TIDMSO4
RNS Number : 2151A
Salt Lake Potash Limited
28 September 2020
28 September 2020 AIM/ASX Code: SO4
SALT LAKE POTASH LIMITED
Annual Report 2020
-------------------------
AIM and ASX listed company Salt Lake Potash Limited ("SO4" or
the "Company"), announces its results for the year ended 30 June
2020.
The Company's full Annual Report including Accounts can be
viewed at www.so4.com.au .
The Company also advises that an Appendix 4G (Key to
Disclosures: Corporate Governance Council Principles and
Recommendations) and the 2020 Corporate Governance Statement have
been released today and are also available on the Company's
website.
For further information please visit www.so4.com.au or
contact:
Tony Swiericzuk/Richard Salt Lake Potash Limited Tel: +61 8 6559 5800
Knights
Colin Aaronson/Seamus Grant Thornton UK LLP Tel: +44 (0) 20 7383 5100
Fricker (Nominated Adviser)
Derrick Lee/Peter Lynch Cenkos Securities plc Tel: +44 (0) 131 220 6939
(Joint Broker)
Rupert Fane/Ernest Hannam & Partners (Joint Tel: +44 (0) 20 7907 8500
Bell Broker)
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
During 2020 SO4's primary activities related to the development
of the Lake Way project in the Goldfields district of Western
Australia.
On-Lake Operations
Brine Extraction - Trenches
48km of brine extraction trenches were constructed during the
year at Lake Way, delivering the majority of brine to the
evaporation pond network. The trenches were excavated to an average
depth of around four meters. To move brine from the trench network
to the evaporation pond system, a specialised pipe network and
pumping system was designed to suit the site environment.
Brine Extraction - Paleochannel Bores
During the second half of the financial year SO4 commenced
development of the Lake Way paleochannel, drilling the first four
brine abstraction bores into the paleochannel basal sands at pads
8, 17, 18 and 21. The results from the test-pumping confirmed the
BFS model for both aquifer parameters, brine grade and flow
rates.
Two of the four completed brine abstraction bores were
test-pumped (Pad 8 and 17) with results pending for pads 18 and 21.
Test pumping at pads 8 and 17 was conducted at flow rates ranging
from 10-18 l/s with the observed grades during testing ranging from
7,240mg/l to 5,370mg/l.
Pond Operation
In the March 2020 quarter the Company completed the Stage 2 pond
network consisting of 275ha of evaporation pond area, taking total
pond evaporation area to 400ha.
The Stage 1 pond network spans approximately 125ha and was
commissioned in the June quarter of 2019. The Stage 1 ponds were
initially filled with high grade brine (25kg/m3 SOP) from the
Williamson Pit.
The Stage 2 pond network spans approximately 275 ha and
commenced commissioning in the June quarter of 2020. The Stage 2
pond construction included the installation of 12,000 sheet piles
and 200,000 cubic meters of earthworks to form the walls of the
ponds.
Across the pond network brine chemistry was monitored
continuously and aligned with modelled outcomes. In March 2020, a
277kg bulk sample taken from Kainite Pond 1, Cell C4 was analysed
and reported a potassium grade of 7.5%, ahead of the average
modelled harvest salt grade in the BFS of 6.8%.
Halite salts form in the initial cells in the pond train, after
which the more concentrated brine is pumped into the harvest cells
for the precipitation of the potassium rich harvest salts schoenite
and kainite. Over the course of FY 20 the harvest salt pavement in
the Stage 1 harvest cells accumulated to heights of up to
330mm.
Off-Lake Operations
Process Plant Construction & Procurement
Early works at the process plant site commenced in earnest in
the first calendar quarter of 2020 and by the end of the financial
year the Company had completed bulk civil earthworks and commenced
pouring concrete foundations.
In June 2020 SO4 awarded the Engineering, Procurement and
Construction (EPC) and Engineering, Procurement and Construction
Management (EPCM) contracts for construction of the processing
facility to GR Engineering Services (ASX:GNG). The EPC contract
encompassed the provision of plant, labour, materials and
construction services for the process plant and Non-Process
Infrastructure (NPI) valued at A$85m. The EPCM contract encompassed
the provision of services for the engineering, procurement and
construction management for areas of the process plant and NPI,
valued at A$22m.
By the end of the financial year the project was 90% procured
for major packages with all key vendor contracts executed. The
largest procurement package, the process plant crystalliser,
arrived at site in July 2020, several weeks ahead of schedule.
Other major plant components including centrifuges, attritioners,
flotation cells, sizing screens, thickeners, rotary drier, impact
crushers, lump breakers and conveyer belts were procured and
expected to arrive at site towards the end of the 2020 calendar
year.
Non-Process Infrastructure Construction
Construction of Non-Process Infrastructure commenced in the
first calendar quarter with bulk civil earthworks. By financial
year-end the Lake Way village had been constructed with 100
permanent and 160 temporary rooms.
Bulk civil earthworks were finalised including pad preparation
for construction of the power plant, warehouse, workshop,
administration and site village, as well as construction of the raw
water pond, runoff settlement ponds and site access roads.
A t the West Creek process water borefield the Company drilled a
total of seven production bores and two monitoring bores that will
supply the RO Plant (potable water) and water for the process
plant. The production bores have been test-pumped and the steady
state operation pumping philosophy finalised.
Approvals
In November 2019, the Company executed the Native Title Land
Access Agreement (LAA) with Tarlka Matuwa Piarku (Aboriginal
Corporation) RNTBC (TMPAC) for the whole of the Lake Way
Project.
The landmark LAA provides for the continuing development of the
Lake Way Project and significant benefits to TMPAC and the broader
community. TMPAC entered into the LAA with SO4 on behalf of the
Wiluna People who are the recognised Native Title Holders of the
land covering the Lake Way Project area.
The LAA provides tenure and native title approval security to
SO4 for the duration of the Project and covers the whole of the
Lake Way Project area. In line with customary industry standards,
TMPAC and the broader Wiluna Community will receive significant
economic, social and environmental benefits, including:
-- Royalty payments;
-- Community support programs;
-- Employment & training;
-- Aboriginal business development and contracting opportunities;
-- Heritage protection and land management opportunities.
The primary remaining environmental approval to support
sustained full-scale operations is the Environmental Protection
Authority (EPA) approval. The Environmental Review Document was
submitted to the EPA during the June quarter and contained detailed
surveys, studies, ground and surface water modelling, management
plans and assessments. SO4's comprehensive work did not identify
any environmental factors that could constitute insurmountable
obstacles to gaining necessary statutory approvals.
Marketing
The Company executed purchase agreements with six offtake
partners during the year, accounting for 224kt per annum of Lake
Way's 245kt per annum capacity. In combination these agreements
geographically diversify SO4's marketing portfolio with six
reputable partners supplying SOP to six continents.
The offtake agreements and partners can be summarised as
follows:
-- Indagro (70ktpa, 5 years): Indagro is an international
trading firm established in Geneva, Switzerland in the early
1980's. Indagro specializes in the global marketing of chemical
fertilisers and their raw materials. Through its network of 16
representative offices around the globe, Indagro adds value to the
fertiliser supply chain by offering proprietary risk management
services to producers, distributors and importers alike. The
agreement is for the sale of premium standard, granular and water
soluble fertigation grade SOP over five years, for distribution in
North and South America, Europe and Africa.
-- Unifert (60ktpa, 5 years): Unifert is a leading comprehensive
solutions provider to the agricultural industry in Europe, the
Middle East and Africa. It distributes a broad range of
agricultural inputs such as specialty and traditional fertilisers,
seeds and crop protection chemicals. The agreement is for the sale
of premium standard, granular and water soluble fertigation grade
SOP over five years, with an option to extend, for distribution to
the Middle East and Africa.
-- HELM (50ktpa, 10 years): HELM is a Hamburg, Germany, based
family-owned company established in 1900. HELM is one of the
world's largest chemicals marketing companies. HELM secures access
to the world's key markets through its specific regional knowledge
as well as its subsidiaries, sales offices and participations in
over 30 countries. As a multifunctional marketing organization HELM
is active in the chemicals industry, in the crop protection
industry, in pharmaceuticals and in the fertiliser industry. The
agreement is for the sale of premium standard, granular and water
soluble fertigation grade SOP over ten years, for distribution into
Asia and the Middle East.
-- Fertisur (30ktpa, 5 years): Fertisur is a Peruvian company
distributing fertilisers throughout South America, focussing on
products designed to offer crop solutions through drip
fertilisation, fertigation and foliar feeding for greenhouses. The
agreement is for the sale of premium standard, granular and water
soluble fertigation grade SOP over five years, for distribution in
South America.
-- WeGrow (10ktpa, 5 years): WeGrow is a subsidiary of Keytrade
AG, responsible for controlled and precision agriculture and
marketing the highest quality soluble fertilisers. The WeGrow
offtake agreement is for a 10ktpa over a term of five years and
covers North, Central and South America.
-- Mitsui & Co. Asia Pacific (4ktpa, 5 years): Mitsui &
Co., Ltd. is one of the largest trading and investment companies in
the world with over 42,000 employees (consolidated). Its Nutrition
& Agriculture Business Unit is involved in the manufacture and
sales of agrochemicals and fertilisers, as well as providing global
logistics services for fertiliser resources and raw materials,
alongside animal and human nutrition business lines.
Corporate
Equity Financing
The Company conducted three separate equity capital raisings in
the year to June 2020.
-- August 2019: A$7.4m placement to Fidelity at A$0.70/share to
fund costs in the acquisition of a package of tenements and other
key assets from Wiluna Mining Corporation (formerly Blackham
Resources).
-- December 2019: A$23.5m placement at A$0.70/share to
institutional and high net worth investors.
-- April 2020: A$20m placement at A$0.34/share to institutional and high net worth investors.
Post year end the Company raised a further A$15m via zero-coupon
convertible notes, structured as deferred equity. As part of
funding, the Company completed a A$98.5m placement and an
accelerated non-renounceable entitlement offer at A$0.50/share.
Debt Financing
In addition to equity finance, the Company drew down a US$45m
Stage 1 Funding Facility from Taurus Funds Management (Taurus) over
two tranches. The initial US$30m facility was announced in August
2019, with a further US$15m extension announced in December
2019.
The Stage 1 Funding Facility provided initial access to funding
for early construction works and enabled completion of the BFS
prior to completion of the Syndicated Facility Agreement.
Following the end of the financial year the Company achieved
full financing for the Lake Way project with the signing of a
US$138m Syndicated Facility Agreement with Taurus and the
Australian Government's Clean Energy Finance Corporation in
conjunction with the equity placement.
Director Appointment
The Company appointed Mr Matthew Bungey to the board during in
May 2020. Mr Bungey is a Chemical Engineer with over 20 years
experience in natural resources, most recently as Managing Director
and Head of Mining and Metals with Barclays Investment Bank in
London.
Green Label Certification
SO4 was granted 'Green label' certification for debt issued to
develop its Lake Way Project. The 'Green label' provides assurance
to all stakeholders of the positive environmental contribution of
solar brine fertiliser production.
The 'Green label' loan is st out by the LMA and APLMA green loan
principles and eligibility was assessed by DNV GL. As part of the
review, Wood Canada Limited conducted a technical assessment of
greenhouse gas emissions of SOP production at Lake Way, relative to
Mannheim SOP production in other locations. The assessment
concluded that a Mannheim process plant of comparable capacity
would have around 60% higher CO2 emissions than the Lake Way
Project .
Sustainability
SO4 is committed to ensure that its business has a sustainable
future for all of its stakeholders. The Company is driven by our
core values to create positive multi-generational benefits through
responsible environmental, social, cultural and economic
behaviours. SO4 has developed a sustainability framework which is
intended for release in the December 2020 quarter.
Results of Operations
The net loss of the Consolidated Entity for the year ended 30
June 2020 was $15,610,002 (2019: net loss of $26,896,121). This
loss is mainly attributable to:
(i) The recognition of $4,459,520 in research and development
rebate incentives income (2019: $1,652,110) pertaining to the 2018
and 2019 financial periods. The research and development incentive
is a jointly administered program between AusIndustry and the
Australian Taxation Office;
(ii) Exploration and evaluation expenses of $12,554,091 (2019:
$13,745,503) which is attributable to the Group's accounting policy
of expensing exploration and development expenditure incurred by
the Group subsequent to the acquisition of the rights to explore
and up to the successful completion of bankable feasibility studies
(BFS) for each separate area of interest. The Lake Way BFS was
released to market in October 2019 and, as such, it is anticipated
that Exploration and Evaluation expenditure will significantly drop
in the 2021 Financial Year as the predominant focus of the Company
will be completing the Lake Way Project on time and budget;
(iii) Pre-Development expenses of $13,017,398 (2019: $8,513,393)
relating to the construction of the first phase of the commercial
scale SOP brine evaporation ponds and dewatering of the Williamson
Pit. These pre-development costs have been expensed in accordance
with the Group's accounting policy of expensing exploration and
pre-development expenditure incurred by the Group up to the
successful completion of a BFS;
Following completion of the BFS for the Lake Way Project in
October 2019, the Group has recognised a mine development asset and
commenced capitalising mine development expenditure with effect
from 1 November 2019;
(iv) Corporate and administrative expenses of $3,574,369 (2019:
$3,257,046) attributable to the administration of the Company and
its operations, as well as corporate expenses including the
Company's dual listing on ASX and AIM together with investor
relations activities. The Group's administrative expenses have
increased in 2020 to support the rapidly progressing development
activities at Lake Way;
(v) Non-cash share-based payment expenses of $6,504,826 (2019:
$2,302,381) which are attributable to the Group's accounting policy
of expensing the value (estimated using an option pricing model,
and performance rights valued using the underlying share price) 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/rights holders become unconditionally
entitled to the options and/or rights;
(vi) Business development expenses of $4,712,057 (2019:
$865,860) which are attributable to additional activities required
to support the growth and development of the Lake Way Project
including indirect project funding costs and offtake activities;
and
(vii) An income tax benefit of $19,657,371 (2019: $Nil) due to
the Group recognising previous tax losses for the first time as the
Company is anticipated to make future profits from the Lake Way
Project.
Impact of COVID-19
These financial results were partly incurred during the COVID-19
pandemic. In order to minimise any financial or operational impact,
the Company took immediate action to protect the integrity of the
Company's business interests and the safety and well-being of its
employees and stakeholders.
Salt Lake operates in the isolated and remote mining area of
Wiluna and fortunately with the positive protection measures and
support of governments and employees the Lake Way Project continued
to function close to normal levels. Prompt implementation and
affirmative compliance with government and health bodies'
regulations and recommendations forced quick change to operating
processes including strict social distancing and isolation
practices. The demographic regions of our remote workforce also
required changes to rosters and transport to comply with Government
restrictions. The closure of borders required immediate action to
manage the impact on the outputs, inputs, employees and communities
that Salt Lake operates in.
To protect the local community the Company applied restrictions
on staff entering the town of Wiluna or local communities. The
Company provided additional support to local communities by
providing fresh food at a time when the normal supply chain for
goods into Wiluna was under pressure from the impact of
COVID-19.
Social and mental health impact were a possible outcome from
roster changes, changed travel, commuting, dining and enhanced
hygiene practices. Salt Lake Potash has taken a considerate
approach to the hidden consequences of such changes and continues
to work with its employees to lessen the impact. The over-arching
objective of the Company has been to keep all its employees and
stakeholders safe and free from infection and/or spread, and
importantly to keep people employed during these uncertain
times.
In addition, the Company acted to preserve its cash position and
allocate more existing cash reserves to the Lake Way Project with
Executives taking a temporary 40% reductions from April to June
2020 and general staff taking a temporary 20% pay reduction during
this period.
Due to the concerted and quick action of the Company, the
overall financial impact of COVID-19 has been minimal.
Financial Position
At 30 June 2020, the Group had cash reserves of $7,030,418
(2019: $19,304,075) and net assets of $59,522,349 (2019:
$14,708,374), an increase of 305% compared with the previous year.
The increase in net assets is largely a result of raising
$49,108,876 (net of costs) throughout the 12 month period and
directly applying those funds to the construction and ongoing
development of the Lake Way Project.
Business Strategies and Prospects for Future Financial Years
The objective of the Group is to create long-term shareholder
value through the exploitation of its SOP projects. To achieve its
objective, the Group currently has the following business
strategies and prospects:
(i) Complete construction of on-lake infrastructure and process
plant for the Lake Way Project with a view to commencing
commissioning in December 2020 and first production by March
2021;
(ii) Complete first sales of product to key offtakers to receive first revenues in 2021 ;
(iii) Progress to nameplate capacity of 245,000t per annum of SOP at Lake Way by FY 22; and
(iv) Continue assessment and exploration across the Company's multi lake portfolio.
All of these activities have inherent risk 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:
Development Risks - As a result of the substantial expenditures
involved in mine development projects, mine developments are prone
to material cost overruns versus budget. The capital expenditures
and time required to develop new mines are considerable and changes
in cost or construction schedules can significantly increase both
the time and capital required to build the mine;
Operational risks - The planned schedule for production of
harvest salts for the commissioning and ramp up of the process
plant are subject to operating risks that could impact the amount
of harvest salts produced at its SOP operations, delay availability
of harvest salts or increase the cost of production for varying
lengths of time. Such difficulties include: changes or variations
in hydrogeological conditions, weather conditions effecting
evaporation and/or recharge, or other conditions; mining,
processing and loading equipment failures and unexpected
maintenance problems; limited availability or increased costs of
mining, processing and loading equipment and parts and other
materials from suppliers; mine safety accidents; adverse weather
and natural disasters; and a shortage of skilled labour. If any of
these or other conditions or events occur in the future, they may
increase the cost of mining or delay or halt planned commissioning,
ramp up and production, which could adversely affect our results of
operations or decrease the value of our assets. The Group has in
place a framework for the management of operational risks and an
insurance program which provides coverage for a number of these
operating risks.
Sulphate of Potash prices and foreign exchange - The price of
potash and other commodities fluctuate and are affected by numerous
factors beyond the control of the Company. Potential future
production 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 is engaging with
potential customers with a view to finalising binding offtake or
distribution or tolling agreements.
Project financing facilities with Taurus Funds Management are
denominated in US dollars whilst many of the planned development
and operational activities are denominated in Australian
dollars.The Company's ability to fund these activities maybe
adversely affected if the Australian dollar rises against the US
dollar;
The Company's activities may require further capital - The
development of the Company's projects may require additional
funding. The Company has recently executed a US$138m (A$203m) debt
financing package and a fully underwritten equity placement and
accelerated non-renounceable offer for A$98.5m to complete the
construction of the Lake Way Project on schedule. Whilst current
forecasts of cost to complete are in line with expectations, 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;
Native title and Aboriginal Heritage - There are areas of the
Company's projects, including Lake Way, over which legitimate
common law and/or statutory Native Title rights of Aboriginal
Australians exist. Where Native Title rights do exist, the Company
must obtain consent of the relevant landowner to progress the
exploration, development and mining phases of its operations. Where
there is an Aboriginal Site for the purposes of the Aboriginal
Heritage Act 1972, the Company must obtain consents in accordance
with the Act. The Company has executed a Native Title Land Access
Agreement with the Native Title Owners, and established a framework
for obtaining required consents for the continuity of works, but in
the event that it is unable to obtain these consents, its
activities may be adversely affected;
The Company's activities are subject to Government regulations
and approvals - The development of the Lake Way Project is subject
to obtaining further key approvals from relevant government
authorities. The Company has an approvals schedule and a management
team with significant experience in approvals required for mining
projects in Western Australia. A delay or failure to obtain
required permits may affect the Company's schedule or ability to
develop the project.
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 Lake Way Project and other lakes in the
Company's portfolio. 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; 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 caused by
the COVID-19 pandemic 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
2020 2019
Cents Cents
---------------------------------- ------- --------
Basic and diluted loss per share (5.46) (13.74)
---------------------------------- ------- --------
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Consolidated
Entity during the 2020 financial year were as follows:
(i) On 5 August 2019, the Company announced that it had mandated
Taurus Funds Management to provide up to US$150m staged project
financing for the Lake Way Project;
(ii) On 6 August 2019, Salt Lake Potash announced the completion
of a A$7.4m placement to Fidelity International to assist with the
acquisition costs of a portfolio of strategic Lake Way tenements
and assets from Blackham Resources Ltd. This transaction was
completed on 8 October 2019;
(iii) On 11 October 2019, the Company announced the outstanding
results of its Lake Way Bankable Feasibility Study which
demonstrated a highly compelling and long life asset;
(iv) On 18 November 2019, the Company secured 170ktpa in binding
offtakes with Unifert, Indagro and Fertisur, representing Salt Lake
Potash's diversified marketing strategy using multiple strategic
counterparties to undertake sales and distribution across a mix of
geographic regions;
(v) On 21 November 2019, Salt Lake Potash and Tarlka Matuwa
Piarku (Aboriginal Corporation) RNTBC advised of the execution of
the Native Title Land Access Agreement for the whole of the Lake
Way Project being a significant de-risking event for the
Company;
(vi) On 6 December 2019, the Company announced a A$23.5m
placement at A$0.70 and extended its Stage 1 debt facility with
Taurus Funds Management by a further US$15m;
(vii) On 18 December 2019, the Company secured an additional
50ktpa offtake agreement with HELM AG, a world leading chemical and
fertiliser company. Following execution of this binding offer the
Company had secured offtake agreements representing 90% of the
total planned production of the Lake Way Project; and
(viii) On 15 June 2020, the Company announced it had awarded the
Engineering, Procurement and Construction (EPC) contract involving
the provision of plant, labour, materials and construction services
for the Process Plant and Non-Process Infrastructure (NPI) valued
at A$85m. The Engineering, Procurement and Construction Management
(EPCM) contract was also awarded for the process plant and NPI to
the value of A$22m.
SIGNIFICANT EVENTS AFTER BALANCE DATE
i) On 2 July 2020, Salt Lake Potash announced it had received
commitments to raise A$15m through the placement of unsecured
zero-coupon Convertible Notes to corporate and institutional
investors. The Convertible Notes are structured as deferred equity
with zero coupon and mandatory conversion into equity at the lower
of $0.45c per share or a 5% discount to any future equity raising
of at least A$10m. Convertible Notes raising A$5m have since been
converted at $0.45c per share.
ii) On 5 August 2020, the Company announced it had fully funded
the Lake Way Project via the execution of a US$138m (A$203m) debt
financing package and a fully underwritten equity placement and
accelerated non-renounceable offer for A$98.5m to complete the
construction of the Lake Way Project on schedule. The debt
financing package is via a Syndicated Facility Agreement with
Taurus Mining Finance Fund No.2 L.P. and the Clean Energy Finance
Corporation.
Other than as noted above, as at the date of this report there
are no matters or circumstances which have arisen since 30 June
2020 that have significantly affected or may significantly
affect:
-- The operations, in financial years subsequent to 30 June 2020, of the Consolidated Entity;
-- The results of those operations, in financial years
subsequent to 30 June 2020, of the Consolidated Entity; or
-- The state of affairs, in financial years subsequent to 30
June 2020, of the Consolidated Entity.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year
consisted of the exploration and development of resource projects.
No significant change in nature of these activities occurred during
the year.
DIRECTORS
The names of the Group's Directors in office at any time during
the financial year or since the end of the financial year are:
Current Directors
Mr Ian Middlemas Chairman
Mr Tony Swiericzuk Chief Executive Officer (CEO) & Managing Director
Mr Mark Pearce Non-Executive Director
Mr Bryn Jones Non-Executive Director
Mr Matthew Bungey Non-Executive Director (Appointed 14 May 2020)
Former Directors
Mr Matthew Syme Non-Executive Director (Resigned 23 July 2019)
Unless otherwise stated, Directors held their office from 1 July
2019 until the date of this report.
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 Shares(1) Incentive Options (2) Performance Rights (3)
-------------------- ------------------- ---------------------- -----------------------
Mr Ian Middlemas 17,000,000 - -
Mr Tony Swiericzuk 4,416,146 5,000,000 5,788,324
Mr Mark Pearce 4,450,000 - 50,000
Mr Bryn Jones 65,625 - 50,000
Mr Matthew Bungey 1,494,075 450,000 1,500,000
-------------------- ------------------- ---------------------- -----------------------
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.
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.
DIVIDS
No dividends were paid or declared since the start of the
financial year. No recommendation for payment of dividends has been
made.
SHARE OPTIONS, PERFORMANCE SHARES, PERFORMANCE RIGHTS AND
CONVERTIBLE NOTES
At the date of this report the following options, performance
shares and convertible notes have been issued over unissued
Ordinary Shares of the Company:
-- 1,000,000 Incentive Options exercisable at $0.60 each on or before 29 April 2021;
-- 250,000 Incentive Options exercisable at $0.40 each on or before 30 June 2021;
-- 500,000 Incentive Options exercisable at $0.50 each on or before 30 June 2021;
-- 750,000 Incentive Options exercisable at $0.60 each on or before 30 June 2021;
-- 400,000 Incentive Options exercisable at $0.70 each on or before 30 June 2021;
-- 9,375,000 Unlisted Options exercisable at $0.85 each on or before 30 June 2023;
-- 2,000,000 Incentive Options exercisable at $0.60 each on or before 1 November 2023;
-- 4,650,000 Incentive Options exercisable at $1.00 each on or before 1 November 2023;
-- 5,000,000 Incentive Options exercisable at $1.20 each on or before 1 November 2023;
-- 1,000,000 Unlisted Options exercisable at $0.702 each on or before 30 June 2023;
-- 9,000,000 Unlisted Options exercisable at $0.702 each on or before 4 August 2024;
-- 18,560,398 Performance Rights which are subject to various
performance conditions to be satisfied prior to the relevant expiry
dates between 31 July 2020 and 1 November 2023; and
-- 10,000,000 Convertible Notes with a face value of $1.00 each.
During the year ended 30 June 2020, 4,645,000 Ordinary Shares
were issued as a result of the conversion of Performance Rights and
no Ordinary Shares were issued as a result of the conversion of
Incentive Options or Performance Shares. 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 or conversion of
Performance Shares or Rights.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2020
30 June 30 June
2020 2019
Notes $ $
---------------------------------------- ------ ------------- -------------
Interest income 161,612 135,952
Government grant income 170,000 -
Research and Development Tax Incentive
rebate 4,459,520 1,652,110
Exploration and evaluation expenses (12,554,091) (13,745,503)
Pre-Development expenses (13,017,398) (8,513,393)
Corporate and administrative expenses (3,574,369) (3,257,046)
Business development expenses (4,712,057) (865,860)
Loss on disposal of asset (11,036) -
Unrealised/Realised foreign exchange 1,311,104 -
gain/(loss)
Finance costs (995,832) -
Share based payment expense 3 (6,504,826) (2,302,381)
---------------------------------------- ------ ------------- -------------
Loss before tax (35,267,373) (26,896,121)
Income tax benefit 4 19,657,371 -
---------------------------------------- ------ ------------- -------------
Total comprehensive loss for the
year (15,610,002) (26,896,121)
---------------------------------------- ------ ------------- -------------
Basic and diluted loss per share
attributable to the ordinary equity
holders of the company (cents per
share) 19 (5.46) (13.74)
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 2020
30 June 30 June
2020 2019
Notes $ $
---------------------------------------- ------- -------------- --------------
ASSETS
Current Assets
Cash and cash equivalents 5 7,030,418 19,304,075
Trade and other receivables 6 4,032,181 923,036
Inventory 7 1,534,657 -
---------------------------------------- ------- -------------- --------------
Total Current Assets 12,597,256 20,227,111
Non-Current Assets
Security deposits 76,121 -
Property, plant and equipment 8 3,401,527 763,566
Right of use assets 9 5,617,305 -
Exploration and evaluation expenditure 10 2,276,736 2,276,736
Mine development 11 116,780,737 -
Deferred tax assets 4 21,056,646 -
Total Non-Current Assets 149,209,072 3,040,302
---------------------------------------- ------- -------------- --------------
TOTAL ASSETS 161,806,328 23,267,413
LIABILITIES
Current Liabilities
Trade and other payables 12 28,170,764 7,709,590
Interest bearing loans 13 63,840,117 -
Non interest bearing loans 7,202 7,202
Lease liabilities 14 1,332,297 11,828
Provisions 15 670,989 79,368
Total Current Liabilities 94,021,369 7,807,988
---------------------------------------- ------- -------------- --------------
Non-Current Liabilities
Lease liabilities 14 4,420,748 27,163
Non interest bearing loans 4,801 12,003
Provisions 15 3,837,061 711,885
---------------------------------------- ------- -------------- --------------
Total Non-Current Liabilities 8,262,610 751,051
---------------------------------------- ------- -------------- --------------
TOTAL LIABILITIES 102,283,979 8,559,039
---------------------------------------- ------- -------------- --------------
NET ASSETS 59,522,349 14,708,374
======================================== ======= ============== ==============
EQUITY
Contributed equity 16 209,611,743 155,917,578
Reserves 17 10,605,822 4,273,967
Accumulated losses (160,695,216) (145,483,171)
---------------------------------------- ------- -------------- --------------
TOTAL EQUITY 59,522,349 14,708,374
======================================== ======= ============== ==============
The above Consolidated Statement of Financial Position should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2020
Share- Based Payment
Contributed Equity Reserve Accumulated Losses Total Equity
-----------------------------
$ $ $ $
----------------------------- ------------------- ----------------------------- ------------------- --------------
Balance at 1 July 2019 155,917,578 4,273,967 (145,483,171) 14,708,374
Net loss for the year - - (15,610,002) (15,610,002)
Total comprehensive loss for
the year - - (15,610,002) (15,610,002)
Shares issued from
placements 50,890,601 - - 50,890,601
Shares issued on exercise of
options 142,500 (142,500) - -
Shares issued in connection
to conversion of
performance rights 2,600,687 (2,600,687) - -
Shares issued to employees 430,827 - - 430,827
Shares issued in lieu of
fees 12,000 - - 12,000
Incentive options expired - (153,000) 153,000 -
Performance rights expired - (244,957) 244,957 -
Share issue costs (1,781,725) - - (1,781,725)
Deferred tax asset
recognised in equity 1,399,275 - - 1,399,275
Options issued as
transaction cost for the
interest bearing loan - 3,411,000 - 3,411,000
Share based payment expense - 6,061,999 - 6,061,999
----------------------------- ------------------- ----------------------------- ------------------- --------------
Balance at 30 June 2020 209,611,743 10,605,822 (160,695,216) 59,522,349
============================= =================== ============================= =================== ==============
Balance at 1 July 2018 123,501,153 2,105,886 (118,587,050) 7,019,989
Net loss for the year - - (26,896,121) (26,896,121)
Total comprehensive loss for
the year - - (26,896,121) (26,896,121)
Shares issued from
placements 33,250,000 - - 33,250,000
Shares issued on exercise of
options 300,000 - - 300,000
Shares issued in lieu of
fees 467,633 - - 467,633
Share issue costs (1,601,208) - - (1,601,208)
Share based payment expense - 2,168,081 - 2,168,081
Balance at 30 June 2019 155,917,578 4,273,967 (145,483,171) 14,708,374
============================= =================== ============================= =================== ==============
The above Consolidated Statement of Changes in Equity should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2020
30 June 30 June
2020 2019
Note $ $
----------------------------------------------------------- ------ --------------- -------------
Cash flows from operating activities
Payments to suppliers and employees (39,553,535) (20,130,140)
R&D tax incentive received 912,766 1,652,110
Interest received 167,618 144,043
Interest paid (19,229) -
Government grants received 170,000 -
Payment for security deposits (76,121) -
Net cash outflow from operating activities 18(a) ( 38,398,501 ) (18,333,987)
----------------------------------------------------------- ------ --------------- -------------
Cash flows from investing activities
Payment for mine properties (10,000,000) -
Payments for property, plant and equipment (2,374,829) (357,321)
Proceeds from sale of assets 35,455 -
Payments for mine development (76,208,627) -
Net cash outflow from investing activities (88,548,001) (357,321)
----------------------------------------------------------- ------ --------------- -------------
Cash flows from financing activities
Proceeds from issue of shares 50,890,601 33,550,000
Payment of transaction costs from issue of shares (1,781,725) (1,250,434)
Receipt of borrowings 66,599,796 -
Transaction costs related to interest bearing loans (982,101) -
Lease payments (411,539) (13,629)
Net cash inflow from financing activities 114,315,032 32,285,937
----------------------------------------------------------- ------ --------------- -------------
Net (decrease)/increase in cash and cash equivalents held (12,631,470) 13,594,629
Cash and cash equivalents at the beginning of the year 19,304,075 5,709,446
Effect of exchange rate fluctuations on cash held 357,813 -
----------------------------------------------------------- ------ --------------- -------------
Cash and cash equivalents at the end of the year 5 7,030,418 19,304,075
----------------------------------------------------------- ------ --------------- -------------
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 YEARED 30 JUNE 2020
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 2020 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
2020 was authorised for issue in accordance with a resolution of
the Directors on 23 September 2020.
(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.
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.
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 2020, the Consolidated Entity
incurred a net loss of $15,610,002 (2019: $26,896,121), experienced
net cash outflows from operating and investing activities of
$126,946,502 (2019: $18,691,308) and held cash and cash equivalents
of $7,030,418 (2019: $19,304,075).
Since 30 June 2020, the Company has secured multiple sources of
capital to enable the Company to fund the Company's operations
through the development of the Lake Way project. On 2 July 2020,
the Company secured A$15m of capital via the placement of unsecured
zero-coupon Convertible Notes to corporate and institutional
investors and on 5 August 2020, announced a A$203m (US$138m) debt
financing and fully underwritten A$98.5m equity raising to enable
first production. Equity funds have been received, whilst draw down
of part of the debt financing remains subject to satisfaction of
all conditions precedent. As such, the Company continues to
construct the Lake Way Project on schedule and in line with the
capex budget of A$264m announced 15 June 2020 and will have
sufficient funds to meet currently committed expenditure.
Due to the uncertain timing of revenue receipts, and in order
for the Company to begin investigating bringing additional lakes
online, the Company may require additional funds to continue as a
going concern. The Company has demonstrated that it can secure
funds from multiple sources. It addition, the Directors have been
involved in a number of recent successful capital raisings for the
Company and for other listed resource companies and are satisfied
that they will be able to raise additional capital if and when
required to enable the Consolidated Entity to meet its obligations
as and when they fall due. Accordingly, the Directors consider that
it is appropriate to prepare the financial statements on the going
concern basis.
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) New Accounting Standards Interpretations and amendments adopted by the Group (Continued)
Since 1 July 2019, the Consolidated Entity has adopted all
Accounting Standards and Interpretations effective from 1 July
2019. Other than the changes described below, the accounting
policies adopted are consistent with those of the previous
financial year. The Consolidated Entity has not early adopted any
other standard, interpretation or amendment that has been issued
but is not yet effective.
Several new and amended Accounting Standards and Interpretations
applied for the first time from 1 July 2019. These did not have an
impact on the consolidated financial statements of the Consolidated
Entity with the exception of AASB 16 Leases.
AASB 16 Leases
During February 2016, the AASB issued AASB 16, which replaces
the leases guidance in AASB 117 Leases and related interpretations.
Lessor accounting under AASB 16 is substantially unchanged from
AASB 117. Lessors will continue to classify leases as either
operating or finance leases using similar principles as in AASB
117. Therefore, AASB 16 did not have an impact for leases where the
Group is the lessor.
The Group has applied AASB 16 for the first time on 1 July 2019,
using the modified retrospective approach. Thus, no restatement of
comparative information. The Group elected to use the practically
expedient transition provisions which allow for the standard to be
applied only to contracts that were previously identified as leases
applying AASB 117 and related interpretations at the date of
initial application. The Group also applied the practical
expedients wherein it applied the short-term leases exemptions to
leases with a lease term that ends within 12 months at the date of
initial application. The Group has also elected to use the
recognition exemptions for lease contracts that, at the
commencement date, have a lease term of 12 months or less and do
not contain a purchase option ('short-term leases'), and lease
contracts for which the underlying asset is of low value
('low-value assets').
The Group has lease contracts over office leases, car bays, site
communication equipment and a permanent village. Before the
adoption of AASB 16, the Group classified each of its leases (as
lessee) at the inception date as either a finance lease or an
operating lease. A lease is classified as a finance lease if it
transferred substantially all of the risks and rewards incidental
to ownership of the leased asset to the Group otherwise it was
classified as an operating lease. Finance leases are capitalised at
the commencement of the lease using the inception date fair value
of the assets or, if lower, the present value of the minimum lease
payments. Lease payments are apportioned between interest
(recognised as finance costs) and reduction of the lease liability.
Under the previous standard AASB 117, in an operating lease, the
leased property was not capitalised and the lease payments were
recognised as rent expense in the statement of profit or loss on a
straight line basis over the lease term. Any prepaid rent and
accrued rent were recognised under prepayments and trade and other
payables, respectively.
Upon adoption of AASB 16, the Group applied a single recognition
and measurement approach for all leases that it is the lessee,
except for short term leases and leases of low value assets. The
standard provides specific transition requirements and practical
expedients, which has been applied by the Group.
Leases previously classified as finance leases
The Group did not change the initial carrying amounts of
recognised assets and liabilities at the date of initial
application for leases previously classify as finance leases (i.e.
the right-of-use assets and lease liabilities equal the lease
assets and liabilities recognised under AASB 117). The requirements
of AASB 16 were applied on these leases from 1 July 2019.
Leases previously accounted for as operating leases
The Group recognised right-of-use assets and lease liabilities
for those leases previously classified as operating leases, except
for short-term leases and leases of low value assets. The Group has
elected to present right-of-use assets and lease liabilities
separately. On transition, the right-of-use assets were recognised
based on an amount equal to the lease liabilities. Lease
liabilities were recognised based on the present value of the
remaining lease payments, discounted using the incremental
borrowing rate at the date of initial application. The discount
rate applied was at the range of 3.10% - 8.74%.
The effect of adoption AASB 16 as at 1 July 2019 is as
follows:
$
---------------------------------------------------- ---------
Assets
Non-current: Right-of-use assets 940,767
Property, plant and equipment previously a finance
lease reclassified to right-of-use assets (47,852)
Total assets 892,915
---------------------------------------------------- ---------
Liabilities
Current: Lease liabilities 177,187
Non-current: Lease liabilities 715,728
---------------------------------------------------- ---------
Total liabilities 892,915
---------------------------------------------------- ---------
(i) Reconciliation of operating lease commitments
$
-------------------------------------------------------- ---------
Operating lease commitments as at 30 June 2019 236,026
Assessment of option periods on leases at 30 June 2019
reasonably certain to be exercised 771,563
Weighted average incremental borrowing rate as at 1
July 2019 3.95%
Discounted operating lease commitments as at 1 July
2019 911,500
Less:
Commitments relating to short-term leases (18,585)
Commitments relating to leases of low-value assets -
Add:
Commitments relating to leases previously classified
as finance leases 38,991
-------------------------------------------------------- ---------
Lease liabilities as at 1 July 2019 931,906
-------------------------------------------------------- ---------
AASB Interpretation 23 Uncertainty over Income tax treatment
AASB Interpretation 23 addresses the accounting for income taxes
when tax treatments involve uncertainty that affects the
application of AASB 112 Income Taxes (AASB 112). It does not apply
to taxes or levies outside the scope of AASB 112, nor does it
specifically include requirements relating to interest and
penalties associated with uncertain tax treatments. The
Interpretation specifically addresses the following:
- Whether an entity considers uncertain tax treatments separately
- The assumptions an entity makes about the examination of tax
treatments by taxation authorities;
- How an entity determines taxable profit (tax losses), tax
bases, unused tax losses, unused tax credit and tax rates; and
- How an entity considers changes in facts and circumstances.
An entity must determine whether to consider each uncertain tax
treatment separately or together with one or more other uncertain
tax treatments. The approach that better predicts the resolution of
the uncertainty needs to be followed.
The Group applies significant judgment in identifying
uncertainties over income tax treatments. For the year ended 30
June 2020, the Group has assessed that the interpretation has not
had an impact on the financial statements of the Group.
Due to the Group entering the phase of Mine Development, it is
has been deemed probable that future profits will be able to be
offset against available prior year tax losses and other deferred
tax assets. The Group has recognised a deferred tax asset of
$21,056,646 and income tax benefit for the 30 June 2020 period
totaling $19,657,371.
(c) Principles of Consolidation
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of the Company as at 30 June 2019
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) Financial Assets
Financial assets are recognised when the entity becomes a party
to the contractual provisions to the instrument. Trade receivables
are initially recognised at transaction price. Transaction costs
that are directly attributable to the acquisition or issue of
financial assets (other than financial assets at fair value through
profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the
acquisition of financial assets at fair value through profit or
loss are recognised immediately in profit or loss.
Classification and subsequent measurement of financial
assets
For the purpose of subsequent measurement, financial assets
other than those designated and effective as hedging instruments
are classified into the following categories upon initial
recognition:
-- Amortised cost
-- Fair value through profit or loss (FVPL)
-- Equity instruments at fair value through other comprehensive income (FVOCI)
-- Debt instruments at fair value through other comprehensive income
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within other income or
expenses respectively.
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of
the following conditions are met:
-- The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual
cash flows; and
-- The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured
using the effective interest rate (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss when
the asset is derecognised, modified or impaired.
The Consolidated Entity's financial assets at amortised cost
include short term deposits and other receivables.
Impairment
The Group recognises an allowance for Expected Credit Loss (ECL)
for all debt instruments not held at fair value through profit or
loss. ECL is based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows
that the Group expects to receive, discounted at an approximation
of the original EIR. An ECL is recognised in two stages. For credit
exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the
next 12-months (a 12-month ECL). For those credit exposures for
which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
For receivables due in less than 12 months, the Group will
recognise a loss allowance based on the financial asset's lifetime
ECL at each reporting date. The Group will establish a provision
matrix for these receivables that is based on its historical credit
loss experience, adjusted for forward-looking factors specific to
the debtors and the economic environment as sales from product
eventuate or significant receivables come to hand.
The Group considers a financial asset in default when
contractual payments are 60 days past due. In certain cases, the
Group may consider a financial asset to be in default when internal
or external information indicates that the Group is unlikely to
receive the outstanding contractual amounts in full before taking
into account any credit enhancements held by the Group. A financial
asset is written off when there is no reasonable expectation of
recovering the contractual cash flows and usually occurs when past
due for more than one year and not subject to enforcement
activity.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
(f) Inventory
Inventories are valued at the lower of cost or net realisable
value. Cost is determined primarily on the basis of average costs.
Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and cost
necessary to make the sale. The cost of raw materials spare parts,
freight and indirect costs allocation is the purchase price. The
cost of partly processed and saleable products is generally the
cost of production including:
-- Labour costs, materials and contractor expenses which are
directly attributable to the extraction and processing of brine
-- The depreciation of mining properties and leases of property
plant and equipment used in the extraction and processing of brine
and production of Sulphate of Potash and production overheads.
Brine inventory quantities are assessed primarily through
pumping and flow physicals together with grade from assays. If the
contained Sulphate of Potash calculated in the brine will not be
processed within 12 months after the balance sheet date, it is
included within non-current assets.
(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.
2020 2019
--------------------------------------------- ------- -------
Major depreciation and amortisation periods
are:
Plant and equipment: 3-50% 22-40%
Computer equipment: 10-50% 10-50%
Lab equipment: 10-50% 10-50%
Motor vehicles: 13% 13%
Software: 50% 50%
Office equipment 1-100% 1-100%
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, Evaluation and Pre-Development Expenditure
Expenditure on exploration, evaluation and pre-development is
accounted for in accordance with the 'area of interest' method.
Exploration, evaluation and pre-development expenditure
encompasses expenditures incurred by the Group in connection with
the exploration for and evaluation of mineral resources and early
development activities 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 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, evaluation and pre-development expenditure incurred
by the Group subsequent to acquisition of the rights to explore is
expensed as incurred, up to and including costs associated with the
preparation of a bankable feasibility study.
(i) Impairment
Capitalised 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 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) Mine Development
Expenditure is distinguished between 'Exploration and evaluation
assets' and 'Mine Development' once the work completed to date
supports the future development of the project and such development
receives appropriate approvals. Following this point, all
subsequent expenditure on the construction, installation or
completion of ponds and other infrastructure facilities is
capitalised in 'Mine Development'. Development expenditure is net
of proceeds from the sale of ore extracted during the development
phase to the extent that it is considered integral to the
development of the mine. Any costs incurred in testing the assets
to determine if they are functioning as intended, are capitalised,
net of any proceeds received from selling any product produced
while testing. After production starts, all assets included in the
'Mine Development' are then transferred to 'Producing mines' and
amortisation commences.
Borrowing costs that are directly attributable to the
acquisition, construction or production of mine development assets,
are also capitalised. Capitalisation of borrowing costs ceases once
productions start and assets included in 'Mine Development' are
transferred to 'Producing Mines' or are otherwise ready for their
intended use or sale.
(j) Payables
Liabilities are recognised for amounts to be paid in the future
for goods and services received. Trade accounts payable are
normally settled within 30 days. Payables are carried at amortised
cost.
(k) 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.
Rehabilitation
The Group is required to decommission and rehabilitate mines or
related assets at the end of their producing lives to a condition
acceptable to the relevant authorities. A rehabilitation provision
is recognised when the Group has a present obligation, whether
legal or constructive, as a result of a past event.
The expected cost of any approved decommissioning or
rehabilitation programme, discounted to its net present value, is
provided when the related environmental disturbance occurs. Until a
decision to mine is made, the cost is brought up front and expensed
whether the rehabilitation activity is expected to occur over the
life of the operation or at the time of closure. Once a decision to
mine is made, the rehabilitation cost will be capitalised and
amortised over the life of the operation and the increase in net
present value of the provision for the expected cost is included in
financing expenses. Expected decommissioning and rehabilitation
costs are based on the discounted value of the estimated future
cost of the detailed plans prepared. Where there is a change in the
expected decommissioning and restoration costs, the value of the
provision and any related asset are adjusted and the effect is
recognised in the profit or loss on a prospective basis over the
remaining life of the operation.
The estimated costs of the rehabilitation are reviewed annually
and adjusted as appropriate for changes in legislation, technology
or other circumstances. Cost estimates are not reduced by potential
proceeds from the sale of assets or from plant/site clean up at
closure.
The ultimate cost of rehabilitation is uncertain and costs can
vary in response to many factors including changes to the relevant
legal requirements, the emergence of new rehabilitation techniques
or experience at other sites. The expected
(k) Provisions
timing of expenditure can also change. Changes to any of the
estimates could result in significant changes to the level of
provisioning required, which would in turn impact future financial
results.
In recognising the amount of rehabilitation obligation at each
reporting date, judgement is made on the extent of rehabilitation
that the Group is responsible for at each reporting date.
(l) Interest Income
Interest income is recognised as it accrues in the Statement of
Profit or Loss, using the effective interest method. This
methodology exactly discounts estimated future cash receipts
through the expected life of the financial asset to the gross
carrying amount of the financial asset.
(m) 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 using the
full liability method 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 tax 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 tax group entity is then subsequently assumed
by the Company. The tax consolidated group has entered a tax
sharing agreement whereby each company in the tax group contributes
to the income tax payable in proportion to their contribution to
the net profit before tax of the tax consolidated group.
(n) 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 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.
(o) 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.
(p) 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.
(q) Research & Development Incentive Rebate
Any rebate received for eligible Research and Development
activities are offset against the area where the costs were
initially incurred. For R&D expenditure that has been
capitalised, any claim received will be offset against 'Exploration
and Evaluation' or 'Mine Development' in the Consolidated Statement
of Financial Position. For R&D expenditure that has been
expensed, any claim received will be recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
(r) Acquisition of Assets
A group of assets may be acquired in a transaction which is not
a business combination. In such cases the cost is allocated to the
individual identifiable assets (including intangible assets that
meet the definition of and recognition criteria for intangible
assets in AASB 138 Intangible Assets) acquired and liabilities
assumed on the basis of their relative fair values at the date of
purchase.
(s) 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 the Statement of
Profit or Loss and Other Comprehensive Income. 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.
(t) 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.
(u) 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.
(v) Government Grant Income
Government grants are recognised in the profit or loss on a
systematic basis over the period in which the entity recognises as
expenses the related costs for which the grants are intended to
compensate; i.e matching income and expenses.
If the grant relates to expenses or losses already incurred by
the entity, or to provide immediate financial support to the entity
with no future related costs, the income is recognised in the
period in which it becomes available
(w) 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 of options 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 23.
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
(w) Share-Based Payments
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 or provision of
services. 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.
(x) Interest Bearing Loans
Non-derivative financial liabilities other than financial
guarantees are initially measured at fair value net of directly
attributable transaction costs. These are subsequently measured at
amortised cost. Transaction costs that relate to these instruments
are included in the calculation of the amortised cost using the
effective interest method. Any gains or losses are recognised in
profit or loss through the amortisation process and when the
financial liabilities is derecognised.
(y) Leases
Pre 1 July 2019 policy
Leases are classified at their inception as either operating or
finance leases based on the economic substance of the agreement so
as to reflect the risks and benefits incidental to ownership.
(i) Operating Leases
The minimum lease payments of operating leases, where the lessor
effectively retains substantially all of the risks and benefits of
ownership of the leased item, are recognised as an expense in
profit and loss on a straight-line basis over the lease term.
Contingent rentals are recognised as an expense in the financial
year in which they are incurred.
(ii) Finance Leases
Leases which effectively transfer substantially all the risks
and benefits incidental to ownership of the leased item to the
Consolidated Entity are capitalised at the inception of the lease
at the fair value of the leased property or, if lower, at the
present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance
charges are charged directly to profit and loss. Capitalised leased
assets are depreciated over the estimated useful life of the asset
or where appropriate, over the estimated life of the mine.
The cost of improvements to or on leasehold property is
capitalised, disclosed as leasehold improvements, and amortised
over the unexpired period of the lease or the estimated useful
lives of the improvements, whichever is the shorter.
Post 1 July 2019 policy
The Group assesses at contract inception whether a contract is,
or contains, a lease. That is, if the contract conveys the right to
control the use of an identifiable asset for a period of time in
exchange for consideration.
Right-of-use Assets
The Group recognises right-of-use assets at the commencement
date of the lease (i.e. the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset
at the end of the lease term, the recognised right-of-use assets
are depreciated on a straight line basis over the shorter of its
estimated useful life and the lease term. Right-of-use assets are
subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees and do not include non-lease components of a
contract. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group and
payments of penalties for terminating a lease, if the lease term
reflects the Group exercising the option to terminate. The variable
lease payments that do not depend on an index or a rate are
recognised as expense in the period on which the event or condition
that triggers the payment occurs. In calculating the present value
of lease payments, the Group uses the incremental borrowing rate at
the lease commencement date if the interest rate implicit in the
lease is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion
of interest and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is
a modification, a change in the lease term, a change in the
substance of fixed lease payments or a change in the assessment to
purchase the underlying asset.
Short-term leases and leases of low value assets
The Group applies the short term lease recognition exemption to
its short term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also
applies the lease of low value assets recognition exemption to
leases of office equipment that are considered of low value (i.e.
below $5,000). Lease payments on short term leases and leases of
low value assets are recognised as an expense on a straight line
basis over the lease term.
(y) 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:
(i) Deferred Tax Assets (Note 4)
Following completion of the Bankable Feasibility Study for the
Lake Way Project that demonstrated the technical feasibility and
commercial viability of the Project in October 2019, the Group has
determined that it is appropriate for the Company to transfer the
Lake Way Project 'Exploration and evaluation assets' to 'Mine
Development' with effect from 1 November 2019.
Due to the Group entering the phase of Mine Development, it has
been deemed probable that future profits will be able to be offset
against available prior year tax losses and other deferred tax
assets. The Group has recognised a deferred tax asset of
$21,056,646 and income tax benefit for the 30 June 2020 period
totalling $19,657,371.
In determining the recoverability of deferred tax assets,
management prepare and review an analysis of estimated future
results which support the future realisation of deferred tax
assets. The estimated future profitability results are judgmental
and involves a number of key assumptions. These assumptions are
also used for impairment assessments referred to in the notes
below. To the extent that cash flows and taxable income differ
significantly from estimates, the ability of the Group to realise
recognised deferred tax assets would be impacted.
(ii) Research and Development (Note 6)
The Group is entitled to claim R&D tax incentives in
Australia. The R&D tax incentive is calculated using the
estimated R&D expenditure multiplied by 43.5% non-refundable
tax offset. For the 2020 financial year, the Group has accounted
for this incentive as other income in within the Statement of
Profit or Loss and Other Comprehensive Income.
(iii) Inventory (Note 7)
Certain estimates, including expected Sulphate of Potash
recoveries are calculated by engineers using available industry,
engineering and scientific data. Estimates are periodically
reassessed by the Group taking into account technical analysis and
historical performance. Changes in estimates are adjusted for on a
prospective basis.
(iv) Right of Use Assets and Lease Liabilities (Note 9 and Note 14)
The Group determines the lease term as the non-cancellable term
of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the
assets for additional terms of one to four years. The Group applies
judgement in evaluating whether it is reasonably certain to
exercise the option to renew. That is, it considers all relevant
factors that create an economic incentive for it to exercise the
renewal. After the commencement date, the Group reassesses the
lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to
exercise (or not to exercise) the option to renew (e.g. a change in
business strategy).
(v) Exploration and Evaluation Expenditure (Note 10)
The future recoverability of exploration and evaluation
expenditure is dependent on a number of factors, including whether
the Group decides to exploit the related area of interest itself
or, if not, whether it successfully recovers the related
exploration and evaluation asset through sale.
To the extent that exploration and evaluation expenditure is
determined not to be recoverable in the future, profits and net
assets will be reduced in the period in which this determination is
made.
(vi) Mine Rehabilitation (Note 15)
The Group assesses its mine rehabilitation provision in
accordance with the accounting policy stated in Note 1(k). In
determining an appropriate level of provision, consideration is
given to the expected future costs to be incurred, the timing of
those future costs and the estimated level of inflation. The
ultimate rehabilitation costs are uncertain, and cost estimates can
vary in response to many factors, including estimates of the extent
and costs of rehabilitation activities, technological changes,
regulatory changes, cost increases as compared to the inflation
rates, and changes in discount rates. The expected timing of
expenditure can also change. These uncertainties may result in
future actual expenditure differing from the amounts currently
provided. Therefore, significant estimates and assumptions are made
in determining the provision for mine rehabilitation. As a result,
there could be significant adjustments to the provisions
established which would affect future financial results. The
provision at reporting date represents management's best estimate
of the present value of the future rehabilitation costs
required.
(vii) Share-Based Payments (Note 23)
The assessed fair value at grant date of options granted as
share-based payments during the period was determined using a
binomial option pricing model that takes into account the exercise
price, the price of the underlying share at grant date, the life of
the option, the volatility of the underlying share, the risk-free
rate and expected dividend payout and any applicable vesting
conditions. Management was required to make assumptions and
estimates in order to determine the inputs into the binomial option
pricing model. The assessed fair value at grant date of performance
rights granted as share-based payments during the period was
determined as at the date of grant based on the underlying share
price.
(viii) Impairment of Non-Financial Assets
The recoverability of mine development and property, plant and
equipment is dependent on a number of factors, including the level
of proved and probable reserves, production levels, future cash
costs and the future technological changes which could impact the
cost, future legal changes (including changes to environmental
restoration obligations) and changes in commodity prices.
Non-financial assets are reviewed for impairment if there is any
indication that the carrying amount may not be recoverable.
2. SEGMENT INFORMATION
The Consolidated Entity operates in one operating segment, being
exploitation of SOP projects 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. EXPENSES
2020 2019
$ $
---------------------------------------------- ---------- ---------
(a) Depreciation included in statement of
comprehensive income
Depreciation of property, plant and equipment 233,135 193,630
Depreciation of right of use assets 176,987 -
============================================== ========== =========
(b) Employee benefits expense
Salaries and wages 4,793,978 3,618,088
Superannuation expense 393,920 304,812
Share-based payment expense 6,176,826 2,168,081
Total employment expenses included in profit
or loss 11,364,724 6,090,981
============================================== ========== =========
2020 2019
$ $
----------------------------------------------------- ---------- ----------
Expenses arising from equity-settled share-based
payment transactions relating incentive
options and performance rights 6,061,999 2,168,081
Expenses arising from equity-settled share-based
payment transactions for previously issued
performance rights that vested but could
not be exercised due to share trading restrictions 430,827 -
Expenses arising from equity-settled share-based
payment transactions to suppliers and consultants 12,000 134,300
----------------------------------------------------- ---------- ----------
Total share-based payments recognised during
the year 6,504,826 2,302,381
===================================================== ========== ==========
4. INCOME TAX
2020 2019
$ $
------------------------------------------------- ------------ ------------
(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 19,657,371 -
Income tax benefit reported in the statement
of Profit or Loss and other Comprehensive
income 19,657,371 -
================================================= ============ ============
(b) Recognised in the statement of comprehensive
income
Deferred income tax related to items
charged or credited to equity
Deferred tax assets not previously brought
to account from prior periods 864,758 -
Deferred tax assets recognised in equity 534,517 -
------------------------------------------------- ------------ ------------
Income tax benefit recognised in equity 1,399,275 -
================================================= ============ ============
Total deferred tax asset recognised
at 30 June 21,056,646 -
================================================= ============ ============
(c) Reconciliation between tax expense
and accounting loss before income tax
Accounting loss before income tax (35,267,373) (26,896,121)
================================================= ============ ============
At the domestic income tax rate of 30%
(2019: 30%) (10,580,212) (8,068,836)
Expenditure not allowable for income
tax purposes 2,800,534 691,952
Income not assessable for income tax
purposes (1,352,858) (491,903)
Capital allowances - (380,363)
Change in tax rate - -
Adjustment in respect of current income
tax of previous years - (13,971)
Other 849 -
Deferred tax assets brought to account* (10,525,684) -
Deferred tax assets not brought to account - 8,263,121
Income tax expense/(benefit) reported
in the statement of Profit or Loss and
other Comprehensive income (19,657,371) -
================================================= ============ ============
2020 2019
$ $
------------------------------------------------ ----------- ------------
(d) Deferred Tax Assets and Liabilities
Deferred income tax at 30 June relates
to the following:
Deferred Tax Liabilities
Accrued income (1,569) (3,370)
Exploration and evaluation assets (47,137) (47,137)
Property, Plant and Equipment (30,862) -
Borrowing costs (329,119) -
Interest bearing liabilities and borrowings (401,348) -
Right of use assets (1,685,191) -
Deferred tax assets used to offset deferred
tax liabilities 2,495,226 50,507
------------------------------------------------ ----------- ------------
- -
Deferred Tax Assets
Mine development 3,855,066 -
Accrued expenditure 73,810 9,900
Lease liabilities 1,755,043 -
Net rehabilitation asset 89,130 -
Other capitalised costs 171,760 -
Provisions 201,295 213,566
Capital allowances 778,183 463,242
Tax losses available for offset against
future taxable income 16,627,585 16,974,847
Deferred tax assets used to offset deferred
tax liabilities (2,495,226) (50,507)
Deferred tax assets not brought to account - (17,611,048)
21,056,646 -
================================================ =========== ============
* Following completion of a Bankable Feasibility Study for the
Lake Way Project in October 2019 that demonstrated the economic
returns of the project, the Group has determined that it is now
considered probable that sufficient taxable income will be
generated in future periods and therefore deferred tax assets have
been recognised for the first time during the year ended 30 June
2020 for temporary differences and unused tax losses.
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.
5. CASH AND CASH EQUIVALENTS
2020 2019
$ $
------------------------- --------- ----------
Cash on hand and at bank 6,980,418 19,177,455
Deposit on call 50,000 126,620
7,030,418 19,304,075
========================= ========= ==========
The Group has assessed the credit risk on cash and cash
equivalents using the life time expected credit losses method and
concluded that the probability of default is insignificant.
6. TRADE AND OTHER RECEIVABLES
2020 2019
$ $
------------------------------------------ --------- -------
Accrued interest 5,224 11,231
Research and development incentive rebate 3,546,754 -
GST and other receivables 480,203 911,805
4,032,181 923,036
========================================== ========= =======
Other receivables are non-interest bearing. There are no past
due nor impaired receivables at 30 June 2020. GST receivables are
due from the ATO. The Group has assessed the probability of default
as low and the expected credit loss is insignificant.
7. INVENTORY
2020 2019
$ $
---------------------------- --------- ----
Work in progress at cost(1) 1,534,657 -
1,534,657 -
============================ ========= ====
Notes:
(1) The Company has determined the tonnes of Sulphate of Potash
equivalent at 30 June 2020 by estimating the tonnes of harvestable
salts that could be used for processing at Lake Way. There has been
no write-downs of inventories for the year ended 30 June 2020.
8. PROPERTY, PLANT AND EQUIPMENT
2020 2019
$ $
------------------------------------------ --------- ---------
(a) Plant and Equipment
Gross carrying amount - at cost 4,012,800 1,074,496
Accumulated depreciation (611,273) (310,930)
------------------------------------------- --------- ---------
Carrying amount at end of year, net of
accumulated depreciation 3,401,527 763,566
=========================================== ========= =========
(b) Reconciliation
Carrying amount at beginning of year,
net of accumulated depreciation 763,566 535,344
Additions 3,021,925 421,852
Reclassification of Right of Use Asset
as a result of AASB 16 transition (47,852) -
Depreciation charge (capitalised and
expensed) (336,112) (193,630)
Carrying amount at end of year, net of
accumulated depreciation 3,401,527 763,566
=========================================== ========= =========
9. RIGHT OF USE ASSETS
Office and
Property Lake Way
2020 Village Total
$ Lake Way Communications
2020 2020 2020
$ $ $
------------------------------------------ ----------- --------- ------------------------ ---------
(a) Right of Use Assets
Gross carrying amount
- at cost 949,855 4,193,450 1,012,436 6,155,741
Accumulated depreciation (190,924) (197,015) (150,497) (538,436)
------------------------------------------ ----------- --------- ------------------------ ---------
Carrying amount at end
of year, net of accumulated
depreciation 758,931 3,996,435 861,939 5,617,305
========================================== =========== ========= ======================== =========
(b) Reconciliation
Opening balance at 1 -
July 2019 - - -
Transition on adoption
of AASB 16 940,767 - - 940,767
Additions 56,441 4,193,450 1,012,436 5,262,327
Terminations (47,353) - - (47,353)
Depreciation charge (190,924) (197,015) (150,497) (538,436)
Carrying amount at end
of year, net of accumulated
depreciation 758,931 3,996,435 861,939 5,617,305
========================================== =========== ========= ======================== =========
10. EXPLORATION AND EVALUATION EXPITURE
2020 2019
$ $
------------------------------------------------------- ------------ ---------
(a) Areas of Interest
SOP Project 2,276,736 2,276,736
Carrying amount at end of year, net of impairment(1) 2,276,736 2,276,736
======================================================= ============ =========
(b) Reconciliation
Carrying amount at start of year 2,276,736 2,276,736
Additions (Lake Way Project)(2) 10,714,915 -
Transfer to Mine Development(2) (10,714,915) -
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.
(2) The Company completed the acquisition of tenements from
Blackham Resources Limited on 8 October 2019. The cost of
acquisition was initially recognised as an 'Exploration and
evaluation asset' before being transferred to Mine Development
assets following completion of a bankable feasibility study for the
Lake Way Project with effect from 1 November 2019.
SOP Project
The Group 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. MINE DEVELOPMENT
2020 2019
$ $
-------------------------------------- ------------ -----
Mine Development(1)
Mine properties 10,714,915 -
Capitalised borrowing costs 6,880,754 -
Capitalised assets under construction 59,662,737 -
Mine development 39,522,331 -
-------------------------------------- ------------ -----
116,780,737 -
====================================== ============ =====
Notes:
(1) Following completion of the bankable feasibility study on
the Lake Way Project in October 2019, the Group has determined that
it is appropriate to transfer the Lake Way Project from
'Exploration and evaluation assets' to 'Mine development' with
effect from 1 November 2019 and for all subsequent expenditure on
the construction, installation or completion of infrastructure
facilities to be capitalised in 'Mine development'. This date marks
the first month-end post completion of the BFS and the commencement
of the second stage of on-lake construction at Lake Way.
12. TRADE AND OTHER PAYABLES
2020 2019
$ $
--------------------- ---------- ---------
Trade creditors 7,275,056 5,111,915
Accrued expenses 20,273,098 2,326,553
Employee obligations 622,610 271,122
--------------------- ---------- ---------
28,170,764 7,709,590
===================== ========== =========
Terms and conditions of the above financial liabilities:
- Trade payables are non-interest bearing and are normally settled on 30-day terms.
13. INTEREST BEARING LIABILITIES
2020 2019
$ $
-------------------------------------------- ------------ -----
Interest Bearing Liability
Face value drawn down(1) 65,568,993 -
Transaction costs and establishment (1,728,876)
fees net of interest amortisation(2) -
Carrying Amount of Interest Bearing 63,840,117
Liabilities -
-------------------------------------------- ------------ -----
Notes:
(1) This balance relates to the extended Stage 1 Facility with
Taurus Funds Management. The Facility was extended from US$30
million to US$45 million as announced to the market on 6 December
2019 and as at balance date has been fully drawn down. The Facility
is secured and interest is payable at 9.75% pa and is expected to
be repaid. Since balance date, the Company executed a binding
agreement to obtain access to the Project Development Facility
(PDF). The PDF will be used to refinance the Stage 1 Facility and
for project development and working capital purposes. Draw down of
the PDF will be subject to a number of Conditions Precedent. The
PDF will be secured and interest will be payable at 9.00% pa.
(2) Transaction costs for the Stage 1 Facility include 9,000,000
unlisted options issued to Taurus Funds Management which are
exercisable at $0.702 on or before 4 August 2024. These options
were valued at $0.379 per option using a Binomial option valuation
model on the date of grant (2 August 2019). The share price on the
date of grant was $0.790. Refer to Note 17(c) for further details
of the terms and conditions of unlisted options.
14. LEASE LIABILITIES
2020 2019
$ $
--------------------------------------- ---------- ----------
Opening balance 38,991 50,820
Recognised at 1 July 2019 on adoption 892,915 -
of AASB 16
Additions 5,262,327 -
Terminations (34,705) -
Interest expense 5,056 2,800
Payments(2) (411,539) (13,629)
--------------------------------------- ---------- ----------
As at 30 June 5,753,045 39,991(1)
--------------------------------------- ---------- ----------
Current Lease Liabilities 1,332,297 11,828
Non Current Lease Liabilities 4,420,748 27,163
--------------------------------------- ---------- ----------
5,753,045 38,991(1)
--------------------------------------- ---------- ----------
Notes:
(1) This amount represents the closing balance of finance leases
for vehicles as 30 June 2019 and excludes operating leases which
were recongised on balance sheet for the first time at 1 July
2019.
(2) The Company had total cash outflows for lease liabilities
related to right of use assets of $411,539 (2019: $13,629).
15. PROVISIONS
2020 2019
$ $
----------------------- --------- -------
Current Provisions
----------------------- --------- -------
Annual Leave 670,989 79,368
----------------------- --------- -------
Non-Current Provisions
----------------------- --------- -------
Mine Rehabilitation(1) 3,837,061 711,885
----------------------- --------- -------
Notes:
(1) Salt Lake has recognised the need to provide for the costs
of rehabilitating the land at Lake Way associated with the first
phase of the Lake Way evaporation ponds up to and including 30 June
2020.
The mine rehabilitation provision represents the present value
of rehabilitation costs relating to Lake Way, which are expected to
be incurred at the end of the project life, when the producing
ponds cease operations. Assumptions based on the current economic
environment have been made, which management believe is a
reasonable basis upon which to estimate the future liability. The
timing of rehabilitation is like to depend on when the ponds cease
to produce at economically viable rates. This, in turn, will depend
on future potash prices, which are inherently uncertain.
2020 2019
$ $
-------------------------------- --------- -------
Movement in mine rehabilitation
At 1 July 711,885 -
Change in cost estimate(1) (410,528) -
Arising during the year 3,489,843 711,885
Unwind of discount 45,861 -
-------------------------------- --------- -------
At 30 June 3,837,061 711,885
-------------------------------- --------- -------
(1) During the year, there was a reassessment of the disturbed
area and cost estimate which resulted in an impact of $410,528 to
the statement of profit and loss and other comprehensive
income.
16. CONTRIBUTED EQUITY
2020 2019
$ $
--------------------------------------------------------- ------------ ------------
Share Capital
353,285,840 (30 June 2019: 245,137,865) Ordinary Shares 209,611,743 155,917,578
--------------------------------------------------------- ------------ ------------
209,611,743 155,917,578
--------------------------------------------------------- ------------ ------------
(a) Movements in Ordinary Shares During the Past Two Years Were as Follows:
Issue Price
Number of Ordinary Shares $ $
------------------ ------------------------------------------ -------------------------- ------------ ------------
01-Jul-19 Opening Balance 245,137,865 155,917,578
6-Aug-19 Share issue(1) 266,258 0.802 213,600
6-Aug-19 Placement 10,582,857 0.700 7,408,000
Conversion of performance rights to
11-Nov-19 shares 472,500 0.482 227,814
11-Nov-19 Share issue(2) 17,635 0.680 12,000
11-Nov-19 Share issue(1) 266,258 0.816 217,227
18-Dec-19 Placement 32,867,858 0.700 23,007,601
7-Feb-20 Placement 678,571 0.700 475,000
12-Feb-20 Share issue(3) 4 0.000 -
Conversion of performance rights to
20-Mar-20 shares 4,172,500 0.675 2,515,373
23-Apr-20 Placement 56,067,647 0.340 19,063,000
17-Jun-20 Share issue(3) 4 0.000 -
17-Jun-20 Placement 2,755,883 0.340 937,000
30-Jun-20 Deferred tax assets recognised in equity - - 1,399,275
Jul-19 to Jun-20 Share issue costs - - (1,781,725)
30-Jun-20 Closing balance 353,285,840 209,611,743
------------------ ------------------------------------------ -------------------------- ------------ ------------
01-Jul-18 Opening Balance 175,049,596 123,501,153
16-Nov-18 Placement 29,035,714 0.42 12,195,000
20-Nov-18 Placement 214,286 0.42 90,000
31-Dec-18 Share issue (1) 268,604 0.50 134,300
09-Jan-19 Placement 1,702,381 0.42 715,000
15-May-19 Exercise of options 750,000 0.40 300,000
14-Jun-19 Placement 25,476,000 0.54 13,757,040
18-Jun-19 Placement 12,024,000 0.54 6,492,960
18-Jun-19 Share issue(1) 617,284 0.54 333,333
Jul-18 to Jun-19 Share issue costs - - (1,601,208)
------------------ ------------------------------------------ -------------------------- ------------ ------------
30-Jun-19 Closing balance 245,137,865 155,917,578
------------------ ------------------------------------------ -------------------------- ------------ ------------
Notes:
(1) Shares issued relating to performance shares that could not
be issued at the time of vesting as a result of the Company being
in a Blackout Period.
(2) Shares issued to key consultants of the Company in lieu of
fees.
(3) As a result of performance shares relating to the
acquisition of the Company's SOP Project (Note 10) expiring, each
holder of performance shares was issued one share.
(b) Rights Attaching to Ordinary Shares:
The rights attaching to fully paid 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 17(c) or Performance Shares in
accordance with Note 17(d) or Performance Rights in accordance with
Note 17(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. 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.
17. RESERVES
2020 2019
Note $ $
----------------------------- ----- ---------- ---------
Share-based payments reserve 17(b) 10,605,822 4,273,967
10,605,822 4,273,967
============================= ===== ========== =========
(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 Number of Number of
Performance Rights Performance Shares Unlisted Options $
------------------ -------------------- -------------------- -------------------- ------------------ ------------
01-Jul-19 Opening Balance 20,945,016 17,500,000 11,100,000 4,273,967
Incentive options
converted to
1-Jul-19 equity - - - (142,500)
1-Jul-19 Issue of 538,324
Performance Rights - - -
22-Jul-19 Issue of 500,000
Performance Rights - - -
Expiry of
31-Jul-19 Performance Rights (532,516) - - (244,957)
Issue of Unlisted
5-Aug-19 Options - - 9,000,000 3,411,000
16-Sep-19 Issue of 3,113,750 - - -
Performance Rights
14-Oct-19 Issue of 200,000 - - -
Performance Rights
11-Nov-19 Issue of Incentive - - 5,200,000 -
Options
11-Nov-19 Issue of 788,324 - - -
Performance Rights
Performance Rights
converted to
11-Nov-19 Shares (472,500) - - (227,814)
Cancellation of
31-Dec-19 Performance Rights (400,000) - - (162,067)
31-Dec-19 Expiry of - (7,500,000) - -
Performance Shares
Performance Rights
converted to
20-Mar-20 Shares (4,172,500) - - (2,372,873)
12-Jun-20 Expiry of - (10,000,000) - -
Performance Shares
Cancellation of
30-Jun-20 Performance Rights (1,947,500) - - (951,126)
Cancellation of
30-Jun-20 Incentive Options - - (750,000) (153,000)
Share based
payments expense
excluding
cancellation of
Jul-19 to Jun-20 Performance Rights - - - 7,175,192
30-Jun-20 Closing balance 18,560,398 - 24,550,000 10,605,82 2
------------------ -------------------- -------------------- -------------------- ------------------ ------------
Number of Number of Number of
Performance Rights Performance Shares Unlisted Options $
------------------ --------------------- -------------------- --------------------- ------------------ ----------
01-Jul-18 Opening Balance 5,400,000 22,500,000 4,400,000 2,105,886
02-Nov-18 Issue of Performance 7,266,258
Rights - - -
02-Nov-18 Issue of Incentive -
Options - 5,000,000 -
31-Dec-18 Issue of Performance 10,781,258
Rights - - -
Cancellation/Expiry
of Performance
31-Dec-18 Rights (2,352,500) - - (984,383)
31-Dec-18 Issue of Incentive - - 2,450,000 -
Options
31-Dec-18 Expiry of - (5,000,000) - -
Performance Shares
15-May-19 Exercise of - - (750,000) -
Incentive Options
Cancellation of
30-Jun-19 Performance Rights (150,000) - - (32,273)
Share based payments
Jul-18 to Jun-19 expense - - - 3,184,737
------------------ --------------------- -------------------- --------------------- ------------------ ----------
30-Jun-19 Closing balance 20,945,016 17,500,000 11,100,000 4,273,967
------------------ --------------------- -------------------- --------------------- ------------------ ----------
(b) 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:
- 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;
- 1,000,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2023;
- 2,000,000 Unlisted Options exercisable at $0.60 each on or before 1 November 2023;
- 4,650,000 Unlisted Options exercisable at $1.00 each on or before 1 November 2023;
- 5,000,000 Unlisted Options exercisable at $1.20 each on or before 1 November 2023; and
- 9,000,000 Unlisted Options exercisable at $0.70 each on or before 4 August 2024.
-- 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
As a result of performance hurdles not being met during the 30
June Financial Period, all 17,500,000 outstanding Performance
Shares on issue at the beginning of the financial year expired.
Each tranche of Performance Shares were converted to four Fully
Paid Ordinary shares upon cancellation. As two tranches expired in
the 12 month period, a total of eight shares were issued.
(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:
- 1,197,500 Performance Rights subject to the Production Milestone expiring on 30 June 2021;
- 3,772,500 Performance Rights subject to the Plant Construction
Milestone expiring on 1 November 2021;
- 4,550,000 Performance Rights subject to the Plant
Commissioning Milestone expiring on 1 November 2022;
- 4,900,000 Performance Rights subject to the Nameplate Capacity
Milestone expiring on 1 November 2023;
- 1,300,000 Performance Rights subject to the Schedule
Advancement Milestone expiring on 31 December 2021;
- 1,400,000 Performance Rights subject to the Reduce Capex
Milestone expiring on 31 December 2021;
- 250,000 Performance Rights subject to the Lake Wells Milestone expiring on 31 December 2020;
- 500,000 Performance Rights subject to the Product Marketing
and Offtake Milestone expiring on 31 December 2020; and
- 690,398 Performance Rights subject to the Short Term Incentive
Milestone expiring on 31 July 2020.
-- 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.
18. STATEMENT OF CASH FLOWS
(a) Reconciliation of the Loss after Tax to the Net Cash Flows from Operations
2020 2019
$ $
------------------------------------------------------- ------------ ------------
Net loss for the year (15,610,002) (26,896,121)
Adjustment for non-cash income and expense items
Depreciation of plant and equipment 410,122 193,630
Share based payment expense 6,504,826 2,302,381
FX movement on equity settled transactions (11,069) (17,441)
Deferred tax asset recognition (19,657,371) -
Unrealised foreign exchange movements (1,337,828) -
Change in rehabilitation estimate (410,528) -
Loss on disposal of asset 11,036 -
Interest expense unwind from leasing 5,056 -
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables (3,032,715) (695,764)
(Increase)/decrease in inventory (1,534,657) -
Increase in trade and other payables (4,859,025) 6,025,910
Increase in provisions 148,754 753,418
Non operating activity transactions 974,900 -
Net cash outflow from operating activities (38,398,501) (18,333,987)
======================================================== ============ ============
19. EARNINGS PER SHARE
2020 2019
$ $
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 excluding abnormal items (15,768,966) (26,896,121)
======================================================================================== ============= =============
Number of Shares Number of Shares
2020 2019
Weighted average number of ordinary shares used in calculating basic and
diluted earnings
per share 288,733,430 195,720,503
================================================================================ ================= =================
(a) Non-Dilutive Securities
As at balance date, 24,550,000 Unlisted Options (which represent
24,550,000 potential Ordinary Shares) and 18,560,398 Performance
Rights (which represent 18,560,398 potential Ordinary Shares) were
considered non-dilutive as they would decrease the loss per
share.
(b) Conversions, Calls, Subscriptions or Issues after 30 June 2020
The Company has issued 10,849,115 Ordinary Shares and no
Unlisted Options or Performance Rights since 30 June 2020.
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.
20. RELATED PARTIES
(a) Subsidiaries
% Equity Interest
Name Country of 2020 2019
Incorporation
% %
----------------------------- ---------------- --------- ---------
Ultimate parent entity:
Salt Lake Potash Limited Australia
Subsidiaries of Salt Lake
Potash Limited
Australia Salt Lake Potash
Pty Ltd Australia 100 100
Piper Preston Pty Ltd Australia 100 100
Irve Holdings Pty Ltd Australia 100 100
Irve Developments Pty Ltd Australia 100 100
Two Lake Holdings Pty Ltd Australia 100 100
Two Lake Developments Pty
Ltd Australia 100 100
SO4 Fertiliser Holdings Pty
Ltd Australia 100 100
SO4 Fertiliser Developments
Pty Ltd Australia 100 100
(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 21.
21. 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 Tony Swiericzuk Chief Executive Officer (CEO) & Managing Director
Mr Matthew Syme Non-Executive Director (resigned 23 July 2019)
Mr Mark Pearce Non-Executive Director
Mr Bryn Jones Non-Executive Director
Mr Matthew Bungey Executive Director (appointed 14 May 2020)
Other KMP
Mr Shaun Day Chief Financial Officer (appointed 16 September 2019)
Mr Clint McGhie Company Secretary
Mr Stephen Cathcart Project Director - Technical
Unless otherwise disclosed, the KMP held their position from 1
July 2019 until the date of this report.
2020 2019
$ $
----------------------------- ---------- ----------
Short-term employee benefits 1,120,640 1,194,638
Post-employment benefits 92,301 88,172
Share-based payments 4,219,683 1,239,099
Total compensation 5,432,624 2,521,909
============================== ========== ==========
(b) Loans from Key Management Personnel
No loans were provided to or received from Key Management
Personnel during the year ended 30 June 2020 (2019: Nil).
(c) Other Transactions
No other related party transactions were entered into in the
2020 Financial year (2019: $100,000).
22. PARENT ENTITY DISCLOSURES
2020 2019
$ $
------------------------------ -------------- --------------
(a) Financial Position
Assets
Current assets 10,640,756 20,219,527
Non-current assets 132,201,541 2,334,973
------------------------------ -------------- --------------
Total assets 142,842,297 22,554,500
------------------------------ -------------- --------------
Liabilities
Current liabilities 67,288,355 7,728,621
Non-current liabilities 758,608 830,419
Total liabilities 68,046,963 8,559,040
------------------------------ -------------- --------------
Equity
Contributed equity 209,611,643 155,917,578
Accumulated losses (145,422,131) (146,196,085)
Share Based Payments Reserve 10,605,822 4,273,967
------------------------------ -------------- --------------
Total equity 74,795,334 13,995,460
============================== ============== ==============
(b) Financial Performance
Profit/(Loss) for the year 375,999 (26,895,784)
------------------------------ -------------- --------------
Total comprehensive loss 375,999 (26,895,784)
============================== ============== ==============
(c) Other information
The Company has not entered into any guarantees in relation to
its subsidiaries.
Refer to Note 26 for details of contingent assets and
liabilities.
23. 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 granted shares in
lieu of payments to key consultants in accordance with the terms of
engagement.
During the past two years, the following equity-settled
share-based payments have been recognised:
2020 2019
$ $
----------------------------------------------------- ---------- ----------
Expenses arising from equity-settled share-based
payment transactions relating incentive
options and performance rights 6,061,999 2,168,081
Expenses arising from equity-settled share-based
payment transactions for previously issued
performance rights that vested but could
not be exercised due to share trading restrictions 430,827 -
Expenses arising from equity-settled share-based
payment transactions to suppliers and consultants 12,000 134,300
----------------------------------------------------- ---------- ----------
Total share-based payments recognised during
the year 6,504,826 2,302,381
===================================================== ========== ==========
(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 Expiry Date Exercise Price Grant Date
Date $ Fair Value
$
----------- ---------------- --------------- ---------- ---------- ------------ --------------- ---------------
2020
Salt Lake
Series 51 Potash Limited Options 300,000 22-Jul-19 1-Nov-23 0.6 0.354
Salt Lake
Series 52 Potash Limited Options 9,000,000 2-Aug-19 4-Aug-24 0.7 0.379
Salt Lake
Series 53 Potash Limited Options 1,000,000 11-Nov-19 30-Jun-23 0.7 0.316
Salt Lake
Series 54 Potash Limited Options 300,000 22-Jul-19 1-Nov-23 1 0.239
Salt Lake
Series 55 Potash Limited Options 1,500,000 16-Sep-19 1-Nov-23 1 0.296
Salt Lake
Series 56 Potash Limited Options 100,000 14-Oct-19 1-Nov-23 1 0.291
Salt Lake
Series 57 Potash Limited Options 400,000 22-Jul-19 1-Nov-23 1.2 0.201
Salt Lake
Series 58 Potash Limited Options 1,500,000 16-Sep-19 1-Nov-23 1.2 0.252
Salt Lake
Series 59 Potash Limited Options 100,000 14-Oct-19 1-Nov-23 1.2 0.246
Salt Lake
Series 60 Potash Limited Rights 250,000 24-Jun-19 1-Nov-23 - 0.79
Salt Lake
Series 61 Potash Limited Rights 288,324 1-Jul-19 31-Jul-20 - 0.745
Salt Lake
Series 62 Potash Limited Rights 500,000 22-Jul-19 31-Dec-20 - 0.748
Salt Lake
Series 63 Potash Limited Rights 113,750 16-Sep-19 31-Jul-20 - 0.862
Salt Lake
Series 64 Potash Limited Rights 750,000 16-Sep-19 1-Nov-20 - 0.862
Salt Lake
Series 65 Potash Limited Rights 750,000 16-Sep-19 1-Nov-21 - 0.862
Salt Lake
Series 66 Potash Limited Rights 750,000 16-Sep-19 1-Nov-22 - 0.862
Salt Lake
Series 67 Potash Limited Rights 750,000 16-Sep-19 1-Nov-23 - 0.862
Salt Lake
Series 68 Potash Limited Rights 100,000 14-Oct-19 31-Dec-21 - 0.8
Salt Lake
Series 69 Potash Limited Rights 100,000 14-Oct-19 31-Dec-23 - 0.8
Salt Lake
Series 70 Potash Limited Rights 288,324 11-Nov-19 31-Jul-20 - 0.816
Salt Lake
Series 71 Potash Limited Rights 250,000 11-Nov-19 1-Nov-22 - 0.816
Salt Lake
Series 72 Potash Limited Rights 250,000 11-Nov-19 1-Nov-23 - 0.816
----------- ---------------- --------------- ---------- ---------- ------------ --------------- ---------------
Series Issuing Entity Security Type Number Grant Expiry Date Exercise Price Grant Date
Date Fair Value
$ $
----------- ---------------- --------------- ---------- ---------- ------------ --------------- ---------------
2019
Salt Lake
Series 30 Potash Limited Options 1,000,000 2-Nov-18 1-Nov-23 0.6 0.219
Salt Lake
Series 31 Potash Limited Options 2,000,000 2-Nov-18 1-Nov-23 1.0 0.159
Salt Lake
Series 32 Potash Limited Options 2,000,000 2-Nov-18 1-Nov-23 1.2 0.139
Salt Lake
Series 33 Potash Limited Options 700,000 31-Dec-18 1-Nov-23 0.6 0.206
Salt Lake
Series 34 Potash Limited Options 750,000 31-Dec-18 1-Nov-23 1.0 0.148
Salt Lake
Series 35 Potash Limited Options 1,000,000 31-Dec-18 1-Nov-23 1.2 0.129
Salt Lake
Series 36 Potash Limited Rights 266,258 2-Nov-18 31-Jul-19 - 0.460
Salt Lake
Series 37 Potash Limited Rights 1,500,000 2-Nov-18 1-Nov-20 - 0.470
Salt Lake
Series 38 Potash Limited Rights 1,500,000 2-Nov-18 1-Nov-21 - 0.470
Salt Lake
Series 39 Potash Limited Rights 2,000,000 2-Nov-18 1-Nov-22 - 0.470
Salt Lake
Series 40 Potash Limited Rights 2,000,000 2-Nov-18 1-Nov-23 - 0.470
Salt Lake
Series 41 Potash Limited Rights 266,258 2-Nov-18 31-Jul-19 - 0.460
Salt Lake
Series 42 Potash Limited Rights 1,982,500 31-Dec-18 1-Nov-20 - 0.460
Salt Lake
Series 43 Potash Limited Rights 1,582,500 31-Dec-18 1-Nov-21 - 0.460
Salt Lake
Series 44 Potash Limited Rights 1,550,000 31-Dec-18 1-Nov-22 - 0.460
Salt Lake
Series 45 Potash Limited Rights 1,550,000 31-Dec-18 1-Nov-23 - 0.460
Salt Lake
Series 46 Potash Limited Rights 1,300,000 31-Dec-18 31-Dec-21 - 0.460
Salt Lake
Series 47 Potash Limited Rights 1,300,000 31-Dec-18 31-Dec-21 - 0.460
Salt Lake
Series 48 Potash Limited Rights 250,000 31-Dec-18 31-Dec-19 - 0.460
Salt Lake
Series 49 Potash Limited Rights 250,000 31-Dec-18 31-Dec-20 - 0.460
Salt Lake
Series 50 Potash Limited Rights 750,000 31-Dec-18 30-Jun-20 - 0.460
----------- ---------------- --------------- ---------- ---------- ------------ --------------- ---------------
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 2020 2020 2019 2019
Number WAEP Number WAEP
---------------------------------------- ----------- ------ ----------- ------
Outstanding at beginning of year 11,100,000 $0.84 4,400,000 $0.54
Granted by the Company during the year 14,200,000 $0.81 7,450,000 $0.99
Forfeited/cancelled/lapsed/exercised (750,000) $0.50 (750,000) $0.48
Outstanding at end of year 24,550,000 $0.84 11,100,000 $0.84
======================================== =========== ====== =========== ======
Exercisable at end of year 4,600,000 $0.59 3,650,000 $0.56
======================================== =========== ====== =========== ======
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 2020 2020 2019 2019
Number WAEP Number WAEP
---------------------------------------- ------------ ------ ------------ ------
Outstanding at beginning of year 20,945,016 - 5,400,000 -
Granted by the Company during the year 5,140,398 - 18,047,516 -
Forfeited/cancelled/lapsed/expired (7,525,016) - (2,502,500) -
Outstanding at end of year 18,560,398 - 20,945,016 -
======================================== ============ ====== ============ ======
(c) Weighted Average Remaining Contractual Life
At 30 June 2020, the weighted average remaining contractual life
of Unlisted Options on issue that had been granted as share-based
payments was 3.32 years (2019: 3.48 years) and of Performance
Rights on issue that had been granted as share-based payments was
2.52 years (2019: 2.42 years).
(d) Range of Exercise Prices
At 30 June 2020, the range of exercise prices of Unlisted
Options on issue that had been granted as share-based payments was
$0.60 to $1.20 (2019: $0.60 to $1.20). Performance Rights have no
exercise price.
(e) 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
2020 was $0.342 (2019: $0.161) and of Performance Rights granted as
share-based payments was $0.83 (2019: $0.463).
(f) 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 a 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 year:
2020
Inputs Series 51 Series 52 Series 53
----------------------------- ----------- ----------- -----------
Options
Exercise price $0.60 $0.70 $0.70
Grant date share price $0.745 $0.49 $0.79
Dividend yield (1) - - -
Volatility (2) 50% 51% 48%
Risk-free interest rate 1.04% 0.85% 0.95%
Grant date 22-Jul-19 2-Nov-19 11-Nov-19
Expiry date 1-Nov-23 4-Aug-24 30-Jun-23
Expected life of option (3) 4.28 years 5.01 years 3.64 years
Fair value at grant date $0.354 $0.379 $0.316
----------------------------- ----------- ----------- -----------
Inputs Series 54 Series 55 Series 56
----------------------------- ----------- ----------- -----------
Options
Exercise price $1.00 $1.00 $1.00
Grant date share price $0.745 $0.84 $0.845
Dividend yield (1) - - -
Volatility (2) 50% 51% 50%
Risk-free interest rate 1.04% 0.98% 0.77%
Grant date 22-Jul-19 16-Sep-19 14-Oct-19
Expiry date 1-Nov-23 1-Nov-23 1-Nov-23
Expected life of option (3) 4.28 years 4.13 years 4.05 years
Fair value at grant date $0.239 $0.296 $0.291
----------------------------- ----------- ----------- -----------
Inputs Series 57 Series 58 Series 59
----------------------------- ----------- ----------- -----------
Options
Exercise price $1.20 $1.20 $1.20
Grant date share price $0.745 $0.84 $0.845
Dividend yield (1) - - -
Volatility (2) 50% 51% 50%
Risk-free interest rate 1.04% 0.98% 0.77%
Grant date 22-Jul-19 16-Sep-19 14-Oct-19
Expiry date 1-Nov-23 1-Nov-23 1-Nov-23
Expected life of option (3) 4.28 years 4.13 years 4.84 years
Fair value at grant date $0.201 $0.252 $0.246
----------------------------- ----------- ----------- -----------
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 60 Series 61 Series 62 Series 63 Series 64
Milestones Nameplate Short Term Marketing & Short Term Trench
Capacity Incentive Offtake Incentive Construction
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Performance
Rights
Exercise price - - - - -
Grant date share
price $0.760 $0.760 $0.745 $0.840 $0.840
Grant date 24-Jun-19 1-Jul-19 22-Jul-19 16-Sep-19 16-Sep-19
Expiry date 1-Nov-23 31-Jul-20 31-Dec-20 31-Jul-20 1-Nov-20
Expected life (1) 4.36 years 1.08 years 1.45 years 0.87 years 1.13 years
Fair value at
grant date (2) $0.790 $0.745 $0.748 $0.862 $0.862
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Inputs Series 65 Series 66 Series 67 Series 68 Series 69
Milestones Plant Construction Plant Commission-ing Nameplate Nameplate Capacity Reduced Capex
Capacity
------------------------ ------------------- --------------------- ----------- ------------------- --------------
Performance Rights
Exercise price - - - - -
Grant date share price $0.840 $0.840 $0.840 $0.845 $0.845
Grant date 16-Sep-19 16-Sep-19 16-Sep-19 14-Oct-19 14-Oct-19
Expiry date 1-Nov-21 1-Nov-22 1-Nov-23 31-Dec-23 31-Dec-21
Expected life (1) 2.13 years 3.13 years 4.13 years 4.05 years 2.05 years
Fair value at grant
date (2) $0.862 $0.862 $0.862 $0.800 $0.800
------------------------ ------------------- --------------------- ----------- ------------------- --------------
Inputs Series 70 Series 71 Series 72
Milestones Short Term Incentive Plant Commissioning Nameplate Capacity
------------------------------ --------------------- -------------------- -------------------
Performance Rights
Exercise price - - -
Grant date share price $0.790 $0.790 $0.790
Grant date 11-Nov-19 11-Nov-19 11-Nov-19
Expiry date 31-Jul-20 1-Nov-22 1-Nov-23
Expected life (1) 0.72 years 2.98 years 3.98 years
Fair value at grant date (2) $0.816 $0.816 $0.816
------------------------------ --------------------- -------------------- -------------------
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
closing share price at the date of issuance).
24. AUDITORS' REMUNERATION
As a result of work in relation to and required for the 30 June
2020 period, the auditor of Salt Lake Potash Limited, Ernst and
Young, has charged the following fees:
2020 2019
$ $
------------------------------------------------------------ -------- -------
Fees to Ernst & Young (Australia):
* Fees for auditing the statutory financial report of
the parent covering the group and auditing the
statutory financial reports of any controlled
entities 76,298 29,854
* Fees for other services including tax and other
advisory services 36,996 11,566
113,294 41,420
============================================================ ======== =======
25. 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.
The Group's financial assets and liabilities are held at amortised
cost.
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:
2020 2019
$ $
----------------------------- ----------- -----------
Financial assets
Cash and cash equivalents 7,030,418 19,304,075
Trade and other receivables 4,032,181 923,036
Total Financial Assets 11,062,599 20,227,111
============================= =========== ===========
With respect to credit risk arising from cash and cash
equivalents, the Group's exposure to credit risk arises from
default of the counterparty, 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 a research and development
rebate in relation to the 2019 financial period, interest accrued
and GST refunds due. Where possible the Group 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 2020, none
(2019 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 2019, the Group had sufficient
liquid assets to meet its financial obligations. At 30 June 2020,
the Group was satisfied it had sufficient liquid assets having
completed an equity raising and debt financing subsequent to year
end.
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
$
$ $ $ $
---------------------------- ----------- ------------ ---------- ---------- -----------
2020
Group
Financial Liabilities
Trade and other payables 27,548,154 - - - 27,548,154
Lease liabilities 698,597 698,597 4,871,986 1,200 6,270,380
Interest bearing loans 65,568,993 - - - 65,568,993
Non interest bearing loans 3,601 3,601 3,601 - 10,803
---------------------------- ----------- ------------ ---------- ---------- -----------
93,819,345 702,198 4,875,587 1,200 99,398,330
---------------------------- ----------- ------------ ---------- ---------- -----------
2019
Group
Financial Liabilities
Finance lease 5,914 5,914 22,537 - 34,365
Trade and other payables 7,709,590 - - - 7,709,590
Non interest bearing loans 3,601 3,601 16,629 - 23,831
---------------------------- ----------- ------------ ---------- ---------- -----------
7,719,105 9,515 39,166 - 7,767,786
---------------------------- ----------- ------------ ---------- ---------- -----------
(d) Interest Rate Risk
Interest rate risk is the risk that the fair value of future
cash flows of a financial instrument will fluctuate because of
changes in the market interest rates. At 30 June 2020 the Company
had secured and fully drawn down US$45million (2019: Nil) through
its Stage 1 Facility with Taurus Funds Management. The Group's
exposure to risk of changes in market interest rates is limited as
the interest rate on the Stage 1 Facility is fixed at 9.75%.
The loan is denominated in US dollars, as future revenues will
be in US dollars, this will create a natural hedge. The Company is
investigating the potential use of hedging and/or derivative
instruments that it could apply against the short term foreign
capital requirements of the Group. The Group will also consider
longer term hedging for the conversion of US dollar revenue to meet
AUD operational expenses.
The Company has recently formed a Treasury Committee to actively
monitor and assess its risk and exposure profile.
(e) Changes in liabilities arising from financing activities
Foreign
Exchange New
1-Jul-19 Cashflows Movement Lease/Liability Disposal Other 30-Jun-20
-----------------
$ $ $ $ $ $ $
----------------- --------- ------------ ----------------- ------------ --------------- -----------
2020
Current
Interest bearing
loans and
liabilities - 66,599,796 (1,030,803) - - (1,728,876)(1) 63,840,117
Non interest
bearing
loans and
liabilties 7,202 (7,202) - - - 7,202(2) 7,202
Lease
liabilities 11,828 (411,539) - 1,525,817 (7,542)(3) 213,733(2) 1,332,297
Non Current
Non interest
bearing
loans and
liabilties 12,003 - - - - (7,202)(2) 4,801
Lease
liabilities 27,163 - - 4,668,416 (27,163)(3) (247,668)(2) 4,420,748
----------------- --------- ----------- ------------ ----------------- ------------ --------------- -----------
58,196 66,181,055 (1,030,803) 6,194,233 (34,705) (1,762,811) 69,605,165
----------------- --------- ----------- ------------ ----------------- ------------ --------------- -----------
1-Jul-18 Cashflows Foreign New Lease/Liability Disposal Other 30-Jun-19
Exchange
Movement
----------------------
$ $ $ $ $ $ $
---------------------- ----------- ---------- -------------------- --------- ------------ ----------
2019
Current
Non interest bearing
loans and liabilties - (3,601) - 4,799 - 6,004 7,202
Lease liabilities 11,828 (11,828) - - - 11,828 11,828
Non Current
Non interest bearing
loans and liabilties - - - 18,007 - (6,004) 12,003
Lease liabilities 38,991 - - - - (11,828) 27,163
---------------------- ----------- ---------- ---------- -------------------- --------- ------------ ----------
50,819 (15,429) - 22,806 - - 58,196
---------------------- ----------- ---------- ---------- -------------------- --------- ------------ ----------
Notes:
(1) Indicates the transaction and establishment fees net of
interest amortisation.
(2) Indicates the effect of reclassification of non-current
portion of non interest bearing loans and leases to current due to
the passage of time and the accrued but not yet paid lease
liabilities.
(3) Indicates the reduction in liability as a result of the
disposal of the lease liability.
(f) Capital Management
The Group defines its Capital as total equity of the Group,
being $59,522,349 as at 30 June 2020 (2019: $14,708,374). 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 actively manage its balance
sheet and continue to look for cost saving initiatives that help
deliver the Lake Way Project on schedule and within budget.
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, however, during the next 12 months, as
a matter of capital prudence the Company will investigate alternate
funding sources that may result in an improved outcome for all
shareholders and stakeholders.
(g) Fair Value
The Group uses various methods in estimating the fair value of a
financial instrument. The methods comprise:
-- Level 1 - the fair value is calculated using quoted prices in
active markets.
-- Level 2 - the fair value is estimated using inputs other than
quoted prices included in Level 1 that are observable for the asset
or liability, either directly (as prices) or indirectly (derived
from prices).
-- Level 3 - the fair value is estimated using inputs for the
asset or liability that are not based on observable market
data.
At 30 June 2020 and 30 June 2019, the carrying value of the
Group's financial assets and liabilities approximate their fair
value.
26. CONTINGENT ASSETS AND LIABILITIES
(i) Contingent Assets
The Group has undertaken research and development (R&D)
activities during the 30 June 2020 financial year. It is expected
that these activities will be eligible for an R&D tax incentive
paid by the Australian Taxation Office. Whilst the Company is yet
to quantify the claim, it anticipates lodging its claim prior to 31
December 2020 and recognising the tax incentive upon lodgement of
the 2020 Company Tax Return.
As at the date of this report, no other contingent assets had
been identified in relation to the 30 June 2020 financial year.
(ii) Contingent Liability
As at the date of this report, no contingent liabilities had
been identified in relation to the 30 June 2020 financial year.
27. COMMITMENTS
Management have identified the following material commitments
for the Group as at 30 June 2020 and 30 June 2019. As at 30 June
2020, the Group has capital commitments that relate principally to
the purchase of plant and equipment for its Lake Way
operations:
2020 2019
$ $
---------------------------------------- ----------- -------
Commercial commitments
Within one year 12,447,619 19,030
Later than one year but not later than
five years 8,929,299 39,166
21,376,918 58,196
======================================== =========== =======
2020 2019
$ $
---------------------------------------- ----------- -----------
Exploration commitments
Within one year 5,197,881 4,790,041
Later than one year but not later than
five years 15,110,912 16,335,116
20,308,793 21,125,157
======================================== =========== ===========
28. EVENTS SUBSEQUENT TO BALANCE DATE
i) On 2 July 2020, Salt Lake Potash announced it had received
commitments to raise A$15m through the placement of unsecured
zero-coupon Convertible Notes to corporate and institutional
investors. The Convertible Notes are structured as deferred equity
with zero coupon and mandatory conversion into equity at the lower
of 45c per share or a 5% discount to any future equity raising of
at least A$10m. These notes have since converted, except for the
A$10m of Convertible Notes subscribed for by Equatorial Resources
Limited (ASX: EQX). Mr Ian Middlemas is the Chairman and Mr Mark
Pearce is a Non-Executive Director of EQX and both abstained from
consideration of this issue. The exercise of these Convertible
Notes was subject to the approval of Salt Lake Potash shareholders,
which was received on 23 September 2020.
ii) On 5 August 2020, the Company announced it had fully funded
the Lake Way Project via the execution of a US$138m (A$203m) debt
financing package and a fully underwritten equity placement and
accelerated non-renounceable offer for A$98.5m to complete the
construction of the Lake Way Project on schedule. The debt
financing package is via a Syndicated Facility Agreement with
Taurus Mining Finance Fund No.2 L.P. and the Clean Energy Finance
Corporation.
Other than as noted above, as at the date of this report there
are no matters or circumstances which have arisen since 30 June
2020 that have significantly affected or may significantly
affect:
-- The operations, in financial years subsequent to 30 June 2020, of the Consolidated Entity;
-- The results of those operations, in financial years
subsequent to 30 June 2020, of the Consolidated Entity; or
-- The state of affairs, in financial years subsequent to 30
June 2020, of the Consolidated Entity.
CORPORATE GOVERNANCE
The Company believes corporate governance is a critical pillar
on which business objectives and, in turn, shareholder value must
be built. The Board of Salt Lake has adopted a suite of charters
and key corporate governance documents which articulate the
policies and procedures followed by the Company.
These documents are available in the Corporate Governance
section of the Company's website,
www.so4.com.au/corporate-governance/ .These documents are reviewed
to address any changes in governance practices and the law.
The Company's 2020 Corporate Governance Statement, which is
current as at 30 June 2020 and has been approved by the Company's
Board, explains how Salt Lake complies with the ASX Corporate
Governance Council's 'Corporate Governance Principles and
Recommendations - 3rd Edition' in relation to the year ended 30
June 2020. The Corporate Governance Statement is available in the
Corporate Governance section of the Company's website,
www.so4.com.au/corporate-governance/ and will be lodged with ASX
(and other exchanges the Company has a listing on) together with an
Appendix 4G at the same time that this Annual Report is lodged.
In addition to the ASX Corporate Governance Council's 'Corporate
Governance Principles and Recommendations - 3rd Edition' the Board
has taken into account a number of important factors in determining
its corporate governance policies and procedures; including
the:
-- Relatively simple operations of the Company, which currently
only undertakes mineral exploration and development activities;
-- Cost verses benefit of additional corporate governance
requirements or processes;
-- Size of the Board;
-- Board's experience in the resources sector;
-- Organisational reporting structure and number of reporting
functions, operational divisions and employees;
-- Relatively simple financial affairs with limited complexity
and quantum;
-- Relatively moderate market capitalisation and economic value
of the entity; and
-- Direct shareholder feedback.
Mineral Resources Statement
Salt Lake Potash's Mineral Resource Statement as at 30 June 2020
is reported by Lake, all of which are located in Western
Australia.
Annual Review of Mineral Resources -
Resource
The Company reported its maiden resource at Lake Way in July
2018. A significant extension was subsequently reported in March
2019. The Mineral Resource Estimate was further updated in October
2019.
The AusIMM and the AMEC 2019 Brine Guidelines adopted by the
JORC Committee have determined that brine mineral resources should
be reported as tonnages of contained elements (Potassium, Magnesium
and Sulphate), not tonnage of the product to be derived from
processing (Sulphate of Potash - SOP). The previous resource
estimates for Salt Lake Potash were reported as SOP and are
modified here ( Table and Table 1 2) to report the tonnage of
contained elements. All other aspects of the Resource Estimates
remain unchanged.
The mineral resource hosted in the Williamson Pit at Lake Way
and the sediment hosted resource was reported in March 2019 (ASX
Announcement 18 March 2019). The information for Williamson Pit is
repeated in Table 1.
The sediment hosted resource at Lake Way was revised in the
Bankable Feasibility Study (BFS) report based on a revised
geological model and larger sediment volume (ASX Announcement 11
October 2019). The information for the sediment hosted resource is
repeated in Table 1.
The Mineral Resource Estimate calculated from drainable porosity
(or specific yield) at Lake Way represents the static free-draining
portion of the total porosity Mineral Resource prior to extraction.
It does not take into account the impact of any groundwater
recharge or solute transport which increases the amount of
extractable brine above the static free-draining component over
time.
A proportion of the Mineral Resource calculated from total
porosity, in addition to the drainable porosity Mineral Resource,
is considered to be extractable but is dependent on the transient
groundwater flow and transport conditions affecting the Mineral
Resource during extraction. The Reserve calculated for a 20 year
mine life comprises approximately 40% of the Mineral Resource
calculated from total porosity.
Reserve
A Probable Reserve for the Lake Way Project was reported in the
BFS (ASX Announcement 11 October 2019). The Reserve comprised
minerals dissolved in brine to be mined from the Measured Resource
reported for the Northern Lake Bed Sediments and minerals dissolved
in brine to be mined from the Measured and Indicated Resources
reported for the Paleochannel Basal Sands. This information is
repeated in Table 1 and additional information is provided that
details the split between Reserves hosted in the Lake Bed Sediments
and Reserves hosted in the Paleochannel Basal Sands.
The minerals dissolved in brine within the Williamson pit were
not included in the Reserve because mining of brine from the pit
was substantially progressed at the time of the BFS release.
Production
Mining from the Williamson Pit (brine pumping from the pit lake)
commenced in June 2019 and was completed in March 2020. In total an
estimated 0.015 Mt potassium was mined. Currently an immaterial
volume of brine is produced from the Williamson pit due to
dewatering of the pit during gold mining operations by Wiluna
Mining and disposed of by pumping to the east and west drains.
Mining from the Lake Bed Sediments (brine pumping from trenches)
commenced in July 2019 and is ongoing. At 30 June 2020 an estimated
0.018Mt Potassium has been mined. The mined brine is currently
contained within the evaporation ponds and these are treated as
stockpiles for the purposes of this report.
As of 30 June 2020 no SOP product has been produced.
Mining commenced prior to reporting of the Resource and Reserve
Statement within the BFS report (ASX Announcement 11 October 2019).
However, the 11 October 2019 Resource and Reserve statement reports
the total resource prior to the commencement of mining (excluding
Williamson Pit).
Depletion
The Williamson Pit Resource has been depleted to zero.
Production from the Lakebed Sediment has resulted in very minor
depletion of the Resource and Reserve. In general, the depletion is
less than the rounding to two significant figures of the Resource
and Reserve Estimate.
Tonnages that have been mined and the depleted Resource and
Reserve at 30 June 2020 are reported in Table 1 and Table 2 .
Table 1: Mineral Resource Depletion and Status
Mineral Tonnage Calculated Mineral Tonnage Calculated
from Total Porosity(1) from Drainable Porosity
Potassium Magnesium Sulphate Potassium Magnesium Sulphate
Tonnage Tonnage Tonnage Tonnage Tonnage Tonnage
---------- ---------- --------- ---------- ---------- ---------
Confidence Host Description (Mt) (Mt) (Mt) (Mt) (Mt) (Mt)
---------- ---------- --------- ---------- ---------- ---------
Resource
Measured North LBS 1/6/2019 3.1 3.6 12 0.79 0.93 3.2
--------------- ----------------- ---------- ---------- --------- ---------- ---------- ---------
Mined FY2019-2020 0.018 0.020 0.072 0.018 0.020 0.072
---------------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Resource
30/6/2020 3.1 3.6 12 0.77 0.91 3.1
---------------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Williamson Resource
Measured Pit 1/6/2019 0.014 0.019 0.060
--------------- ----------------- ---------- ---------- --------- ---------- ---------- ---------
Mined FY2019-2020 0.015 0.020 0.063
---------------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Resource
30/6/2020 0 0 0
---------------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Paleochannel Resource
Measured Basal Sands 30/6/2020 0.29 0.39 1.2 0.11 0.15 0.45
--------------- ----------------- ---------- ---------- --------- ---------- ---------- ---------
Paleochannel Resource
Indicated Basal Sands 30/6/2020 2.4 3.2 9.8 0.90 1.2 3.7
--------------- ----------------- ---------- ---------- --------- ---------- ---------- ---------
South Lake Resource
Inferred Bed Sediment 30/6/2020 0.9 1.1 3.8 0.24 0.3 1.0
--------------- ----------------- ---------- ---------- --------- ---------- ---------- ---------
Paleochannel Resource
Inferred Sediment 30/6/2020 41 49 168 3.1 3.6 13
--------------- ----------------- ---------- ---------- --------- ---------- ---------- ---------
Resource
Total Measured 30/6/2020 3.3 4.0 14 0.88 1.1 3.6
----------------- ---------- ---------- --------- ---------- ---------- ---------
Resource
Total Indicated 30/6/2020 2.4 3.2 10 0.90 1.2 3.7
----------------- ---------- ---------- --------- ---------- ---------- ---------
Resource
Total Inferred 30/6/2020 42 50 172 3.3 3.9 14
----------------- ---------- ---------- --------- ---------- ---------- ---------
Notes:
1) The resource calculated from Total Porosity represents the
in-situ contained brine with no recovery factor applied. The amount
of contained brine which can be extracted will be significantly
less than the in-situ quantity and depends on many factors
including the permeability of the sediments, the drainable
porosity, the recharge dynamics of the aquifer and the duration of
mining. In particular the Paleochannel Sediment hosted Inferred
Resrource exhibits low permeability and brine production from this
unit will be slow and only a small fraction might be recovered.
Table 2: Mineral Reserve Depletion and Status
Potassium Tonnage Magnesium Tonnage Sulphate Tonnage
Host Description Mt Mt Mt
------------------ ------------------ -----------------
Probable Reserve Reported
Lake Bed Sediment 11/10/2019 1.1 1.3 4.5
-------------------------------- ------------------ ------------------ -----------------
Mined (FY2019-2020) 0.018 0.020 0.072
---------------------------------------------------------- ------------------ ------------------ -----------------
Remaining Probable Reserve 30/6/2020 1.1 1.3 4.4
---------------------------------------------------------- ------------------ ------------------ -----------------
Probable Reserve Reported
Paleochannel Basal Sand 11/10/2019 1.3 1.7 5.2
-------------------------------- ------------------ ------------------ -----------------
Mined (FY2019-2020) 0 0 0
---------------------------------------------------------- ------------------ ------------------ -----------------
Remaining Probable Reserve 30/6/2020 1.3 1.7 5.2
---------------------------------------------------------- ------------------ ------------------ -----------------
Probable Reserve Reported
Total 11/10/2019 2.4 3.0 9.7
-------------------------------- ------------------ ------------------ -----------------
Remaining Probable Reserve 30/6/2020 2.4 3.0 9.6
---------------------------------------------------------- ------------------ ------------------ -----------------
Governance
The Company engages external consultants and Competent Persons
(as determined pursuant to the JORC Code 2012) to prepare and
estimate the Mineral Resources and Reserves. Management and the
Board review these estimates and underlying assumptions for
reasonableness and accuracy. The results of the Mineral Resource
and Reserve 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 and Reserves as at 30
June each year. A revised Mineral Resource or Reserve 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.
Competent Person Statement - Mineral Resource Statement
The information in this Mineral Resources and Ore Reserves
Statement that relates to Mineral Resources and Ore Reserves is
based on information compiled by Ben Jeuken, a Competent Person who
is a Member of the Australasian Institute of Mining and Metallurgy.
Mr Jeuken is an employee of Groundwater Science Pty Ltd.
Groundwater Science Pty Ltd is engaged as a consultant to Salt Lake
Potash Limited. Mr Jeuken has sufficient experience that is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the
"Australasian Core for Reporting of Exploration Results, Minerals
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.
ADDITIONAL INFORMATION
1. TWENTY LARGEST HOLDERS OF LISTED SECURITIES
The names of the twenty largest holders of listed securities as
at 31 August 2020 are listed below:
Number of Percentage
Ordinary Shares of Ordinary
Name Shares
------------------------------------------- ---------------- -------------
COMPUTERSHARE CLEARING PTY LTD 93,072,314 18.38
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 72,080,246 14,23
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 39,365,945 7.77
CITICORP NOMINEES PTY LIMITED 32,277,539 6.37
ARREDO PTY LTD 17,000,000 3.36
CS THIRD NOMINEES PTY LIMITED 14,182,501 2.80
EQUATORIAL RESOURCES LIMITED 12,000,000 2.37
NATIONAL NOMINEES LIMITED 9,563,465 1.89
ARGONAUT SECURITIES (NOMINEES) PTY LTD 8,350,000 1.65
AWJ FAMILY PTY LTD 7,150,934 1.41
BNP PARIBAS NOMS PTY LTD 5,417,513 1.07
HOWITT MGMT PTY LTD 5,020,003 0.99
MR NEIL DAVID IRVINE 5,000,000 0.99
MR TONY JAMES & MS BEVERLY JEAN EATON
SWIERICZUK 4,416,146 0.87
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 4,193,747 0.83
J P MORGAN NOMINEES AUSTRALIA LIMITED 4,129,905 0.82
ELLISON (WA) PTY LTD 3,980,000 0.82
ARGONAUT SECURITIES (NOMINEES) PTY LTD 3,940,000 0.78
RANSOME'S DOCK LIMITED 3,840,000 0.76
MR MARK STUART SAVAGE 3,375,000 0.67
Total Top 20 348,355,258 68.78
Others 158,125,018 31.22
------------------------------------------- ---------------- -------------
Total Ordinary Shares on Issue 506,480,276 100.00
=========================================== ================ =============
2. DISTRIBUTION OF EQUITY SECURITIES
An analysis of numbers of holders of listed securities by size
of holding as at 31 August 2020 is listed below:
Ordinary Shares
Number of Number of
Distribution Shareholders Ordinary Shares
-------------------- ------------- ----------------
1 - 1,000 1,152 372,726
1,001 - 5,000 851 2,180,506
5,001 - 10,000 431 3,464,432
10,001 - 100,000 970 34,496,329
More than 100,000 259 465,966,283
-------------------- ------------- ----------------
Totals 3,663 506,480,276
==================== ============= ================
There were 1084 holders of less than a marketable parcel of
Ordinary Shares.
3. VOTING RIGHTS
See Note 16(b) of the Notes to the Financial Statements.
4. SUBSTANTIAL SHAREHOLDERS
Substantial holders who have notified the Company in accordance
with section 671B of the Corporations Act 2001 are as follows:
Number of
Distribution Ordinary Shares
------------------------------------------------- ----------------
Lombard Odier Asset Management (Europe) Limited 60,016,313
FIL Limited 54,601,226
------------------------------------------------- ----------------
5. UNQUOTED SECURITIES
Unlisted Options Unlisted Options Unlisted Options Unlisted Options Unlisted Options Unlisted Options
exercisable exercisable exercisable exercisable exercisable
at $0.60 at $0.40 at $0.50 at $0.60 at $0.70
Holder 29-Apr-21 30-Jun-21 30-Jun-21 30-Jun-21 30-Jun-21
-------------------- ------------------ ------------------- ------------------- ---------------- ----------------
Hopetoun Consulting
Pty Ltd 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 - - 50,000 - -
20%)
-------------------- ------------------ ------------------- ------------------- ---------------- ----------------
Total 1,000,000 250,000 500,000 750,000 400,000
==================== ================== =================== =================== ================ ================
Total holders 1 1 3 3 2
Unlisted Options Unlisted Options exercisable Unlisted Options exercisable Unlisted Options exercisable
at $0.60 at $1.00 at $1.20
Holder 01-Nov-23 01-Nov-23 01-Nov-23
----------------------- ---------------------------- ---------------------------- ----------------------------
Mr Tony Swiericzuk 1,000,000 2,000,000 2,000,000
Mr Shaun Day - 1,500,000 1,500,000
Others (less than 20%) 1,000,000 1,150,000 1,500,000
Total 2,000,000 4,650,000 5,000,000
======================= ============================ ============================ ============================
Total holders 5 7 7
Unlisted Options Unlisted Options exercisable Unlisted Options exercisable
at $0.70 at $1.00
Holder 04-Aug-24 30-Jun-23
---------------------------- ---------------------------- ----------------------------
Taurus Funds Management P/L 9,000,000 -
Argonaut Limited - 1,000,000
Total 9,000,000 1,000,000
============================ ============================ ============================
Total holders 1 1
As at 31 August 2020, there are 18,560,398 Performance Rights
issued under an employee incentive scheme.
6. ON-MARKET BUY BACK
There is currently no on-market buyback program for any of Salt
Lake Potash Limited's listed securities.
7. EXPLORATION INTERESTS
Summary of Exploration and Mining Tenements held as at 31 August
2020
Project Status Type of Change License Number Interest (%)
since 30-Jun-20 31-Aug-20
Western Australia
-------------------- ------------- ------------------- ---------------- -------------
Lake Way
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E53/1878 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E53/2057 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E53/1897 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E53/2059 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E53/2060 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/208 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - M53/1102 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - M53/1103 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - M53/1104 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - M53/1105 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - M53/1106 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - M53/1107 100%
-------------------- ------------- ------------------- ---------------- -------------
East Application - M53/1109 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E53/1862 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - E53/1863 100%
-------------------- ------------- ------------------- ---------------- -------------
North Application - E53/1905 100%
-------------------- ------------- ------------------- ---------------- -------------
North Application - E53/1952 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - E53/1966 100%
-------------------- ------------- ------------------- ---------------- -------------
North Application - E53/2049 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - P53/1642 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - P53/1643 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - P53/1644 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - P53/1645 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - P53/1666 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - P53/1667 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - P53/1668 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - M53/121 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - M53/122 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - M53/123 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - M53/147 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - M53/253 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - M53/796 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - M53/797 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - M53/798 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - M53/910 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - L53/51 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/207 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - L53/211 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - L53/212 100%
-------------------- ------------- ------------------- ---------------- -------------
-
West Application - L53/214 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/215 100%
-------------------- ------------- ------------------- ---------------- -------------
North Application - L53/216 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/217 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - L53/218 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/210 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/219 100%
-------------------- ------------- ------------------- ---------------- -------------
South Application - L53/225 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/226 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - L53/228 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application Application L53/229 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - G53/24 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted Granted G53/25 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Wells
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E38/2710 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E38/2821 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E38/2824 100%
-------------------- ------------- ------------------- ---------------- -------------
Outer East Granted - E38/3055 100%
-------------------- ------------- ------------------- ---------------- -------------
Single Block Granted - E38/3056 100%
-------------------- ------------- ------------------- ---------------- -------------
Outer West Granted - E38/3057 100%
-------------------- ------------- ------------------- ---------------- -------------
North West Granted - E38/3124 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - L38/262 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - L38/263 100%
-------------------- ------------- ------------------- ---------------- -------------
South West Granted - L38/264 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - L38/287 100%
-------------------- ------------- ------------------- ---------------- -------------
South Western Granted - E38/3247 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - M38/1278 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - E38/3380 100%
-------------------- ------------- ------------------- ---------------- -------------
North Application - E38/3469 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - E38/3470 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Ballard
-------------------- ------------- ------------------- ---------------- -------------
West Granted - E29/912 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E29/913 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E29/948 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E29/958 100%
-------------------- ------------- ------------------- ---------------- -------------
South East Granted - E29/1011 100%
-------------------- ------------- ------------------- ---------------- -------------
South East Granted - E29/1020 100%
-------------------- ------------- ------------------- ---------------- -------------
South East Granted - E29/1021 100%
-------------------- ------------- ------------------- ---------------- -------------
South East Granted - E29/1022 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E29/1067 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E29/1068 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E29/1069 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E29/1070 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Irwin
-------------------- ------------- ------------------- ---------------- -------------
West Granted - E37/1233 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E39/1892 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E38/3087 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E37/1261 100%
-------------------- ------------- ------------------- ---------------- -------------
Central East Granted - E38/3113 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E39/1955 100%
-------------------- ------------- ------------------- ---------------- -------------
North West Granted - E37/1260 100%
-------------------- ------------- ------------------- ---------------- -------------
South West Granted - E39/1956 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Minigwal
-------------------- ------------- ------------------- ---------------- -------------
West Granted - E39/1893 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E39/1894 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E39/1962 100%
-------------------- ------------- ------------------- ---------------- -------------
Central East Granted - E39/1963 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E39/1964 100%
-------------------- ------------- ------------------- ---------------- -------------
South West Granted - E39/1965 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Marmion
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E29/1000 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E29/1001 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E29/1002 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - E29/1005 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - E29/1069 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Noondie
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E57/1062 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E57/1063 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E57/1064 100%
-------------------- ------------- ------------------- ---------------- -------------
West Granted - E57/1065 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E36/932 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted Granted E36/984 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Application - E36/985 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Barlee
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E30/495 100%
-------------------- ------------- ------------------- ---------------- -------------
Central Granted - E30/496 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E77/2441 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Raeside
-------------------- ------------- ------------------- ---------------- -------------
North Granted - E37/1305 100%
-------------------- ------------- ------------------- ---------------- -------------
Lake Austin
-------------------- ------------- ------------------- ---------------- -------------
North Application - E21/205 100%
-------------------- ------------- ------------------- ---------------- -------------
West Application - E21/206 100%
-------------------- ------------- ------------------- ---------------- -------------
East Granted - E58/529 100%
-------------------- ------------- ------------------- ---------------- -------------
South Granted - E58/530 100%
-------------------- ------------- ------------------- ---------------- -------------
South West Granted - E58/531 100%
-------------------- ------------- ------------------- ---------------- -------------
Northern Territory
-------------------- ------------- ------------------- ---------------- -------------
Lake Lewis
-------------------- ------------- ------------------- ---------------- -------------
South Granted - EL 29787 100%
-------------------- ------------- ------------------- ---------------- -------------
North Granted - EL 29903 100%
-------------------- ------------- ------------------- ---------------- -------------
8. COMPETENT PERSONS STATEMENTS
The information in this Annual Report that relates to
Exploration Results for Lake Way is based on, and fairly
represents, information reviewed by Mr Ben Jeuken, who is a member
of the Australasian 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'. 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 information in this Annual Report that relates to Process
Testwork Results is extracted from the announcement entitled
'Harvest Salt Results Report Above Modelled Potassium Grades' dated
28 May 2020. This announcement is available to view on
www.so4.com.au. The information in the original ASX Announcement
that related to Process Testwork Results was based on, and fairly
represents, information provided by Mr Bryn Jones, BAppSc (Chem),
MEng (Mining) who is a Fellow of the Australasian Institute of
Mining and Metallurgy. Mr Jones is a holder of shares and
performance rights in, and is a Director of, Salt Lake Potash
Limited. Mr Jones 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. 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 Annual Report that relates to Process
Testwork Results is extracted from the announcement entitled
'Premium Grade Water Soluble Sulphate of Potash Produced from Lake
Way Salts' dated 18 September 2019. This announcement is available
to view on www.so4.com.au . The information in the original ASX
Announcement that related to Process Testwork Results was based on,
and fairly represents, information compiled by Mr Bryn Jones,
BAppSc (Chem), MEng (Mining) who is a Fellow of the AusIMM. Mr
Jones is a Director of Salt Lake Potash Limited. Mr Jones 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. 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.
9. PRODUCTION TARGET
The Lake Way 245ktpa Production Target and the forecast
financial statements based on that Production Target are based on
the Company's Bankable Feasibility Study as released to the ASX on
11 October 2019. The information in relation to the Production
Target and forecast financial information 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 11 October 2019. As announced on 15 June
2020, following substantial progress in detailed engineering and
vendor procurement, the capital expenditure budget was increased
from A$254m to A$264m. The Company confirms that the material
assumptions underpinning the Production Target and the forecast
financial information referenced in the 11 October 2019 release and
the updated capital expenditure budget referenced in the 15 June
2020 release continue to apply and have not materially changed.
10. FORWARD LOOKING STATEMENTS
This announcement may include forward-looking statements. These
forward-looking statements are based on Salt Lake Potash Limited's
expectations and beliefs concerning future events. Forward looking
statements are necessarily subject to risks, uncertainties and
other factors, many of which are outside the control of Salt Lake
Potash Limited, which could cause actual results to differ
materially from such statements. Salt Lake Potash Limited makes no
undertaking to subsequently update or revise the forward-looking
statements made in this announcement, to reflect the circumstances
or events after the date of that announcement.
The full version of the 2020 Annual Report is available on the
Company's website at www.so4.com.au
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR SEUSUWESSELU
(END) Dow Jones Newswires
September 28, 2020 02:00 ET (06:00 GMT)
Grafico Azioni Salt Lake Potash (LSE:SO4)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Salt Lake Potash (LSE:SO4)
Storico
Da Apr 2023 a Apr 2024
