TIDMSO4
RNS Number : 4491L
Salt Lake Potash Limited
30 April 2020
30 April 2020 AIM/ASX Code: SO4
SALT LAKE POTASH LIMITED
-------------------------
MARCH 2020 QUARTERLY REPORT
Salt Lake Potash Limited ( SO4 or the Company ) is pleased to
present its Quarterly Report for the period ending 31 March 2020.
The Company is focussed on rapidly progressing development of its
Lake Way SOP Project in Wiluna, Western Australia.
HIGHLIGHTS
On-Lake Construction & Operations: Stage 2 commissioned
-- Completed Stage 2 on-lake civil work consisting of 275ha of
evaporation pond area, taking total pond area to 400ha with 35km of
brine abstraction trenches.
-- Potassium grades across the pond network continue to align
with model.
Process Plant and Non-Process Infrastructure:Civil earthworks
and procurement
-- Completed bulk civil earthworks at the process plant and
non-process infrastructure (NPI) site.
-- Process plant procurement significantly advanced with major
components including the crystalliser, centrifuges, attritioners
and flotation cells now commited.
Lake Way Village completed
-- Construction and installation of the permanent 100 person
Lake Way village was completed in April 2020, with workers moving
in and first meal served on 24 April.
-- Completion of the village has reduced the daily travel time
for workers by 90 minutes, further de-risking the Project and
improving quality of life for the workforce.
Binding Offtake term sheets: Mitsui added to offtake
portfolio
-- Announced a binding term-sheet with Mitsui & Co. (Asia
Pacific) for the sale of 4kt per annum of premium water soluble SOP
over five years.
-- SO4 has now secured offtake for 224kt per annum of the 245kt
per annum Lake Way production, with the remainder to be sold into
spot and local markets.
Paleochannel Development: Bore drilling commenced at Lake Way
Paleochannel
-- Commenced drilling the Lake Way Paleochannel and installation
of brine extraction bores.
-- Completed drilling the West Creek water supply borefield.
Institutional Placement
-- In April, SO4 received binding commitments to raise A$20m
through the issue of 58.8m shares at A$0.34 each.
-- The funds will enable SO4 to continue to deliver the Lake Way
Project and achieve first SOP production in Q1'21.
Covid-19 Business Update
-- Operational changes in place to minimise potential impact of
Covid-19, with no material impact on schedule expected.
-- No current delays expected for delivery of items ordered for
process plant and non-process infrastructure.
-- Cost saving measures implemented including temporary 40%
reduction to Director fees and executive salaries.
Upcoming milestones
-- Finalisation of full project funding.
-- Commencement of process plant construction.
on-lake construction
During the quarter SO4 completed the Stage 2 pond network,
comprising of 275ha of evaporation pond area and 35km of brine
extraction trenches, taking the total pond network size to 400ha.
Stage 2 pond construction included the installation of 12,000 sheet
piles and 200,000 cubic metres of earthworks to form the walls of
the ponds, as well as 20 kilometres of pipework to move the brine
from the trenches to the ponds.
Stage 3 pond construction is scheduled to commence in Q4 2020,
with harvest salt availability aligning with process plant ramp
up.
on-lake operations
Potassium grades across the pond network continue to follow the
system curve and align with modelled outcomes. The Stage 1 pond
system is producing salts from all five harvest cells during the
quarter. The Stage 2 pond system is commissioned and is
precipitating harvest salts.
To operate the brine abstraction trench network and evaporation
pond system, a Brine Transport System (BTS) has been installed.
Work on the BTS continued throughout the quarter.
The BTS provides flexibility to pump brine from across the
different areas of the trench network and discharge into the
various Halite ponds. Brine is drawn from four sumps strategically
located across the lake, connected with pumps and pipes to
individual cells across the pond network.
Process Plant construction
At the process plant site, ground clearing and bulk civil
earthworks were completed during the quarter. This work included
pad preparation for construction of the process plant, power plant,
warehouse, workshop, administration and site village, as well as
construction of the raw water pond, runoff settlement ponds and
site access roads. Concrete foundations for the process plant and
power station have commenced.
Procurement activities accelerated during the quarter with a
number of major plant components ordered including the centrifuges,
attritioners, flotation cells, sizing screens, thickeners, rotary
drier, impact crusher, lump breakers and conveyer belts. Associated
components including supporting steelwork, motor control centres,
switchrooms, transformers, low-voltage and high-voltage cable have
also been ordered. In combination these components make-up a
material portion of the plant construction capex.
The Company is currently finalising the Engineering Procurement
Construction Management (EPCM) and Engineering Procurement
Construction (EPC) contracts with GR Engineering Servies (GRES),
who are operating on site under an early services arrangement.
During the quarter GRES and Wood Group continued to develop the
Process Plant design.
lake way village completed
Following the period-end construction and installation of the
permanent infrastructure for the 100 person Lake Way village was
completed, with workers moving in and first meal served on 24 April
2020. Completion of the on site village has reduced the daily
travel time for workers by 90 minutes between the temporary
accommodation and the processing plant site, further de-risking the
Project and improving quality of life for the workforce. Work
continues on the 200 person construction village designed to house
workers during peak construction in the second half of the
year.
LAKE WAY PALEOCHANNEL
During the quarter SO4 commenced drilling on the Lake Way
paleochannel. The initial scope of work includes drilling at nine
(9) pad locations along the Eastern side of the lake.
Installation of the first brine extraction bore was successfully
completed in April with strong airlift flows observed.
In addition to the drilling on the Lake Way paleochannel, the
Company also completed drilling at West Creek where fresh water
supplies for the processing plant and potable water for the village
will be sourced.
Water has been extracted from the West Creek area since the
1980's. SO4 secured a groundwater abstraction licence for 0.7GL/
year covering the existing borefield area in mid 2019. During the
quarter SO4 drilled a total of seven (7) production bores and two
(2) monitoring bores.
Offtake
During the quarter SO4 signed another binding term-sheet for the
sale of 4kt per annum of SOP with Mitsui & Co. (Asia Pacific).
The agreement has a five year term and is for the sale of premium
quality water soluble SOP into select countries in Asia.
The Company has now secured binding term sheets for 224kt per
annum of the 245kt per annum Lake Way production, with the
remaining tonnes expected to be sold into local and spot
markets.
Approvals
SO4 has continued to advancefinal permitting required to support
full-scale operations. Work to date has not identified any social
or environmental factors that could constitute fatal flaws or
insurmountable obstacles to gaining necessary statutory approvals.
The final outstanding approvals for the Lake Way Project are
currently being progressed on schedule.
The EPA has determined that the full project scope requires
formal assessment with no public review. As part of this assessment
the EPA requires an Environmental Review Document to be prepared
and submitted.
The seasonal rainfall received at Lake Way in early 2020 created
conditions on site to allow meaningful additional environmental
studies to be commenced. These surveys will support the
Environmental Review Document and include:
-- Flora survey. The survey involved targeted searches for
priority species, soil profiling around Tecticornia, vegetation
health monitoring of existing quadrats and installation of
additional vegetation health quadrats.
-- Fauna survey.
-- Stygofauna survey of bores within the SO4 Lake Way production area.
-- Shorebird assessment of Lake Way.
-- Short range invertebrate assessment.
In addition to these surveys a number of studies have been
continued and/or commenced to support the EPA submission which
include:
-- Visual impact assessment of the full scale operation.
-- Ground water modelling optimisation to include all factors
from the proposed paleo channel bores.
-- Flood study modelling optimisation. The flood model has been
improved as additional knowledge has been gained into the behaviour
of lake surface water movement based on the recent rain events.
-- Vadoze zone modelling.
-- Salt dissipation study.
