area to determine if there are any negative
indicators that would suggest a potential impairment of the
asset
• Considered whether the exploration activities within each area
of interest have reached a stage where the determination of
commercially viable resource estimates could be made
• Assessed the adequacy of the disclosure included in the financial
report.
2. Share-based payments
Why significant
How our audit addressed the KAM
As disclosed in Note 20, in the current year, the Group granted
share-based payment awards in the form of performance rights
and options. The awards vest subject to the achievement of
vesting conditions.
In determining the share-based payments expense, the Group
uses assumptions in respect of the achievement of future non-
market performance conditions.
Due to the complexity and judgemental estimates used in
determining the valuation of the share-based payments and
vesting period, we considered the Group’s calculation of the
share-based payments expense to be a key audit matter.
For awards granted or vesting during the year, in performing
our procedures, we:
• Assessed the assumptions used in the fair value
calculation including the share price of the underlying
equity, grant date and other key assumptions
• Assessed the vesting period assumptions and probability
of achievement
• Assessed the adequacy of the disclosure included in the
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:SLP:007
56
Salt Lake Potash Limited ANNUAL REPORT 2018
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information
included in the annual report, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the Directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:SLP:007
Salt Lake Potash Limited ANNUAL REPORT 2018
57
INDEPENDENT AUDITORS REPORT (Continued)
(cid:3)
(cid:3)
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 20 of the Directors' report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Salt Lake Potash Limited for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:SLP:007
58
Salt Lake Potash Limited ANNUAL REPORT 2018
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
T S Hammond
Partner
Perth
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
TH:CT:SLP:007
Salt Lake Potash Limited ANNUAL REPORT 2018
59
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-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 2018 Corporate Governance Statement, which is current as at 30 June 2018 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 2018.
The Corporate Governance Statement is available in the Corporate Governance section of the Company’s website,
www.saltlakepotash.com.au/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.
60
Salt Lake Potash Limited ANNUAL REPORT 2018
ASX ADDITIONAL INFORMATION
1.
TWENTY LARGEST HOLDERS OF LISTED SECURITIES
The names of the twenty largest holders of listed securities as at 31 August 2018 are listed below:
Name
COMPUTERSHARE CLEARING PTY LTD
ARREDO PTY LTD
CITICORP NOMINEES PTY LIMITED
PERSHING AUSTRALIA NOMINEES PTY LTD
HOWITT MGMT PTY LTD
HOPETOUN CONSULTING PTY LTD
MR MARK STUART SAVAGE
AWJ FAMILY PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
AROIDA INVESTMENTS PTY LTD
MR NEIL DAVID IRVINE
AEGEAN CAPITAL PTY LTD
MR TERRY PATRICK COFFEY & HAWKES BAY NOMINEES
LIMITED
BELL POTTER NOMINEES LTD
ROSEBERRY HOLDINGS PTY LTD
APOLLO GROUP PTY LTD
SUNSET CAPITAL MANAGEMENT PTY LTD
VYNBEN PTY LTD
D GRAY & CO PTY LTD
Total Top 20
Others
Total Ordinary Shares on Issue
Number of
Ordinary Shares
Percentage of
Ordinary Shares
43,433,570
11,000,000
8,804,536
8,016,017
4,620,000
4,500,000
3,600,000
3,020,000
3,006,923
2,720,100
2,439,636
2,307,493
2,237,749
2,230,064
2,018,721
2,000,000
2,000,000
1,800,000
1,725,498
1,610,000
113,090,307
61,959,289
175,049,596
24.81
6.28
5.03
4.58
2.64
2.57
2.06
1.73
1.72
1.55
1.39
1.32
1.28
1.27
1.15
1.14
1.14
1.03
0.99
0.92
64.60
35.40
100.00
2.
DISTRIBUTION OF EQUITY SECURITIES
An analysis of numbers of holders of listed securities by size of holding as at 31 August 2018 is listed below:
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
1,101
399
157
326
140
2,123
300,105
1,031,382
1,222,564
13,141,101
159,354,444
175,049,596
There were 1,135 holders of less than a marketable parcel of Ordinary Shares.
Salt Lake Potash Limited ANNUAL REPORT 2018
61
ASX ADDITIONAL INFORMATION (Continued)
3.
VOTING RIGHTS
See Note 13(b) of the Notes to the Financial Statements.
4.
SUBSTANTIAL SHAREHOLDERS
Substantial holders who have notified the Company in accordance with section 671B of the Corporations Act 2001
are as follows:
Distribution
Lombard Odier Asset Management (Europe) Limited
Arredo Pty Ltd
Number of
Ordinary Shares
17,071,000
11,000,000
5.
UNQUOTED SECURITIES
Performance Shares
Holder
JBJF Management Pty Ltd
Mr Aharon Arakel & Mrs Ida Arakel
Howitt MGMT Pty Ltd
Others (less than 20%)
Total
Total holders
Performance Shares
Subject to Pre-Feasibility
Study Milestone (Class A)
expiring
31-Dec-18
Performance Shares
Subject to Definitive
Feasibility Study
Milestone (Class B)
expiring
31-Dec-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
Unlisted
Options
Holder
Hopetoun Consulting
Pty Ltd
JJB Advisory Limited
Mr Sapan Ghai
Mr Hannes Huster
Others (less than 20%)
Total
Total holders
Unlisted
Options
exercisable
at $0.40
Unlisted
Options
exercisable
at $0.50
Unlisted
Options
exercisable
at $0.60
Unlisted
Options
exercisable
at $0.40
29-Apr-19
29-Apr-20
29-Apr-21
30-Jun-21
Unlisted
Options
exercisable
at $0.50
30-Jun-21
Unlisted
Options
exercisable
at $0.60
30-Jun-21
Unlisted
Options
exercisable
at $0.70
30-Jun-21
750,000
750,000
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
-
-
-
750,000
750,000
1,000,000
250,000
350,000
100,000
-
50,000
500,000
500,000
150,000
100,000
-
750,000
400,000
1
1
1
1
3
3
2
-
-
250,000
150,000
-
As at 31 August 2018, there are 5,400,000 Performance Rights issued under an employee incentive scheme.
6.
ON-MARKET BUY BACK
There is currently no on-market buyback program for any of Salt Lake Potash Limited's listed securities.
62
Salt Lake Potash Limited ANNUAL REPORT 2018
7.
EXPLORATION INTERESTS
Summary of Exploration and Mining Tenements held as at 31 August 2018
Project
Status
License Number
Area (km2)
Interest
(%)
Western Australia
Lake Wells
Lake Way
Lake Ballard
Lake Marmion
Lake Irwin
Lake Minigwal
Lake Noondie
Lake Barlee
Lake Raeside
Lake Austin
Lake Moore
Northern Territory
Lake Lewis
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Granted
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Granted
Granted
E38/2710
E38/2821
E38/2824
E38/3055
E38/3056
E38/3057
E38/3124
L38/262
L38/263
L38/264
E38/3247
M38/1278
E53/1878
E53/1897
E29/912
E29/913
E29/958
E29/1011
E29/1020
E29/1021
E29/1022
E29/1000
E29/1001
E29/1002
E29/1005
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
E57/1062
E57/1063
E57/1064
E57/1065
E36/932
E77/2441
E30/495
E30/496
E37/1305
E21/205
E21/206
E58/529
E58/530
E58/531
E59/2340
E59/2341
E59/2342
E59/2343
E59/2344
E70/5195
EL 29787
EL 29903
192.2
131.5
198.2
298.8
3.0
301.9
39.0
113.0
28.6
32.6
350.3
87.5
217.0
77.5
607.0
73.2
30.0
68.2
9.3
27.9
43.4
167.4
204.6
186.0
68.2
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
217.0
55.8
120.9
108.5
173.6
217.0
217.0
155.0
117.8
192.2
213.9
217.0
96.1
217.0
217.0
217.0
201.5
217.0
124.0
146.4
125.1
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Salt Lake Potash Limited ANNUAL REPORT 2018
63
ASX ADDITIONAL INFORMATION (Continued)
8. MINERAL RESOURCES STATEMENT
Salt Lake’s Mineral Resource Statement as at 30 June 2018 is grouped by deposit, all of which form part of the
Lake Wells SOP in Western Australia. To date, no Ore Reserves have been reported for these deposits.
Subsequent to 30 June 2018, the Company reported a Mineral Resource Estimate for Lake Way. The Lake Way
Mineral Resource does not form part of this statement.
Governance
The Company engages external consultants and Competent Persons (as determined pursuant to the JORC Code
2012) to prepare and estimate the Mineral Resources. Management and the Board review these estimates and
underlying assumptions for reasonableness and accuracy. The results of the Mineral Resource estimates are then
reported in accordance with the requirements of the JORC Code 2012 and other applicable rules (including ASX
Listing Rules).
Where material changes occur during the year to the project, including the project’s size, title, exploration results or
other technical information, previous resource estimates and market disclosures are reviewed for completeness.
The Company reviews its Mineral Resources as at 30 June each year. A revised Mineral Resource estimate will be
prepared as part of the annual review process where a material change has occurred in the assumptions or data
used in previously reported Mineral Resources. However, there are circumstances where this may not be possible
(e.g. an ongoing drilling programme), in which case a revised Mineral Resource estimate will be prepared and
reported as soon as practicable.
Results of Annual Review
In November 2015, the Company reported its maiden JORC Mineral Resource estimate for the Lake Wells Project,
totalling 29 million tonnes (Mt) of Sulphate of Potash (SOP) with approximately 80% in the ‘Measured’ category
with excellent brine chemistry of 4,009 mg/L Potassium (K), 19,175 mg/L (SO4). The resource was calculated only
on the upper 16 metres of the Lake, with mineralisation remaining open at depth across most of the Lake.
In February 2016, an expanded Mineral Resource Estimate (MRE) was calculated at Lake Wells totalling 80-85
million tonnes of SOP. This represents an additional 51-56 Mt of Inferred Resource calculated in the strata below
the previously reported shallow Resource of 29 Mt.
During the year ended 30 June 2018, the Company continued exploration and development activities for Lake Wells
including surface aquifer characterisation (test pits and trenches), deep aquifer exploration, long term pump testing,
evaporation pond trials and process testwork.
In addition, in March 2018, the Company released an initial estimate of Exploration Targets for eight of the nine
lakes comprising the GSLP. The ninth lake, Lake Wells (as discussed above) already has a Mineral Resource
reported in accordance with the JORC code.
The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained SOP, with an average SOP grade
of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration
Target ranges from 26Mt – 153Mt of SOP. The total playa area of the lakes is approximately 3,312km2. The
potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient
exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a
Mineral Resource.
As a result of the annual review of the Company’s Mineral Resources, there has been no change to the Mineral
Resources reported for the Lake Wells Project in February 2016 as at 30 June 2018.
Total Mineral Resource Estimate
Classification
Geological Unit
Bulk
Volume
(Million m3)
Porosity
Brine Volume
(Million m3)
Average SOP1
(K2SO4)
Concentration
(kg/m3)
K2SO4
Tonnage
(Mt)
Measured
Playa Lake Sediments
Indicated
Playa Lake Sediments
Inferred
Playa Lake Sediments
(Islands)
5,427
775
1,204
0.464
0.464
0.464
2,518
359
558
Inferred
Paleovalley Sediment
10,600
0.40
4,240
Inferred
Fractured Siltstone Aquifer
6,717
0.22-.30
1,478 - 2,015
8.94
8.49
5.34
9.07
8.79
23
3
3
38
13-18
64
Salt Lake Potash Limited ANNUAL REPORT 2018
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.
9.
COMPETENT PERSONS STATEMENTS
The information in this report that relates to the Lake Way Mineral Resource is extracted from the report entitled
‘Scoping Study for Low Capex, High Margin Demonstration Plant at Lake Way’ dated 31 July 2018. This
announcement is available to view on www.saltlakepotash.com.au. The information in the original ASX
Announcement that related to Mineral Resources was based on, and fairly represents, information compiled by Mr
Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International
Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent
consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially
affects the information included in the original market announcement and, in the case of estimates of Mineral
Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant
market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that
the form and context in which the Competent Person’s findings are presented have not been materially modified
from the original market announcement.
The information in this report that relates to the Lake Wells Mineral Resource is extracted from the reports entitled
‘Lake Wells Resource Increased by 193% to 85Mt of SOP’ dated 22 February 2016 and ‘Significant Maiden SOP
Resource of 29Mt at Lake Wells’ dated 11 November 2015. These announcements are available to view on
www.saltlakepotash.com.au. The information in the original ASX Announcements that related to Mineral Resources
was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australian Institute
of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed
by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which
is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware
of any new information or data that materially affects the information included in the original market announcement
and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue to apply and have not materially
changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings
are presented have not been materially modified from the original market announcement.
The information in this report that relates to Exploration Targets is extracted from the report entitled ‘Exploration
Targets Reveal World Class Scale Potential’ dated 28 March 2018 The information in the original ASX
Announcement that related to Exploration Targets or Mineral Resources is based on information compiled by Mr
Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy. Mr Jeuken is employed by Groundwater
Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the
style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Jeuken consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears. The Company confirms that it is not aware of
any new information or data that materially affects the information included in the original market announcement.
The Company confirms that the form and context in which the Competent Person’s findings are presented have not
been materially modified from the original market announcement.
Salt Lake Potash Limited ANNUAL REPORT 2018
65
ASX ADDITIONAL INFORMATION (Continued)
10. PRODUCTION TARGET
The Lake Way Demonstration Plant Production Target stated in this report is based on the Company’s Scoping
Study as released to the ASX on 31 July 2018. The information in relation to the Production Target that the Company
is required to include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in the
Company’s ASX Announcement released on 31 July 2018. The Company confirms that the material assumptions
underpinning the Production Target referenced in the 31 July 2018 release continue to apply and have not materially
changed.
The Lake Wells Production Target stated in this report is based on the Company’s Scoping Study as released to
the ASX on 29 August 2016. The information in relation to the Production Target that the Company is required to
include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in the Company’s ASX
Announcement released on 29 August 2016. The Company confirms that the material assumptions underpinning
the Production Target referenced in the 29 August 2016 release continue to apply and have not materially changed.
11. FORWARD LOOKING STATEMENTS
This report contains ‘forward-looking information’ that is based on the Company’s expectations, estimates and
projections as of the date on which the statements were made. This forward-looking information includes, among
other things, statements with respect to pre-feasibility and definitive feasibility studies, the Company’s business
strategy, plans, development, objectives, performance, outlook, growth, cash flow, projections, targets and
expectations, mineral reserves and resources, results of exploration and related expenses. Generally, this forward-
looking information can be identified by the use of forward-looking terminology such as ‘outlook’, ‘anticipate’,
‘project’, ‘target’, ‘potential’, ‘likely’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘would’, ‘could’, ‘should’,
‘scheduled’, ‘will’, ‘plan’, ‘forecast’, ‘evolve’ and similar expressions. Persons reading this news release are
cautioned that such statements are only predictions, and that the Company’s actual future results or performance
may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and
other factors that may cause the Company’s actual results, level of activity, performance or achievements to be
materially different from those expressed or implied by such forward-looking information. Forward-looking
information is developed based on assumptions about such risks, uncertainties and other factors set out herein,
including but not limited to the risk factors set out in Schedule 2 of the Company’s Notice of General Meeting and
Explanatory Memorandum dated 8 May 2015.
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Salt Lake Potash Limited ANNUAL REPORT 2018
ASX/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 2018 ANNUAL REPORTANNUAL REPORTGROW WITH US.