Final Results

AIM and ASX listed company Salt Lake Potash Limited ("SO4" or the "Company"), announces its results for the year ended 30 June 2019.

The Company's full Annual Report including Accounts can be viewed at www.so4.com.au.

The Company also advises that an Appendix 4G (Key to Disclosures: Corporate Governance Council Principles and Recommendations) and the 2019 Corporate Governance Statement have been released today and are also available on the Company's website: https://www.so4.com.au/corporate-governance/.

For further information please visit www.so4.com.au or contact:

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.

MESSAGE FROM THE CEO

Dear Shareholders

I am very pleased to provide my first update on the Company's progress during a period where we have transitioned from explorer to developer of the Lake Way Project, and face an exciting future ahead.

Prior to joining Salt Lake Potash as CEO & Managing Director in November 2018, I was very aware of the emerging sulphate of potash (SOP) sector in Western Australia and had studied several of the proponents and their respective projects. A further deep dive in to SO4's work uncovered the high quality technical studies, business model and industry relationships that were established over the years that preceded me. I took little convincing that it was the best company to lead the development of the new Potash industry in Australia. SO4's scalable multi-lake holdings in proximity to the Goldfields infrastructure was paramount in offering significant potential to achieve a fast pathway to production, costs savings and economies of scale.

We have achieved a huge number of significant milestones during the year and have rapidly advanced the development of our first Project:

Technical Studies for Commercial Operation

In June 2019, we completed our scoping study for a commercial scale 200ktpa SOP development at Lake Way. The study shows the Project generates exceptional economic returns with a low capital intensity, bottom quartile operating costs and sustainable operating life. The bankable feasibility study on a commercial operation will be completed and released in early October.

Construction of first Commercial Scale Evaporation pond

Construction of the Train 1Williamson Ponds at Lake Way, measuring 2.5km by 0.5km (125Ha) was completed in June 2019. This is the first commercial scale on-lake SOP evaporation pond system and has provided the team with invaluable data on construction and operations methodology and costs. With the dewatering of the high-grade brine from the Williamson Pit progressing well, the Company has commenced the evaporation process for production of first harvest salts.

Acquisition of Blackham Tenements

A sensational deal that involves the acquisition of Blackham owned Lake Way tenements, process water sufficient to satisfy SO4's project needs, and the extinguishment of the Blackham Royalty on brine extracted from their tenements. This transaction provides significant benefits to the Lake Way Project and further support the rapid progress towards first production in late 2020. The acquisition will provide material value through capital and operating savings to SO4 and also significantly de-risks the Project by providing ownership of key project tenements and access to infrastructure including water.

Project Financing

A significant milestone for the Company is our recently announced mandate with Taurus to provide up to US$150 million in project financing for the Lake Way Project. Initial funds for early construction works and completion of the BFS are available for drawdown ahead of the main facility. We are delighted to have entered a long-term partnership with Taurus, with their commitment as this stage of our development being a strong endorsement of the Project and delivery team.

SO4 Team

With the incredible positive attributes of the Lake Way Project, and expansion opportunity across the many lakes in the portfolio, SO4 has attracted a highly experienced construction and operations team. This is supporting the Company with its plan to rapidly develop Lake Way and future lakes in the SO4 portfolio. Having previously worked closely with many of the current SO4 team on project development and ramp up, and having achieved significant successes, it is exciting to again share the opportunity to develop another outstanding project in WA.

The next 12 months will be pivotal to SO4 with many key work fronts rapidly progressing, including construction of the process plant and associated support infrastructure, completion of Stage 2 and 3 on-lake civil works and finalising permitting for the Project in line with our project schedule.

Having now been in my position for 11 months and with the achievement of so many significant milestones that have rapidly progressed the development at Lake Way, I remain convinced of SO4's potential to lead the development of the SOP sector in Australia and be a major global fertiliser company.

It is difficult for me to contain my enthusiasm about the development and construction journey that lies ahead over the coming 18 months. I would like to extend my appreciation to our shareholders for your support and I look forward to sharing success with you in the coming year.

Yours sincerely

Tony Swiericzuk

Chief Executive Officer

OPERATING AND FINANCIAL REVIEW

Operations

Salt Lake Potash is the owner of nine large salt lakes in the Northern Goldfields Region of Western Australia. This outstanding portfolio of assets has a number of important, favourable characteristics:

§ Over 7,250km2 of playa surface, with in-situ clays suitable for low cost on-lake pond construction;

§ Very large paleochannel hosted brine aquifers, with chemistry amenable to evaporation of salts for SOP production, extractable from both low-cost trenches and deeper bores;

§ Excellent evaporation conditions;

§ Excellent access to transport, energy and other infrastructure in the Goldfields mining district;

§ Clear opportunity to reduce transport costs by developing lakes closer to infrastructure and by capturing economies of scale; and

§ Potential for multi-lake production offers optionality and significant scale potential, operational flexibility, cost advantages and risk mitigation from localised weather events.

Salt Lake Potash's immediate focus is on the rapid development of the Lake Way Project, Wiluna. Lake Way's location and logistical advantages make it the ideal location for the Company's first SOP operation.

The Company's long term plan is to develop an integrated SOP operation, producing from a number (or all) of the lakes. Salt Lake Potash will progressively explore each of the lakes with a view to estimating resources for each Lake, and determining the development potential. Exploration of the lakes will be prioritised based on likely transport costs, scale, permitting pathway and brine chemistry.

LAKE WAY PROJECT

Lake Way is located in the Northern Goldfields Region of Western Australia, less than 15km south of Wiluna. The surface area of the Lake is over 270km2.

Salt Lake Potash holds five Exploration Licences (two granted and three under application) and one application for a Mining Lease, covering most of Lake Way and select areas off-lake, including the paleochannel. The northern end of the Lake is largely covered by a number of Mining Leases, held by Blackham Resources Limited, the owner of the Wiluna Gold Mine. The Blackham tenements are now subject to a Sales Agreement where Salt Lake Potash will acquire a package of strategic tenements and other key assets for the Lake Way Project.

Lake Way has a number of compelling advantages which make it an ideal site for Salt Lake Potash's initial SOP operation, including:

Ø Existing Mining Leases provide advanced permitting pathway for early development activity, including the first phase of the Lake Way evaporation ponds completed in June 2019.

Ø Completion of the first phase of the Lake Way evaporation ponds is enabling the Company to dewater the existing Williamson Pit. The pit contained an estimated 1.2 gigalitres (GL) of brine at the exceptional grade of 25kg/m3 of SOP. This brine is the ideal starter feed for evaporation ponds, having already evaporated from the normal Lake Way brine grade, which averages over 15kg/m3.

Ø The high grade brines at Lake Way will result in lower capital and operating costs due to lower extraction and evaporation requirements.

Ø The presence of clays in the upper levels of the lake which are amenable to low cost, on-lake evaporation pond construction.

Ø The site has excellent freight solutions, being adjacent to the Goldfields Highway, which is permitted for heavy haulage, quad trailer road trains to the railhead at Leonora and then direct rail access to both Esperance and Fremantle Ports, or via other heavy haulage roads to Geraldton Port.

Ø The Goldfields Gas Pipeline is adjacent to Salt Lake Potash's tenements, running past the eastern side of the Lake.

Acquisition of Strategic Tenement Package

In July 2019, Salt Lake Potash entered into a Sale Agreement with Blackham to acquire a package of tenements and other key assets for the Lake Way Project.

Blackham and Salt Lake Potash have been cooperating on their respective projects in the Wiluna/Lake Way region for the past 18 months. The Company was able to identify specific Blackham assets which provide synergies for the Lake Way Project and material value to Salt Lake Potash.

Under the Sale Agreement which is expected to complete shortly, Salt Lake Potash will acquire the tenements owned by Blackham that sit on the Northern end of Lake Way and to the East of the Goldfields highway.

Blackham agreed to provide immediate access to process water, and consent to the grant of new tenure over its tenements to enable Salt Lake Potash to advance early works including camps and water infrastructure. Blackham has also granted Salt Lake Potash an option to acquire a key borefield which will support the Lake Way Project.

The Brine Royalty granted to Blackham as part of the Split Commodity Agreement will be extinguished effective 30 June 2020.

Under the Sale Agreement, Salt Lake Potash paid total consideration of A$10 million and Blackham retains the gold rights across the transferred tenements. The Company has also assumed rehabilitation obligation for all existing disturbance on Lake Way.

Salt Lake Potash and Blackham also identified a mutual opportunity for Salt Lake Potash to utilise part of the pre-strip material from Blackham's proposed Williamson Pit development for the construction of the Company's on-lake evaporation ponds. Under the arrangement, Salt Lake Potash will contribute up to a A$10m towards the performance of the pre-strip of the Williamson Pit, with pre-strip material directly applied towards the construction of the bund walls of the on-lake evaporation ponds. This contribution forms part of the Project's existing construction capex and will be funded as part of project financing.

The acquisition is an important step in providing the Company with certainty over the timing and capital expenditure required to bring the Lake Way Project into production.

Scoping Study for Commercial Scale Development

The Company completed a Scoping Study for the commercial scale development of its SOP project at Lake Way in June 2019. The Scoping Study demonstrated the potential for the Lake Way Project to support a low capital and operating cost operation on a commercial scale with the ability to support a long mine life:

Lake Way Project to produce an estimated 200,000 tonnes per year of premium grade SOP (>52% K2O)

Ø High-grade SOP resource underpins long Mine Life of 20 years

Ø Low development capital requirements of approximately A$237m (US$166m) including a growth allowance of ~13% (A$32m) supported by the close proximity to infrastructure

Ø Exceptional economics with estimated project post-tax NPV8 of A$381m (pre-tax NPV8 of A$580m) and post-tax IRR of 27% (pre-tax IRR 33%)

Ø Steady state EBITDA of A$90m annually and average annual after tax cashflow of A$64m

Ø Strong cashflow and low capital cost result in early payback period of 3.2 years

Ø Construction complete on the first phase of Evaporation Ponds (the Williamson Ponds) which will support the dewatering of the Williamson Pit's super saturated brine with an SOP grade of 25kg/m3

Ø Plant commissioning expected Q4 2020 utilising salts from the Williamson Pit brine

Ø BFS currently underway with completion expected in early October 2019 to support project financing

Salt Lake Potash has already significantly de-risked the commercial scale project through the early construction works on the first phase of the Evaporation Ponds (the Williamson Ponds). The de-watering of the Williamson Pit and commencement of evaporation will provide additional insight into the critical evaporation processes which in turn will further de-risk the Project.

Scoping Study Results

The Scoping Study was based on the Mineral Resource Estimate for the Lake Way Project reported in March 2019, comprising 8.2Mt of SOP calculated using Drainable Porosity (73 million tonnes of SOP using Total Porosity).

The Scoping Study assumes a mine life of 20 years with plant commissioning in Q4 2020. The study mine plan, comprising a network of trenches and paleochannel bores, provides for a 200,000tpa production run rate. Table 1 provides a summary of production and cost figures for the Project.

Table 1: Lake Way Project Overview

Short Payback period

The low development capital requirements and significant margins received for the Lake Way Project provides a short payback period of just 3.2 years from first production. This will result in full repayment of development capital by 2024.

KCl Addition Opportunity

The resource at Lake Way contains a significant excess of sulphate (SO4) which provides the opportunity for the Company to explore value adding measures including a potassium chloride (KCl) reaction phase to the processing stage. Preliminary work has shown significant benefits to the Lake Way Project through the inclusion of the KCl reaction phase in the process, including a potential increase in annual production of SOP and subsequent improvements in financial returns to shareholders. The Company is exploring this opportunity as part of the BFS for the Lake Way Project including process testwork at Saskatchewan Research Council, which has confirmed that high quality soluble SOP can be generated via the process flowsheet with the inclusion of KCl.

Robust Economics

The Study demonstrates that the Lake Way Project provides exceptional economics even under the most extreme downside pricing scenarios. The breakeven pricing scenario is a significant 40+% decrease in price at US$323/t.

 Table 2: Pricing Scenarios

Bankable Feasibility Study (BFS)

Having completed the successful Scoping Study, Salt Lake Potash subsequently commenced a BFS targeted for completion in early October 2019. The Company appointed GR Engineering Services Limited (GRES, ASX:GNG) as lead engineer for the BFS. GRES are working with a number of industry experts including Wood Saskatoon.

In parallel with work being undertaken on the BFS and utilising experience gained from the construction of the first phase Evaporation Ponds, the Company is moving into a Front End Engineering Design (FEED).

Mineral Resource Estimate

In March 2019, the Company completed an extensive exploration program covering the remaining areas of Lake Way and reported a 'whole of lake' Mineral Resource Estimate including the playa surface and the Paleochannel aquifers of Lake Way.

The Mineral Resource Estimate of 73Mt is hosted within approximately 15 billion cubic metres of sediment ranging in thickness from a few metres to over 100m, beneath 189km2 of Playa Lake surface including the paleochannel basal sand unit of 20m thickness and 30km length.

The Mineral Resource Estimate for Lake Way is divided into resource classifications that are controlled by the host geological units:

§ Lake Bed Sediment

§ Paleovalley Sediment

§ Paleochannel Basal Sands

The mineral resource estimate is summarised in Tables 3-5.

Table 3: Measured Resource

Table 4: Indicated Resource

Table 5: Inferred Resource

The northern section of Mineral Resource Estimate has been classified into a Measured category for the upper 8m of lakebed sediments. The resources contained within the lakebed sediments below 8m, and the southern section of the lake at all depths, are all classified in the Inferred category. The Paleochannel running along the eastern boundary of the lake has been classified in the Indicated category.

Following completion of the first phase of the Lake Way evaporation ponds, the Company has commenced dewatering the Williamson Pit brine, thus reducing this section of the resource. The Company expects to update the Mineral Resource Estimate and report an Ore Reserve as part of the BFS.

Civil Construction - On-Lake Infrastructure

Salt Lake Potash commenced construction of the first phase of the commercial scale SOP brine evaporation ponds in March 2019 following receipt of the Part V works approval from the Department of Water and Environmental Regulation (DWER). The first phase of ponds consisted of:

§ Two evaporation ponds;

o Kainite Harvest Pond 500m x 500m (25Ha); and

o Halite Pond 2,000m x 500m (100Ha);

§ A 3.4km long and 6-8m deep trench running parallel to the ponds, which will provide additional brine feed into the pond network;

§ A 1.4km causeway from the Williamson Pit to the Kainite Harvest Pond; and

§ Associated piping and pumping infrastructure.

Construction of the evaporation ponds was completed in June 2019, and the trench was completed in July 2019. The Company undertook a self-perform model for the delivery of the first phase of the Lake Way evaporation ponds. This delivery model allowed a fast track mobilisation and cost effective execution of the works, whilst providing the Company with critical hands on experience allowing testing and validating of various design criteria to de-risk the future on-lake construction.

The first phase of evaporation ponds were designed to receive the 1.2GL of high-grade SOP brine from the Williamson Pit mine, with de-watering of the pit now underway and is scheduled to complete in second half of 2019. Given the super-saturated nature of the Williamson Pit brines, precipitation of salts started immediately upon pumping into the evaporation pond. The Company will be able to harvest first salts from the Williamson Ponds which are expected to be utilised as initial feed stock for the process plant commissioning.

Process Testwork

During the year, process testwork continued at Saskatchewan Research Council (SRC), the world leading potash laboratory, processing salts harvested from the Lake Way evaporation trials.

SRC has recently completed a Pilot Plant operation that is representative of the proposed Lake Way Project process flowsheet. The Pilot Plant operation included the addition of Potassium Chloride (KCl) to take advantage of the excess sulphate that naturally occurs within the Lake Way brine.

Two separate Pilot Plant runs utilising 5 tonnes of salt harvested from Lake Way site evaporation trials were completed, producing premium grade, highly water soluble SOP. The Total Solubility and Dissolution Rate indicate that the product would be suitable for application in drip irrigation (otherwise known as fertigation) systems.

Table 4: Lake Way Pilot Plant 2 Composite Specifications

The Pilot Plant runs successfully confirmed that high quality soluble SOP can be generated via the process flowsheet with the inclusion of KCl. Importantly the positive results of the inclusion of the KCl within the process flowsheet will provide significant benefits to the Lake Way Project by increasing the SOP output from an equivalent volume of Lake Way brine. This can be achieved without significant changes to the processing equipment and no material additional capital expenditure.

The outstanding results achieved from the Pilot Plant indicate that the product is comparable with other premium grade soluble products on the market and supports Salt Lake Potash's marketing strategy to supply into the premium SOP market. The premium achievable for soluble grade SOP can be up to 20% above standard pricing.

The process flowsheet that has been developed and confirmed as part of the Pilot Plant test work, has been incorporated in the Lake Way BFS which is scheduled for completion in early October 2019.

Native Title

In December 2018, the Company signed a Native Title Land Access and Brine Minerals Exploration Agreement (the Agreement) with Tarlka Matuwa Piarku (Aboriginal Corporation) RNTBC (TMPAC) covering the Lake Way Project area.

TMPAC entered into the Agreement with Salt Lake Potash on behalf of the Wiluna People who are the recognised Native Title Holders of the land covering the Lake Way Project area. TMPAC also provided consent for the total area required for the construction and operation of the initial Lake Way Ponds.

The Company is finalising negotiations with TMPAC to achieve a Native Title Mining Agreement to provide consent to the grant of its mining lease and for the ongoing mining operation. The Native Title Mining Agreement is expected to be finalised and signed in the coming months.

Approvals Advancing

During the year, the Company continued its engagement with all relevant regulatory authorities. Several key approvals were granted, including:

§ The Department of Mines, Industry Regulation and Safety (DMIRS) approval of the Company's Mining Proposal and Project Management Plan for the first phase of the Lake Way evaporation ponds;

§ Final approval from the Department of Water and Environmental Regulation (DWER) for the Part V works approval in March 2019, for construction and operation of the initial evaporation ponds for Lake Way and de-watering of the Williamson Pit;

§ Decision by the Environmental Protection Authority (EPA) that the following development works for the Project on the existing Mining Leases do not warrant formal assessment:

o Up to 757 hectares of on lake pond disturbance to allow the following activities;

o Up to 47 hectares of off lake disturbance to allow for a process plant for sulphate of potash production and miscellaneous infrastructure including power and water.

Following the EPA decision, Salt Lake Potash has submitted the remaining approvals required for the next phase of the Project, with a focus on the on-lake ponds and trenches to allow brine extraction and evaporation.

The Company has submitted a mining proposal and closure plan to the Department of Mines, Industry Regulation and Safety (DMIRS) and the Works Approval to the Department of Water and Environmental Regulation (DWER) for the next phase of the Project. The Company has also submitted Section 18 Notices to the Aboriginal Cultural Materials Committee (ACMC) for Ministerial consent to use the land.

Obtaining these approvals will enable the Company to commence construction of this next phase of the project, including significant areas of evaporation ponds and trenches. However, further approvals, including EPA approval will be required for the full commercial scope of the Project.

Project Funding Advanced

The Company has mandated Taurus Funds Management (Taurus) to provide US$150m staged project debt financing for the Lake Way Project.

The arrangement with Taurus is an important step in progressing the development and financing of the Lake Way Project. With recent equity raisings totalling A$27.65m, the staged project financing enables the Company to complete the Bankable Feasibility Study (BFS), conclude the acquisition of strategic tenements from Blackham and continue early construction works to advance the Lake Way Project prior to the drawdown of the main Project Development Facility (PDF).

Stage 1 Facility of US$30m (c.A$42m)

The arrangement with Taurus is an important step in progressing the development and financing of the Lake Way Project. The Stage 1 Facility has been partly drawn by the Company.

Project Development Facility (PDF) of US$150m (c.A$214m)

The PDF will be used for refinancing the Stage 1 Facility and for project development and working capital associated with the development of the Lake Way Project. The PDF will become available upon completion of the BFS, satisfaction of conditions precedent to the Lender's satisfaction and final documentation. Conditions precedent are customary for a project financing of this nature and include execution of financing agreements, satisfying the equity requirement based upon a cost to complete analysis and offtake agreements being agreed.

Capital Raising

In November 2018, the Company completed a placement to existing and new institutional and sophisticated investors in Australia and overseas for 31.0m new ordinary shares of the Company, to raise gross proceeds of A$13.0m.

In June 2019, the Company completed a placement to strategic investors of 37.5m shares to raise gross proceeds of A$20.25m. This placement was led by a consortium of cornerstone investors, including the founders of LionOre Mining International as well as the key investors in Mantra Resources at its inception, who will collectively subscribe for 26.4m shares to raise A$14.25m. LionOre was bought by Norilsk Nickel for US$6.3b in 2007, whilst Mantra Resources was sold to Rosatom in 2010 for A$1.02b.

The Company's largest shareholder, Lombard Odier, also subscribed for 11.1m shares to raise A$6.0m, further confirming its continued support for Salt Lake Potash and the Lake Way Project.

These Placements are funding the ongoing construction of the Lake Way Project, including the development of on-lake infrastructure, the payment of deposits on certain process plant long-lead items, completion of feasibility studies, and general working capital.

In July 2019, the Company agreed to place a further 10.58m shares to Fidelity International to raise A$7.4m before costs. The Placement completed in August 2019 and will fund the majority of the consideration to be paid for the acquisition of the strategic tenement package from Blackham.

Key Appointments

Mr Tony Swiericzuk was appointed Managing Director and Chief Executive Officer (CEO), effective 5 November 2018.

Mr Swiericzuk is a Mining Engineer with outstanding credentials as a builder and operator of mining projects, having recently been General Manager of the Fortescue Christmas Creek Mine from 2012 to 2017. He oversaw the construction, commissioning and ramp-up of this project from 15Mtpa to 60Mtpa in his initial 2 year period, then proceeded to optimise the operation and help drive FMG to become the world's lowest cost iron ore producer.

Mr Swiericzuk has the ideal operating and commercial experience to rapidly deliver on the exceptional potential of the Lake Way Project and the Company's broader portfolio of assets.

The Company has also made a number of key project appointments during the year including Mr Peter Cardillo, Project Director - Processing and NPI, Mr Lloyd Edmunds, Project Director - Civil, and Mr Stephen Cathcart, Project Director - Technical. These appointments bring diversified technical, construction, operations, process infrastructure experience to the Company as it rapidly moves through the project development phase.

Subsequent to year end, the Company appointed Mr Shaun Day in the role of Chief Financial Officer. Mr Day will be responsible for the delivery of the financial, commercial and strategic outcomes for Salt Lake Potash. In addition, Mr Mark Wilde joined the Company as Director - Sales and Marketing, overseeing the Sales and Marketing functions.

Results of Operations

The net loss of the Consolidated Entity for the year ended 30 June 2019 was $26,896,121 (2018: net loss of $11,327,108). This loss is mainly attributable to:

(i) Exploration and evaluation expenses of $12,745,503 (2018: $8,545,647) which are attributable to the Group's accounting policy of expensing exploration and development expenditure incurred by the Group subsequent to the acquisition of the rights to explore and up to the successful completion of bankable feasibility studies for each separate area of interest. During the year, the Company undertook significant activity in rapidly advancing the Lake Way Project including, definition of whole of lake resource, site evaporation testwork and process testwork, scoping study on the commercial scale operation and commencement of a bankable feasibility study;

(ii) Pre-Development expenses of $8,513,313 (2018: Nil) relating the construction of the first phase of the commercial scale SOP brine evaporation ponds at Lake Way. These development costs have been expensed in accordance with the Group's accounting policy of expensing exploration and development expenditure incurred by the Group up to the successful completion of bankable feasibility studies;

(iii) Corporate and administrative expenses of $3,257,046 (2018: $1,081,738) attributable to the administration of the Company and its operations, as well as corporate expenses including the Company's dual listing on ASX and AIM and investor relations activities. The Group's administrative expenses have increased in 2019 to support the rapidly progressing development activities at Lake Way;

(iv) Non-cash share-based payment expenses of $2,302,081 (2018: $1,284,062) which are attributable to the Group's accounting policy of expensing the value (estimated using an option pricing model, and performance rights valued using the underlying share price) of Incentive Securities issued to key employees and consultants. The value is measured at grant date and recognised over the period during which the option/rights holders become unconditionally entitled to the options and/or rights; and

(v) Business development expenses of $865,860 (2018: $1,110,578) which are attributable to additional business development activities required to support the growth and development of the Lake Way Project.

Financial Position

At 30 June 2019, the Group had cash reserves of $19,304,075 (2018: $5,709,446). The Consolidated Entity is in a strong financial position to conduct its current and planned development activities.

At 30 June 2019, the Group had net assets of $14,708,374 (2018: $7,019,989), an increase of 217% compared with the previous year. The increase is a result of raising over $33.25m throughout the 12 month period, with each raising being achieved at a higher share price than the previous.

Business Strategies and Prospects for Future Financial Years

The objective of the Group is to create long-term shareholder value through the discovery, exploration and development of its projects. To date, the Group has not commenced production of any minerals. To achieve its objective, the Group currently has the following business strategies and prospects:

(i) Complete a BFS for a commercial scale operation at Lake Way;

(ii) Commence construction of the next phase of on-lake infrastructure and Plant for the Lake Way Project;

(iii) Enter into offtake/product sales agreement for the sale of Lake Way SOP;

(iv) Finalise project development funding for the Lake Way Project;

(v) Develop an organic premium SOP product in conjunction with offtake partners and potential customers; and

(vi) Continue assessment and exploration across the Company's multi lake portfolio.

All of these activities have inherent risk and the Board is unable to provide certainty of the expected results of these activities, or that any or all of these likely activities will be achieved. The material business risks faced by the Group that could have an effect on the Group's future prospects, and how the Group manages these risks, include:

Development Risks - As a result of the substantial expenditures involved in mine development projects, mine developments are prone to material cost overruns versus budget. The capital expenditures and time required to develop new mines are considerable and changes in cost or construction schedules can significantly increase both the time and capital required to build the mine;

Operational risks - The planned schedule for production of harvest salts for the commissioning and ramp up of the process plant are subject to operating risks that could impact the amount of harvest salts produced at its SOP operations, delay availability of harvest salts or increase the cost of production for varying lengths of time. Such difficulties include: changes or variations in hydrogeological conditions, weather conditions effecting evaporation and/or recharge, or other conditions; mining, processing and loading equipment failures and unexpected maintenance problems; limited availability or increased costs of mining, processing and loading equipment and parts and other materials from suppliers; mine safety accidents; adverse weather and natural disasters; and a shortage of skilled labour. If any of these or other conditions or events occur in the future, they may increase the cost of mining or delay or halt planned commissioning, ramp up and production, which could adversely affect our results of operations or decrease the value of our assets. The Group has in place a framework for the management of operational risks and an insurance program which provides coverage for a number of these operating risks.

The Company's activities will require further capital - The development of the Company's projects will require additional funding. The Company has recently mandated Taurus Funds Management to provide up to US$150m staged project financing for the Lake Way Project. The Stage 1 Facility of US$30m is available to drawdown. The Project Development Facility is subject to completion of the BFS and satisfaction of conditions precedent. Failure to satisfy the conditions precedent to draw down on the Project Development Facility, may result in delaying the development of the Company's properties or even a loss of property interest. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company;

Native title and Aboriginal Heritage - There are areas of the Company's projects, including Lake Way, over which legitimate common law and/or statutory Native Title rights of Aboriginal Australians exist. Where Native Title rights do exist, the Company must obtain consent of the relevant landowner to progress the exploration, development and mining phases of its operations. Where there is an Aboriginal Site for the purposes of the Aboriginal Heritage Act 1972, the Company must obtain consents in accordance with the Act. The Company has established a framework for obtaining required consents for the continuity of works, but in the event that it is unable to obtain these consents, its activities may be adversely affected;

Sulphate of Potash prices and foreign exchange - The price of potash and other commodities fluctuate and are affected by numerous factors beyond the control of the Company. Future production, if any, from the Company's mineral properties will be dependent upon the price of potash and other commodities being adequate to make these properties economic. The Company is engaging with potential customers with a view to entering binding offtake or distribution or tolling agreements. Project financing facilities with Taurus Funds Management are denominated in US dollars whilst many of the planned development and operational activities are denominated in Australian dollars. The Company's ability to fund these activities maybe adversely affected if the Australian dollar rises against the US dollar;

The Company's activities are subject to Government regulations and approvals - The development of the Lake Way Project is subject to obtaining further key approvals from relevant government authorities. The Company has an approvals schedule and a management team with significant experience in approvals required for mining projects in Western Australia. A delay or failure to obtain required permits may affect the Company's schedule or ability to develop the project.

Any material adverse changes in government policies or legislation in Western Australia and Australia that affect mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of any planned development the Lake Way Project and other lakes in the Company's portfolio. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could adversely impact the Group's mineral properties; and

Global financial conditions may adversely affect the Company's growth and profitability - Many industries, including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. Due to the current nature of the Company's activities, a slowdown in the financial markets or other economic conditions may adversely affect the Company's growth and ability to finance its activities. If these increased levels of volatility and market turmoil continue, the Company's activities could be adversely impacted and the trading price of the Company's shares could be adversely affected.

EARNINGS PER SHARE

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:

(i) On 2 October 2018, the Company announced it had executed a Memorandum of Understanding (MOU) with Sinofert for a long term offtake agreement for distribution into China.

(ii) On 5 November 2018, Mr Tony Swiericzuk commenced as Managing Director and Chief Executive Officer (CEO) of Salt Lake Potash. Mr Swiericzuk replaced Mr Matthew Syme who moved to become a Non-Executive Director.

(iii) On 9 November 2018, Salt Lake Potash announced it had completed a placement for A$13.0m at A$0.42 per share from a suite of new institutional and sophisticated.

(iv) On 6 March 2019, the Company was advised that it had received the final approval from the Department of Water and Environmental Regulation (DWER) to construct the first phase of the Lake Way evaporation ponds, which will enable Williamson Pit brine to be extracted and stored for evaporation.

(v) On 6 June 2019, Salt Lake Potash announced it had completed a placement for A$20.25m at A$0.54 per share to fund the Lake Way Construction including the development of on-lake infrastructure.

(vi) On 13 June 2019, Salt Lake Potash announced the results of a Scoping Study for a 200,000tpa commercial scale Lake Way Project with a 20 year mine life.

(vii) On 24 June 2019, the Company announced the commencement of commercial scale SOP Evaporation as the construction of the first phase of the Lake Way evaporation ponds was complete, enabling dewatering of the Williamson Pit.

SIGNIFICANT EVENTS AFTER BALANCE DATE

(i) On 23 July 2019, Salt Lake Potash announced the acquisition of a strategic package of tenements and other key assets for the Lake Way Project from Blackham Resources Limited. A placement to raise A$7.4m at A$0.70 per share to fund the majority of the acquisition consideration was also announced.

(ii) On 23 July 2019, Mr Matthew Syme resigned as Non-Executive Director.

(iii) On 5 August 2019, the Company announced that it had mandated Taurus Funds Management to provide up to US$150m staged project financing for the Lake Way Project, and the Stage 1 Facility has been partly drawn down.

Other than as noted above, as at the date of this report there are no matters or circumstances which have arisen since 30 June 2019 that have significantly affected or may significantly affect:

§ the operations, in financial years subsequent to 30 June 2019, of the Consolidated Entity;

§ the results of those operations, in financial years subsequent to 30 June 2019, of the Consolidated Entity; or

§ the state of affairs, in financial years subsequent to 30 June 2019, of the Consolidated Entity.

DIRECTORS' INTERESTS

As at the date of this report, the Directors' interests in the securities of the Company are as follows:

Notes:

1 Ordinary Shares means fully paid Ordinary Shares in the capital of the Company.

2 Incentive Options means an unlisted share option to subscribe for one Ordinary Share in the capital of the Company.

3 Performance Rights means Performance Rights issued by the Company that convert to one Ordinary Share in the capital of the Company upon satisfaction of various performance conditions.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group's operations are subject to various environmental laws and regulations under the relevant government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.

Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities.

There have been no significant known breaches by the Group during the financial year.

DIVIDENDS

No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.

SHARE OPTIONS, PERFORMANCE SHARES AND PERFORMANCE RIGHTS

At the date of this report the following options and performance shares have been issued over unissued Ordinary Shares of the Company:

§ 750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;

§ 1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;

§ 250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;

§ 500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;

§ 750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021;

§ 400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021;

§ 9,375,000 Unlisted Options exercisable at $0.85 each on or before 30 June 2023;

§ 1,700,000 Unlisted Options exercisable at $0.60 each on or before 1 November 2023;

§ 2,750,000 Unlisted Options exercisable at $1.00 each on or before 1 November 2023;

§ 3,000,000 Unlisted Options exercisable at $1.20 each on or before 1 November 2023;

§ 9,000,000 Unlisted Options exercisable at $0.702 each on or before 4 August 2024;

§ 7,500,000 'Class B' Performance Shares on or before 31 December 2019;

§ 10,000,000 'Class C' Performance Shares on or before 12 June 2020; and

§ 20,412,500 Performance Rights which are subject to various performance conditions to be satisfied prior to the relevant expiry dates between 31 December 2019 and 1 November 2023.

During the year ended 30 June 2019, 750,000 Ordinary Shares were issued at $0.40 as a result of the exercise of Unlisted Options. No Ordinary Shares have been issued as a result of the conversion of Performance Shares or Rights during the year ended 30 June 2019. Subsequent to year end and until the date of this report, no Ordinary Shares have been issued as a result of the exercise of Unlisted Options or conversion of Performance Shares or Rights. On 6 August 2019, the Company issued 266,258 Ordinary Shares (subject to shareholder approval) to key employees following the expiry of vested Performance Rights that were unable to be converted into Ordinary Shares whilst the employees were in possession of inside information.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2019

The above Consolidated Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2019

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2019

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in preparing the financial report of Salt Lake Potash Limited (Salt Lake or Company) and its consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2019 are stated to assist in a general understanding of the financial report.

Salt Lake is a Company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX), and the AIM Market (AIM) of the London Stock Exchange.

The financial report of the Group for the year ended 30 June 2019 was authorised for issue in accordance with a resolution of the Directors on 24 September 2019.

(a) Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards ("AASBs") and other authoritative pronouncements of the Australian Accounting Standards Board ("AASB") and the Corporations Act 2001. The Group is a for-profit entity for the purposes of preparing the consolidated financial statements.

The financial report has been prepared on a historical cost basis. The financial report is presented in Australian dollars.

Statement of compliance

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

Going concern

The consolidated financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

For the year ended 30 June 2019, the Consolidated Entity incurred a net loss of $26,896,121 (2018: $11,327,108) and experienced net cash outflows from operating and investing activities of $18,691,308 (2018: $9,803,152). As at 30 June 2019, the Group had cash and cash equivalents of $19,304,075 (2018: $5,709,446) and net current assets of $12,419,123 (2018: $4,246,901).

The Company has recently completed a successful Scoping Study for the commercial scale development of its SOP project at Lake Way and is currently in the process of completing a Bankable Feasibility Study (BFS). The Scoping Study supports a low capital and operating cost operation on a commercial scale with the ability to support a long mine life. The Company has sufficient funds to meet currently committed expenditure but in order to progress development and construction of the Lake Way Project, it will require additional funds.

In August 2019, the Company mandated Taurus Funds Management (Taurus) to provide US$150m staged project financing for the Lake Way Project. The Stage 1 Facility documentation has been executed and conditions satisfied, which has enabled the Company to commence drawing down on the initial facility of US$30m. The Project Development Facility (PDF) for up to US$150m will be used for refinancing the Stage 1 Facility and for project development and working capital associated with the development of the Lake Way Project. The PDF will become available upon completion of the BFS and satisfaction of conditions precedent. Conditions precedent are customary for a project financing of this nature and include execution of financing agreements, satisfying the equity requirement based upon a Cost to Complete analysis and offtake agreements being finalised.

Based on the successful results of the Scoping Study, the Directors are confident that they will be able to agree documentation and satisfy the conditions precedent to access the PDF to fund the ongoing development of the Lake Way Project.

In addition, the Directors have been involved in a number of recent successful capital raisings for the Company and for other listed resource companies, and accordingly, they are satisfied that they will be able to raise additional capital when required to enable the Consolidated Entity to meet its obligations as and when they fall due, and accordingly, consider that it is appropriate to prepare the financial statements on the going concern basis.

Should the Consolidated Entity be unable to access the PDF or raise additional capital or debt as and when required, the Consolidated Entity would need to reduce operational expenditure to continue as a going concern. In the event that the Consolidated Entity is unable to achieve the matters referred to above, uncertainty would exist that may cast doubt on the ability of the Consolidated Entity to continue as a going concern.

(a) Basis of Preparation (Continued)

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the Consolidated Entity be unable to continue as a going concern.

(b) New Accounting Standards

Since 1 July 2018, the Consolidated Entity has adopted all Accounting Standards and Interpretations effective from 1 July 2018. Other than the changes described below, the accounting policies adopted are consistent with those of the previous financial year. The Consolidated Entity has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The Consolidated Entity applied AASB 9 Financial Instruments (AASB 9) for the first time from 1 July 2018. A discussion on the impact of the adoption of AASB 9 is included below.

Several other new and amended Accounting Standards and Interpretations applied for the first time from 1 July 2018. These did not have an impact on the consolidated financial statements of the Consolidated Entity and, hence, have not been disclosed.

AASB 9 Financial Instruments

AASB 9 replaces parts of AASB 139 Financial Instruments: Recognition and Measurement (AASB 139) bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting. The accounting policies have been updated to reflect the application of AASB 9 for the period from 1 July 2018 (refer to note 1(f)).

The Consolidated Entity has applied AASB 9 retrospectively, with the initial application date being 1 July 2018. The cumulative impact of applying AASB 9 is recognised at the date of initial application as an adjustment to the opening balance of retained earnings. The Consolidated Entity has elected not to adjust comparative information.

(i) Classification and Measurement

On adoption of AASB 9, the Company classified financial assets and liabilities as subsequently measured at either amortised cost or fair value through profit and loss. The classification is based on two criteria; the Group's business model for managing the assets; and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (the SPPI criterion). There were no changes in the measurement of the Company's financial instruments due to the change in classification of financial instruments.

At the date of initial application, existing financial assets and liabilities of the Group were assessed in terms of the requirements of AASB 9. The assessment was conducted on instruments that had not been derecognised as at 1 July 2018.

There was no impact on the statement of comprehensive income or the statement of changes in equity on adoption of AASB 9 in relation to classification and measurement of financial assets and liabilities. The following table summarises the impact on the classification and measurement of the Group's financial instruments at 1 July 2018:

(ii) Impairment

The adoption of AASB 9 has changed the Consolidated Entity's accounting for impairment losses for financial assets by replacing AASB 139's incurred loss approach with a forward-looking expected credit loss (ECL) approach. AASB 9 requires the Consolidated Entity to recognise an allowance for ECLs for all debt instruments not held at fair value through profit or loss.

The Company's receivables balance consists of GST refunds from the Australian Tax Office and interest receivables from recognised Australian banking institutions. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, all bank balances are assessed to have low credit risk as they are held with reputable financial institutions which have a credit rating of AA- (Standard & Poor's) and above.

The loss allowances for financial assets are based on the assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Given the Company's receivables are from the Australian Tax Office and recognised Australian banking institutions, the Company has assessed that the risk of default is minimal and as such, no additional impairment loss has been recognised against these receivables as at 30 June 2019.

(c) New and amended Accounting Standards and Interpretations not early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Company for the reporting period ended 30 June 2019. Those which may be relevant to the Company are set out below. Other than as discussed for AASB 16, these are not expected to have any significant impact on the Company's financial statements.

AASB 16 Leases (AASB 16)

AASB 16 Leases will replace existing accounting requirements for leases under AASB 117 Leases (AASB 117). Under current requirements, leases are classified based on their nature as either finance leases which are recognised on the Statement of Financial Position, or operating leases, which are not recognised on the Statement of Financial Position.

Under AASB 16, with the exception of short-term and low value leases, the Company's accounting for operating leases as a lessee will result in the recognition of a right-of-use (ROU) asset and an associated lease liability on the Statement of Financial Position. The lease liability represents the present value of future lease payments. An interest expense will be recognised on the lease liabilities and a depreciation charge will be recognised for the ROU assets. There will also be additional disclosure requirements under the new standard.

The Company will initially apply AASB 16 on 1 July 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 July 2019, with no restatement of comparative information.

When applying the modified retrospective approach to leases previously classified as operating leases under AASB 117, the Company can elect, on a lease-by-lease basis, whether to apply a number of practical expedients on transition. The Company will elect to use the exemptions proposed by the standard on lease contracts for which the lease term ends within 12 months as of the date of initial application, and lease contracts for which the underlying asset is of low value.

The Company is in the progress of assessing the impact of the new leases standard and the effect on the Group's financial statements. In summary, the impact of AASB 16 is to create a right-of-use asset and a lease liability. As a result of a right-of-use asset and lease liability, depreciation expense and interest expense is expected to increase and operating lease expense will reduce. In addition, the classification between cashflow from operating activities and cash flow from financing activities will also change.

(d) Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2019 and the results of all subsidiaries for the year then ended.

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.

Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases. Intercompany transactions and balances, income and expenses and profits and losses between Group companies, are eliminated.

(e) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

(f) Financial Assets

Pre 1 July 2018 policy

Classification

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than twelve months after the reporting date which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position.

Loans and receivables are carried at amortised cost using the effective interest rate method.

Impairment

Collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment allowance is recognised when there is objective evidence that the Consolidated Entity will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

Post 1 July 2018 policy

Financial assets are recognised when the entity becomes a party to the contractual provisions to the instrument. Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are recognised immediately in profit or loss.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

§ amortised cost

§ fair value through profit or loss (FVPL)

§ equity instruments at fair value through other comprehensive income (FVOCI)

§ debt instruments at fair value through other comprehensive income

All income and expenses relating to financial assets that are recognised in profit or loss are presented within other income or expenses respectively.

Financial assets at amortised cost (debt instruments)

The Group measures financial assets at amortised cost if both of the following conditions are met:

§ The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

§ The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Consolidated Entity's financial assets at amortised cost include short term deposits and other receivables.

Impairment

The Group recognises an allowance for ECLs for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For receivables due in less than 12 months, the Group will recognise a loss allowance based on the financial asset's lifetime ECL at each reporting date. The Group will establish a provision matrix for these receivables that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment as sales from product eventuate or significant receivables come to hand.

The Group considers a financial asset in default when contractual payments are 60 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.

At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

(g) Property, Plant and Equipment

(i) Recognition and measurement

All classes of property, plant and equipment are measured at historical cost.

Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in the Statement of Profit or Loss and other Comprehensive Income as incurred.

(ii) Depreciation and Amortisation

Depreciation is provided on a straight line basis on all property, plant and equipment.

The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(iii) Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

(h) Exploration, Evaluation and Pre-Development Expenditure

Expenditure on exploration, evaluation and pre-development is accounted for in accordance with the 'area of interest' method.

Exploration, evaluation and pre-development expenditure encompasses expenditures incurred by the Group in connection with the exploration for and evaluation of mineral resources and early development activities before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets are measured at cost at recognition and are recorded as an asset if:

a. the rights to tenure of the area of interest are current; and

b. at least one of the following conditions is also met:

§ the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; and

§ exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration, evaluation and pre-development expenditure incurred by the Group subsequent to acquisition of the rights to explore is expensed as incurred, up to and including costs associated with the preparation of a bankable feasibility study.

(i) Impairment

Capitalised costs are reviewed each reporting date to establish whether an indication of impairment exists. If any such indication exists, the recoverable amount of the capitalised costs is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and transferred to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced. Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

(i) Payables

Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts payable are normally settled within 30 days. Payables are carried at amortised cost.

(j) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Rehabilitation

The Group is required to decommission and rehabilitate mines or related assets at the end of their producing lives to a condition acceptable to the relevant authorities. A rehabilitation provision is recognised when the Group has a present obligation, whether legal or constructive, as a result of a past event.

The expected cost of any approved decommissioning or rehabilitation programme, discounted to its net present value, is provided when the related environmental disturbance occurs. Until a decision to mine is made, the cost is brought up front and expensed whether the rehabilitation activity is expected to occur over the life of the operation or at the time of closure. Once a decision to mine is made, the rehabilitation cost will be capitalised and amortised over the life of the operation and the increase in net present value of the provision for the expected cost is included in financing expenses. Expected decommissioning and rehabilitation costs are based on the discounted value of the estimated future cost of the detailed plans prepared. Where there is a change in the expected decommissioning and restoration costs, the value of the provision and any related asset are adjusted and the effect is recognised in the profit or loss on a prospective basis over the remaining life of the operation.

The estimated costs of the rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by potential proceeds from the sale of assets or from plant/site clean up at closure.

The ultimate cost of rehabilitation is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new rehabilitation techniques or experience at other sites. The expected timing of expenditure can also change. Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results.

In recognising the amount of rehabilitation obligation at each reporting date, judgement is made on the extent of rehabilitation that the Group is responsible for at each reporting date.

(k) Interest Income

Interest income is recognised as it accrues in profit or loss, using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset.

(l) Income Tax

The income tax expense for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised using the full liability method for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose on goodwill or in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same taxation authority.

Tax consolidation

Salt Lake Potash Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Company. The current tax liability of each group entity is then subsequently assumed by the Company. The tax consolidated group has entered a tax sharing agreement whereby each company in the Group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

(m) Employee Entitlements

Provision is made for the Group's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within 12 months have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits expected to be settled later than 12 months after the year end have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(n) Earnings per Share

Basic earnings per share (EPS) is calculated by dividing the net profit attributable to members of the Company for the reporting period, after excluding any costs of servicing equity, by the weighted average number of Ordinary Shares of the Company, adjusted for any bonus issue.

Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive potential Ordinary Shares and the effect on revenues and expenses of conversion to Ordinary Shares associated with dilutive potential Ordinary Shares, by the weighted average number of Ordinary Shares and dilutive Ordinary Shares adjusted for any bonus issue.

(o) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(p) Acquisition of Assets

A group of assets may be acquired in a transaction which is not a business combination. In such cases the cost is allocated to the individual identifiable assets (including intangible assets that meet the definition of and recognition criteria for intangible assets in AASB 138 Intangible Assets) acquired and liabilities assumed on the basis of their relative fair values at the date of purchase.

(q) Impairment of Non-Current Assets

The Group assesses at each reporting date whether there is an indication that a non-current asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(r) Issued and Unissued Capital

Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the Company.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(s) Foreign Currencies

(i) Functional and presentation currency

The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Company's functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.

Exchange differences arising on the translation of monetary items are recognised in the Statement Profit or Loss and other Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the other Comprehensive Income.

(iii) Group companies

The financial results and position of foreign operations whose functional currency is different from the Group's presentation currency are translated as follows:

§ assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

§ income and expenses are translated at average exchange rates for the period; and

§ items of equity are translated at the historical exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign currency translation reserve in the statement of financial position. These differences are recognised in the Statement of Profit or Loss and other Comprehensive Income in the period in which the operation is disposed.

(t) Share-Based Payments

Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These share-based payments are measured at the fair value of the equity instrument at the grant date. Fair value of options is determined using the Binomial option pricing model. Further details on how the fair value of equity-settled share based payments has been determined can be found in Note 18.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Company's estimate of equity instruments that will eventually vest. At each reporting date, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the share based payments reserve.

Equity-settled share-based payments may also be provided as consideration for the acquisition of assets or provision of services. Where Ordinary Shares are issued, the transaction is recorded at fair value based on the quoted price of the Ordinary Shares at the date of issue. The acquisition is then recorded as an asset or expensed in accordance with accounting standards.

(u) Use and Revision of Accounting Estimates, Judgements and Assumptions

The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in the following notes:

(i) Exploration and Evaluation Expenditure (Note 8)

The future recoverability of exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related area of interest itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

To the extent that exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

(ii) Mine Rehabilitation (Note 10)

The Group assesses its mine rehabilitation provision in accordance with the accounting policy stated in Note 1(j). In determining an appropriate level of provision, consideration is given to the expected future costs to be incurred, the timing of those future costs and the estimated level of inflation. The ultimate rehabilitation costs are uncertain, and cost estimates can vary in response to many factors, including estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes in discount rates. The expected timing of expenditure can also change. These uncertainties may result in future actual expenditure differing from the amounts currently provided. Therefore, significant estimates and assumptions are made in determining the provision for mine rehabilitation. As a result, there could be significant adjustments to the provisions established which would affect future financial results. The provision at reporting date represents management's best estimate of the present value of the future rehabilitation costs required.

(iii) Share-Based Payments (Note 18)

The assessed fair value at grant date of options granted as share-based payments during the period was determined using a binomial option pricing model that takes into account the exercise price, the price of the underlying share at grant date, the life of the option, the volatility of the underlying share, the risk-free rate and expected dividend payout and any applicable vesting conditions. Management was required to make assumptions and estimates in order to determine the inputs into the binomial option pricing model. The assessed fair value at grant date of performance rights granted as share-based payments during the period was determined as at the date of grant based on the underlying share price.

2. SEGMENT INFORMATION

The Consolidated Entity operates in one operating segment, being mineral exploration in Australia. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Consolidated Entity.

3. EXPENSES

4. INCOME TAX

The benefit of deferred tax assets not brought to account will only be brought to account if:

§ future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;

§ the conditions for deductibility imposed by tax legislation continue to be complied with; and

§ no changes in tax legislation adversely affect the Group in realising the benefit.

Deferred tax assets have not been recognised in respect to tax losses because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

Tax Consolidation

The Company and its wholly-owned Australian resident entities have formed a tax consolidated group and are therefore taxed as a single entity. The head entity within the tax consolidated group is Salt Lake Potash Limited.

5. CASH AND CASH EQUIVALENTS

The Group has assessed the credit risk on cash and cash equivalents using the life time expected credit losses method and concluded that the probability of default is insignificant.

6. TRADE AND OTHER RECEIVABLES

Other receivables are non-interest bearing. There are no past due nor impaired receivables at 30 June 2019. GST receivables are due from the ATO. The Group has assessed the probability of default as low and the expected credit loss is insignificant.

7. PROPERTY, PLANT AND EQUIPMENT

Finance Leases

The carrying value of plant and equipment held under finance leases at 30 June 2019 was $58,196 (2018: $55,857). Additions during the year include $21,004 (2018: Nil) of plant and equipment under finance lease.

8. EXPLORATION AND EVALUATION EXPENDITURE

Notes:

1 The ultimate recoupment of costs carried forward for exploration and evaluation is dependent on the successful development and commercial exploitation or sale of the respective areas of interest.

SOP Project

Salt Lake holds a number of large salt lake brine projects (Projects) in Western Australia and the Northern Territory, each having potential to produce highly sought after Sulphate of Potash (SOP) for domestic and international fertiliser markets.

9. TRADE AND OTHER PAYABLES

Terms and conditions of the above financial liabilities:

- Trade payables are non-interest bearing and are normally settled on 30-day terms.

10. PROVISIONS

1Salt Lake has recognised the need to provide for the costs of rehabilitating the land at Lake Way associated with the first phase of the Lake Way evaporation ponds up to and including 30 June 2019. As the Company currently expenses items associated with AASB 6, the provision has been expensed until such point as the Company finalises its decision to mine once the Bankable Feasibility Study is completed, at which point costs associated with the project, including future rehabilitation costs, will be capitalised.

11. CONTRIBUTED EQUITY

(a) Movements in Ordinary Shares During the Past Two Years Were as Follows:

Notes:

1 Shares issued to key consultants of the Company in lieu of fees.

(b) Rights Attaching to Ordinary Shares:

The rights attaching to fully paid Ordinary Shares (Ordinary Shares) arise from a combination of the Company's Constitution, statute and general law.

Ordinary Shares issued following the exercise of Unlisted Options in accordance with Note 12(c) or Performance Shares in accordance with Note 12(d) or Performance Rights in accordance with Note 12(e) will rank equally in all respects with the Company's existing Ordinary Shares.

Copies of the Company's Constitution are available for inspection during business hours at the Company's registered office. The clauses of the Constitution contain the internal rules of the Company and define matters such as the rights, duties and powers of its shareholders and directors, including provisions to the following effect (when read in conjunction with the Corporations Act 2001 or the listing rules of the ASX and AIM (Listing Rules)).

(i) Shares

The issue of shares in the capital of the Company and options over unissued shares by the Company is under the control of the Directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any special class of shares.

(ii) Meetings of Members

Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of meetings of members and all members are entitled to a notice of meeting. A meeting may be held in two or more places linked together by audio-visual communication devices. A quorum for a meeting of members is two shareholders.

The Company holds annual general meetings in accordance with the Corporations Act 2001 and the Listing Rules.

(iii) Voting

Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company, each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a general meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to one vote only despite the number of members the person represents.

On a poll each eligible member has one vote for each fully paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share.

(iv) Changes to the Constitution

The Company's Constitution can only be amended by a special resolution passed by at least three quarters of the members present and voting at a general meeting of the Company. At least 28 days' written notice specifying the intention to propose the resolution as a special resolution must be given.

(v) Listing Rules

Provided the Company remains admitted to the Official List of the ASX, then despite anything in its Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules. The Company's Constitution will be deemed to comply with the Listing Rules as amended from time to time.

12. RESERVES

(a) Nature and Purpose of Reserves

(i) Share-based payments reserve

The share-based payments reserve is used to record the fair value of Unlisted Options, Performance Rights and Performance Shares issued by the Group.

(b) Movements in the share-based payments reserve during the past two years were as follows:

(c) Terms and Conditions of Unlisted Options

The Unlisted Options are granted based upon the following terms and conditions:

§ Each Unlisted Option entitles the holder to the right to subscribe for one Ordinary Share upon the exercise of each Unlisted Option;

§ The Unlisted Options outstanding at the end of the financial year have the following exercise prices and expiry dates:

- 750,000 Unlisted Options exercisable at $0.50 each on or before 29 April 2020;

- 1,000,000 Unlisted Options exercisable at $0.60 each on or before 29 April 2021;

- 250,000 Unlisted Options exercisable at $0.40 each on or before 30 June 2021;

- 500,000 Unlisted Options exercisable at $0.50 each on or before 30 June 2021;

- 750,000 Unlisted Options exercisable at $0.60 each on or before 30 June 2021;

- 400,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2021;

- 1,700,000 Unlisted Options exercisable at $0.60 each on or before 1 November 2023;

- 2,750,000 Unlisted Options exercisable at $1.00 each on or before 1 November 2023; and

- 3,000,000 Unlisted Options exercisable at $1.20 each on or before 1 November 2023.

§ The Unlisted Options are exercisable at any time prior to the Expiry Date, subject to vesting conditions being satisfied (if applicable);

§ Ordinary Shares issued on exercise of the Unlisted Options rank equally with the then Ordinary Shares of the Company;

§ Application will be made by the Company to ASX and to the AIM market of the London Stock Exchange for official quotation of the Ordinary Shares issued upon the exercise of the Unlisted Options;

§ If there is any reconstruction of the issued share capital of the Company, the rights of the Unlisted Option holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction; and

§ No application for quotation of the Unlisted Options will be made by the Company.

(d) Terms and Conditions of Performance Shares

The Convertible Performance Shares (Performance Shares) were granted as part of the consideration to acquire Australia Salt Lake Potash Pty Ltd on the following terms and conditions:

§ Each Performance Share will convert into one Ordinary Share upon the satisfaction, prior to the Expiry Date, of the respective Milestone:

- 7,500,000 Performance Shares subject to Class B Milestone: The announcement by the Company to ASX of the results of a positive Bankable Feasibility Study on all or part of the Project Licences; and

- 10,000,000 Performance Shares subject to Class C Milestone: The commencement of construction activities for a mining operation on all or part of the Project Licences (including the commencement of ground breaking for the construction of infrastructure and/or processing facilities) following a final investment decision by the Board as per the project development schedule and budget in accordance with the Bankable Feasibility Study, within five years from the date of issue.

§ Expiry Date means:

- in relation to the Class B Performance Shares, 31 December 2019 (amended following Shareholder approval on 11 June 2018); and

- in relation to the Class C Performance Shares, 5 years from the date of issue (12 June 2020);

§ If the Milestone for a Performance Share is not met by the Expiry Date, the total number of the relevant class of Performance Shares will convert into one Ordinary Share per holder;

§ The Company shall allot and issue Ordinary Shares immediately upon conversion of the Performance Shares for no consideration;

§ Ordinary Shares issued on conversion of the Performance Shares rank equally with the then Ordinary Shares of the Company;

§ In the event of any reconstruction, consolidation or division into (respectively) a lesser or greater number of securities of the Ordinary Shares, the Performance Shares shall be reconstructed, consolidated or divided in the same proportion as the Ordinary Shares are reconstructed, consolidated or divided and, in any event, in a manner which will not result in any additional benefits being conferred on the Performance Shareholders which are not conferred on the Ordinary Shareholders;

§ The Performance Shareholders shall have no right to vote, subject to the Corporations Act;

§ No application for quotation of the Performance Shares will be made by the Company; and

§ The Performance Shares are not transferable.

(e) Terms and Conditions of Performance Rights

The Performance Rights are granted based upon the following terms and conditions:

§ Each Performance Right automatically converts into one Ordinary Share upon vesting of the Performance Right;

§ Each Performance Right is subject to performance conditions (as determined by the Board from time to time) which must be satisfied in order for the Performance Right to vest;

§ The Performance Rights have the following expiry dates:

- 502,500 Performance Rights subject to the BFS Milestone expiring on 31 December 2019 (amended following Shareholder approval on 11 June 2018);

- 1,227,500 Performance Rights subject to the Construction Milestone expiring on 30 June 2020; and

- 1,227,500 Performance Rights subject to the Production Milestone expiring on 30 June 2021.

- 3,452,500 Performance Rights subject to the Trench Construction Milestone expiring on 1 November 2020.

- 3,052,500 Performance Rights subject to the Plant Construction Milestone expiring on 1 November 2021.

- 3,550,000 Performance Rights subject to the Plant Commissioning Milestone expiring on 1 November 2022.

- 3,550,000 Performance Rights subject to the Nameplate Capacity Milestone expiring on 1 November 2023.

- 1,300,000 Performance Rights subject to the Schedule Advancement Milestone expiring on 31 December 2021.

- 1,300,000 Performance Rights subject to the Reduce Capex Milestone expiring on 31 December 2021.

- 250,000 Performance Rights subject to the Lake Way Approval Milestone expiring on 31 December 2019.

- 250,000 Performance Rights subject to the Lake Wells Milestone expiring on 31 December 2020.

- 750,000 Performance Rights subject to the Financing Milestone expiring on 30 June 2020.

- 532,516 Performance Rights subject to the Short Term Incentive Milestone expiring on 31 December 2019.

§ Ordinary Shares issued on conversion of the Performance Rights rank equally with the then Ordinary Shares of the Company;

§ Application will be made by the Company to ASX AIM market of the London Stock Exchange for official quotation of the Ordinary Shares issued upon conversion of the Performance Rights;

§ If there is any reconstruction of the issued share capital of the Company, the rights of the Performance Right holders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction; and

§ No application for quotation of the Performance Rights will be made by the Company.

13. STATEMENT OF CASH FLOWS

(a) Reconciliation of the Loss after Tax to the Net Cash Flows from Operations

14. EARNINGS PER SHARE

(a) Non-Dilutive Securities

As at balance date, 11,100,000 Unlisted Options (which represent 11,100,000 potential Ordinary Shares), 17,500,000 Performance Shares (which represent 17,500,000 potential Ordinary Shares) and 20,945,016 Performance Rights (which represent 20,945,016 potential Ordinary Shares) were considered non-dilutive as they would decrease the loss per share.

(b) Conversions, Calls, Subscriptions or Issues after 30 June 2019

The Company has issued 10,849,115 Ordinary Shares and 18,375,000 Unlisted Options since 30 June 2019.

There have been no other conversions to, calls of, or subscriptions for Ordinary Shares or issues of potential Ordinary Shares since the reporting date and before the completion of this financial report.

15. RELATED PARTIES

(a) Subsidiaries

(b) Ultimate Parent

Salt Lake Potash Limited is the ultimate parent of the Group.

(c) Transactions with Related Parties

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Transactions with Key Management Personnel, including remuneration, are included at Note 16.

16. KEY MANAGEMENT PERSONNEL

(a) Details of Key Management Personnel

The KMP of the Group during or since the end of the financial year were as follows:

Directors

Mr Ian Middlemas Chairman

Mr Tony Swiericzuk Chief Executive Officer (CEO) & Managing Director (appointed 5 November 2018)

Mr Matthew Syme Non-Executive Director (resigned 23 July 2019)

Mr Mark Pearce Non-Executive DirectorMr Bryn Jones Non-Executive Director

(1) Mr Tony Swiericzuk was appointed to the position of CEO & Managing Director on 5 November 2018. At this time, Mr Matthew Syme transitioned into the role of Non-Executive Director.

Other KMP

Mr Shaun Day Chief Financial Officer (appointed 16 September 2019)

Mr Clint McGhie Company Secretary (appointed 10 August 2018)

Mr Stephen Cathcart Project Director - Technical (appointed 6 November 2018)

Mr David Maxton Chief Operating Officer (resigned 21 December 2018)

Mr Sam Cordin Company Secretary (resigned 10 August 2018)

Unless otherwise disclosed, the KMP held their position from 1 July 2018 until the date of this report.

(b) Loans from Key Management Personnel

No loans were provided to or received from Key Management Personnel during the year ended 30 June 2019 (2018: Nil).

(c) Other Transactions

Apollo Group Pty Ltd, a Company of which Mr Mark Pearce is a Director and beneficial shareholder, was paid $100,000 (2018: $150,000) for the provision of serviced office facilities, corporate and administration services until the contract was terminated effective 28 February 2019. The amount was based on a monthly retainer adjusted for expended/consumed items at cost, due and payable in advance, with no fixed term, and was able to be terminated by either party with one month's notice. At 30 June 2019, Nil (2018: $25,000) was included as a current liability in the Statement of Financial Position.

17. PARENT ENTITY DISCLOSURES

(c) Other information

The Company has not entered into any guarantees in relation to its subsidiaries.

Refer to Note 21 for details of contingent assets and liabilities.

18. SHARE-BASED PAYMENTS

(a) Recognised Share-based Payment Expense

From time to time, the Group provides incentive Unlisted Options and Performance Rights to officers, employees, consultants and other key advisors as part of remuneration and incentive arrangements. The number of options or rights granted, and the terms of the options or rights granted are determined by the Board. Shareholder approval is sought where required.

In the current and prior year, the Company has also granted shares in lieu of payments to key consultants in accordance with the terms of engagement.

During the past two years, the following equity-settled share-based payments have been recognised:

(b) Summary of Unlisted Options and Performance Rights Granted as Share-based Payments

The following Unlisted Options and Performance Rights were granted as share-based payments during the past two years:

(c) Summary of Unlisted Options and Performance Rights Granted as Share-based Payments

The following table illustrates the number and weighted average exercise prices (WAEP) of Unlisted Options granted as share-based payments at the beginning and end of the financial year:

The following table illustrates the number and weighted average exercise prices (WAEP) of Performance Rights granted as share-based payments at the beginning and end of the financial year: