TIDMSO4
RNS Number : 5473B
Salt Lake Potash Limited
31 January 2020
31 January 2020 AIM/ASX Code: SO4
SALT LAKE POTASH LIMITED
-------------------------
DECEMBER 2019 QUARTERLY REPORT
Salt Lake Potash Limited (SO4 or the Company) is pleased to
present its Quarterly Report for the period ending 31 December
2019. The Company is focussed on rapidly progressing development of
its Lake Way SOP Project in Wiluna, Western Australia.
HIGHLIGHTS
Stage 2 On-Lake Construction progressing on schedule
-- Construction of evaporation ponds and trench infrastructure
commenced in November 2019 with over 400ha of brine evaporation
pond area nearing completion and 35km of brine abstraction trenches
planned to complete
-- 225ha of brine evaporation ponds commissioned and in
operation at 31 December 2019, and producing harvest salts for
plant commissioning in Q4 2020
-- +12,000m of brine transfer piping installed with transfer
pumping capacity of 600L/s to operate the brine evaporation
ponds
Process Plant and Non-Process Infrastructure (NPI)
-- Progressed detailed engineering design for process plant and
NPI enabling key contracts to be awarded
-- Process plant and NPI site clearance activities commence in
January 2020
-- Procured key long lead process plant equipment and NPI
packages, including:
o Accommodation Village Awarded
o Power Plant Awarded
o Reverse Osmosis Water Treatment Plant Awarded
o Wastewater Treatment Plant Awarded
o SOP and Schoenite Chrystallisers Awarded
o Communication System Awarded
o Concrete Package Awarded
Binding Offtake term sheets provide access to major global
markets
-- SO4 has secured 220,000t per annum of offtake to industry
leading partners representing 90% of total planned production for
five and ten year terms from commencement of shipping in Q1 2021,
with take or pay arrangements on product resale
-- Final purchase agreements based on the executed term sheets
are well advanced with each of the offtake couterparties
-- Binding agreements support SO4's strategy of diversifying
distribution across key global premium SOP seaborne markets
Native Title Land Access Agreement executed for Lake Way
Project
-- SO4 and Tarlka Matuwa Piarku (Aboriginal Corporation) RNTBC
(TMPAC) executed the Native Title Land Access Agreement (LAA) that
covers the whole of the Lake Way Project
-- Execution of the LAA is a key milestone enabling the rapid
development of the Project
Australian Institutional Placement and Debt Facility
Extension
-- SO4 secured further funding for the Project via a placement
and debt facility extension for total A$45.5 million
-- The Placement further strengthens SO4's share register with
strong demand from new and existing institutional investors
-- Taurus continued their strong support of the Project by
agreeing to extend the Stage 1 Facility by US$15 million (A$22
million) to a revised total of US$45 million ahead of finalising
the main Project Development Facility
-- The combined additional funding ensures the Company is well
placed to continue with the rapid development of the Lake Way
Project, including the Stage 2 On-lake construction which is
nearing completion and commencement of Process Plant and NPI
construction in early 2020
-- A$57.6 million in combined available funding at 31 December
2019 ahead of anticipated finalisation of full Project funding in
the coming months
Completion of BFS for the commercial scale development of the
245,000t per annum Lake Way SOP Project demonstrating outstanding
economic returns
-- Exceptional economics with estimated project post-tax (real)
NPV8 of A$479 million (pre-tax NPV8 of A$696 million) and post-tax
IRR of 28% (pre-tax IRR 38%)
-- Steady state Project EBITDA of A$111 million annually and
average annual after tax free cash flow of A$78 million (A$83
million during first 5 years)
-- Strong cash flow and low capital costs result in early
payback period of 3.5 years
-- First quartile operating costs for global SOP producers with
a C1 cash cost estimate of A$302/t (US$205/t)
-- Low development capital requirements of approximately A$254
million (US$173 million), including contingency of A$21 million,
which is supported by the close proximity to infrastructure
Anticipated milestones in the coming months
-- Finalisation of full Project funding
-- Completion of Stage 2 on lake civil construction
-- Commencement of Process Plant and NPI site works
-- Execution of final purchase agreements based on the binding
Offtake term sheets
-- Completion of the permanent on-site accommodation
-- Procurement of final long lead packages for the Process Plant
and NPI in line with the advanced Project Schedule
lake way Project Overview
Lake Way is located in the Northern Goldfields Region of Western
Australia, less than 15km south of Wiluna. The Lake Way Project
tenements comprise approximately 386km(2) .
