December 2015 Quarterly Report

The Board of Salt Lake Potash Limited (the Company or Salt Lake) is pleased to present its quarterly report for the period ending 31 December 2015. The Company's primary focus during the period continued to be the advancement of the Lake Wells' Project, to confirm its potential to host a large, high grade salt lake brine project to produce highly sought after Sulphate of Potash (SOP) for domestic and international fertiliser markets.

Highlights:

Initial Shallow Core Drilling Program

Ø A program of 32 shallow hollow auger core holes was completed over the entire surface of the Lake, forming the basis of the maiden resource estimate.

Maiden JORC Resource Estimate for Lake Wells

Ø The Company completed it's maiden JORC Mineral Resource estimate for the Lake Wells Project, totalling 29 million tonnes (Mt) of Sulphate of Potash (SOP) with approximately 80% in the 'Measured' category with excellent brine chemistry of 4,009 mg/L Potassium (K), 19,175 mg/L (SO4). 

Ø The resource is calculated only on the upper 16 metres of the Lake, with mineralisation remaining open at depth across most of the Lake.

Completion of Deeper Air Core Drill Program

Ø 27 air core drill holes for a total of 1,697m were drilled over the entire surface of the Lake. An average drill depth of 63m (ranging from 15m-126m) was achieved, confirming continuation of the brine pool at depth. The majority of holes ended in high grade brine, and the brine pool remains open at depth.

Ø The successful air core program identified permeable rock units (aquifers) at the base of the brine saturated sedimentary sequence, potentially representing a productive aquifer for brine extraction by pumping from bores, a very encouraging result.

Next Steps

Ø The Company has commenced laboratory isothermal evaporation trials on bulk brine samples to define the evaporation patterns, estimate the salting points of mixed salts and predict the conditions for production of schoenite salt (a key step in the production of SOP).

Ø An updated JORC Mineral Resource estimate incorporating the results from the deeper air core program is currently in progress.

Ø Pump testing of 3 types of aquifers at Lake Wells will commence shortly, measuring the hydraulic properties (permeability and storage) of the aquifers hosting the brine.

Ø A Scoping Study on the potential of the Lake Wells Project will commence shortly.

Lake Wells Project

The Lake Wells Project is located in the Northern Goldfields of Western Australia approximately 200km north of Laverton. The Project comprises 1,126 km2 of granted Exploration Licences, substantially covering the Lake Wells Playa and the area immediately contiguous to the Lake.

During the quarter, the Lake has been the subject of a shallow hollow auger coring program followed by a deeper air core drill program. The data from the shallow core program formed the basis of an initial shallow resource estimate of 29Mt of SOP (see ASX Announcement dated 11 November 2015).

Shallow Core Drilling Program

A total of 32 hollow-core auger drill holes were completed for a total of 504 metres of drilling. Of these 32 holes, 29 holes recovered intact core totalling 465 metres, and 3 holes recovered split core totalling 38m. The hole depths ranged from 1.5m to 22.95m with the average depth being approximately 16m. The majority of holes ended in brine saturated sediment and therefore are effectively open at depth.

The program produced a comprehensive set of intact core and brine samples for geological interpretation, aquifer modelling and ongoing chemical analysis. The program also identified a zone of saturated coarser-grained evaporite sediments within the upper 3-4 metres of the Lake bed in most drill holes in the program.

Mineral Resource Estimate

Following the completion of the 2015 Shallow Core Drill Program, the Company engaged an independent hydrogeological consultant with substantial salt lake brine expertise, to complete the maiden Mineral Resource Estimate (MRE) for the Lake Wells project as set out in Table 2 below.

Table 1: Lake Wells Project - Mineral Resource Estimate (JORC 2012)

Measured Resource Estimate

The Measured resource estimate of 23Mt is confined to the area of the lake playa within the granted exploration licenses and constrained to within 3,800m of drillhole data points.

Indicated Resource Estimate

The Indicated resource estimate of 3Mt, is confined to the area of the lake playa for which a drill spacing exceeding 3,800m but within 5,000m has been satisfied.