The studies and surveys will be completed shortly for submission
of the ERD in the coming weeks.
The Company has continued to obtain Ministerial consents to use
the land under section 18 of the Aboriginal Heritage Act 1972, for
additional development as needed to meet ongoing project
requirements with a number of applications being approved,
including for the paleochannel bore works that have commenced.
In respect of the processing plant and village construction, the
Company has received:
-- Mining Proposal approval from the Department of Mines,
Industry Regulation and Safety (DMIRS) for the construction of the
processing plant and village.
-- Project Management Plan approval from the Department of
Mines, Industry Regulation and Safety (DMIRS) for the construction
of the processing plant and village.
-- Works Approval from the Department of Water and Environment
Regulation (DWER) for the construction of the processing plant and
a sewage treatment plant to support the village.
In respect of the initial paleochannel bores, project approvals
for the construction of bores to obtain brine from the paleo
channel were received from the Department of Mines, Industry
Regulation and Safety (DMIRS) to enable this work to commence.
SO4 has obtained the necessary water licences to extract process
water from the West Creek borefield and for brine extraction from
the lake. Once the studies described above have been completed the
final brine extraction licences will be sought.
exploration at lake marmion & lake Ballard
The Company is currently progressing resource development work
at both Lake Marmion and Lake Ballard as part of a strategic review
to prioritise which of SO4's lakes would be next development
priority. During the quarter a passive seismic geophysical survey
at both Lake Marmion and Lake Ballard were completed.
At Lake Marmion the results will be merged with the data from
the 2019 survey to provide a comprehensive picture of the depth and
width of the paelochannels beneath the lake surface. Laboratory
analysis of the brine samples taken in the December 2019 quarter
are ongoing.
At Lake Ballard, the survey was undertaken to further improve on
the results of the 2018 gravity survey.
covid-19 business update
SO4 has responded with changes to its operations as Government
advice regarding Covid-19 has evolved in order to minimise
potential impacts. Specifically, interstate workers have elected to
transit home while non critical movement to and from site has been
minimised. All interaction with the local Wiluna community has
ceased. Use of the Wiluna airport for travel to/from site has not
been impacted and this airport continues to support the SO4
business. These changes to operations in response to Covid-19 are
not currently expected to have an impact on the project
schedule.
The Company has received no information from suppliers to
suggest material delays to any items ordered for the process plant
and non-process infrastructure.
As part of the Company's response to Covid-19, SO4 has also
implemented a number of efficiencies and cost saving measures to
ensure the ongoing success of the Project. These include a
temporary 40% reduction to Director fees, executive and management
salaries (including the Managing Director) and a 20% reduction to
employees and contractors, to be monitored on a monthly basis
effective April 2020.
Project Funding
Institutional Placement
In April 2020, the Company announced it had received binding
commitments to place 58.8 million new ordinary shares at A$0.34
each to raise gross proceeds of A$20m. The shares were placed to
existing and new institutional investors, confirming ongoing
support for SO4 and the Lake Way project.
As part of the placement SO4 Directors and management subscribed
for a total of 3.5 million shares. This includes 2,250,000 shares
by Chairman, Mr Ian Middlemas and 505,883 shares by Managing
Director and CEO, Mr Tony Swiericzuk, that they intend to subscribe
for subject to shareholder approval.
The Placement funds will be used primarily on Lake Way Project
development, including Process Plant procurement and construction
and ongoing operation of Stage 1 & 2 Evaporation Ponds. The
funds will enable SO4 to continue to deliver the Lake Way Project
to achieve first production in Q1 2021.
Debt Financing
In August 2019, SO4 announced that it had mandated Taurus Funds
Management (Taurus or the Lenders), to provide up to US$150m
project financing for the Lake Way Project.
The Stage 1 Facility (Facility) provided initial access to
funding for early construction works at the Lake Way Project and
enabled completion of the BFS prior to drawdown of the main Project
Development Facility (PDF) . The Facility also funded civil works
for the Stage 2 trenches and evaporation ponds, which will provide
the initial harvest salt feed for plant commissioning.
To fund the ongoing construction of key infrastructure prior to
drawdown of the PDF, the parties agreed to a US$15m extension to
the Facility in December 2019. These funds were drawn down during
the quarter and the extended Facility will be refinanced upon
drawdown of the PDF.
Following completion of the BFS, SO4 has been working closely
with Taurus to complete the documentation, derisk the project and
satisfy the conditions precedent to the PDF in the near future. In
addition to the PDF, the Company is assessing complimentary funding
options to ensure that it is fully funded to complete construction
in line with the Project schedule.
For further information please visit www.so4.com.au or
contact:
Tony Swiericzuk / Richard Knights Salt Lake Potash Limited Tel: +61 8 6559 5800
Colin Aaronson / Richard Tonthat / Ben Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Roberts
Derrick Lee / Peter Lynch Cenkos Securities plc (Joint Broker) Tel: +44 (0) 131 220 6939
Rupert Fane / Ernest Bell Hannam & Partners (Joint Broker) Tel: +44 (0) 20 7907 8500
This announcement has been authorised for release by the Board
of Directors.
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.
Appendix a - disclosures in accordance with asx listing rule
5.3
Summary of Mining Tenements
Project Status Type of Change License Number Interest (%) Interest (%)
31-Dec-19 31-Mar-20
-------------
Western Australia
==================== ============= ================= ================= ============= =============
Lake Way
==================== ============= ================= ================= ============= =============
Central Granted - E53/1878 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - E53/2057 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E53/1897 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E53/2059 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E53/2060 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/208 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - M53/1102 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - M53/1103 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - M53/1104 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - M53/1105 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - M53/1106 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - M53/1107 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - E53/1862 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - E53/1863 100% 100%
==================== ============= ================= ================= ============= =============
North Application - E53/1905 100% 100%
==================== ============= ================= ================= ============= =============
North Application - E53/1952 100% 100%
==================== ============= ================= ================= ============= =============
West Application - E53/1966 100% 100%
==================== ============= ================= ================= ============= =============
North Application - E53/2049 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - P53/1642 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - P53/1643 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - P53/1644 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - P53/1645 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - P53/1666 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - P53/1667 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - P53/1668 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - M53/121 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - M53/122 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - M53/123 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - M53/147 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - M53/253 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - M53/796 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - M53/797 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - M53/798 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - M53/910 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - L53/51 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/207 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/211 100% 100%
==================== ============= ================= ================= ============= =============
North Application - L53/212 100% 100%
==================== ============= ================= ================= ============= =============
-
West Application - L53/214 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/215 100% 100%
==================== ============= ================= ================= ============= =============
North Application - L53/216 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/217 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/218 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/210 100% 100%
==================== ============= ================= ================= ============= =============
West Application - L53/219 100% 100%
==================== ============= ================= ================= ============= =============
West Granted Granted G53/24 - 100%
==================== ============= ================= ================= ============= =============
West Application Application G53/25 - 100%
==================== ============= ================= ================= ============= =============
Lake Wells
==================== ============= ================= ================= ============= =============
Central Granted - E38/2710 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E38/2821 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - E38/2824 100% 100%
==================== ============= ================= ================= ============= =============
Outer East Granted - E38/3055 100% 100%
==================== ============= ================= ================= ============= =============
Single Block Granted - E38/3056 100% 100%
==================== ============= ================= ================= ============= =============
Outer West Granted - E38/3057 100% 100%
==================== ============= ================= ================= ============= =============
North West Granted - E38/3124 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - L38/262 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - L38/263 100% 100%
==================== ============= ================= ================= ============= =============
South West Granted - L38/264 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - L38/287 100% 100%
==================== ============= ================= ================= ============= =============
South Western Granted - E38/3247 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - M38/1278 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - E38/3380 100% 100%
==================== ============= ================= ================= ============= =============
North Application Application E38/3469 - 100%
==================== ============= ================= ================= ============= =============
Central Application Application E38/3470 - 100%
==================== ============= ================= ================= ============= =============
Lake Ballard
==================== ============= ================= ================= ============= =============
West Granted - E29/912 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - E29/913 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - E29/948 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E29/958 100% 100%
==================== ============= ================= ================= ============= =============
South East Granted - E29/1011 100% 100%
==================== ============= ================= ================= ============= =============
South East Granted - E29/1020 100% 100%
==================== ============= ================= ================= ============= =============
South East Granted - E29/1021 100% 100%
==================== ============= ================= ================= ============= =============
South East Granted - E29/1022 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E29/1067 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E29/1068 100% 100%
==================== ============= ================= ================= ============= =============
East Application - E29/1069 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - E29/1070 100% 100%
==================== ============= ================= ================= ============= =============
Lake Irwin
==================== ============= ================= ================= ============= =============
West Granted - E37/1233 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - E39/1892 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - E38/3087 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - E37/1261 100% 100%
==================== ============= ================= ================= ============= =============
Central East Granted - E38/3113 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E39/1955 100% 100%
==================== ============= ================= ================= ============= =============
North West Granted - E37/1260 100% 100%
==================== ============= ================= ================= ============= =============
South West Granted - E39/1956 100% 100%
==================== ============= ================= ================= ============= =============
Lake Minigwal
==================== ============= ================= ================= ============= =============
West Granted - E39/1893 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - E39/1894 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - E39/1962 100% 100%
==================== ============= ================= ================= ============= =============
Central East Granted - E39/1963 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E39/1964 100% 100%
==================== ============= ================= ================= ============= =============
South West Granted - E39/1965 100% 100%
==================== ============= ================= ================= ============= =============
Lake Marmion
==================== ============= ================= ================= ============= =============
North Granted - E29/1000 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - E29/1001 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E29/1002 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - E29/1005 100% 100%
==================== ============= ================= ================= ============= =============
West Application - E29/1069 100% 100%
==================== ============= ================= ================= ============= =============
Lake Noondie
==================== ============= ================= ================= ============= =============
North Granted - E57/1062 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - E57/1063 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E57/1064 100% 100%
==================== ============= ================= ================= ============= =============
West Granted - E57/1065 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - E36/932 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - E36/984 100% 100%
==================== ============= ================= ================= ============= =============
Central Application - E36/985 100% 100%
==================== ============= ================= ================= ============= =============
Lake Barlee
==================== ============= ================= ================= ============= =============
North Granted - E30/495 100% 100%
==================== ============= ================= ================= ============= =============
Central Granted - E30/496 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E77/2441 100% 100%
==================== ============= ================= ================= ============= =============
Lake Raeside
==================== ============= ================= ================= ============= =============
North Granted - E37/1305 100% 100%
==================== ============= ================= ================= ============= =============
Lake Austin
==================== ============= ================= ================= ============= =============
North Application - E21/205 100% 100%
==================== ============= ================= ================= ============= =============
West Application - E21/206 100% 100%
==================== ============= ================= ================= ============= =============
East Granted - E58/529 100% 100%
==================== ============= ================= ================= ============= =============
South Granted - E58/530 100% 100%
==================== ============= ================= ================= ============= =============
South West Granted - E58/531 100% 100%
==================== ============= ================= ================= ============= =============
Lake Moore
==================== ============= ================= ================= ============= =============
Central Granted - E59/2344 100% 100%
==================== ============= ================= ================= ============= =============
Northern Territory
==================== ============= ================= ================= ============= =============
Lake Lewis
==================== ============= ================= ================= ============= =============
South Granted - EL 29787 100% 100%
==================== ============= ================= ================= ============= =============
North Granted - EL 29903 100% 100%
==================== ============= ================= ================= ============= =============
Related Party Payments
During the quarter ended 31 March 2020, the Company made
payments of $114,000 to related parties and their associates. These
payments relate to existing remuneration arrangements (executive
salaries, director fees and superannuation).
Appendix B - Competent Person Statement and Disclaimer
Competent Persons Statement
The information in this announcement that relates to Production
Targets and Ore Reserves for Lake Way is extracted from the
announcement entitled 'Outstanding Bankable Feasibility Results for
Lake Way' dated 11 October 2019. This announcement is available to
view on www.so4.com.au. The information in the original ASX
Announcement that related to Production Targets and Ore Reserves
was based on, and fairly represents, information compiled 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, and Mr Robert Kinnell, who is a member of the
Australasian Institute of Mining and Metallurgy and a Fellow of the
Geological Society of London. Mr Jeuken is employed by Groundwater
Science Pty Ltd, an independent consulting Company. Mr Kinnell is a
full time employee of Salt Lake Potash Limited. Mr Jeuken and Mr
Kinnell have sufficient experience, which is relevant to the style
of mineralisation and type of deposit under consideration and to
the activity, which they are 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.
Production Target
The Lake Way 245ktpa Production Target stated in this
presentation is 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 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. The Company confirms that the material assumptions
underpinning the Production Target referenced in the 11 October
2019 release continue to apply and have not materially changed.
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.
Appendix C - asx aPPIX 5B
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
-----------------------------------------------------
Salt Lake Potash Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
98 117 085 748 31 March 2020
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows
$A'000 (9 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation
(if expensed) (3,000) (30,389)
(b) development - -
(c) production - -
(d) staff costs (2,286) (7,573)
(e) administration and corporate
costs (231) (1,859)
1.3 Dividends received (see note - -
3)
1.4 Interest received 70 149
Interest and other costs of
1.5 finance paid (3) (982)
1.6 Income taxes paid - -
Government grants and tax
1.7 incentives 912 912
Other (provide details if
1.8 material)
* Business Development (1,042) (2,523)
- (126)
* Security Deposits
---------------- -------------
Net cash from / (used in)
1.9 operating activities (5,580) (42,391)
----- -------------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) entities - -
(b) tenements - (10,000)
(c) property, plant and equipment (1,142) (1,629)
(d) exploration & evaluation - -
(if capitalised)
(e) investments - -
(f) other non-current assets
- Mine Properties in development (34,147) (40,842)
2.2 Proceeds from the disposal
of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - 35
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other - -
entities
2.4 Dividends received (see note - -
3)
2.5 Other (provide details if - -
material)
---------------- -------------
Net cash from / (used in)
2.6 investing activities (35,289) (52,436)
----- -------------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) 475 30,891
3.2 Proceeds from issue of convertible - -
debt securities
3.3 Proceeds from exercise of - -
options
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (122) (982)
3.5 Proceeds from borrowings 22,555 66,600
3.6 Repayment of borrowings (198) (238)
Transaction costs related
3.7 to loans and borrowings (669) (3,080)
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
---------------- -------------
Net cash from / (used in)
3.10 financing activities 22,041 93,191
----- -------------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 36,206 19,304
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (5,580) (42,391)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (35,289) (52,436)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 22,041 93,191
Effect of movement in exchange
4.5 rates on cash held (68) (358)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 17,310 17,310
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 17,310 36,206
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 17,310 36,206
---- ----------------------------------- ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 (114)
-----------------
6.2 Aggregate amount of payments to related -
parties and their associates included in
item 2
-----------------
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly
activity report must include a description of, and an explanation
for, such payments
-------------------------------------------------------------------------
7. Financing facilities Total facility Amount drawn
Note: the term "facility' amount at quarter at quarter end
includes all forms of financing end $A'000
arrangements available to $A'000
the entity.
Add notes as necessary for
an understanding of the sources
of finance available to the
entity.
7.1 Loan facilities 72,784 72,784
------------------- ----------------
7.2 Credit standby arrangements - -
------------------- ----------------
7.3 Other (please specify) - -
------------------- ----------------
7.4 Total financing facilities 72,784 72,784
------------------- ----------------
7.5 Unused financing facilities available at -
quarter end
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
---- ------------------------------------------------------------------------
The Company has mandated Taurus Funds Management (as manager
of the Taurus Mining Finance Fund L.P., Taurus Mining Finance
Annex Fund L.P. and Taurus Mining Finance Fund No. 2 L.P.)
to provide up to US$150m project financing for the Lake Way
Project.
The Stage 1 Facility was extended from US$30 million to US$45
million as announced to the market on 6 December 2020 and continues
to be drawn down. The facility is secured and interest is payable
at 9.75% pa.
The Project Development Facility (PDF) for up to US$150m (A$214m)
will be used to refinancing the Stage 1 Facility and for project
development and working capital associated with the development
of the Lake Way Project. Draw down of the PDF is subject to
a number of Conditions Precedent, The PDF will be secured and
interest will be payable at 9.00% pa.
As the loan is denominated in USD, the facility amount and
amount drawn down has been converted at an FX rate of $0.6175
USD/AUD, being the FX cross rate at 31 March 2020.
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (Item 1.9) (5,580)
8.2 Capitalised exploration & evaluation (Item -
2.1(d))
8.3 Total relevant outgoings (Item 8.1 + Item (5,580)
8.2)
8.4 Cash and cash equivalents at quarter end 17,310
(Item 4.6)
8.5 Unused finance facilities available at quarter -
end (Item 7.5)
8.6 Total available funding (Item 8.4 + Item 17,310
8.5)
Estimated quarters of funding available
8.7 (Item 8.6 divided by Item 8.3) 3.1
---- ----------------------------------------------------------
8.8 If Item 8.7 is less than 2 quarters, please provide answers
to the following questions:
1. Does the entity expect that it will continue to have
the current level of net operating cash flows for the
time being and, if not, why not?
---------------------------------------------------------------------
Answer:
Not applicable. The Company notes however that it expects
to have similar levels of total net operating and investing
cash flows for the current quarter.
---------------------------------------------------------------------
2. Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
---------------------------------------------------------------------
Answer:
Not applicable. The Company notes however that further
to the response above and as detailed in the attached
March 2020 Quarterly Activities Report, the Company has
raised $20m in April 2020 from existing and new Institutional
investors to enable the Company to continue to deliver
the Lake Way Project to schedule. In addition, the Company
is working closely with Taurus to complete the PDF documentation,
derisk the Project and satisfy the conditions precedent
to the PDF (refer 7.6 above) in the near future. The Company
is also pursuing complementary funding options to ensure
that it is fully funded to complete the Project in accordance
with the Project schedule.
---------------------------------------------------------------------
3. Does the entity expect to be able to continue its operations
and to meet its business objectives and, if so, on what
basis?
---------------------------------------------------------------------
Answer:
Not applicable. Further to the responses above, the Company
notes however that it has a reasonable expectation that
it will complete project funding in the near future. The
Company has an existing mandate with Taurus to provide
up to US$150m in staged project financing (refer 7.6 above).
Negotiations with Taurus on the PDF have entered the final
stage, satisfaction of conditions precedent will shortly
follow allowing completion of the Project in accordance
with the Project schedule. As evidenced by the recent
$20m equity raising, Company has a strong institutional
shareholder base and support for the Project remains strong.
The Company actively managing its cash and commitments
to ensure that it can continue its operations and to meet
its business objectives of constructing the Lake Way Project.
---------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 30 April 2020
By the Board
Authorised by:
...................................................................................
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [name of
board committee - eg Audit and Risk Committee]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations, the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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.
END
UPDWPUQCCUPUUGU
(END) Dow Jones Newswires
April 30, 2020 02:00 ET (06:00 GMT)
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