SO4 currently holds nine Mining Leases and seven Exploration
Licences which cover the whole of the Lake Way surface and key
strategic areas off-lake, including the extensive paleochannel and
proposed process plant and village area. The Company has secured
various Miscellaneous Licenses within the surrounding Lake Way area
to support key infrastructure including process water bore fields,
gas pipelines and access roads.
The recently completed transaction with Blackham Resources Ltd
(Blackham), the owner of the adjacent Matilda-Wiluna Gold
Operation, has secured access to process water rights in the
Southern Borefield, as well as the acquisition of additional key
tenements.
The October 2019 Bankable Feasibility Study for the commercial
scale development of a 245,000t per annum Sulphate of Potash (SOP)
operation at Lake Way demonstrates that the Project will generate
outstanding returns with low operating costs and capital
intensity.
SO4 has significantly advanced development of the Project,
including completion of the Stage 1 125ha of evaporation ponds
which are now filled with high grade brine (25kg/m(3) SOP) from the
Williamson Pit and commencement of Stage 2 on-lake construction.
This has provided the Company with additional insight into the
critical evaporation processes and provided opportunities to
further improve design and construction of the remaining
evaporation pond network.
Bankable feasibility study
In October 2019, the Company reported the results of its
Bankable Feasibility Study (BFS) for the commercial scale
development of its 245,000t per annum Sulphate of Potash (SOP)
project at Lake Way (Project).
Table 1: Key Project Metrics
Element Unit Value
========================================= =========== ========
Physical
========================================= =========== ========
Life of mine years 20
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Annual SOP production tpa 245,000
========================================= =========== ========
Production plan
========================================= =========== ========
Ore reserve
========================================= =========== ========
Brine volume GL 474
========================================= =========== ========
Brine grade (LOM average) kg/m(3) K 5.0
========================================= =========== ========
Contained potassium Mt 2.4
========================================= =========== ========
Production method(1)
========================================= =========== ========
Trenches km 132
========================================= =========== ========
Bores No. 18
========================================= =========== ========
Evaporation ponds
========================================= =========== ========
Halite ponds ha 686
========================================= =========== ========
Harvest ponds ha 96
========================================= =========== ========
Recovery of potassium from brine % 91%
========================================= =========== ========
Process plant
========================================= =========== ========
Operating time hours/yr 7,600
========================================= =========== ========
Harvest salt to plant Mtpa 2.27
========================================= =========== ========
KCl addition tpa 42,360
========================================= =========== ========
Recovery of potassium from harvest salt % 84%
========================================= =========== ========
Operating and capital costs
========================================= =========== ========
Operating costs
========================================= =========== ========
Mine gate cash operating cost A$/t 240
========================================= =========== ========
Transport and handling cost A$/t 62
========================================= =========== ========
C1 cash cost A$/t 302
========================================= =========== ========
Capital costs
========================================= =========== ========
Direct cost A$m 157
========================================= =========== ========
Indirect cost A$m 76
========================================= =========== ========
Contingency A$m 21
========================================= =========== ========
Total capital cost A$m 254
========================================= =========== ========
Financial performance
========================================= =========== ========
Price (FOB) US$/t 550
========================================= =========== ========
Exchange rate A$/US$ 0.68
========================================= =========== ========
Discount rate % 8%
========================================= =========== ========
NPV(8) (post-tax) A$m 479
========================================= =========== ========
IRR (post-tax) % 28%
========================================= =========== ========
NPV(8) (pre-tax) A$m 696
========================================= =========== ========
IRR (pre-tax) % 38%
========================================= =========== ========
EBITDA(2) A$m 111
========================================= =========== ========
Post tax annual cash flow(2) A$m 78
========================================= =========== ========
Payback years 3.5
========================================= =========== ========
Note 1: Refers to initial trench and bore development included
in the capital cost estimate. Note 2: Refers to average annual
Project cash flows during steady-state production.
STAGE 2 CONSTRUCTION UPDATE
SO4 is using a staged approach to pond construction that aligns
with the process plant ramp-up schedule and steady-state production
requirements, enabling some initial capital expenditure to be
deferred for a period of up to 12 months.
The first stage of solar evaporation ponds (125ha) were
completed in June 2019 and are now filled with high grade brine
(25kg/m(3) SOP) from the Williamson Pit. These ponds have now been
in operation for over 6 months, and have provided the Company with
additional insight into the critical evaporation processes and
provided opportunities to further improve design and construction
of the remaining evaporation pond network.
Stage 2 of on-lake construction commenced during Q4 2019.
Approximately 275ha of evaporation pond area and accompanying brine
extraction trenches will be constructed as part of Stage 2 on-lake
construction.
The Stage 2 evaporation ponds are being constructed using a
combination of PVC sheet piles and traditional bulk earthworks.
Material to form access around the perimeter of the ponds and the
internal pond walls have been constructed using pre-strip material
sourced from Blackham's Williamson Pit pre-strip mining operation.
Keller, one of the largest specialist geotechnical contractors in
Australia, is installing specially designed PVC sheet piles to
create the perimeter/external wall of the ponds. The construction
methodology adopted has resulted in a compression of the project
schedule compared to traditional earthwork berms.
As at 31 December 2019, in line with the Project schedule, the
civil construction team completed over 100ha of Stage 2 evaporation
ponds. These ponds have been pre-soaked and filled with brine from
the expanding trench network. The ponds completed during the
quarter take the total under operation to 225ha. A further 175ha of
evaporation ponds will be completed and transferred to operations
over the next few weeks, taking the total evaporation ponds in
operation to over 400ha.
Construction of the brine extraction trench network on the lake
playa continued on schedule during the quarter, with trenches
constructed at an average depth of more than 4m.
To operate the brine abstraction trench network and evaporation
pond system, a specialised pipe network and pumping system has been
designed and constructed to suit the unique site environment. In
excess of 12,000m of brine transfer piping has been installed with
pump capacity of 600l/s.
In early January 2020, the Lake Way site received approximately
62mm of rain over a seven (7) day period.
The rain event was timely such that it positively assisted to
pre-soak the newly constructed Stage 2 on-lake evaporation ponds
prior to filling with potassium rich brine from trenches. In
addition, the rain also filled the trench network and recharged the
surface playa aquifer in the areas on lake where water flow
moved.
The very high evaporation rates experienced during summer ensure
that the rain received has had minimal ongoing impact on the
construction schedule.
lake way operations
SO4's Operations team have been managing the 125ha Stage 1
evaporation ponds since June 2019.
During Q4 2019, the completed Stage 2 evaporation ponds were
commissioned and handed over to operations. Approximately 2.1GL of
Lake Way brine had been transferred into evaporation ponds by the
end of December 2019, including 1.2GL from the Williamson Pit.
Average chemistry of lake playa brine pumped from Brine
Extraction Trenches was 6.8 Kg/m(3) of Potassium (K) (15.2 Kg/m(3)
SOP) in line with expectations. Brine chemistry is performing as
expected within evaporation ponds and the system commenced
precipitating Potassium salts during the quarter as planned.
Handover of the brine extraction trench network to the
operations team and ramp up of brine production capacity is
ongoing.
Process Plant
The Company has engaged GR Engineering Services Limited (GRES)
to design, procure and manage construction of the process plant
under an early services arrangement whilst a major contract is
finalised between the parties. Wood Group PLC has been engaged as
the process engineer.
The site clearance for the Process Plant commenced in January
2020 and construction is expected to commence during Q1 2020.
Other key engineering activities undertaken during the quarter
include:
-- Veolia continued detailed design of the crystalliser package
and fabrication commenced in January 2020;
-- Continued the detailed process design, including mechanical
and piping layout design, as well as finalising equipment selection
and tender assessments for vendor supply packages;
-- Progressed pumping calculations and definition of design
parameters for the steel tanks;
-- Electrical design work progressed for switchroom layouts,
load lists and cable schedules.
Non-Process Infrastructure (NPI)
SO4 awareded a number of key contracts for the installation and
supply of key NPI and services during Q4 2019.
Construction and installation of an Accommodation Village was
awarded to the Complete Group (Complete). The permanent camp will
be acquired under a build, own, transfer (BOT) contract. The scope
of works includes the design, engineering, supply and installation
of buildings, detailed site works, services and commissioning for
the construction of the village.
Complete progressed the detailed design and procurement for the
accommodation village during the quarter. Installation of the
village is expected to commence on site during Q1 2020.
Power West has been engaged for the supply of power to the
Project under a 10-year Power Purchase Agreement (PPA). The PPA
provides gas generated power with containerised alternate fuel
source co-generation to allow for early commissioning.
Other packages awarded during Q4 2019 included:
-- Reverse Osmosis Water Treatment Plant contract awarded for
the design, supply and installation of the Brackish Water Reverse
Osmosis Treatment Plant including tanks, pipes and pumps.
-- Wastewater Treatment Plant contract awarded for the design,
supply and installation of the Moving Bed Bioreactor Plus Sewerage
Treatment Plant including the treated effluent discharge
system.
-- Communication System, including Telstra contract to supply
sitewide communications, and backhaul to Wiluna, and the fixed
communications tower contract.
Discussions regarding the Gas Transport Agreement progressed
during the December Quarter, with an early services agreement
awarded to progress design of the Goldfields Gas Pipeline tie in,
the lateral pipeline together with associated infrastructure and
commencement of necessary approval activities. Agreements for the
supply of natural gas were also progressed.
The design for the main intersection roadworks at the Goldfields
Highway progressed with Mainroads WA approval allowing finalisation
of construction planning.
Acquisition of strategic tenement package
In July 2019, SO4 and Blackham entered into a Sales Agreement
whereby SO4 will acquire a package of tenements and other key
assets for the Lake Way Project. The conditions precedent to the
Sales Agreement were satisfied and the transaction has completed in
early October 2019. The acquisition is another important step in
providing the Company with certainty over tenure, timing and
capital expenditure required to bring the Lake Way Project into
production.
During the Q4 2019, SO4 exercised its option under the Sales
Agreement to acquire Blackham's southern water borefield
infrastructure outright, securing long term water supply. The
Company is required to make a A$3m payment to Blackham by 30 June
2020.
Approvals
Lake Way is located in an area with a long history of minerals
exploration and associated environmental assessment. SO4 has taken
advantage of existing environmental knowledge to support the
permitting of its early works programme and focus additional
investigations required for permitting of full-scale
operations.
Environmental 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.
The pond and trench construction activities for Stage 2 Project
development works commenced in Q4 2019 after receipt of the Project
Management Plan approval from Department of Mines, Industry
Regulation and Safety (DMIRS). These are the construction
activities which were determined by the Environmental Protection
Agency (EPA) to not require formal assessment under Part IV of the
Environmental Protection Act 1986 and have an approved Mining
Proposal from the Department of Mines, Industry Regulation and
Safety (DMIRS) and a Works Approval from the Department of Water
and Environmental Regulation (DWER). These approvals include a
disturbance area to construct ponds and trenches totalling up to
757ha.
Further approvals are required for the full scope of the Project
with allowance for these approvals included in the Project
schedule. The EPA has determined that the full project scope
requires formal assessment with no public review. This assessment
process is progressing well with a draft scoping document accepted
and the commencement of the additional studies required.
Greenhouse gas emissions studies completed to date show Scope 1
CO(2) emissions are significantly less than the proposed EPA
threshold emission level of 100,000t CO(2) equivalent, which would
require formal assessment.
The recent rainfall received in January 2020 has created
opportunities for SO4 to undertake additional studies to be
undertaken in Q1 2020. The studies to be conducted include: Aquatic
Lake Invertebrate survey, Short Range Endemic survey, targeted
Tecticornia survey, Noise study, targeted Flora and Fauna surveys
and Flood study.
In respect of the Processing Plant construction, the Company
received a Mining Permit approval from Department of Mines,
Industry Regulation and Safety (DMIRS) and Native Vegetation
Clearing Permit has been approved. These approvals have allowed the
bulk earthworks for the plant site to commence.
The Company has continued to obtain Ministerial consent to use
the land under section 18 of the Aboriginal Heritage Act 1972, for
additional development as needed to meet ongoing project
requirements.
SO4 has obtained the necessary water licences to extract process
water and for brine extraction from the lake. Final brine
extraction licences are being sought. Project approvals for the
construction of the initial paleo bores to obtain brine from the
paleo channel are imminent.
Native Title and Heritage
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 will provide for the continuing development of
the Lake Way Project and significant benefits to TMPAC and the
broader community. TMPAC have 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 LAA includes an agreed procedure for the grant of any
necessary statutory Aboriginal heritage consents for project
operations as well as exclusion zones to protect areas of
particular cultural sensitivity, all of which sit outside the
footprint of proposed operations.
The execution of the LAA is a major milestone for the Lake Way
Project and ensures remaining Mining Leases and associated tenure
will be granted to support the rapid development of the Lake Way
Project.
SO4 has been actively engaging with TMPAC and the broader Wiluna
community for over 18 months as part of its commitment to establish
early consultation and engagement into the design and
implementation of the Lake Way Project.
Offtake
During the Q4 2019, the Company signed binding term sheets for
the sale of 220,000t per annum of premium SOP from the Lake Way
Project, including:
o HELM AG - 50,000t per annum for 10 years in South East Asia
and the Middle East
o Unifert - 60,000t per annum for 5 years in the Middle East and
Africa
o Indagro - 50,000t per annum for 5 years in North America and
Europe
o Fertisur - 60,000t per annum for 5 years in South America
Supported by the extensive test work and samples produced to
date from Lake Way harvested salts, SO4 is planning to deliver a
high quality, premium grade SOP to the market. Initially the
Project will produce two products, (i) a high potassium content
standard powder SOP (SSOP) and (ii) fertigation grade water soluble
SOP (WSSOP). SO4 intends to increase the product offering to
include a granular grade after production has commenced.
SO4's marketing strategy for the sale and distribution of its
premium grade SOP is to work with selected industry leading
partners targeting high growth markets and focussing on
geographical areas with the highest concentration of crops which
benefit from SOP fertilisers.
SO4 has been working with each of the offtake counterparties to
execute final purchase agreements, based upon the binding terms
sheets.
Discussions are also advanced with an additional Tier-1
fertiliser company for the sale of further premium SOP from the
Lake Way Project and the Company continues to engage with a number
of other potential customers.
Project Funding
In December 2019, SO4 secured further funding for the Project
via an institutional placement and debt facility extension for a
total of A$45.5 million in additional available funding.
The combined additional funding ensures the Company is well
placed to continue with the rapid development of the Lake Way
Project, including the Stage 2 on-lake construction which is
substantially advanced and commencement of process plant
construction in Q1 2020.
Institutional Placement
The Company agreed to place approximately 33.6 million shares to
a number of new Australian institutional investors and existing
institutional shareholders at A$0.70 each to raise A$23.5 million
before costs.
The Placement has contributed to the continued rapid development
of the Lake Way Project, including construction of Stage 2 on-lake
infrastructure and commencement of site works for the process plant
in early 2020, along with ongoing exploration of other lakes and
general working capital.
Stage 1 Facility Extension
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 for the Lake Way Project and
enabled completion of the BFS prior to drawdown of the main Project
Development Facility (PDF). The Facility is also funding civil
works including the second stage of trenches and key evaporation
ponds currently under construction, which will provide the initial
harvest salts to enable the feed for plant commissioning. Given the
lead-time required to generate harvest salts, the Facility is a
crucial part of accelerating Lake Way's development towards
commercial SOP production.
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. Terms and conditions of the extension to the Facility
are consistent with the original terms. The extended Facility will
be refinanced upon drawdown of the PDF.
Following completion of the BFS, SO4 has been working with
Taurus to complete documentation and satisfy the conditions
precedent to the PDF. In addition to the PDF, the Company is
assessing a range of alternative and complementary funding options
to ensure that it is fully funded in the coming months to complete
construction in line with the Project schedule.
LAKE MARMION EXPLORATION PROGRAM
The Company continued to progress its assessment of the other
lakes in its portfolio in order to prioritise future potential
development. During Q4 2019 exploration activities commenced at
Lake Marmion with a view to reporting a maiden mineral resource
estimate.
Work at Lake Marmion consisted of the following:
-- Drilling, completion and development of 37 100mm diameter
auger holes as piezometers between 3m and 7m depth;
-- Installation of 17 piezometers with pressure transducers to
monitor long term water level variations;
-- Carrying out of Slug Tests for hydraulic conductivity estimation on 19 piezometers;
-- Installation of 20 piezometers at the test trench location to
monitor the change in water level due to the trench test
pumping;
-- Digging of 2 trenches and 5 test pits with an amphibious excavator for test pumping;
-- 36 insitu core samples from the piezometers, 20 of which have
been sent to a laboratory for porosity, hydraulic conductivity and
specific yield determination;
-- 21 grab samples for soil analysis;
-- 8 Column samples of which 6 were sent to a laboratory to
assess the impact of dilution in response to recharge events;
-- 62 brine samples for grade analysis, including duplicates,
collected from piezometers, pits and hand dug pits.
Results from this program are pending and will be reported when
available.
For further information please visit www.so4.com.au or
contact:
Tony Swiericzuk / Clint McGhie 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 - 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.
The information in this announcement that relates to Exploration
Results and Mineral Resources 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 Exploration Results and Mineral
Resources 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. Mr Jeuken is employed by Groundwater Science
Pty Ltd, an independent consulting company. Mr Jeuken has
sufficient experience, which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity, which he is undertaking to qualify as a Competent Person
as defined in the 2012 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves'. Salt Lake Potash Limited confirms that it is not aware
of any new information or data that materially affects the
information included in the original market announcement. 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 announcement that relates to Processing
and the Process Plant 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 Processing and the Process Plant was based on, and
fairly represents, information provided by Mr Kevin Martina,
Professional Engineer, who is a Member of the Association of
Professional Engineers and Geoscientists of Saskatchewan (APEGS), a
'Recognised Professional Organisation' (RPO) included in a list
promulgated by the ASX from time to time. Mr Martina is employed by
Wood Canada Limited, Saskatoon. Wood is engaged as a consultant by
Salt Lake Potash Limited. Mr Martina 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.
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 2 - Summary of Exploration and Mining Tenements as at
31 DECEMBER 2019
Project Status Type of Change License Number Interest (%) Interest (%)
30-Sep-19 31-Dec-19
Western Australia
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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 Application M53/1103 - 100%
==================== ============= ================ ================ ============= =============
Central Application Application M53/1104 - 100%
==================== ============= ================ ================ ============= =============
Central Application Application M53/1105 - 100%
==================== ============= ================ ================ ============= =============
Central Application Application M53/1106 - 100%
==================== ============= ================ ================ ============= =============
Central Application Application M53/1107 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition E53/1862 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition E53/1863 - 100%
==================== ============= ================ ================ ============= =============
North Application Acquisition E53/1905 100%
==================== ============= ================ ================ ============= =============
North Application Acquisition E53/1952 - 100%
==================== ============= ================ ================ ============= =============
West Application Acquisition E53/1966 100%
==================== ============= ================ ================ ============= =============
North Application Acquisition E53/2049 100%
==================== ============= ================ ================ ============= =============
North Granted Acquisition P53/1642 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition P53/1643 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition P53/1644 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition P53/1645 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition P53/1666 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition P53/1667 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition P53/1668 100%
==================== ============= ================ ================ ============= =============
North Granted Acquisition M53/121 - 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition M53/122 - 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition M53/123 - 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition M53/147 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition M53/253 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition M53/796 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition M53/797 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition M53/798 - 100%
==================== ============= ================ ================ ============= =============
Central Granted Acquisition M53/910 - 100%
==================== ============= ================ ================ ============= =============
West Granted Acquisition L53/51 - 100%
==================== ============= ================ ================ ============= =============
West Application Acquisition L53/207 - 100%
==================== ============= ================ ================ ============= =============
West Application - L53/211 100% 100%
==================== ============= ================ ================ ============= =============
North Application - L53/212 100% 100%
==================== ============= ================ ================ ============= =============
West Application Application L53/214 - 100%
==================== ============= ================ ================ ============= =============
West Application Application L53/215 - 100%
==================== ============= ================ ================ ============= =============
North Application Application L53/216 - 100%
==================== ============= ================ ================ ============= =============
West Application Application L53/217 - 100%
==================== ============= ================ ================ ============= =============
West Application Application L53/218 - 100%
==================== ============= ================ ================ ============= =============
West Application Application L53/210 - 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%
==================== ============= ================ ================ ============= =============
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 Application E36/984 - 100%
==================== ============= ================ ================ ============= =============
Central Application Application E36/984 - 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%
==================== ============= ================ ================ ============= =============
Appendix 3 - asx aPPIX 5B
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97,
01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
-----------------------------------------------------
Salt Lake Potash Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
98 117 085 748 31 December 2019
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows $A'000 (6 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation (18,348) (27,388)
(b) development (1) (5,472) (7,668)
(c) production - -
(d) staff costs (3,069) (5,287)
(e) administration and corporate
costs (991) (1,628)
1.3 Dividends received (see note - -
3)
1.4 Interest received 31 78
Interest and other costs of
1.5 finance paid (2) (5)
1.6 Income taxes paid - -
1.7 Research and development refunds - -
Other (provide details if
1.8 material)
- Business Development (1,023) (1,481)
- Security Deposits (126) (126)
---------------- ----------------
Net cash from / (used in)
1.9 operating activities (29,000) (43,505)
----- ------------------------------------- ---------------- ----------------
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) property, plant and equipment (329) (487)
(b) tenements (see item 10) (7,000) (10,000)
(c) investments - -
(d) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) property, plant and equipment 35 35
(b) tenements (see item 10) - -
(c) investments - -
(d) 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 (7,294) (10,452)
------- ----------------------------------- ---------------- ----------------
3. Cash flows from financing
activities
3.1 Proceeds from issues of shares 23,008 30,416
3.2 Proceeds from issue of convertible - -
notes
3.3 Proceeds from exercise of - -
share options
Transaction costs related
to issues of shares, convertible
3.4 notes or options (762) (859)
3.5 Proceeds from borrowings 29,226 44,043
3.6 Repayment of borrowings (1) (40)
Transaction costs related
3.7 to loans and borrowings (671) (2,411)
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
---------------- ----------------
Net cash from / (used in)
3.10 financing activities 50,800 71,149
------- ----------------------------------- ---------------- ----------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 21,989 19,304
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (29,000) (43,505)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (7,294) (10,452)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 50,800 71,149
Effect of movement in exchange
4.5 rates on cash held (289) (290)
---------------- ----------------
Cash and cash equivalents
4.6 at end of period 36,206 36,206
------- ----------------------------------- ---------------- ----------------
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 36,206 21,862
5.2 Call deposits - 127
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) 36,206 21,989
---- ----------------------------------- ---------------- -----------------
6. Payments to directors of the entity and Current quarter
their associates $A'000
Aggregate amount of payments to these parties
6.1 included in item 1.2 (136)
----------------
6.2 Aggregate amount of cash flow from loans -
to these parties included in item 2.3
----------------
6.3 Include below any explanation necessary to understand
the transactions included in items 6.1 and 6.2
----- -----------------------------------------------------------------
Payments include salaries, director and consulting fees and
superannuation.
7. Payments to related entities of the entity Current quarter
and their associates $A'000
7.1 Aggregate amount of payments to these parties -
included in item 1.2
----------------
7.2 Aggregate amount of cash flow from loans -
to these parties included in item 2.3
----------------
7.3 Include below any explanation necessary to understand
the transactions included in items 7.1 and 7.2
---- ----------------------------------------------------------------
Not applicable.
8. Financing facilities available Total facility Amount drawn
Add notes as necessary for amount at quarter at quarter end
an understanding of the position end $A'000
$A'000
8.1 Loan facilities 64,230 42,820
------------------- ----------------
8.2 Credit standby arrangements - -
------------------- ----------------
8.3 Other (please specify) - -
------------------- ----------------
8.4 Include below a description of each facility above, including
the lender, interest rate and whether it is secured or
unsecured. If any additional facilities have been entered
into or are proposed to be entered into after quarter
end, include 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 $0.7006
USD/AUD, being the FX crossrate at 31 December 2019.
9. Estimated cash outflows for next $A'000
quarter
9.1 Exploration and evaluation 400
9.2 Development 36,000
9.3 Production -
9.4 Staff costs 3,200
9.5 Administration and corporate costs 800
9.6 Other (provide details if material)
- Property Plant & Equipment 1,400
- Business Development 500
- Finance expenses 1,500
- Loan funds draw down (21,410)
-----------
9.7 Total estimated cash outflows 22,390
---- ------------------------------------ -----------
10. Changes in tenements Tenement Nature of interest Interest Interest
(items 2.1(b) reference at beginning at end
and 2.2(b) above) and location of quarter of quarter
10.1 Interests in Refer to Appendix
mining tenements 2
and petroleum
tenements lapsed,
relinquished
or reduced
----- --------------------- -------------- ------------------- -------------- ------------
10.2 Interests in
mining tenements
and petroleum
tenements acquired
or increased
----- --------------------- -------------- ------------------- -------------- ------------
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.
Sign here:
............................................................ Date:
31 January 2020
(Director/Company secretary)
Print name: Clint McGhie
Notes
1. The quarterly report provides a basis for informing the
market how the entity's activities have been financed for the past
quarter and the effect on its cash position. An entity that wishes
to disclose additional information is encouraged to do so, in a
note or notes included in or attached to this report.
2. If this quarterly 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 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.
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
DOCBBMATMTMJMAM
(END) Dow Jones Newswires
January 31, 2020 02:00 ET (07:00 GMT)
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