Inferred Resource Estimate

The Inferred resource estimate of 3Mt, is confined to the area of islands within the lake playa. Analysis of the available drilling data from three islands indicates that the shallow brine beneath islands is diluted and the depth of dilution extends approximately 14 to 18 metres (m) below the water table surface, resulting in a significantly lower average potassium concentration.

Total Resource Estimate

The total resource estimate of 29Mt is hosted within approximately 7.4 billion cubic meters of lake playa sediments with an average thickness of 15.5 metres beneath 477 km2 of lake playa surface.

The estimated tonnage represents the in-situ brine with no recovery factor applied. It will not be possible to extract all of the contained brine by pumping of bores or trenches; the amount which can be extracted depends on many factors including the permeability of the sediments, the drainable porosity, and the recharge dynamics of the aquifers.

Deeper Air Core Drilling

A total of 27 air core drill holes for 1,697m were completed over the entire surface of the Lake. An average drill depth of 63m (ranging from 15m-126m) was achieved, confirming continuation of the brine pool at depth. The majority of holes ended in high grade brine, and the brine pool is considered open at depth.

The air core drill program successfully achieved its objective of enhancing the Company's understanding of the Lake Wells sedimentary sequence including determination of the depth to basement. The identification of permeable rock units (aquifers) at the base of the brine saturated sedimentary sequence potentially represents a productive aquifer for brine extraction.

Based on the data obtained the Company is in the process of updating the Projects' JORC SOP resource estimate incorporating the resource beneath the shallow Resource defined previously by the hollow-core auger drilling which was based on the upper 16 metres of the Lake.

Encouraging brine chemistry results were received from the air core program, with an average chemistry of brine samples processed exhibiting exceptional consistency at depth and are relatively consistent laterally, with average potassium concentration increasing slightly in the expansive northern arm of the lake:

Table 2: Average Brine Chemistry

The results from the exploration programs allowed for a geological interpretation of the Lake. The geological structure identified through air core drilling comprises (from surface).

Surficial Playa Lake Sediments: Recent (Cainozoic), unconsolidated silt, sand and clay sediment containing variable abundance of evaporite minerals, particularly gypsum. The unit is ubiquitous across the salt lake surface. The thickness of the unit ranges from approximately 10 to 20m. This unit hosts the Measured, Indicated and Inferred Resource, estimated on the basis of shallow Auger Core drilling (see ASX Announcement dated 11 November 2015). Permeability is variable and is likely controlled by grainsize and sorting of the soft sediment.

Palaeovalley silt, sand and clay: Tertiary, unconsolidated clay with variable interbeds of silt and sand. The thickness varies considerably, from negligible at the southern and northern margins of the lake, to greater than 60m thick in the central and northern parts of the lake. Recovery of brine samples from this unit was difficult due to the fine grained lithology. Intermittent samples were obtained from more permeable silt and sand inter-beds. These samples exhibited high grade brine, consistent with overlying and underlying strata.

Palaeochannel Basal Sand: Tertiary, unconsolidated medium to coarse grained sand. This unit was intersected in only a few holes that reached the deepest parts of the palaeochannel in the northern part of the lake. The maximum intersected thickness was 15m (LWA006). The inferred permeability is high on the basis of coarse-grained lithology and relatively high brine flow rates measured during brine sampling. This unit is expected to represent a productive aquifer. The extent of the unit is poorly understood since most drillholes in the deeper sections of the northern part of the lake failed to reach the basal units.

Basement: Proterozoic siltstone sediment. The upper part of the basement yielded water at variable rates for most drillholes which demonstrates elevated permeability. The permeability of this unit is likely to be associated with weathering and fracturing of the rock matrix. Where fractured, the rock is expected to act as a productive aquifer. The maximum thickness of fractured, brine yielding aquifer was 45m (LWA009). Most drillholes ended in fractured brine yielding aquifer and were constrained by the capacity of the aircore drilling method. The siltstone aquifer and brine pool potentially continues some depth below the range of the current drilling program.

Basement structure is variable. Basement is shallow (

The identification of permeable rock units (aquifers) at the base of the brine saturated sedimentary sequence is very encouraging. These aquifers have the potential to yield brine from bores at a high rate due to the depth and subsequent high hydrostatic pressure of the brine within the aquifer. Importantly, the aquifer's position at the base of the sedimentary sequence will, upon pumping of the aquifer, induce brine leakage from the overlying fine-grained material. The rate at which bores can be pumped and the rate of brine drainage from overlying fine-grained material will be dependent on the permeability of the strata which has not yet been measured. Brine drainage rates can be optimised by bore spacing and design but cannot be increased above a natural limit.

Outlook

Results from the deeper air core drilling program are being incorporated into a model for an extended resource below the existing estimate.

The Company has commenced isothermal evaporation trials on selected bulk brine samples from the Lake Wells Potash Project to define the evaporation patterns, estimate the salting points of mixed salts and predict the conditions for production of schoenite salt. Additionally, the trial will generate quantities of mixed salt for flotation separation trials.

Preliminary results have been very encouraging and in line with the Company's expectations for the Projects potential to produce SOP using conventional evaporation and crystallisation ponds based on its very favourable arid climatic conditions. The Company expects to announce the results of the evaporation trials this quarter.

A program of bore construction and test pumping is currently being designed in order to measure the hydraulic properties (permeability and storage) of the material hosting the brine. This work will enable estimation of brine production rates, and capex and opex estimates of brine production infrastructure as part of future technical studies. This work is the equivalent of mine planning and optimisation in traditional mineral project evaluation.

The Company has held preliminary discussions with a number of expert engineering firms, with a view to shortly commencing a Scoping Study on the Lake Wells Project.

OTHER PROJECTS

Golden Eagle Uranium and Vanadium Project

The Golden Eagle Uranium and Vanadium Project (GEU) holds nine U.S. Department of Energy (DOE) Uranium/Vanadium Mining Leases, covering 22.7 km2 located in the Uravan Mineral Belt, Colorado USA.

Technical reports for a number of the lease have been drafted based on historic data, however, exploration drilling and core analysis need to be completed in order to finalise these reports. The leases will expire eight years after the courts complete their review of the Record of Decision (ROD) published in 2014 in the Federal Register and the DOE allows the lease holders to resume activates on their leases.

Salt Lake also possess an option on Gold Eagle Mining Inc. (GEMI) leases; GEMI has three DOE properties of which two have active operating permits.

The Company has completed its initial review of the project. Based on the available information, current economic conditions and the price of uranium it is not viable for the Company to undertake any further exploration activities at this time. The Company is assessing its options to extract the best value for shareholders for its interest in the GEU Project. The project's carrying value at 30 June 2015 of $660,556 will be fully impaired in the Company's Half Year Accounts for the period ending 31 December 2015.

CORPORATE

The Company changed its name ASX and AIM code has changed to Salt Lake Potash Limited and ASX/AIM code "SO4".

As approved at the Company's Annual General Meeting on Friday 27 November 2015, the appointment of Ernst & Young as the Company's auditor. The resolution was subject to the resignation of KPMG and receiving consent from ASIC. During the quarter, the Company received consent from ASIC and notice of resignation from KPMG, putting in effect the appointment of Ernst & Young.

Table 2 - Summary of Exploration and Mining Tenements

As at 31 December 2015, the Company holds interests in the following tenements:

Australian Projects:

Other Projects:

Competent Persons Statement

The information in this report that relates to Exploration Results for Lake Wells, is extracted from the reports entitled 'Aircore Drilling Confirms Deeper Potential At Lake Wells' dated 23 November 2015, 'Successful Shallow Core Drilling Completed at Lake Wells' dated 22 September 2015 and 'Wildhorse Acquires Two Large Scale High Grade Sulphate Of Potash Brine Projects' dated 9 April 2015 and are available to view on the Company's website www.saltlakepotash.com.au. The information in the original ASX Announcement that related to Exploration Results for Lake Wells based on information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this Report that relates to Mineral Resources is extracted from the report entitled 'Significant Maiden SOP Resource of 29Mt at Lake Wells' dated 11 November 2015. The announcement is available to view on www.saltlakepotash.com.au. The information in the original ASX Announcement that related to Mineral Resources was based on, and fairly represents, information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy and a member of the International Association of Hydrogeologists. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

For further information please visit www.saltlakepotash.com.au or contact: