AIM and ASX listed company Salt Lake Potash Limited (“SO4” or the “Company”), announces its results for the year ended 30 June 2018.
The Company’s Report and Accounts can be viewed at www.saltlakepotash.com.au.
The Company also advises that an Appendix 4G (Key to Disclosures: Corporate Governance Council Principles and Recommendations) and the 2018 Corporate Governance Statement have been released today and are available on the Company’s website: www.saltlakepotash.com.au/corporate-governance/.
For further information please visit www.saltlakepotash.com.au or contact:
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Clint McGhie
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Salt Lake Potash Limited
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Tel: +61 8 9322 6322
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Colin Aaronson/Richard Tonthat/Ben Roberts
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Grant Thornton UK LLP (Nominated Adviser)
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Tel: +44 (0) 20 7383 5100
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Derrick Lee/Beth McKiernan
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Cenkos Securities plc (Joint Broker)
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Tel: +44 (0) 131 220 6939
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Jerry Keen/Toby Gibbs
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Shore Capital (Joint broker)
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Tel: +44 (0) 20 7468 7967
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The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
OPERATING AND FINANCIAL REVIEW
Operations
The Company’s aim is to develop the first salt-lake brine Sulphate of Potash (SOP) operation in Australia, starting with a Demonstration Plant producing up to 50,000tpa of SOP, at the Goldfields Salt Lakes Project (GSLP) located in the Northern Goldfields of Western Australia. The Company’s multi-lake portfolio, and the comprehensive technical achievements to date, highlight the potential for a very economic, large scale and long term project.
Highlights
The Company has undertaken a significant level of work during the year across a range of disciplines and has achieved a number of very important milestones, substantially progressing the Company’s aim is to develop the first salt-lake SOP operation in Australia. Highlights during, and subsequent to the end of, the financial year include:
LAKE WAY
MOU with Blackham Resources to access Lake Way
· The Company entered into a Memorandum of Understanding (MOU) with Blackham Resources Limited (Blackham) to investigate the potential development of a SOP operation based at Lake Way, near Wiluna.
Pursuant to the MOU with Blackham, the Company would construct an initial pond system to dewater Blackham’s Williamson Pit, which contains approximately 1.2GL of super-saturated brine, with a very high average SOP content of 25kg/m3. These Williamson Ponds would comprise approximately 1/3 of the total Demonstration Plant pond area, and dewatering of the Williamson Pit offers a shorter development time due to its very high grade and salt saturation.
Scoping Study for Low Capex, High Margin Demonstration Plant
· The Company completed a Scoping Study on the development of a 50,000tpa SOP Demonstration Plant at Lake Way that supports a low capex, highly profitable, staged development model, with total capital costs of approximately A$49m and average cash operating costs (FOB) of approximately A$387/t.
The Demonstration Plant is intended to validate the technical and commercial viability of brine SOP production from the GSLP, providing the basis to build a world class, low cost, long life SOP operation across the 9 lakes in the GSLP.
LAKE WELLS
Process Testwork
· The Company completed pilot scale crystalliser validation testwork at a leading crystalliser vendor in the United States, processing approximately 400 kg of crystalliser feed salt (schoenite concentrate), produced from previous Lake Wells development work at Saskatchewan Research Council (SRC). The testwork successfully produced high quality SOP crystals, representative of a full scale plant product.
· The Site Evaporation Trial (SET) at Lake Wells was decommissioned after completing over 18 months of operation under site conditions and through all seasons. The SET processed approximately 412 tonnes of brine and produced over 10 tonnes of harvest salts.
MOU with Australian Potash to study sharing infrastructure and other costs at Lake Wells
· Subsequent to year end, the Company and Australian Potash Limited (ASX: APC) entered into a Memorandum of Understanding and Co-operation Agreement to undertake a joint study of the potential benefits of development cost sharing for each Company’s projects at Lake Wells.
· The Company’s first Mining Lease at Lake Wells was granted subsequent to year end, a significant milestone in the Projects development pathway.
LAKE BALLARD
· An initial surface aquifer exploration program was completed at Lake Ballard, comprising a total of 160 shallow test pits and 10 test trenches. This work provides preliminary data for the geological and hydrological models for the surface aquifer of the Lake, as well as brine, geological and geotechnical samples.
· Subsequent to year end exploration drilling and excavation continued with a view to reporting an initial JORC mineral resource estimate for the shall aquifer.
LAKE IRWIN
· A surface aquifer exploration program was completed at Lake Irwin, comprising 56 shallow test pits and 5 test trenches. This work provides preliminary data for the geological and hydrological models of the surface aquifer of the Lake, as well as brine, geological and geotechnical samples.
REGIONAL LAKES
· The Company undertook initial surface brine sampling of the near surface aquifer and reconnaissance of access and infrastructure at all remaining Lakes held under the GSLP.
GOLDFIELDS SALT LAKE PROJECT
First MOU for an Offtake Agreement with Mitsubishi
· The Company executed its first MOU for an Offtake Agreement with Mitsubishi, for the sales and offtake rights for up to 50% of the SOP production, from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets.
World Class Scale Revealed with Initial Exploration Target Estimation
· The Company released an initial estimate of Exploration Targets for eight of the nine lakes comprising the Company’s GSLP. The ninth lake, Lake Wells, already having a Mineral Resource reported in accordance with the JORC code.
The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained Sulphate of Potash (SOP) with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. The total playa area of the lakes is approximately 3,312km2.
The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Background
The Company is the owner of the Goldfields Salt Lakes Project (GSLP), which comprises nine large salt lakes in the Northern Goldfields Region of Western Australia.
The GSLP has a number of important, favourable characteristics:
· Very large paleochannel hosted brine aquifers, with chemistry amenable to evaporation of salts for SOP production, extractable from both low-cost trenches and deeper bores;
· Over 3,300km2 of playa surface, with in-situ clays suitable for low cost on-lake pond construction;
· The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained Sulphate of Potash (SOP) with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. [The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource].
· Excellent evaporation conditions;
· Excellent access to transport, energy and other infrastructure in the Goldfields mining district;
· Lowest quartile capex and opex potential based on the Lake Wells Scoping Study;
· Clear opportunity to reduce transport costs by developing lakes closer to infrastructure and by capturing economies of scale;
· Multi-lake production offers operational flexibility, cost advantages and risk mitigation from localised weather events;
· The very high level of technical validation already undertaken at Lake Wells substantially applies to the other lakes in the GSLP; and
· Potential co-product revenues, particularly where transport costs are lowest.
The Company’s long term plan is to develop an integrated SOP operation of global scale, producing high quality organic SOP from a number (or all) of the lakes within the GSLP, after confirming the technical and commercial elements of the Project through construction and operation of a Demonstration Plant producing up to 50,000tpa of SOP.
Demonstration Plant
The Company believes the advantages of the Demonstration Plant approach are:
· While substantial salt-lake brine production of SOP is undertaken in China, Chile and the USA, it is new in Australia and overseas production models need to be tested and adapted for Australian conditions.
· Proof of concept for SOP production from salt-lake brines in Australia will substantially de-risk the full-scale project, with commensurate improvement in financing costs and alternatives. While the Demonstration Plant does not benefit from economies of scale, it will provide financiers and partners a very reliable cost basis for larger scale, longer term operations, while still being low capex and high margin in its own right.
· Refinement of design and costing of engineering elements at Demonstration Plant scale should result in considerable time and cost savings at larger scale.
· Market acceptance of a new product in conservative agricultural markets is best achieved progressively and in conjunction with existing, established partner(s). It is important to establish Salt Lake’s product(s) as premium, sustainable nutrients in the key long-term markets, and staged production increments are the best way to achieve this objective.
· A Demonstration Plant offers an accelerated pathway to initial production, with limited infrastructure requirements and a faster, simpler approval process. The Demonstration Plant is intended to operate for 12-24 months to establish parameters for larger scale production, and then be integrated into a larger operation. The Company’s objective is to commence construction in 2018, harvesting first salts in 2019, and producing first SOP in 2020.
Lake Way
Salt Lake holds two Exploration Licences (one granted and one under application) covering most of Lake Way, including the paleochannel defined by previous exploration. The Northern end of the Lake is largely covered by a number of Mining Leases, held by Blackham Resources Limited (Blackham), the owner of the Wiluna Gold Mine.
The Company entered into a Memorandum of Understanding with Blackham in March 2018 to investigate the development of an SOP operation on Blackham’s existing Mining Leases at Lake Way, including initially a 50,000tpa Demonstration Plant.
Lake Way is located less than 15km south of Wiluna. The Wiluna region is an historic mining precinct dating back to the late 19th century. It has been a prolific nickel and gold mining region with well developed, high quality infrastructure in place.
The Goldfields Highway is a high quality sealed road permitted to carry quad road trains and passes 2km from the Lake. The Goldfields Gas Pipeline is adjacent to SLP’s tenements, running past the eastern side of the Lake.
Scoping Study
In July 2018, the Company completed a Scoping Study on development of a 50,000tpa sulphate of potash (SOP) Demonstration Plant at Lake Way that supports a low capex, highly profitable, staged development model.
The Demonstration Plant is supported by an Indicated and Measured Mineral Resource (drainable) within the Blackham mining lease area totalling 500,000t (Stored Resource – 2Mt), a multiple of the resource required to support a 50,000tpa Demonstration Plant for 2-3 years.
Table 1: Key Scoping Study Outcomes
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Capital Costs (-10% & +30%)
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|
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Total Capital Costs
Including:
– Temporary facilities
– EPCM
– Growth allowance (contingency)
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A$49m
A$0.4m
A$4.8m
A$6.3m
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Average Total Cash Cost (FOB) (+/- 30%)
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|
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Average Total Cash Cost (FOB)
Comprising:
– Mine Gate Opex
– Transport and handling
– Royalties
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A$387/t
A$251/t
A$96/t
A$40/t
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Forecast SOP Price:
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A$667/t (US$500/t)
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Study Manager:
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Wood (formerly Amec Foster Wheeler)
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Average Annual Production:
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50,000 tonnes of SOP
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Development Process
The Demonstration Plant is intended to validate the technical and commercial viability of brine SOP production from the GSLP, providing the basis to build a world class, low cost, long life SOP operation across the 9 lakes in the GSLP.
The Company has previously established that larger production volumes (400,000tpa) can result in operating costs in the lowest cost quartile for SOP production globally*. This is principally a result of the economies of scale inherent in the GSLP’s advantageous location in the Northern Goldfields mining district, mostly in the main cost centres of transport, labour and power.
Pursuant to the MOU with Blackham, the Company will construct an initial pond system to dewater the Williamson Pit, which contains approximately 1.2GL of super-saturated brine, with a very high average SOP content of 25kg/m3. These Williamson Ponds will comprise approximately 1/3 of the total Demonstration Plant pond area, and dewatering of the Williamson Pit offers a shorter development time due to its very high grade and saturation.
Process Testwork
The Company undertook a range of process development testwork to enhance the process model for both Lake Way and Lake Wells.
A large scale, continuous Site Evaporation Trial (SET) at Lake Wells was successfully completed over 18 months of operation under site conditions and through all seasons. The results of the SET are an Australian first and have provided significant knowledge to the Company on the salt crystallisation pathway under site conditions in Australia.
The SET processed approximately 412 tonnes of Lake Wells brine and produced 10.3 tonnes of harvest salts. Site-produced harvest salts have been used in a range of subsequent process development testwork programs.
The Company has used the harvest salts produced by the SET to perform comprehensive process development testwork at Saskatchewan Research Council (SRC). Most recently, SRC completed locked cycle testwork that validated the SysCAD process flowsheet and demonstrated that the process converges quickly to operate at steady state.
In addition to locked cycle testing, 1,000kg of harvest salts from Lake Wells SET were processed by SRC to produce approximately 350kg of the flotation concentrate (crystalliser feed salt) which was then provided to a globally recognized crystalliser vendor for crystalliser testwork and equipment design. The tests generated samples with large chrystal size, similar to full scale production, and allowed the vendor to refine the design and pricing of a key process equipment item.
Building on the knowledge gained from the Lake Wells project, a staged engineering approach was used in the process development for Lake Way, whereby initial evaporation modelling was undertaken followed by laboratory tests and then field trials. The initial brine evaporation modelling, conducted by international solar pond experts, Ad Infinitum, indicated that the predicted harvest salts produced at Lake Way are comparable to those produced at Lake Wells (containing a mix of Halite, Kainite and Schoenite) and therefore suitable for conversion into SOP.
Laboratory evaporation tests were conducted by international laboratory and testing company, Bureau Veritas (BV), to validate the evaporation model. BV completed a series of laboratory-scale brine evaporation trials at their Perth facility, under simulated average Lake Way climate conditions. This testwork confirmed the modelled brine evaporation pathways. Furthermore it demonstrated that the Williamson pit brine follows a similar evaporation pathway to Lake Way lake brine with similar brine chemistry and salts produced. This indicates that the Williamson Pit brine is a pre-concentrated version of the Lake Way brine, which provides the advantage of a large volume of brine that is essentially accelerated in the evaporation pathway.
A range of process development testwork to provide and validate inputs to the Lake Way Scoping Study production model was also undertaken, including field evaporation tests and metallurgical processing testwork on harvest salts. The testwork incorporates brines from the Lake itself, as well as the super-concentrated brines from the Williamson Pit.
The results of testwork undertaken to date support the Company’s aim to produce an organic premium SOP product from the GSLP. Salt Lake continues to progress testwork to refine products in line with offtake partner expectations.
MOU for Offtake with Mitsubishi
The Company executed a MOU for an Offtake Agreement with Mitsubishi for the sales and offtake rights for up to 50% of the SOP production from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets.
Salt Lake Potash is progressing its GSLP development strategy, initially involving construction of a Demonstration Plant producing up to 50,000tpa of high quality SOP, with its plans to distribute production through a small number of global distribution partnerships.
The Mitsubishi MOU is non-binding and sets out the key terms for a subsequent formal Offtake Agreement as the Demonstration Plant is developed. As well as quantities and target markets, the MOU’s other terms include:
· Market pricing and commission mechanisms;
· Specifications and delivery parameters;
· Mitsubishi to provide strategic advice on marketing within the region; and
· The parties to continue discussions regarding funding requirements for the GSLP.
Mitsubishi Australia Limited is a wholly owned subsidiary of Mitsubishi Corporation. Mitsubishi is one of the world’s largest trading and investment enterprises that develops and operates businesses across virtually every industry, including industrial finance, energy, metals, machinery, chemicals, and daily living essentials. Its current activities expand far beyond its traditional trading operations to include investments and business management in diverse fields including natural resources development, manufacturing of industrial goods, retail, new energy, infrastructure, finance and new technology-related businesses.
MOU with Australian Potash
In September 2018, Salt Lake entered into a Memorandum of Understanding and Co-operation Agreement with Australian Potash Limited (ASX: APC) to undertake a joint study of the potential benefits of development cost sharing for each Company’s project developments at Lake Wells.
The Companies’ substantial project holdings at Lake Wells are contiguous with many common infrastructure elements, including access roads, proximity to the Leonora rail terminals, and potential power and fresh water solutions. Both Companies anticipate substantial potential Capex and Opex benefits from some level of infrastructure sharing, with further potential benefits arising from shared or common evaporation and salt processing facilities.
The Companies have agreed to constitute a joint study team to carry out an initial assessment of the merits of infrastructure cooperation. The team will also conduct a high-level review of potential benefits of upstream operational synergies. A substantial part of the Study work will be outsourced to independent engineers and both Companies intend to continue with their independent project developments in parallel with the Study.
The Company’s first Mining Lease at Lake Wells was granted in September 2018, a significant milestone in the Projects development pathway.
Results of Operations
The net loss of the Consolidated Entity for the year ended 30 June 2018 was $11,327,108 (2017: net loss of $9,200,509). This loss is mainly attributable to:
(i) Exploration and evaluation expenses of $8,545,647 (2017: $7,717,231) which are attributable to the Group’s accounting policy of expensing exploration and evaluation expenditure incurred by the Group subsequent to the acquisition of the rights to explore and up to the successful completion of definitive feasibility studies for each separate area of interest;
(ii) Non-cash share-based payment expenses of $1,284,062 (2017: $580,976) which are attributable to the Group’s accounting policy of expensing the value (estimated using an option pricing model) of Incentive Securities issued to key employees and consultants. The value is measured at grant date and recognised over the period during which the option holders become unconditionally entitled to the options and/or rights; and
(iii) Business development expenses of $1,110,578 (2017: $559,247) which are attributable to additional business development and investor relations activities required to support the growth and development of the Goldfields Salt Lakes Project, including travel costs associated with representing the Company at international conferences and investor meetings.
Financial Position
As at the date of this report, the Company had working capital in excess of $4 million which includes cash and cash equivalents.
At 30 June 2018, the Company had cash reserves of $5,709,446 (2017: $15,596,759).
At 30 June 2018, the Company had net assets of $7,019,989 (2017: $17,046,443), a decrease of 59% compared with the previous year. This decrease is a result of the exploration and evaluation activity during the year, which has been expensed as discussed in the results of operations section above.
Business Strategies and Prospects for Future Financial Years
The objective of the Group is to create long-term shareholder value through the discovery, exploration and development of its projects.
To date, the Group has not commenced production of any minerals. To achieve its objective, the Group currently has the following business strategies and prospects:
(i) Complete a PFS for the Lake Way Demonstration Plant;
(ii) Commence construction of the Williamson Ponds at Lake Way and dewatering of Blackham’s Williamson Pit;
(iii) Commence construction of the on-lake infrastructure and Plant for the Lake Way Demonstration Plant;
(iv) Complete a PFS on the Lake Wells Project;
(v) Develop an organic premium SOP product in conjunction with offtake partners and potential customers; and
(vi) Continue additional exploration activities including drilling, test pumping and other testwork across the Company’s multi lake portfolio.
All of these activities are inherently risky and the Board is unable to provide certainty of the expected results of these activities, or that any or all of these likely activities will be achieved. The material business risks faced by the Group that could have an effect on the Group’s future prospects, and how the Group manages these risks, include:
The Company’s exploration properties may never be brought into production – The exploration for, and development of, mineral deposits involves a high degree of risk. Few properties which are explored are ultimately developed into producing mines. To mitigate this risk, the Company will undertake systematic and staged exploration and testing programs on its mineral properties and, subject to the results of these exploration programs, the Company will then progressively undertake a number of technical and economic studies with respect to its projects prior to making a decision to mine. However there can be no guarantee that the studies will confirm the technical and economic viability of the Company’s mineral properties or that the properties will be successfully brought into production;
The Company’s activities will require further capital – The exploration and any development of the Company’s exploration properties will require substantial additional financing. Failure to obtain sufficient financing may result in delaying or indefinite postponement of exploration and any development of the Company’s properties or even a loss of property interest. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company;
The Company’s licences may be subject to Native title and Aboriginal Heritage – There may be areas over which legitimate common law and/or statutory Native Title rights of Aboriginal Australians exist. If Native Title rights do exist, the ability of the Company to gain access to the Projects (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected;
The Company has contractual rights in respect of the Mining Leases on which it plans to build a Demonstration Plant at Lake Way – The Company entered into a Memorandum of Understanding with Blackham in March 2018 that outlines the respective rights and obligations of both parties. The Demonstration Plant will initially be based on Mining Leases held by Blackham and the ability of the Company to proceed with its plans at Lake Way will be dependent on ongoing co-operation with Blackham. The parties intend to formalise arrangements in a Split Commodity Agreement;
The Company’s activities are subject to Government regulations and approvals – Any material adverse changes in government policies or legislation in Western Australia and Australia that affect mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of any planned development the GSLP. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could adversely impact the Group’s mineral properties;
The Company may be adversely affected by fluctuations in commodity prices – The price of potash and other commodities fluctuates widely and is affected by numerous factors beyond the control of the Company. Future production, if any, from the Company’s mineral properties will be dependent upon the price of potash and other commodities being adequate to make these properties economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price risk. As the Company’s operations change, this policy will be reviewed periodically going forward; and
Global financial conditions may adversely affect the Company’s growth and profitability – Many industries, including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. Due to the current nature of the Company’s activities, a slowdown in the financial markets or other economic conditions may adversely affect the Company’s growth and ability to finance its activities. If these increased levels of volatility and market turmoil continue, the Company’s activities could be adversely impacted and the trading price of the Company’s shares could be adversely affected.
EARNINGS PER SHARE
|
2018
Cents
|
2017
Cents
|
|
Basic and diluted loss per share
|
(6.47)
|
(6.61)
|
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:
(i) On 18 August 2017, the Company issued 42,000 shares to an advisor as part of their annual fees.
(ii) On 17 November 2017, the Company issued 1,100,000 incentive options to a key consultant as an incentive to attract and retain their services.
(iii) On 1 December 2017, Mr Mark Hohnen retired as a Non-Executive Director of the Company.
(iv) On 22 December 2017, the Company issued 2,300,000 performance rights to key employees and consultants of the Company pursuant to the Salt Lake Potash Limited Performance Rights Plan, and 800,000 incentive options to a key consultant as an incentive to attract and retain their services.
(v) On 12 March 2018, the Company entered a Memorandum of Understanding (MOU) with Blackham Resources Limited (Blackham) to investigate the potential development of a Sulphate of Potash (SOP) operation based at Lake Way, near Wiluna. Under the MOU, the Company will acquire Blackham’s brine rights and Blackham will acquire gold rights to the Company’s Lake Way holdings, with each company retaining a royalty on their respective holdings.
(vi) On 9 April 2018, the Company announced that it had executed a Memorandum of Understanding with Mitsubishi Australia Limited and Mitsubishi Corporation (Mitsubishi), setting out the basis for the first Offtake Agreement for the Goldfields Salt Lakes Project. The formal Offtake Agreement will provide Mitsubishi with sales and offtake rights for up to 50% of the Sulphate of Potash (SOP) production from a Demonstration Plant at the GSLP, for distribution into Asia and Oceania and potentially other markets.
SIGNIFICANT EVENTS AFTER BALANCE DATE
(i) Announced the results from a Scoping Study on the Lake Wells project which confirmed its potential to produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets;
(ii) On 10 August 2018, the Company appointed Mr Clint McGhie as Company Secretary and Chief Financial Officer following the resignation of Mr Sam Cordin; and
(iii) On 14 September 2018, the Company announced that it entered into a Memorandum of Understanding and Co-operation Agreement with Australian Potash Limited (ASX: APC) to study the potentially very substantial benefits of sharing infrastructure and other costs at Lake Wells.
Other than as noted above, as at the date of this report there are no matters or circumstances which have arisen since 30 June 2018 that have significantly affected or may significantly affect:
· the operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;
· the results of those operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity; or
· the state of affairs, in financial years subsequent to 30 June 2018, of the Consolidated Entity.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group’s operations are subject to various environmental laws and regulations under the relevant government’s legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities.
There have been no significant known breaches by the Group during the financial year.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.
DIRECTORS’ INTERESTS
As at the date of this report, the Directors’ interests in the securities of the Company are as follows:
|
Interest in securities at the date of this report
|
|
Ordinary Shares1
|
Incentive Options 2
|
Performance Rights 3
|
|
Mr Ian Middlemas
|
11,000,000
|
–
|
–
|
|
Mr Matthew Syme
|
4,500,000
|
2,500,000
|
2,000,000
|
|
Mr Mark Pearce
|
4,000,000
|
–
|
200,000
|
|
Mr Bryn Jones
|
–
|
–
|
200,000
|
Notes:
1 Ordinary Shares means fully paid Ordinary Shares in the capital of the Company.
2 Incentive Options means an unlisted share option to subscribe for one Ordinary Share in the capital of the Company.
3 Performance Rights means Performance Rights issued by the Company that convert to one Ordinary Share in the capital of the Company upon satisfaction of various performance conditions.
SHARE OPTIONS, PERFORMANCE SHARES AND PERFORMANCE RIGHTS
At the date of this report the following options and performance shares have been issued over unissued Ordinary Shares of the Company:
· 750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
· 750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
· 1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;
· 250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;
· 500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;
· 750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021;
· 400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021;
· 5,000,000 ‘Class A’ Performance Shares expiring on or before 31 December 2018;
· 7,500,000 ‘Class B’ Performance Shares on or before 31 December 2019;
· 10,000,000 ‘Class C’ Performance Shares on or before 12 June 2020;
· 1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018;
· 1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019;
· 1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
· 1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
During the year ended 30 June 2018, no Ordinary Shares have been issued as a result of the exercise of Unlisted Options, and no Ordinary Shares have been issued as a result of the conversion of Performance Shares or Rights. Subsequent to year end and until the date of this report, no Ordinary Shares have been issued as a result of the exercise of Unlisted Options.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
|
|
30 June
2018
|
30 June
2017
|
|
Notes
|
$
|
$
|
|
|
|
|
|
Finance income
|
3
|
238,208
|
123,477
|
|
Other income
|
4
|
456,709
|
604,468
|
|
Exploration and evaluation expenses
|
|
(8,545,647)
|
(7,717,231)
|
|
Corporate and administrative expenses
|
|
(1,081,738)
|
(1,071,000)
|
|
Business development expenses
|
|
(1,110,578)
|
(559,247)
|
|
Share based payment expense
|
5
|
(1,284,062)
|
(580,976)
|
|
Loss before tax
|
|
(11,327,108)
|
(9,200,509)
|
|
Income tax expense
|
6
|
–
|
–
|
|
Loss for the year
|
|
(11,327,108)
|
(9,200,509)
|
|
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
Foreign currency translation differences reclassified to profit or loss on disposal of controlled entity
|
|
–
|
(454,468)
|
|
Other comprehensive loss for the year, net of tax
|
|
–
|
(454,468)
|
|
Total comprehensive loss for the year
|
|
(11,327,108)
|
(9,654,977)
|
|
Basic and diluted loss per share attributable to the ordinary equity holders of the company (cents per share)
|
16
|
(6.47)
|
(6.61)
|
The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
|
Notes
|
30 June 2018
$
|
30 June 2017
$
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
7
|
5,709,446
|
15,596,759
|
|
Trade and other receivables
|
8
|
227,273
|
300,058
|
|
Total Current Assets
|
|
5,936,719
|
15,896,817
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
Property, plant and equipment
|
9
|
535,344
|
303,511
|
|
Exploration and evaluation expenditure
|
10
|
2,276,736
|
2,276,736
|
|
Total Non-Current Assets
|
|
2,812,080
|
2,580,247
|
|
TOTAL ASSETS
|
|
8,748,799
|
18,477,064
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Trade and other payables
|
11
|
1,620,527
|
1,348,791
|
|
Finance lease
|
|
11,829
|
13,011
|
|
Provisions
|
12
|
57,462
|
19,181
|
|
Total Current Liabilities
|
|
1,689,818
|
1,380,983
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
Finance lease
|
|
38,992
|
49,638
|
|
Total Non-Current Liabilities
|
|
38,992
|
49,638
|
|
TOTAL LIABILITIES
|
|
1,728,810
|
1,430,621
|
|
|
|
|
|
NET ASSETS
|
|
7,019,989
|
17,046,443
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Contributed equity
|
13
|
123,501,153
|
123,484,561
|
|
Reserves
|
14
|
2,105,886
|
821,824
|
|
Accumulated losses
|
|
(118,587,050)
|
(107,259,942)
|
|
TOTAL EQUITY
|
|
7,019,989
|
17,046,443
|
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
|
Contributed Equity
|
Share- Based Payment Reserve
|
Foreign Currency Translation Reserve
|
Accumulated Losses
|
Total Equity
|
|
$
|
$
|
$
|
$
|
$
|
|
Balance at 1 July 2017
|
123,484,561
|
821,824
|
–
|
(107,259,942)
|
17,046,443
|
|
Net loss for the year
|
–
|
–
|
–
|
(11,327,108)
|
(11,327,108)
|
|
Total comprehensive loss for the year
|
–
|
–
|
–
|
(11,327,108)
|
(11,327,108)
|
|
|
|
|
|
|
|
Shares issued in lieu of fees
|
18,476
|
–
|
–
|
–
|
18,476
|
|
Share issue costs
|
(1,884)
|
–
|
–
|
–
|
(1,884)
|
|
Share based payment expense
|
–
|
1,284,062
|
–
|
–
|
1,284,062
|
|
Balance at 30 June 2018
|
123,501,153
|
2,105,886
|
–
|
(118,587,050)
|
7,019,989
|
|
|
|
|
|
|
|
Balance at 1 July 2016
|
106,761,669
|
240,848
|
454,468
|
(98,059,433)
|
9,397,552
|
|
Net loss for the year
|
–
|
–
|
–
|
(9,200,509)
|
(9,200,509)
|
|
Exchange differences reclassified to profit or loss on disposal of controlled entity
|
–
|
–
|
(454,468)
|
–
|
(454,468)
|
|
Total comprehensive loss for the year
|
–
|
–
|
(454,468)
|
(9,200,509)
|
(9,654,977)
|
|
|
|
|
|
|
|
Shares issued in lieu of fees
|
86,400
|
–
|
–
|
–
|
86,400
|
|
Share placement
|
17,630,000
|
–
|
–
|
–
|
17,630,000
|
|
Share issue costs
|
(993,508)
|
–
|
–
|
–
|
(993,508)
|
|
Share based payment expense
|
–
|
580,976
|
–
|
–
|
580,976
|
|
Balance at 30 June 2017
|
123,484,561
|
821,824
|
–
|
(107,259,942)
|
17,046,443
|
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
|
Note
|
30 June
2018
$
|
30 June
2017
$
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
Payments to suppliers and employees
|
|
(10,275,823)
|
(8,657,842)
|
|
Exploration investment scheme received
|
|
30,000
|
120,000
|
|
R&D tax incentive
|
|
456,709
|
–
|
|
Interest received
|
|
242,852
|
114,423
|
|
Net cash outflow from operating activities
|
15(a)
|
(9,546,262)
|
(8,423,419)
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Payments for property, plant and equipment
|
|
(256,890)
|
(162,675)
|
|
Net cash outflow from investing activities
|
|
(256,890)
|
(162,675)
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from issue of shares
|
|
–
|
17,630,000
|
|
Lease payments
|
|
(11,829)
|
–
|
|
Transaction costs from issue of shares
|
|
(72,332)
|
(945,448)
|
|
Net cash inflow/(outflow) from financing activities
|
|
(84,161)
|
16,684,552
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents held
|
|
(9,887,313)
|
8,098,458
|
|
Net foreign exchange differences
|
|
–
|
16
|
|
Cash and cash equivalents at the beginning of the year
|
|
15,596,759
|
7,498,285
|
|
Cash and cash equivalents at the end of the year
|
15(b)
|
5,709,446
|
15,596,759
|
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in preparing the financial report of Salt Lake Potash Limited (Salt Lake or Company) and its consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2018 are stated to assist in a general understanding of the financial report.
Salt Lake is a Company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX), and the AIM Market (AIM) of the London Stock Exchange.
The financial report of the Group for the year ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors on 26 September 2018.
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards (“AASBs”) and other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The Group is a for-profit entity for the purposes of preparing the consolidated financial statements.
The financial report has been prepared on a historical cost basis. The financial report is presented in Australian dollars.
Going concern
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
For the year ended 30 June 2018, the Consolidated Entity incurred a net loss of $11,327,108 (2017: $9,654,977) and experienced net cash outflows from operating and investing activities of $9,821,628 (2017: $8,586,094). As at 30 June 2018, the Group had cash and cash equivalents of $5,709,446 (2017: $15,596,759) and net current assets of $4,246,901 (2017: $14,515,834).
The Company has recently completed a successful Scoping Study for the Lake Way Demonstration Plant and is currently in the process of finalising parameters for the Pre-Feasibility Study and construction of holding ponds to dewater Blackham’s Williamson Pit. The Scoping Study on the development of a 50,000tpa sulphate of potash (SOP) Demonstration Plant at Lake Way supports a low capex, highly profitable, staged development model. In order to continue to progress the Demonstration Plant at Lake Way and ongoing studies for the wider GSLP, the Company will be required to raise additional capital during the current financial year.
Based on the successful results of the Scoping Study and having previously raised funds for the GSLP, the Directors are confident that they will be able to raise additional capital as and when required to continue to fund operations. In addition, the Directors have been involved in a number of recent successful capital raisings for other listed resource companies, and accordingly, they are satisfied that they will be able to raise additional capital when required to enable the Consolidated Entity to meet its obligations as and when they fall due, and accordingly, consider that it is appropriate to prepare the financial statements on the going concern basis.
Should the Consolidated Entity be unable to raise additional capital as and when required, the Consolidated Entity would need to reduce operational expenditure to continue as a going concern. In the event that the Consolidated Entity is unable to achieve the matters referred to above, uncertainty would exist that may cast doubt on the ability of the Consolidated Entity to continue as a going concern.
These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the Consolidated Entity be unable to continue as a going concern.
(b) Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.
New and revised standards and amendments thereof and interpretations effective for the current reporting period that are relevant to the Group include:
· AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses which clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not effected by possible future changes in the carrying amount or expected manner of recovery of the asset;
· AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 which amend existing presentation and disclosure requirements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes; and
· AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2016-2016 Cycle which clarify the existing disclosure requirements and scope of AASB 12 Disclosure of Interest in Other Entities to apply to interests that are classified as held for sale or distribution.
The adoption of these new and revised standards has not resulted in any significant changes to the Group’s accounting policies or to the amounts reported for the current or prior periods.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Group for the annual reporting period ended 30 June 2018. Those which may be relevant to the Group are set out in the table below.
|
Standard/Interpretation
|
Application date of standard
|
Application date for Group
|
|
AASB 9 Financial Instruments, and relevant amending standards
|
1 January 2018
|
1 July 2018
|
|
AASB 15 Revenue from Contracts with Customers, and relevant amending standards
|
1 January 2018
|
1 July 2018
|
|
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions
|
1 January 2018
|
1 July 2018
|
|
AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
|
1 January 2018
|
1 July 2018
|
|
AASB 16 Leases
|
1 January 2019
|
1 July 2019
|
Management has reviewed the requirements of these accounting standards and has assessed that these will not have any significant impact on the Group’s financial statements based on the following:
· At 30 June 2018, the Group’s only financial assets and liabilities are cash, receivables, finance lease and payables for which no significant measurement changes have been introduced under AASB 9. The changes to the impairment model are not anticipated to have an impact on the Group as receivables are primarily comprised of GST and interest;
· The Group does not currently have any revenue contracts and accordingly AASB 15 is not expected to have an impact on the Group’s results; and
· The Group’s main operating lease is for office space, currently at a cost of $10,170 per month. Under AASB 16, an asset (the right to use the leased item) and a financial liability to pay rentals will be recognised. AASB 16 will not apply to short term contracts of less than 12 months.
(c) Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2018 and the results of all subsidiaries for the year then ended.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. Intercompany transactions and balances, income and expenses and profits and losses between Group companies, are eliminated.
(d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.
(e) Trade and Other Receivables
Trade receivables are recognised and carried at the original invoice amount less a provision for any uncollectable debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written‑off as incurred.
Short term receivables from related parties are recognised and carried at the nominal amount due and are interest free.
(f) Investments and Other Financial Assets
(i) Classification
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than twelve months after the reporting date which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position.
Loans and receivables are carried at amortised cost using the effective interest rate method.
(ii) Impairment
Collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment allowance is recognised when there is objective evidence that the Consolidated Entity will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.
(g) Property, Plant and Equipment
(i) Recognition and measurement
All classes of property, plant and equipment are measured at historical cost.
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in the Statement of Profit or Loss and other Comprehensive Income as incurred.
(ii) Depreciation and Amortisation
Depreciation is provided on a straight line basis on all property, plant and equipment.
|
2018
|
2017
|
|
Major depreciation and amortisation periods are:
|
|
|
|
Plant and equipment:
|
22%- 40%
|
22%- 40%
|
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
(iii) Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
(h) Exploration and Development Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method.
Exploration and evaluation expenditure encompasses expenditures incurred by the Group in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets are measured at cost at recognition and are recorded as an asset if:
a. the rights to tenure of the area of interest are current; and
b. at least one of the following conditions is also met:
· the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and
· exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation expenditure incurred by the Group subsequent to acquisition of the rights to explore is expensed as incurred, up to costs associated with the preparation of a feasibility study.
(i) Impairment
Capitalised exploration costs are reviewed each reporting date to establish whether an indication of impairment exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and transferred to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced. Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.
(i) Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts payable are normally settled within 60 days. Payables are carried at amortised cost.
(j) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(k) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable.
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.
(l) Income Tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose on goodwill or in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same taxation authority.
Tax consolidation
Salt Lake Potash Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Company. The current tax liability of each group entity is then subsequently assumed by the Company. The tax consolidated group has entered a tax sharing agreement whereby each company in the Group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.
(m) Employee Entitlements
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within 12 months have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits expected to be settled more later than 12 months after the year end have been measured at the present value of the estimated future cash outflows to be made for those benefits.
(n) Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit attributable to members of the Company for the reporting period, after excluding any costs of servicing equity, by the weighted average number of Ordinary Shares of the Company, adjusted for any bonus issue.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive potential Ordinary Shares and the effect on revenues and expenses of conversion to Ordinary Shares associated with dilutive potential Ordinary Shares, by the weighted average number of Ordinary Shares and dilutive Ordinary Shares adjusted for any bonus issue.
(o) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
(p) Acquisition of Assets
A group of assets may be acquired in a transaction which is not a business combination. In such cases the cost of the group is allocated to the individual identifiable assets (including intangible assets that meet the definition of and recognition criteria for intangible assets in AASB 138) acquired and liabilities assumed on the basis of their relative fair values at the date of purchase.
(q) Impairment of Non-Current Assets
The Group assesses at each reporting date whether there is an indication that a non-current asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(r) Issued and Unissued Capital
Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(s) Foreign Currencies
(i) Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Company’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Exchange differences arising on the translation of monetary items are recognised in the Statement Profit or Loss and other Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the other Comprehensive Income.
(iii) Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows:
· assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
· income and expenses are translated at average exchange rates for the period; and
· items of equity are translated at the historical exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the statement of financial position. These differences are recognised in the Statement of Profit or Loss and other Comprehensive Income in the period in which the operation is disposed.
(t) Share-Based Payments
Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These share-based payments are measured at the fair value of the equity instrument at the grant date. Fair value is determined using the Binomial option pricing model. Further details on how the fair value of equity-settled share based payments has been determined can be found in Note 20.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest. At each reporting date, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the share based payments reserve.
Equity-settled share-based payments may also be provided as consideration for the acquisition of assets. Where Ordinary Shares are issued, the transaction is recorded at fair value based on the quoted price of the Ordinary Shares at the date of issue. The acquisition is then recorded as an asset or expensed in accordance with accounting standards.
(u) Use and Revision of Accounting Estimates, Judgements and Assumptions
The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes:
· Exploration and Evaluation Expenditure (Note 10)
· Share-Based Payments (Note 20)
2. SEGMENT INFORMATION
The Consolidated Entity operates in one operating segment and one geographical segment, being mineral exploration in Australia. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Consolidated Entity.
3. FINANCE INCOME
|
|
2018
|
2017
|
|
Note
|
$
|
$
|
|
|
|
|
|
Interest income
|
|
238,208
|
123,477
|
|
|
238,208
|
123,477
|
4. OTHER INCOME
|
|
2018
|
2017
|
|
Note
|
$
|
$
|
|
|
|
|
|
Gain on disposal of controlled entity1
|
|
–
|
454,468
|
|
Exploration Incentive Scheme
|
|
–
|
150,000
|
|
R&D tax incentive
|
|
456,709
|
–
|
|
|
456,709
|
604,468
|
Notes:
1 During the 2017 year, the Company sold its United States subsidiary, Golden Eagle Uranium, for a nominal amount which resulted in a gain on disposal of A$454,468 relating to prior exchange differences on translation of Golden Eagle Uranium that have been transferred from the foreign currency translation reserve.
5. EXPENSES
|
|
2018
|
2017
|
|
Note
|
$
|
$
|
|
|
|
|
(a) Depreciation included in statement of comprehensive income
|
|
|
|
|
Depreciation of plant and equipment
|
9
|
75,031
|
37,088
|
|
|
|
|
(b) Employee benefits expense (including KMP)
|
|
|
|
|
Salaries and wages
|
|
1,942,801
|
1,342,932
|
|
Superannuation expense
|
|
176,466
|
126,503
|
|
Share-based payment expense
|
20
|
1,284,062
|
580,976
|
|
Total employment expenses included in profit or loss
|
|
3,403,329
|
2,050,411
|
6. INCOME TAX
|
2018
|
2017
|
|
$
|
$
|
|
|
|
(a) Recognised in the statement of comprehensive income
|
|
|
|
Current income tax
|
|
|
|
Current income tax benefit in respect of the current year
|
–
|
–
|
|
Deferred income tax
|
|
|
|
Deferred income tax
|
–
|
–
|
|
Income tax expense reported in the statement of Profit or Loss and other Comprehensive income
|
–
|
–
|
|
|
|
(b) Reconciliation between tax expense and accounting loss before income tax
|
|
|
|
Accounting loss before income tax
|
(11,327,108)
|
(9,200,509)
|
|
|
|
|
At the domestic income tax rate of 27.5% (2017: 27.5%)
|
(3,114,955)
|
(2,530,140)
|
|
Expenditure not allowable for income tax purposes
|
511,763
|
280,752
|
|
Income not assessable for income tax purposes
|
(125,595)
|
(124,979)
|
|
Adjustment in respect of current income tax of previous years
|
(3,447)
|
–
|
|
Deferred tax assets not brought to account
|
2,732,234
|
2,374,367
|
|
Income tax expense/(benefit) reported in the statement of Profit or Loss and other Comprehensive income
|
–
|
–
|
|
2018
|
2017
|
|
$
|
$
|
|
|
|
(c) Deferred Tax Assets and Liabilities
|
|
|
|
Deferred income tax at 30 June relates to the following:
|
|
|
|
|
|
|
Deferred Tax Liabilities
|
|
|
|
Accrued income
|
4,833
|
6,110
|
|
Exploration and evaluation assets
|
43,209
|
43,209
|
|
Deferred tax assets used to offset deferred tax liabilities
|
(48,042)
|
(49,319)
|
|
–
|
–
|
|
|
|
|
Deferred Tax Assets
|
|
|
|
Accrued expenditure
|
21,813
|
7,200
|
|
Capital allowances
|
243,070
|
341,543
|
|
Tax losses available for offset against future taxable income
|
9,183,494
|
6,368,677
|
|
Deferred tax assets used to offset deferred tax liabilities
|
(48,042)
|
(49,319)
|
|
Deferred tax assets not brought to account
|
(9,400,335)
|
(6,668,101)
|
|
–
|
–
|
The benefit of deferred tax assets not brought to account will only be brought to account if:
· future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
· the conditions for deductibility imposed by tax legislation continue to be complied with; and
· no changes in tax legislation adversely affect the Group in realising the benefit.
Deferred tax assets have not been recognised in respect to tax losses because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.
(d) Tax Consolidation
The Company and its wholly-owned Australian resident entities have formed a tax consolidated group and are therefore taxed as a single entity. The head entity within the tax consolidated group is Salt Lake Potash Limited.
7. CASH AND CASH EQUIVALENTS
|
|
2018
|
2017
|
|
|
$
|
$
|
|
|
|
|
|
Cash on hand and at bank
|
|
1,596,390
|
15,524,703
|
|
Deposit on call
|
|
4,113,056
|
72,056
|
|
|
5,709,446
|
15,596,759
|
8. TRADE AND OTHER RECEIVABLES
|
|
2018
|
2017
|
|
|
$
|
$
|
|
|
|
|
|
Accrued interest
|
|
17,572
|
22,216
|
|
GST and other receivables
|
|
209,701
|
277,842
|
|
|
227,273
|
300,058
|
9. PROPERTY, PLANT AND EQUIPMENT
|
|
2018
|
2017
|
|
|
$
|
$
|
(a) Plant and Equipment
|
|
|
|
|
Gross carrying amount – at cost
|
|
652,644
|
345,780
|
|
Accumulated depreciation
|
|
(117,300)
|
(42,269)
|
|
Carrying amount at end of year, net of accumulated depreciation
|
|
535,344
|
303,511
|
|
|
|
|
(b) Reconciliation
|
|
|
|
|
Carrying amount at beginning of year, net of accumulated depreciation
|
|
303,511
|
115,275
|
|
Additions
|
|
306,864
|
225,324
|
|
Depreciation charge
|
|
(75,031)
|
(37,088)
|
|
Carrying amount at end of year, net of accumulated depreciation
|
|
535,344
|
303,511
|
Finance Leases
The carrying value of plant and equipment held under finance leases at 30 June 2018 was $55,857 (2017: $64,036). Additions during the year include $Nil (2017: $64,036) of plant and equipment under finance lease.
10. EXPLORATION AND EVALUATION EXPENDITURE
|
|
2018
|
2017
|
|
Note
|
$
|
$
|
(a) Areas of Interest
|
|
|
|
|
SOP Project
|
|
2,276,736
|
2,276,736
|
|
Carrying amount at end of year, net of impairment1
|
|
2,276,736
|
2,276,736
|
|
|
|
|
(b) Reconciliation
|
|
|
|
|
Carrying amount at start of year
|
|
2,276,736
|
2,276,736
|
|
Impairment losses
|
|
–
|
–
|
|
Carrying amount at end of year net of impairment 1
|
|
2,276,736
|
2,276,736
|
Notes:
1 The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest.
SOP Project
Salt Lake holds a number of large salt lake brine projects (Projects) in Western Australia and the Northern Territory, each having potential to produce highly sought after Sulphate of Potash (SOP) for domestic and international fertiliser markets.
11. TRADE AND OTHER PAYABLES
|
|
2018
|
2017
|
|
|
$
|
$
|
|
|
|
|
|
Trade creditors
|
|
1,483,554
|
1,250,959
|
|
Accrued expenses
|
|
136,973
|
97,832
|
|
|
1,620,527
|
1,348,791
|
Terms and conditions of the above financial liabilities:
– Trade payables are non-interest bearing and are normally settled on 30-day terms.
12. PROVISIONS
|
|
2018
|
2017
|
|
|
$
|
$
|
|
|
|
|
|
Statutory employee benefits
|
|
57,462
|
19,181
|
|
|
57,462
|
19,181
|
13. CONTRIBUTED EQUITY
|
30 June 2018
$
|
30 June 2017
$
|
|
Share Capital
|
|
|
|
175,049,596 (30 June 2017: 175,007,596) Ordinary Shares
|
123,501,153
|
123,484,561
|
|
123,501,153
|
123,484,561
|
(a) Movements in Ordinary Shares During the Past Two Years Were as Follows:
|
|
Number of Ordinary Shares
|
Issue Price
$
|
$
|
|
|
|
|
|
01-Jul-17
|
Opening Balance
|
175,007,596
|
|
123,484,561
|
|
18-Aug-17
|
Share issue 1
|
42,000
|
0.44
|
18,476
|
|
Jul-17 to Jun-18
|
Share issue costs
|
–
|
–
|
(1,884)
|
|
30-Jun-18
|
Closing balance
|
175,049,596
|
|
123,501,153
|
|
|
|
|
|
|
01-Jul-16
|
Opening Balance
|
133,827,596
|
–
|
106,761,669
|
|
09-Sep-16
|
Share issue 1
|
180,000
|
0.48
|
86,400
|
|
02-May-17
|
Share placement
|
30,700,000
|
0.43
|
13,201,000
|
|
21-Jun-17
|
Share placement
|
10,300,000
|
0.43
|
4,429,000
|
|
Jul-16 to Jun-17
|
Share issue costs
|
–
|
–
|
(993,508)
|
|
30-Jun-17
|
Closing balance
|
175,007,596
|
–
|
123,484,561
|
Notes:
1 Shares issued to a key consultant of the Company in lieu of fees.
(b) Rights Attaching to Ordinary Shares:
The rights attaching to fully paid Ordinary Shares (Ordinary Shares) arise from a combination of the Company’s Constitution, statute and general law.
Ordinary Shares issued following the exercise of Unlisted Options in accordance with Note 14(c) or Performance Shares in accordance with Note 14(d) or Performance Rights in accordance with Note 14(e) will rank equally in all respects with the Company’s existing Ordinary Shares.
Copies of the Company’s Constitution are available for inspection during business hours at the Company’s registered office. The clauses of the Constitution contain the internal rules of the Company and define matters such as the rights, duties and powers of its shareholders and directors, including provisions to the following effect (when read in conjunction with the Corporations Act 2001 or the listing rules of the ASX and AIM (Listing Rules)).
(i) Shares
The issue of shares in the capital of the Company and options over unissued shares by the Company is under the control of the Directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any special class of shares.
(ii) Meetings of Members
Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of meetings of members and all members are entitled to a notice of meeting. A meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of members is two shareholders.
The Company holds annual general meetings in accordance with the Corporations Act 2001 and the Listing Rules.
(iii) Voting
Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company, each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a general meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to one vote only despite the number of members the person represents.
On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share.
(iv) Changes to the Constitution
The Company’s Constitution can only be amended by a special resolution passed by at least three quarters of the members present and voting at a general meeting of the Company. At least 28 days’ written notice specifying the intention to propose the resolution as a special resolution must be given.
(v) Listing Rules
Provided the Company remains admitted to the Official List of the ASX, then despite anything in its Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. The Company’s Constitution will be deemed to comply with the Listing Rules as amended from time to time.
14. RESERVES
|
|
2018
|
2017
|
|
Note
|
$
|
$
|
|
|
|
|
|
Share-based payments reserve
|
14(b)
|
2,105,886
|
821,824
|
|
|
2,105,886
|
821,824
|
(a) Nature and Purpose of Reserves
(i) Share-based payments reserve
The share-based payments reserve is used to record the fair value of Unlisted Options, Performance Rights and Performance Shares issued by the Group.
(b) Movements in the share-based payments reserve during the past two years were as follows:
|
|
Number of Performance Rights
|
Number of Performance Shares
|
Number of
Unlisted Options
|
$
|
|
|
|
|
|
|
01-Jul-17
|
Opening Balance
|
4,100,000
|
22,500,000
|
2,500,000
|
821,824
|
|
23-Sep-17
|
Performance Rights forfeited
|
(1,000,000)
|
–
|
–
|
–
|
|
28-Nov-17
|
Issue of unlisted options
|
–
|
–
|
1,100,000
|
–
|
|
22-Dec-17
|
Issue of unlisted options
|
–
|
–
|
800,000
|
–
|
|
22-Dec-17
|
Issue of Performance Rights
|
2,300,000
|
–
|
–
|
–
|
|
Jul-17 to Jun-18
|
Share based payments expense
|
–
|
–
|
–
|
1,284,062
|
|
30-Jun-18
|
Closing balance
|
5,400,000
|
22,500,000
|
4,400,000
|
2,105,886
|
|
|
|
|
|
|
|
01-Jul-16
|
Opening Balance
|
–
|
22,500,000
|
2,705,443
|
240,848
|
|
22-Nov-16
|
Expiry of unlisted options
|
–
|
–
|
(205,443)
|
–
|
|
01-Mar-17
|
Issue of Performance Rights
|
3,000,000
|
–
|
–
|
–
|
|
09-Jun-17
|
Issue of Performance Rights
|
200,000
|
–
|
–
|
–
|
|
20-Jun-17
|
Issue of Performance Rights
|
1,000,000
|
–
|
–
|
–
|
|
30-Jun-17
|
Lapsed Performance Rights
|
(100,000)
|
–
|
–
|
–
|
|
Jul-16 to Jun-17
|
Share based payments expense
|
–
|
–
|
–
|
580,976
|
|
30-Jun-17
|
Closing balance
|
4,100,000
|
22,500,000
|
2,500,000
|
821,824
|
(c) Terms and Conditions of Unlisted Options
The Unlisted Options are granted based upon the following terms and conditions:
· Each Unlisted Option entitles the holder to the right to subscribe for one Ordinary Share upon the exercise of each Unlisted Option;
· The Unlisted Options outstanding at the end of the financial year have the following exercise prices and expiry dates:
· 750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
· 750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
· 1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;
· 250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;
· 500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;
· 750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021; and
· 400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021.
· The Unlisted Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being satisfied (if applicable);
· Ordinary Shares issued on exercise of the Unlisted Options rank equally with the then Ordinary Shares of the Company;
· Application will be made by the Company to ASX and to the AIM market of the London Stock Exchange for official quotation of the Ordinary Shares issued upon the exercise of the Unlisted Options;
· If there is any reconstruction of the issued share capital of the Company, the rights of the Unlisted Option holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction; and
· No application for quotation of the Unlisted Options will be made by the Company.
(d) Terms and Conditions of Performance Shares
The Convertible Performance Shares (Performance Shares) were granted as part of the consideration to acquire Australia Salt Lake Potash Pty Ltd on the following terms and conditions:
· Each Performance Share will convert into one Ordinary Share upon the satisfaction, prior to the Expiry Date, of the respective Milestone:
– 5,000,000 Performance Shares subject to Class A Milestone: The announcement by the Company to ASX of the results of a positive Pre-feasibility Study on all or part of the Project Licences;
– 7,500,000 Performance Shares subject to Class B Milestone: The announcement by the Company to ASX of the results of a positive Definitive Feasibility Study on all or part of the Project Licences; and
– 10,000,000 Performance Shares subject to Class C Milestone: The commencement of construction activities for a mining operation on all or part of the Project Licences (including the commencement of ground breaking for the construction of infrastructure and/or processing facilities) following a final investment decision by the Board as per the project development schedule and budget in accordance with the Definitive Feasibility Study, within five years from the date of issue.
· Expiry Date means:
– in relation to the Class A Performance Shares, 31 December 2018 (amended following Shareholder approval on 11 June 2018);
– in relation to the Class B Performance Shares, 31 December 2019 (amended following Shareholder approval on 11 June 2018);
and
– in relation to the Class C Performance Shares, 5 years from the date of issue (12 June 2020);
· If the Milestone for a Performance Share is not met by the Expiry Date, the total number of the relevant class of Performance Shares will convert into one Ordinary Share per holder;
· The Company shall allot and issue Ordinary Shares immediately upon conversion of the Performance Shares for no consideration;
· Ordinary Shares issued on conversion of the Performance Shares rank equally with the then Ordinary Shares of the Company;
· In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of securities of the Ordinary Shares, the Performance Shares shall be reconstructed, consolidated or divided in the same proportion as the Ordinary Shares are reconstructed, consolidated or divided and, in any event, in a manner which will not result in any additional benefits being conferred on the Performance Shareholders which are not conferred on the Ordinary Shareholders;
· The Performance Shareholders shall have no right to vote, subject to the Corporations Act;
· No application for quotation of the Performance Shares will be made by the Company; and
· The Performance Shares are not transferable.
(e) Terms and Conditions of Performance Rights
The Performance Rights are granted based upon the following terms and conditions:
· Each Performance Right automatically converts into one Ordinary Share upon vesting of the Performance Right;
· Each Performance Right is subject to performance conditions (as determined by the Board from time to time) which must be satisfied in order for the Performance Right to vest;
· The Performance Rights have the following expiry dates:
– 1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018 (amended following Shareholder approval on 11 June 2018);
– 1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended following Shareholder approval on 11 June 2018);
– 1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
– 1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
· Ordinary Shares issued on conversion of the Performance Rights rank equally with the then Ordinary Shares of the Company;
· Application will be made by the Company to ASX AIM market of the London Stock Exchange for official quotation of the Ordinary Shares issued upon conversion of the Performance Rights;
· If there is any reconstruction of the issued share capital of the Company, the rights of the Performance Right holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction; and
· No application for quotation of the Performance Rights will be made by the Company.
15. STATEMENT OF CASH FLOWS
(a) Reconciliation of the Loss after Tax to the Net Cash Flows from Operations
|
|
2018
|
2017
|
|
|
$
|
$
|
|
|
|
|
|
Net loss for the year
|
|
(11,327,108)
|
(9,200,509)
|
|
|
|
|
|
Adjustment for non-cash income and expense items
|
|
|
|
|
Depreciation of plant and equipment
|
|
75,031
|
37,088
|
|
Share based payment expense
|
|
1,284,062
|
580,976
|
|
Gain on disposal of controlled entity
|
|
–
|
(454,468)
|
|
Shares issued in lieu of fees
|
|
18,476
|
86,400
|
|
|
|
|
|
Change in operating assets and liabilities
|
|
|
|
|
(Increase)/decrease in trade and other receivables
|
|
84,784
|
(173,475)
|
|
Increase in trade and other payables
|
|
280,212
|
693,100
|
|
Increase in provisions
|
|
38,281
|
7,469
|
|
|
|
|
|
Net cash outflow from operating activities
|
|
(9,546,262)
|
(8,423,419)
|
16. EARNINGS PER SHARE
|
30 June 2018
$
|
30 June 2017
$
|
|
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
|
|
|
|
Net loss attributable to the owners of the Company used in calculating basic and diluted earnings per share
|
(11,327,108)
|
(9,200,509)
|
|
Number of Shares
2018
|
Number of Shares
2017
|
|
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share
|
175,043,958
|
139,217,150
|
(a) Non-Dilutive Securities
As at balance date, 4,400,000 Unlisted Options (which represent 4,400,000 potential Ordinary Shares), 22,500,000 Performance Shares (which represent 22,500,000 potential Ordinary Shares) and 5,400,000 Performance Rights (which represent 5,400,000 potential Ordinary Shares) were considered non-dilutive as they would decrease the loss per share.
(b) Conversions, Calls, Subscriptions or Issues after 30 June 2018
No securities have been issued since 30 June 2018.
There have been no other conversions to, calls of, or subscriptions for Ordinary Shares or issues of potential Ordinary Shares since the reporting date and before the completion of this financial report.
17. RELATED PARTIES
(a) Subsidiaries
|
|
% Equity Interest
|
|
Name
|
Country of Incorporation
|
2018
%
|
2017
%
|
|
|
|
|
|
Ultimate parent entity:
|
|
|
|
|
Salt Lake Potash Limited
|
Australia
|
|
|
|
Subsidiaries of Salt Lake Potash Limited
|
|
|
|
|
Australia Salt Lake Potash Pty Ltd (ASLP)
|
Australia
|
100
|
100
|
|
Subsidiary of ASLP
|
|
|
|
|
Piper Preston Pty Ltd
|
Australia
|
100
|
100
|
|
Peak Coal Pty Ltd
|
Australia
|
–(i)
|
100
|
(i) Peak Coal was deregistered in April 2018.
(b) Ultimate Parent
Salt Lake Potash Limited is the ultimate parent of the Group.
(c) Transactions with Related Parties
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Transactions with Key Management Personnel, including remuneration, are included at Note 18.
18. KEY MANAGEMENT PERSONNEL
(a) Details of Key Management Personnel
The KMP of the Group during or since the end of the financial year were as follows:
Directors
Mr Ian Middlemas Chairman
Mr Matthew Syme Chief Executive Officer
Mr Mark Pearce Non-Executive Director
Mr Bryn Jones Non-Executive Director
Mr Mark Hohnen Non-Executive Director (resigned 1 December 2017)
Other KMP
Mr David Maxton Chief Operating Officer (appointed 12 April 2018)
Mr Clint McGhie Chief Financial Officer and Company Secretary (appointed 10 August 2018)
Mr Grant Coyle Business Development Manager (appointed 16 July 2018)
Mr Sam Cordin Chief Financial Officer and Company Secretary (resigned 10 August 2018)
Unless otherwise disclosed, the KMP held their position from 1 July 2017 until the date of this report.
|
|
2018
|
2017
|
|
|
$
|
$
|
|
|
|
|
|
Short-term employee benefits
|
|
726,607
|
591,898
|
|
Post-employment benefits
|
|
49,875
|
52,928
|
|
Share-based payments
|
|
595,394
|
556,016
|
|
Total compensation
|
|
1,371,876
|
1,200,842
|
(b) Loans from Key Management Personnel
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2018 (2017: Nil).
(c) Other Transactions
Apollo Group Pty Ltd, a Company of which Mr Mark Pearce is a Director and beneficial shareholder, was paid or is payable $150,000 (2017: $150,000) for the provision of serviced office facilities, corporate and administration services for the year ended 30 June 2018. The amount is based on a monthly retainer due and payable in advance, with no fixed term, and is able to be terminated by either party with one month’s notice. At 30 June 2018, $25,000 (2017: $12,500) was included as a current liability in the Statement of Financial Position.
19. PARENT ENTITY DISCLOSURES
|
2018
|
2017
|
|
$
|
$
|
|
|
|
(a) Financial Position
|
|
|
|
Assets
|
|
|
|
Current assets
|
5,929,459
|
15,738,697
|
|
Non-current assets
|
2,106,089
|
2,027,221
|
|
Total assets
|
8,035,548
|
17,765,918
|
|
|
|
|
Liabilities
|
|
|
|
Current liabilities
|
1,689,818
|
1,430,620
|
|
Non-current liabilities
|
38,992
|
–
|
|
Total liabilities
|
1,728,810
|
1,430,620
|
|
|
|
|
Equity
|
|
|
|
Contributed equity
|
123,501,153
|
123,484,561
|
|
Accumulated losses
|
(119,300,301)
|
(107,971,087)
|
|
Reserves
|
2,105,886
|
821,824
|
|
Total equity
|
6,306,738
|
16,335,298
|
|
|
|
(b) Financial Performance
|
|
|
|
Loss for the year
|
(11,329,214)
|
(10,366,123)
|
|
Total comprehensive loss
|
(11,329,214)
|
(10,366,123)
|
(c) Other information
The Company has not entered into any guarantees in relation to its subsidiaries.
Refer to Note 23 for details of contingent assets and liabilities.
20. SHARE-BASED PAYMENTS
(a) Recognised Share-based Payment Expense
From time to time, the Group provides incentive Unlisted Options and Performance Rights to officers, employees, consultants and other key advisors as part of remuneration and incentive arrangements. The number of options or rights granted, and the terms of the options or rights granted are determined by the Board. Shareholder approval is sought where required.
In the current and prior year, the Company has also granted shares in lieu of payments to a consultant in accordance with the terms of engagement.
During the past two years, the following equity-settled share-based payments have been recognised:
|
2018
|
2017
|
|
$
|
$
|
|
|
|
|
Expenses arising from equity-settled share-based payment transactions relating incentive options and performance rights
|
1,284,062
|
580,976
|
|
|
Expenses arising from equity-settled share-based payment transactions to suppliers and consultants
|
18,476
|
86,400
|
|
|
Total share-based payments recognised during the year
|
1,302,538
|
667,376
|
|
(b) Summary of Unlisted Options and Performance Rights Granted as Share-based Payments
The following Unlisted Options and Performance Rights were granted as share-based payments during the past two years:
|
Series
|
Issuing Entity
|
Security Type
|
Number
|
Grant
Date
|
Expiry Date
|
Exercise Price
$
|
Grant Date Fair Value
$
|
|
2018
|
|
|
|
|
|
|
|
|
Series 20
|
Salt Lake Potash Limited
|
Options
|
250,000
|
22-Nov-17
|
30-Jun-21
|
0.40
|
0.284
|
|
Series 21
|
Salt Lake Potash Limited
|
Options
|
350,000
|
22-Nov-17
|
30-Jun-21
|
0.50
|
0.256
|
|
Series 22
|
Salt Lake Potash Limited
|
Options
|
500,000
|
22-Nov-17
|
30-Jun-21
|
0.60
|
0.233
|
|
Series 23
|
Salt Lake Potash Limited
|
Options
|
150,000
|
15-Dec-17
|
30-Jun-21
|
0.50
|
0.228
|
|
Series 24
|
Salt Lake Potash Limited
|
Options
|
250,000
|
15-Dec-17
|
30-Jun-21
|
0.60
|
0.207
|
|
Series 25
|
Salt Lake Potash Limited
|
Options
|
400,000
|
15-Dec-17
|
30-Jun-21
|
0.70
|
0.188
|
|
Series 26
|
Salt Lake Potash Limited
|
Rights
|
575,000
|
15-Dec-17
|
30-Jun-18
|
–
|
0.486
|
|
Series 27
|
Salt Lake Potash Limited
|
Rights
|
575,000
|
15-Dec-17
|
30-Jun-19
|
–
|
0.486
|
|
Series 28
|
Salt Lake Potash Limited
|
Rights
|
575,000
|
15-Dec-17
|
30-Jun-20
|
–
|
0.486
|
|
Series 29
|
Salt Lake Potash Limited
|
Rights
|
575,000
|
15-Dec-17
|
30-Jun-21
|
–
|
0.486
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
Series 4
|
Salt Lake Potash Limited
|
Rights
|
550,000
|
30-Nov-16
|
30-Jun-18
|
–
|
0.506
|
|
Series 5
|
Salt Lake Potash Limited
|
Rights
|
550,000
|
30-Nov-16
|
30-Jun-19
|
–
|
0.506
|
|
Series 6
|
Salt Lake Potash Limited
|
Rights
|
550,000
|
30-Nov-16
|
30-Jun-20
|
–
|
0.506
|
|
Series 7
|
Salt Lake Potash Limited
|
Rights
|
550,000
|
30-Nov-16
|
30-Jun-21
|
–
|
0.506
|
|
Series 8
|
Salt Lake Potash Limited
|
Rights
|
200,000
|
07-Feb-17
|
30-Jun-18
|
–
|
0.543
|
|
Series 9
|
Salt Lake Potash Limited
|
Rights
|
200,000
|
07-Feb-17
|
30-Jun-19
|
–
|
0.543
|
|
Series 10
|
Salt Lake Potash Limited
|
Rights
|
200,000
|
07-Feb-17
|
30-Jun-20
|
–
|
0.543
|
|
Series 11
|
Salt Lake Potash Limited
|
Rights
|
200,000
|
07-Feb-17
|
30-Jun-21
|
–
|
0.543
|
|
Series 12
|
Salt Lake Potash Limited
|
Rights
|
50,000
|
08-Jun-17
|
30-Jun-18
|
–
|
0.428
|
|
Series 13
|
Salt Lake Potash Limited
|
Rights
|
50,000
|
08-Jun-17
|
30-Jun-19
|
–
|
0.428
|
|
Series 14
|
Salt Lake Potash Limited
|
Rights
|
50,000
|
08-Jun-17
|
30-Jun-20
|
–
|
0.428
|
|
Series 15
|
Salt Lake Potash Limited
|
Rights
|
50,000
|
08-Jun-17
|
30-Jun-21
|
–
|
0.428
|
|
Series 16
|
Salt Lake Potash Limited
|
Rights
|
250,000
|
08-Jun-17
|
30-Jun-18
|
–
|
0.412
|
|
Series 17
|
Salt Lake Potash Limited
|
Rights
|
250,000
|
08-Jun-17
|
30-Jun-19
|
–
|
0.412
|
|
Series 18
|
Salt Lake Potash Limited
|
Rights
|
250,000
|
08-Jun-17
|
30-Jun-20
|
–
|
0.412
|
|
Series 19
|
Salt Lake Potash Limited
|
Rights
|
250,000
|
08-Jun-17
|
30-Jun-21
|
–
|
0.412
|
(c) Summary of Unlisted Options and Performance Rights Granted as Share-based Payments
The following table illustrates the number and weighted average exercise prices (WAEP) of Unlisted Options granted as share-based payments at the beginning and end of the financial year:
|
Unlisted Options
|
2018
Number
|
2018
WAEP
|
2017
Number
|
2017
WAEP
|
|
Outstanding at beginning of year
|
2,500,000
|
$0.51
|
2,705,443
|
$0.81
|
|
Granted by the Company during the year
|
1,900,000
|
$0.57
|
–
|
–
|
|
Forfeited/cancelled/lapsed/expired
|
–
|
–
|
(205,443)
|
$4.46
|
|
Outstanding at end of year
|
4,400,000
|
$0.53
|
2,500,000
|
$0.51
|
|
Exercisable at end of year
|
3,500,000
|
$0.51
|
1,500,000
|
$0.45
|
The outstanding balance of Unlisted Options as at 30 June 2018 is represented by:
· 750,000 Unlisted Options exercisable at $0.40 each on or before 29 April 2019;
· 750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;
· 1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;’
· 250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;
· 500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;
· 750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021; and
· 400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021.
The following table illustrates the number and weighted average exercise prices (WAEP) of Performance Rights granted as share-based payments at the beginning and end of the financial year:
|
Performance Rights
|
2018
Number
|
2018
WAEP
|
2017
Number
|
2017
WAEP
|
|
Outstanding at beginning of year
|
4,100,000
|
–
|
–
|
–
|
|
Granted by the Company during the year
|
2,300,000
|
–
|
4,200,000
|
–
|
|
Forfeited/cancelled/lapsed/expired
|
(1,000,000)
|
–
|
(100,000)
|
–
|
|
Outstanding at end of year
|
5,400,000
|
–
|
4,100,000
|
–
|
The outstanding balance of Performance Rights as at 30 June 2018 is represented by:
· 1,350,000 Performance Rights subject to the PFS Milestone expiring on 31 December 2018 (amended following Shareholder approval on 12 June 2018);
· 1,350,000 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended following Shareholder approval on 12 June 2018);
· 1,350,000 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and
· 1,350,000 Performance Rights subject to the Production Milestone expiring on 30 June 2021.
(d) Weighted Average Remaining Contractual Life
At 30 June 2018, the weighted average remaining contractual life of Unlisted Options on issue that had been granted as share-based payments was 2.39 years (2017: 2.93 years) and of Performance Rights on issue that had been granted as share-based payments was 1.75 years (2017: 2.5 years).
(e) Range of Exercise Prices
At 30 June 2018, the range of exercise prices of Unlisted Options on issue that had been granted as share-based payments was $0.40 to $0.70 (2017: $0.40 to $0.60). Performance Rights have no exercise price.
(f) Weighted Average Fair Value
The weighted average fair value of Unlisted Options granted as share-based payments by the Group during the year ended 30 June 2018 was $0.231 (2017: nil) and of Performance Rights granted as share-based payments was $0.486 (2017: $0.496).
(g) Option and Performance Right Pricing Models
The fair value of the equity-settled share options granted is estimated as at the date of grant using the Binomial option valuation model taking into account the terms and conditions upon which the Unlisted Options were granted. The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to issuance).
The table below lists the inputs to the valuation model used for share options and Performance Rights granted by the Group in the current and prior year:
2018
|
Inputs
|
Series 20
|
Series 21
|
Series 22
|
Series 23
|
Series 24
|
Series 25
|
|
Options
|
|
|
|
|
|
|
|
Exercise price
|
0.40
|
0.50
|
0.60
|
0.50
|
0.60
|
0.70
|
|
Grant date share price
|
0.50
|
0.50
|
0.50
|
0.465
|
0.465
|
0.465
|
|
Dividend yield 1
|
–
|
–
|
–
|
–
|
–
|
–
|
|
Volatility 2
|
70%
|
70%
|
70%
|
70%
|
70%
|
70%
|
|
Risk-free interest rate
|
1.99%
|
1.99%
|
1.99%
|
2.16%
|
2.16%
|
2.16%
|
|
Grant date
|
22-Nov-17
|
22-Nov-17
|
22-Nov-17
|
15-Dec-17
|
15-Dec-17
|
15-Dec-17
|
|
Expiry date
|
30-Jun-21
|
30-Jun-21
|
30-Jun-21
|
30-Jun-21
|
30-Jun-21
|
30-Jun-21
|
|
Expected life of option 3
|
3.61
|
3.61
|
3.61
|
3.54
|
3.54
|
3.54
|
|
Fair value at grant date
|
0.284
|
0.256
|
0.233
|
0.228
|
0.207
|
0.188
|
Notes:
1 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
2 The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.
3 The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise of options.
|
Inputs
|
Series 26
|
Series 27
|
Series 28
|
Series 29
|
|
Performance Rights
|
|
|
|
|
|
Exercise price
|
–
|
–
|
–
|
–
|
|
Grant date share price
|
$0.465
|
$0.465
|
$0.465
|
$0.465
|
|
Grant date
|
15-Dec-17
|
15-Dec-17
|
15-Dec-17
|
15-Dec-17
|
|
Expiry date
|
30-Jun-18 3
|
30-Jun-19 4
|
30-Jun-20
|
30-Jun-21
|
|
Expected life of right 1
|
0.5 years
|
1.5 years
|
2.5 years
|
3.5 years
|
|
Fair value at grant date 2
|
$0.486
|
$0.486
|
$0.486
|
$0.486
|
Notes:
1 The expected life of the Performance Rights is based on the expiry date of the performance rights as there is limited track record of the early conversion of performance rights.
2 The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to issuance).
3 Subsequent to grant, the expiry date was amended to 31 December 2018 following Shareholder approval on 11 June 2018. This has no impact on the fair value of the securities, however the period that the expense is being recognised over has been modified.
4 Subsequent to grant, the expiry date was amended to 31 December 2019 following Shareholder approval on 11 June 2018. This has no impact on the fair value of the securities, however the period that the expense is being recognised over has been modified.
2017
|
Inputs
|
Series 4
|
Series 5
|
Series 6
|
Series 7
|
|
Exercise price
|
–
|
–
|
–
|
–
|
|
Grant date share price
|
$0.51
|
$0.51
|
$0.51
|
$0.51
|
|
Grant date
|
30-Nov-16
|
30-Nov-16
|
30-Nov-16
|
30-Nov-16
|
|
Expiry date
|
30-Jun-18
|
30-Jun-19
|
30-Jun-20
|
30-Jun-21
|
|
Expected life of right 1
|
1.6 years
|
2.6 years
|
3.6 years
|
4.6 years
|
|
Fair value at grant date 2
|
$0.506
|
$0.506
|
$0.506
|
$0.506
|
|
Inputs
|
Series 8
|
Series 9
|
Series 10
|
Series 11
|
|
Exercise price
|
–
|
–
|
–
|
–
|
|
Grant date share price
|
$0.53
|
$0.53
|
$0.53
|
$0.53
|
|
Grant date
|
07-Feb-17
|
07-Feb-17
|
07-Feb-17
|
07-Feb-17
|
|
Expiry date
|
30-Jun-18
|
30-Jun-19
|
30-Jun-20
|
30-Jun-21
|
|
Expected life of right 1
|
1.3 years
|
2.3 years
|
3.3 years
|
4.3 years
|
|
Fair value at grant date 2
|
$0.577
|
$0.577
|
$0.577
|
$0.577
|
|
Inputs
|
Series 12
|
Series 13
|
Series 14
|
Series 15
|
|
Exercise price
|
–
|
–
|
–
|
–
|
|
Grant date share price
|
$0.43
|
$0.43
|
$0.43
|
$0.43
|
|
Grant date
|
08-Jun-17
|
08-Jun-17
|
08-Jun-17
|
08-Jun-17
|
|
Expiry date
|
30-Jun-18
|
30-Jun-19
|
30-Jun-20
|
30-Jun-21
|
|
Expected life of right 1
|
1.1 years
|
2.1 years
|
3.1 years
|
4.1 years
|
|
Fair value at grant date 2
|
$0.431
|
$0.431
|
$0.431
|
$0.431
|
|
Inputs
|
Series 16
|
Series 17
|
Series 18
|
Series 19
|
|
Exercise price
|
–
|
–
|
–
|
–
|
|
Grant date share price
|
$0.41
|
$0.41
|
$0.41
|
$0.41
|
|
Grant date
|
08-Jun-17
|
08-Jun-17
|
08-Jun-17
|
08-Jun-17
|
|
Expiry date
|
30-Jun-18
|
30-Jun-19
|
30-Jun-20
|
30-Jun-21
|
|
Expected life of right 1
|
1.0 years
|
2.0 years
|
3.0 years
|
4.0 years
|
|
Fair value at grant date 2
|
$0.431
|
$0.431
|
$0.431
|
$0.431
|
Notes:
1 The expected life of the Performance Rights is based on the expiry date of the performance rights as there is limited track record of the early conversion of performance rights.
2 The fair value of Performance Rights granted is estimated as at the date of grant based on the underlying share price (being the five day volume weighted average share price prior to issuance).
21. AUDITORS’ REMUNERATION
The auditor of Salt Lake Potash Limited is Ernst and Young.
|
2018
|
2017
|
|
$
|
$
|
|
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
|
25,000
|
25,000
|
|
– tax and other advisory services
|
8,188
|
5,000
|
|
33,188
|
30,000
|
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(a) Overview
The Group’s principal financial instruments comprise receivables, payables, finance leases, cash and short-term deposits. The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and interest rate risk.
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have been no significant changes since the previous financial year to the exposure or management of these risks.
The Group manages its exposure to key financial risks in accordance with the Group’s financial risk management policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new project) and policies are revised as required. The overall objective of the Group’s financial risk management policy is to support the delivery of the Group’s financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows, the Group does not enter into derivative transactions to mitigate the financial risks. In addition, the Group’s policy is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the Group’s operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board reviews and agrees policies for managing the Group’s financial risks as summarised below.
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other receivables.
There are no significant concentrations of credit risk within the Group. The carrying amount of the Group’s financial assets represents the maximum credit risk exposure, as represented below:
|
2018
|
2017
|
|
$
|
$
|
|
Financial assets
|
|
|
|
Cash and cash equivalents
|
5,709,446
|
15,596,759
|
|
Trade and other receivables
|
227,273
|
300,058
|
|
5,936,719
|
15,896,817
|
With respect to credit risk arising from cash and cash equivalents, the Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Where possible, the Group invests its cash and cash equivalents with banks that are rated the equivalent of investment grade and above. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
The Group does not have any significant customers and accordingly does not have significant exposure to bad or doubtful debts.
Trade and other receivables comprise interest accrued and GST refunds due. Where possible the Consolidated Entity trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. At 30 June 2018, none (2017 none) of the Group’s receivables are past due.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board’s approach to managing liquidity is to ensure, as far as possible, that the Group will always have sufficient liquidity to meet its liabilities when due. At 30 June 2018 and 2017, the Group had sufficient liquid assets to meet its financial obligations.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There are no netting arrangements in respect of financial liabilities.
|
≤6 Months
$ |
6-12 Months
$
|
1-5 Years
$ |
≥5 Years
$ |
Total
$ |
|
2018
Group
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
Finance lease
|
5,914
|
5,915
|
38,992
|
–
|
50,821
|
|
Trade and other payables
|
1,620,527
|
–
|
–
|
–
|
1,620,527
|
|
1,626,441
|
5,915
|
38,992
|
–
|
1,671,348
|
|
|
|
|
|
|
|
2017
Group
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
Finance lease
|
5,914
|
5,914
|
50,821
|
–
|
62,649
|
|
Trade and other payables
|
1,348,791
|
–
|
–
|
–
|
1,348,791
|
|
1,354,705
|
5,914
|
50,821
|
–
|
1,411,440
|
(d) Interest Rate Risk
The Group does not have any long-term borrowing or long term deposits, which would expose it to significant cash flow interest rate risk.
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
(e) Capital Management
The Group defines its Capital as total equity of the Group, being $7,019,989 as at 30 June 2018 (2017: $17,046,443). The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while financing the development of its projects through primarily equity based financing. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Given the stage of development of the Group, the Board’s objective is to minimise debt and to raise funds as required through the issue of new shares.
The Group is not subject to externally imposed capital requirements.
There were no changes in the Group’s approach to capital management during the year. During the next 12 months, the Group will continue to explore project financing opportunities, primarily consisting of additional issues of equity.
(f) Fair Value
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
· Level 1 – the fair value is calculated using quoted prices in active markets.
· Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
· Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
At 30 June 2018 and 30 June 2017, the carrying value of the Group’s financial assets and liabilities approximate their fair value.
23. CONTINGENT ASSETS AND LIABILITIES
(i) Contingent Assets
As at the date of this report, no contingent assets had been identified in relation to the 30 June 2018 financial year.
(ii) Contingent Liability
As at the date of this report, no contingent liabilities had been identified in relation to the 30 June 2018 financial year.
24. COMMITMENTS
Management have identified the following material commitments for the consolidated group as at 30 June 2018 and 30 June 2017:
|
2018
|
2017
|
|
$
|
$
|
|
|
|
|
Exploration commitments
|
|
|
|
Within one year
|
1,896,500
|
1,061,000
|
|
Later than one year but not later than five years
|
–
|
–
|
|
1,896,500
|
1,061,000
|
25. EVENTS SUBSEQUENT TO BALANCE DATE
(i) Announced the results from a Scoping Study on the Lake Wells project which confirmed its potential to produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets; and
(ii) On 10 August 2018, the Company appointed Mr Clint McGhie as Company Secretary and Chief Financial Officer following the resignation of Mr Sam Cordin.
Other than as above, as at the date of this report there are no matters or circumstances which have arisen since 30 June 2018 that have significantly affected or may significantly affect:
· the operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity;
· the results of those operations, in financial years subsequent to 30 June 2018, of the Consolidated Entity; or
· the state of affairs, in financial years subsequent to 30 June 2018, of the Consolidated Entity.
ASX ADDITIONAL INFORMATION
1. TWENTY LARGEST HOLDERS OF LISTED SECURITIES
The names of the twenty largest holders of listed securities as at 31 August 2018 are listed below:
|
Name
|
Number of
Ordinary Shares
|
Percentage of Ordinary Shares
|
|
COMPUTERSHARE CLEARING PTY LTD
|
43,433,570
|
24.81
|
|
ARREDO PTY LTD
|
11,000,000
|
6.28
|
|
CITICORP NOMINEES PTY LIMITED
|
8,804,536
|
5.03
|
|
PERSHING AUSTRALIA NOMINEES PTY LTD
|
8,016,017
|
4.58
|
|
HOWITT MGMT PTY LTD
|
4,620,000
|
2.64
|
|
HOPETOUN CONSULTING PTY LTD
|
4,500,000
|
2.57
|
|
MR MARK STUART SAVAGE
|
3,600,000
|
2.06
|
|
AWJ FAMILY PTY LTD
|
3,020,000
|
1.73
|
|
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
|
3,006,923
|
1.72
|
|
J P MORGAN NOMINEES AUSTRALIA LIMITED
|
2,720,100
|
1.55
|
|
AROIDA INVESTMENTS PTY LTD
|
2,439,636
|
1.39
|
|
MR NEIL DAVID IRVINE
|
2,307,493
|
1.32
|
|
AEGEAN CAPITAL PTY LTD
|
2,237,749
|
1.28
|
|
MR TERRY PATRICK COFFEY & HAWKES BAY NOMINEES LIMITED
|
2,230,064
|
1.27
|
|
BELL POTTER NOMINEES LTD
|
2,018,721
|
1.15
|
|
ROSEBERRY HOLDINGS PTY LTD
|
2,000,000
|
1.14
|
|
APOLLO GROUP PTY LTD
|
2,000,000
|
1.14
|
|
SUNSET CAPITAL MANAGEMENT PTY LTD
|
1,800,000
|
1.03
|
|
VYNBEN PTY LTD
|
1,725,498
|
0.99
|
|
D GRAY & CO PTY LTD
|
1,610,000
|
0.92
|
|
Total Top 20
|
113,090,307
|
64.60
|
|
Others
|
61,959,289
|
35.40
|
|
Total Ordinary Shares on Issue
|
175,049,596
|
100.00
|
2. DISTRIBUTION OF EQUITY SECURITIES
An analysis of numbers of holders of listed securities by size of holding as at 31 August 2018 is listed below:
|
Ordinary Shares
|
|
Distribution
|
Number of
Shareholders
|
Number of
Ordinary Shares
|
|
1 – 1,000
|
1,101
|
300,105
|
|
1,001 – 5,000
|
399
|
1,031,382
|
|
5,001 – 10,000
|
157
|
1,222,564
|
|
10,001 – 100,000
|
326
|
13,141,101
|
|
More than 100,000
|
140
|
159,354,444
|
|
Totals
|
2,123
|
175,049,596
|
There were 1,135 holders of less than a marketable parcel of Ordinary Shares.
3. VOTING RIGHTS
See Note 13(b) of the Notes to the Financial Statements.
4. SUBSTANTIAL SHAREHOLDERS
Substantial holders who have notified the Company in accordance with section 671B of the Corporations Act 2001are as follows:
|
Distribution
|
Number of
Ordinary Shares
|
|
Lombard Odier Asset Management (Europe) Limited
|
17,071,000
|
|
Arredo Pty Ltd
|
11,000,000
|
5. UNQUOTED SECURITIES
|
Performance Shares
|
Performance Shares Subject to Pre-Feasibility Study Milestone (Class A) expiring
|
Performance Shares Subject to Definitive Feasibility Study Milestone (Class B) expiring
|
Performance Shares Subject to Construction Milestone (Class C) expiring
|
|
Holder
|
31-Dec-18
|
31-Dec-19
|
12-Jun-20
|
|
JBJF Management Pty Ltd
|
1,700,000
|
2,550,000
|
3,400,000
|
|
Mr Aharon Arakel & Mrs Ida Arakel
|
1,650,000
|
2,475,000
|
3,300,000
|
|
Howitt MGMT Pty Ltd
|
1,540,000
|
2,310,000
|
3,080,000
|
|
Others (less than 20%)
|
110,000
|
165,000
|
220,000
|
|
Total
|
5,000,000
|
7,500,000
|
10,000,000
|
|
Total holders
|
4
|
4
|
4
|
|
Unlisted Options
|
Unlisted Options exercisable
at $0.40
|
Unlisted Options exercisable
at $0.50
|
Unlisted Options exercisable
at $0.60
|
Unlisted Options exercisable
at $0.40
|
Unlisted Options exercisable
at $0.50
|
Unlisted Options
exercisable
at $0.60
|
Unlisted Options
exercisable
at $0.70
|
|
Holder
|
29-Apr-19
|
29-Apr-20
|
29-Apr-21
|
30-Jun-21
|
30-Jun-21
|
30-Jun-21
|
30-Jun-21
|
|
Hopetoun Consulting Pty Ltd
|
750,000
|
750,000
|
1,000,000
|
–
|
–
|
–
|
–
|
|
JJB Advisory Limited
|
–
|
–
|
–
|
250,000
|
350,000
|
500,000
|
–
|
|
Mr Sapan Ghai
|
–
|
–
|
–
|
–
|
100,000
|
150,000
|
250,000
|
|
Mr Hannes Huster
|
–
|
–
|
–
|
–
|
–
|
100,000
|
150,000
|
|
Others (less than 20%)
|
–
|
–
|
–
|
–
|
50,000
|
–
|
–
|
|
Total
|
750,000
|
750,000
|
1,000,000
|
250,000
|
500,000
|
750,000
|
400,000
|
|
Total holders
|
1
|
1
|
1
|
1
|
3
|
3
|
2
|
As at 31 August 2018, there are 5,400,000 Performance Rights issued under an employee incentive scheme.
6. ON-MARKET BUYBACK
There is currently no on-market buyback program for any of Salt Lake Potash Limited’s listed securities.
7. EXPLORATION INTERESTS
Summary of Exploration and Mining Tenements held as at 31 August 2018
|
Project
|
Status
|
License Number
|
Area (km2)
|
Interest
(%)
|
|
Western Australia
|
|
|
|
|
|
Lake Wells
|
Granted
|
E38/2710
|
192.2
|
100%
|
|
Granted
|
E38/2821
|
131.5
|
100%
|
|
Granted
|
E38/2824
|
198.2
|
100%
|
|
Granted
|
E38/3055
|
298.8
|
100%
|
|
Granted
|
E38/3056
|
3.0
|
100%
|
|
Granted
|
E38/3057
|
301.9
|
100%
|
|
Granted
|
E38/3124
|
39.0
|
100%
|
|
Granted
|
L38/262
|
113.0
|
100%
|
|
Granted
|
L38/263
|
28.6
|
100%
|
|
Granted
|
L38/264
|
32.6
|
100%
|
|
Granted
|
E38/3247
|
350.3
|
100%
|
|
Application
|
M38/1278
|
87.5
|
100%
|
|
Lake Way
|
Granted
|
E53/1878
|
217.0
|
100%
|
|
Application
|
E53/1897
|
77.5
|
100%
|
|
Lake Ballard
|
Granted
|
E29/912
|
607.0
|
100%
|
|
Granted
|
E29/913
|
73.2
|
100%
|
|
Granted
|
E29/958
|
30.0
|
100%
|
|
Granted
|
E29/1011
|
68.2
|
100%
|
|
Granted
|
E29/1020
|
9.3
|
100%
|
|
Granted
|
E29/1021
|
27.9
|
100%
|
|
Granted
|
E29/1022
|
43.4
|
100%
|
|
Lake Marmion
|
Granted
|
E29/1000
|
167.4
|
100%
|
|
Granted
|
E29/1001
|
204.6
|
100%
|
|
Granted
|
E29/1002
|
186.0
|
100%
|
|
Granted
|
E29/1005
|
68.2
|
100%
|
|
Lake Irwin
|
Granted
|
E37/1233
|
203.0
|
100%
|
|
Granted
|
E39/1892
|
203.0
|
100%
|
|
Granted
|
E38/3087
|
139.2
|
100%
|
|
Granted
|
E37/1261
|
107.3
|
100%
|
|
Granted
|
E38/3113
|
203.0
|
100%
|
|
Granted
|
E39/1955
|
118.9
|
100%
|
|
Granted
|
E37/1260
|
203.0
|
100%
|
|
Granted
|
E39/1956
|
110.2
|
100%
|
|
Lake Minigwal
|
Granted
|
E39/1893
|
246.2
|
100%
|
|
Granted
|
E39/1894
|
158.1
|
100%
|
|
Granted
|
E39/1962
|
369.0
|
100%
|
|
Granted
|
E39/1963
|
93.0
|
100%
|
|
Granted
|
E39/1964
|
99.0
|
100%
|
|
Granted
|
E39/1965
|
89.9
|
100%
|
|
Lake Noondie
|
Granted
|
E57/1062
|
217.0
|
100%
|
|
Granted
|
E57/1063
|
217.0
|
100%
|
|
Granted
|
E57/1064
|
55.8
|
100%
|
|
Granted
|
E57/1065
|
120.9
|
100%
|
|
Granted
|
E36/932
|
108.5
|
100%
|
|
Lake Barlee
|
Granted
|
E77/2441
|
173.6
|
100%
|
|
Granted
|
E30/495
|
217.0
|
100%
|
|
Granted
|
E30/496
|
217.0
|
100%
|
|
Lake Raeside
|
Granted
|
E37/1305
|
155.0
|
100%
|
|
Lake Austin
|
Application
|
E21/205
|
117.8
|
100%
|
|
Application
|
E21/206
|
192.2
|
100%
|
|
Application
|
E58/529
|
213.9
|
100%
|
|
Application
|
E58/530
|
217.0
|
100%
|
|
Application
|
E58/531
|
96.1
|
100%
|
|
Lake Moore
|
Application
|
E59/2340
|
217.0
|
100%
|
|
Application
|
E59/2341
|
217.0
|
100%
|
|
Application
|
E59/2342
|
217.0
|
100%
|
|
Application
|
E59/2343
|
201.5
|
100%
|
|
Application
|
E59/2344
|
217.0
|
100%
|
|
Application
|
E70/5195
|
124.0
|
100%
|
|
Northern Territory
|
|
|
|
|
|
Lake Lewis
|
Granted
|
EL 29787
|
146.4
|
100%
|
|
Granted
|
EL 29903
|
125.1
|
100%
|
8. MINERAL RESOURCES STATEMENT
Salt Lake’s Mineral Resource Statement as at 30 June 2018 is grouped by deposit, all of which form part of the Lake Wells SOP in Western Australia. To date, no Ore Reserves have been reported for these deposits. Subsequent to 30 June 2018, the Company reported a Mineral Resource Estimate for Lake Way. The Lake Way Mineral Resource does not form part of this statement.
Governance
The Company engages external consultants and Competent Persons (as determined pursuant to the JORC Code 2012) to prepare and estimate the Mineral Resources. Management and the Board review these estimates and underlying assumptions for reasonableness and accuracy. The results of the Mineral Resource estimates are then reported in accordance with the requirements of the JORC Code 2012 and other applicable rules (including ASX Listing Rules).
Where material changes occur during the year to the project, including the project’s size, title, exploration results or other technical information, previous resource estimates and market disclosures are reviewed for completeness.
The Company reviews its Mineral Resources as at 30 June each year. A revised Mineral Resource estimate will be prepared as part of the annual review process where a material change has occurred in the assumptions or data used in previously reported Mineral Resources. However, there are circumstances where this may not be possible (e.g. an ongoing drilling programme), in which case a revised Mineral Resource estimate will be prepared and reported as soon as practicable.
Results of Annual Review
In November 2015, the Company reported its maiden JORC Mineral Resource estimate for the Lake Wells Project, totalling 29 million tonnes (Mt) of Sulphate of Potash (SOP) with approximately 80% in the ‘Measured’ category with excellent brine chemistry of 4,009 mg/L Potassium (K), 19,175 mg/L (SO4). The resource was calculated only on the upper 16 metres of the Lake, with mineralisation remaining open at depth across most of the Lake.
In February 2016, an expanded Mineral Resource Estimate (MRE) was calculated at Lake Wells totalling 80-85 million tonnes of SOP. This represents an additional 51-56 Mt of Inferred Resource calculated in the strata below the previously reported shallow Resource of 29 Mt.
During the year ended 30 June 2018, the Company continued exploration and development activities for Lake Wells including surface aquifer characterisation (test pits and trenches), deep aquifer exploration, long term pump testing, evaporation pond trials and process testwork.
In addition, in March 2018, the Company released an initial estimate of Exploration Targets for eight of the nine lakes comprising the GSLP. The ninth lake, Lake Wells (as discussed above) already has a Mineral Resource reported in accordance with the JORC code.
The total “stored” Exploration Target for the GSLP is 290Mt – 458Mt of contained SOP, with an average SOP grade of 4.4 – 7.1kg/m3 (including Lake Wells’ Mineral Resource of 80-85Mt). On a “drainable” basis the total Exploration Target ranges from 26Mt – 153Mt of SOP. The total playa area of the lakes is approximately 3,312km2. The potential quantity and grade of this Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
As a result of the annual review of the Company’s Mineral Resources, there has been no change to the Mineral Resources reported for the Lake Wells Project in February 2016 as at 30 June 2018.
Total Mineral Resource Estimate
|
Classification
|
Geological Unit
|
Bulk Volume
(Million m3)
|
Porosity
|
Brine Volume
(Million m3)
|
Average SOP1(K2SO4) Concentration (kg/m3)
|
K2SO4Tonnage
(Mt)
|
|
Measured
|
Playa Lake Sediments
|
5,427
|
0.464
|
2,518
|
8.94
|
23
|
|
Indicated
|
Playa Lake Sediments
|
775
|
0.464
|
359
|
8.49
|
3
|
|
Inferred
|
Playa Lake Sediments (Islands)
|
1,204
|
0.464
|
558
|
5.34
|
3
|
|
Inferred
|
Paleovalley Sediment
|
10,600
|
0.40
|
4,240
|
9.07
|
38
|
|
Inferred
|
Fractured Siltstone Aquifer
|
6,717
|
0.22-.30
|
1,478 – 2,015
|
8.79
|
13-18
|
Competent Person Statement – Mineral Resource Statement
The information in this Mineral Resource Statement that relates to Mineral Resources is based on, and fairly represents, information compiled by Mr Ben Jeuken, a Competent Person, who is a member Australian Institute of Mining and Metallurgy. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Mr Jeuken has approved the Mineral Resource Statement as a whole and consents to its inclusion in the form and context in which it appears.
9. COMPETENT PERSONS STATEMENTS
The information in this report that relates to the Lake Way Mineral Resource is extracted from the report entitled ‘Scoping Study for Low Capex, High Margin Demonstration Plant at Lake Way’ dated 31 July 2018. This announcement is available to view on www.saltlakepotash.com.au. The information in the original ASX Announcement that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
The information in this report that relates to the Lake Wells Mineral Resource is extracted from the reports entitled ‘Lake Wells Resource Increased by 193% to 85Mt of SOP’ dated 22 February 2016 and ‘Significant Maiden SOP Resource of 29Mt at Lake Wells’ dated 11 November 2015. These announcements are available to view on www.saltlakepotash.com.au. The information in the original ASX Announcements that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Salt Lake Potash Limited confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Salt Lake Potash Limited confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
The information in this report that relates to Exploration Targets is extracted from the report entitled ‘Exploration Targets Reveal World Class Scale Potential’ dated 28 March 2018 The information in the original ASX Announcement that related to Exploration Targets or Mineral Resources is based on information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Jeuken consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
10. PRODUCTION TARGET
The Lake Way Demonstration Plant Production Target stated in this report is based on the Company’s Scoping Study as released to the ASX on 31 July 2018. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in the Company’s ASX Announcement released on 31 July 2018. The Company confirms that the material assumptions underpinning the Production Target referenced in the 31 July 2018 release continue to apply and have not materially changed.
The Lake Wells Production Target stated in this report is based on the Company’s Scoping Study as released to the ASX on 29 August 2016. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 and 5.17 was included in the Company’s ASX Announcement released on 29 August 2016. The Company confirms that the material assumptions underpinning the Production Target referenced in the 29 August 2016 release continue to apply and have not materially changed.
11. FORWARD LOOKING STATEMENTS
This report contains ‘forward-looking information’ that is based on the Company’s expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to pre-feasibility and definitive feasibility studies, the Company’s business strategy, plans, development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘potential’, ‘likely’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘would’, ‘could’, ‘should’, ‘scheduled’, ‘will’, ‘plan’, ‘forecast’, ‘evolve’ and similar expressions. Persons reading this news release are cautioned that such statements are only predictions, and that the Company’s actual future results or performance may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in Schedule 2 of the Company’s Notice of General Meeting and Explanatory Memorandum dated 8 May 2015.
The Pilbara region of Western Australia is best known for iron ore — and 
Salt Lake promotes Lake Way demonstration numbers
Notionally at least, such a margin would generate annual cashflow at an operational level of $14 million per annum.