Final Results

AIM and ASX listed company Salt Lake Potash Limited ("SO4" or the "Company"), announces its results for the year ended 30 June 2020.

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

The Company also advises that an Appendix 4G (Key to Disclosures: Corporate Governance Council Principles and Recommendations) and the 2020 Corporate Governance Statement have been released today and are also available on the Company's website.

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

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

OPERATING AND FINANCIAL REVIEW

During 2020 SO4's primary activities related to the development of the Lake Way project in the Goldfields district of Western Australia.

On-Lake Operations

Brine Extraction - Trenches

48km of brine extraction trenches were constructed during the year at Lake Way, delivering the majority of brine to the evaporation pond network. The trenches were excavated to an average depth of around four meters. To move brine from the trench network to the evaporation pond system, a specialised pipe network and pumping system was designed to suit the site environment.

Brine Extraction - Paleochannel Bores

During the second half of the financial year SO4 commenced development of the Lake Way paleochannel, drilling the first four brine abstraction bores into the paleochannel basal sands at pads 8, 17, 18 and 21. The results from the test-pumping confirmed the BFS model for both aquifer parameters, brine grade and flow rates.

Two of the four completed brine abstraction bores were test-pumped (Pad 8 and 17) with results pending for pads 18 and 21. Test pumping at pads 8 and 17 was conducted at flow rates ranging from 10-18 l/s with the observed grades during testing ranging from 7,240mg/l to 5,370mg/l.

Pond Operation

In the March 2020 quarter the Company completed the Stage 2 pond network consisting of 275ha of evaporation pond area, taking total pond evaporation area to 400ha.

The Stage 1 pond network spans approximately 125ha and was commissioned in the June quarter of 2019. The Stage 1 ponds were initially filled with high grade brine (25kg/m3 SOP) from the Williamson Pit.

The Stage 2 pond network spans approximately 275 ha and commenced commissioning in the June quarter of 2020. The Stage 2 pond construction included the installation of 12,000 sheet piles and 200,000 cubic meters of earthworks to form the walls of the ponds.

Across the pond network brine chemistry was monitored continuously and aligned with modelled outcomes. In March 2020, a 277kg bulk sample taken from Kainite Pond 1, Cell C4 was analysed and reported a potassium grade of 7.5%, ahead of the average modelled harvest salt grade in the BFS of 6.8%. 

Halite salts form in the initial cells in the pond train, after which the more concentrated brine is pumped into the harvest cells for the precipitation of the potassium rich harvest salts schoenite and kainite. Over the course of FY 20 the harvest salt pavement in the Stage 1 harvest cells accumulated to heights of up to 330mm.

Off-Lake Operations

Process Plant Construction & Procurement

Early works at the process plant site commenced in earnest in the first calendar quarter of 2020 and by the end of the financial year the Company had completed bulk civil earthworks and commenced pouring concrete foundations.

In June 2020 SO4 awarded the Engineering, Procurement and Construction (EPC) and Engineering, Procurement and Construction Management (EPCM) contracts for construction of the processing facility to GR Engineering Services (ASX:GNG). The EPC contract encompassed the provision of plant, labour, materials and construction services for the process plant and Non-Process Infrastructure (NPI) valued at A$85m. The EPCM contract encompassed the provision of services for the engineering, procurement and construction management for areas of the process plant and NPI, valued at A$22m.

By the end of the financial year the project was 90% procured for major packages with all key vendor contracts executed. The largest procurement package, the process plant crystalliser, arrived at site in July 2020, several weeks ahead of schedule. Other major plant components including centrifuges, attritioners, flotation cells, sizing screens, thickeners, rotary drier, impact crushers, lump breakers and conveyer belts were procured and expected to arrive at site towards the end of the 2020 calendar year.

Non-Process Infrastructure Construction

Construction of Non-Process Infrastructure commenced in the first calendar quarter with bulk civil earthworks. By financial year-end the Lake Way village had been constructed with 100 permanent and 160 temporary rooms.

Bulk civil earthworks were finalised including pad preparation for construction of the power plant, warehouse, workshop, administration and site village, as well as construction of the raw water pond, runoff settlement ponds and site access roads.

At the West Creek process water borefield the Company drilled a total of seven production bores and two monitoring bores that will supply the RO Plant (potable water) and water for the process plant. The production bores have been test-pumped and the steady state operation pumping philosophy finalised.

Approvals

In November 2019, the Company executed the Native Title Land Access Agreement (LAA) with Tarlka Matuwa Piarku (Aboriginal Corporation) RNTBC (TMPAC) for the whole of the Lake Way Project.

The landmark LAA provides for the continuing development of the Lake Way Project and significant benefits to TMPAC and the broader community. TMPAC entered into the LAA with SO4 on behalf of the Wiluna People who are the recognised Native Title Holders of the land covering the Lake Way Project area.

The LAA provides tenure and native title approval security to SO4 for the duration of the Project and covers the whole of the Lake Way Project area. In line with customary industry standards, TMPAC and the broader Wiluna Community will receive significant economic, social and environmental benefits, including:

• Royalty payments;

• Community support programs;

• Employment & training;

• Aboriginal business development and contracting opportunities;

• Heritage protection and land management opportunities.

The primary remaining environmental approval to support sustained full-scale operations is the Environmental Protection Authority (EPA) approval. The Environmental Review Document was submitted to the EPA during the June quarter and contained detailed surveys, studies, ground and surface water modelling, management plans and assessments. SO4's comprehensive work did not identify any environmental factors that could constitute insurmountable obstacles to gaining necessary statutory approvals.

Marketing

The Company executed purchase agreements with six offtake partners during the year, accounting for 224kt per annum of Lake Way's 245kt per annum capacity. In combination these agreements geographically diversify SO4's marketing portfolio with six reputable partners supplying SOP to six continents.

The offtake agreements and partners can be summarised as follows:

· Indagro (70ktpa, 5 years): Indagro is an international trading firm established in Geneva, Switzerland in the early 1980's. Indagro specializes in the global marketing of chemical fertilisers and their raw materials. Through its network of 16 representative offices around the globe, Indagro adds value to the fertiliser supply chain by offering proprietary risk management services to producers, distributors and importers alike. The agreement is for the sale of premium standard, granular and water soluble fertigation grade SOP over five years, for distribution in North and South America, Europe and Africa.

· Unifert (60ktpa, 5 years): Unifert is a leading comprehensive solutions provider to the agricultural industry in Europe, the Middle East and Africa. It distributes a broad range of agricultural inputs such as specialty and traditional fertilisers, seeds and crop protection chemicals. The agreement is for the sale of premium standard, granular and water soluble fertigation grade SOP over five years, with an option to extend, for distribution to the Middle East and Africa.

· HELM (50ktpa, 10 years): HELM is a Hamburg, Germany, based family-owned company established in 1900. HELM is one of the world's largest chemicals marketing companies. HELM secures access to the world's key markets through its specific regional knowledge as well as its subsidiaries, sales offices and participations in over 30 countries. As a multifunctional marketing organization HELM is active in the chemicals industry, in the crop protection industry, in pharmaceuticals and in the fertiliser industry. The agreement is for the sale of premium standard, granular and water soluble fertigation grade SOP over ten years, for distribution into Asia and the Middle East.

· Fertisur (30ktpa, 5 years): Fertisur is a Peruvian company distributing fertilisers throughout South America, focussing on products designed to offer crop solutions through drip fertilisation, fertigation and foliar feeding for greenhouses. The agreement is for the sale of premium standard, granular and water soluble fertigation grade SOP over five years, for distribution in South America.

· WeGrow (10ktpa, 5 years): WeGrow is a subsidiary of Keytrade AG, responsible for controlled and precision agriculture and marketing the highest quality soluble fertilisers. The WeGrow offtake agreement is for a 10ktpa over a term of five years and covers North, Central and South America.

· Mitsui & Co. Asia Pacific (4ktpa, 5 years): Mitsui & Co., Ltd. is one of the largest trading and investment companies in the world with over 42,000 employees (consolidated). Its Nutrition & Agriculture Business Unit is involved in the manufacture and sales of agrochemicals and fertilisers, as well as providing global logistics services for fertiliser resources and raw materials, alongside animal and human nutrition business lines.

Corporate

Equity Financing

The Company conducted three separate equity capital raisings in the year to June 2020.

· August 2019: A$7.4m placement to Fidelity at A$0.70/share to fund costs in the acquisition of a package of tenements and other key assets from Wiluna Mining Corporation (formerly Blackham Resources).

· December 2019: A$23.5m placement at A$0.70/share to institutional and high net worth investors.

· April 2020: A$20m placement at A$0.34/share to institutional and high net worth investors.

Post year end the Company raised a further A$15m via zero-coupon convertible notes, structured as deferred equity. As part of funding, the Company completed a A$98.5m placement and an accelerated non-renounceable entitlement offer at A$0.50/share.

Debt Financing

In addition to equity finance, the Company drew down a US$45m Stage 1 Funding Facility from Taurus Funds Management (Taurus) over two tranches. The initial US$30m facility was announced in August 2019, with a further US$15m extension announced in December 2019.

The Stage 1 Funding Facility provided initial access to funding for early construction works and enabled completion of the BFS prior to completion of the Syndicated Facility Agreement.

Following the end of the financial year the Company achieved full financing for the Lake Way project with the signing of a US$138m Syndicated Facility Agreement with Taurus and the Australian Government's Clean Energy Finance Corporation in conjunction with the equity placement.

Director Appointment

The Company appointed Mr Matthew Bungey to the board during in May 2020. Mr Bungey is a Chemical Engineer with over 20 years experience in natural resources, most recently as Managing Director and Head of Mining and Metals with Barclays Investment Bank in London.

Green Label Certification

SO4 was granted 'Green label' certification for debt issued to develop its Lake Way Project. The 'Green label' provides assurance to all stakeholders of the positive environmental contribution of solar brine fertiliser production.

The 'Green label' loan is st out by the LMA and APLMA green loan principles and eligibility was assessed by DNV GL. As part of the review, Wood Canada Limited conducted a technical assessment of greenhouse gas emissions of SOP production at Lake Way, relative to Mannheim SOP production in other locations. The assessment concluded that a Mannheim process plant of comparable capacity would have around 60% higher CO2 emissions than the Lake Way Project.

Sustainability

SO4 is committed to ensure that its business has a sustainable future for all of its stakeholders. The Company is driven by our core values to create positive multi-generational benefits through responsible environmental, social, cultural and economic behaviours. SO4 has developed a sustainability framework which is intended for release in the December 2020 quarter.

Results of Operations

The net loss of the Consolidated Entity for the year ended 30 June 2020 was $15,610,002 (2019: net loss of $26,896,121). This loss is mainly attributable to:

(i) The recognition of $4,459,520 in research and development rebate incentives income (2019: $1,652,110) pertaining to the 2018 and 2019 financial periods. The research and development incentive is a jointly administered program between AusIndustry and the Australian Taxation Office;

(ii) Exploration and evaluation expenses of $12,554,091 (2019: $13,745,503) which is attributable to the Group's accounting policy of expensing exploration and development expenditure incurred by the Group subsequent to the acquisition of the rights to explore and up to the successful completion of bankable feasibility studies (BFS) for each separate area of interest. The Lake Way BFS was released to market in October 2019 and, as such, it is anticipated that Exploration and Evaluation expenditure will significantly drop in the 2021 Financial Year as the predominant focus of the Company will be completing the Lake Way Project on time and budget;

(iii) Pre-Development expenses of $13,017,398 (2019: $8,513,393) relating to the construction of the first phase of the commercial scale SOP brine evaporation ponds and dewatering of the Williamson Pit. These pre-development costs have been expensed in accordance with the Group's accounting policy of expensing exploration and pre-development expenditure incurred by the Group up to the successful completion of a BFS;

Following completion of the BFS for the Lake Way Project in October 2019, the Group has recognised a mine development asset and commenced capitalising mine development expenditure with effect from 1 November 2019;

(iv) Corporate and administrative expenses of $3,574,369 (2019: $3,257,046) attributable to the administration of the Company and its operations, as well as corporate expenses including the Company's dual listing on ASX and AIM together with investor relations activities. The Group's administrative expenses have increased in 2020 to support the rapidly progressing development activities at Lake Way;

(v) Non-cash share-based payment expenses of $6,504,826 (2019: $2,302,381) which are attributable to the Group's accounting policy of expensing the value (estimated using an option pricing model, and performance rights valued using the underlying share price) of Incentive Securities issued to key employees and consultants. The value is measured at grant date and recognised over the period during which the option/rights holders become unconditionally entitled to the options and/or rights;

(vi) Business development expenses of $4,712,057 (2019: $865,860) which are attributable to additional activities required to support the growth and development of the Lake Way Project including indirect project funding costs and offtake activities; and

(vii) An income tax benefit of $19,657,371 (2019: $Nil) due to the Group recognising previous tax losses for the first time as the Company is anticipated to make future profits from the Lake Way Project.

Impact of COVID-19

These financial results were partly incurred during the COVID-19 pandemic. In order to minimise any financial or operational impact, the Company took immediate action to protect the integrity of the Company's business interests and the safety and well-being of its employees and stakeholders.

Salt Lake operates in the isolated and remote mining area of Wiluna and fortunately with the positive protection measures and support of governments and employees the Lake Way Project continued to function close to normal levels. Prompt implementation and affirmative compliance with government and health bodies' regulations and recommendations forced quick change to operating processes including strict social distancing and isolation practices. The demographic regions of our remote workforce also required changes to rosters and transport to comply with Government restrictions. The closure of borders required immediate action to manage the impact on the outputs, inputs, employees and communities that Salt Lake operates in.

To protect the local community the Company applied restrictions on staff entering the town of Wiluna or local communities. The Company provided additional support to local communities by providing fresh food at a time when the normal supply chain for goods into Wiluna was under pressure from the impact of COVID-19.

Social and mental health impact were a possible outcome from roster changes, changed travel, commuting, dining and enhanced hygiene practices. Salt Lake Potash has taken a considerate approach to the hidden consequences of such changes and continues to work with its employees to lessen the impact. The over-arching objective of the Company has been to keep all its employees and stakeholders safe and free from infection and/or spread, and importantly to keep people employed during these uncertain times.

In addition, the Company acted to preserve its cash position and allocate more existing cash reserves to the Lake Way Project with Executives taking a temporary 40% reductions from April to June 2020 and general staff taking a temporary 20% pay reduction during this period.

Due to the concerted and quick action of the Company, the overall financial impact of COVID-19 has been minimal.

Financial Position

At 30 June 2020, the Group had cash reserves of $7,030,418 (2019: $19,304,075) and net assets of $59,522,349 (2019: $14,708,374), an increase of 305% compared with the previous year. The increase in net assets is largely a result of raising $49,108,876 (net of costs) throughout the 12 month period and directly applying those funds to the construction and ongoing development of the Lake Way Project.

Business Strategies and Prospects for Future Financial Years

The objective of the Group is to create long-term shareholder value through the exploitation of its SOP projects. To achieve its objective, the Group currently has the following business strategies and prospects:

(i) Complete construction of on-lake infrastructure and process plant for the Lake Way Project with a view to commencing commissioning in December 2020 and first production by March 2021;

(ii) Complete first sales of product to key offtakers to receive first revenues in 2021;

(iii) Progress to nameplate capacity of 245,000t per annum of SOP at Lake Way by FY 22; and

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

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

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

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

Sulphate of Potash prices and foreign exchange - The price of potash and other commodities fluctuate and are affected by numerous factors beyond the control of the Company. Potential future production from the Company's mineral properties will be dependent upon the price of potash and other commodities being adequate to make these properties economic. The Company is engaging with potential customers with a view to finalising binding offtake or distribution or tolling agreements.

Project financing facilities with Taurus Funds Management are denominated in US dollars whilst many of the planned development and operational activities are denominated in Australian dollars.The Company's ability to fund these activities maybe adversely affected if the Australian dollar rises against the US dollar;

The Company's activities may require further capital - The development of the Company's projects may require additional funding. The Company has recently executed a US$138m (A$203m) debt financing package and a fully underwritten equity placement and accelerated non-renounceable offer for A$98.5m to complete the construction of the Lake Way Project on schedule. Whilst current forecasts of cost to complete are in line with expectations, there can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company;

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

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

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

Global financial conditions may adversely affect the Company's growth and profitability - Many industries, including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil caused by the COVID-19 pandemic include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. Due to the current nature of the Company's activities, a slowdown in the financial markets or other economic conditions may adversely affect the Company's growth and ability to finance its activities. If these increased levels of volatility and market turmoil continue, the Company's activities could be adversely impacted and the trading price of the Company's shares could be adversely affected.

EARNINGS PER SHARE

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Consolidated Entity during the 2020 financial year were as follows:

(i) On 5 August 2019, the Company announced that it had mandated Taurus Funds Management to provide up to US$150m staged project financing for the Lake Way Project;

(ii) On 6 August 2019, Salt Lake Potash announced the completion of a A$7.4m placement to Fidelity International to assist with the acquisition costs of a portfolio of strategic Lake Way tenements and assets from Blackham Resources Ltd. This transaction was completed on 8 October 2019;

(iii) On 11 October 2019, the Company announced the outstanding results of its Lake Way Bankable Feasibility Study which demonstrated a highly compelling and long life asset;

(iv) On 18 November 2019, the Company secured 170ktpa in binding offtakes with Unifert, Indagro and Fertisur, representing Salt Lake Potash's diversified marketing strategy using multiple strategic counterparties to undertake sales and distribution across a mix of geographic regions;

(v) On 21 November 2019, Salt Lake Potash and Tarlka Matuwa Piarku (Aboriginal Corporation) RNTBC advised of the execution of the Native Title Land Access Agreement for the whole of the Lake Way Project being a significant de-risking event for the Company;

(vi) On 6 December 2019, the Company announced a A$23.5m placement at A$0.70 and extended its Stage 1 debt facility with Taurus Funds Management by a further US$15m;

(vii) On 18 December 2019, the Company secured an additional 50ktpa offtake agreement with HELM AG, a world leading chemical and fertiliser company. Following execution of this binding offer the Company had secured offtake agreements representing 90% of the total planned production of the Lake Way Project; and

(viii) On 15 June 2020, the Company announced it had awarded the Engineering, Procurement and Construction (EPC) contract involving the provision of plant, labour, materials and construction services for the Process Plant and Non-Process Infrastructure (NPI) valued at A$85m. The Engineering, Procurement and Construction Management (EPCM) contract was also awarded for the process plant and NPI to the value of A$22m.

SIGNIFICANT EVENTS AFTER BALANCE DATE

i) On 2 July 2020, Salt Lake Potash announced it had received commitments to raise A$15m through the placement of unsecured zero-coupon Convertible Notes to corporate and institutional investors. The Convertible Notes are structured as deferred equity with zero coupon and mandatory conversion into equity at the lower of $0.45c per share or a 5% discount to any future equity raising of at least A$10m. Convertible Notes raising A$5m have since been converted at $0.45c per share.

ii) On 5 August 2020, the Company announced it had fully funded the Lake Way Project via the execution of a US$138m (A$203m) debt financing package and a fully underwritten equity placement and accelerated non-renounceable offer for A$98.5m to complete the construction of the Lake Way Project on schedule. The debt financing package is via a Syndicated Facility Agreement with Taurus Mining Finance Fund No.2 L.P. and the Clean Energy Finance Corporation.

Other than as noted above, as at the date of this report there are no matters or circumstances which have arisen since 30 June 2020 that have significantly affected or may significantly affect:

§ The operations, in financial years subsequent to 30 June 2020, of the Consolidated Entity;

§ The results of those operations, in financial years subsequent to 30 June 2020, of the Consolidated Entity; or

§ The state of affairs, in financial years subsequent to 30 June 2020, of the Consolidated Entity.

PRINCIPAL ACTIVITIES

The principal activities of the Group during the financial year consisted of the exploration and development of resource projects. No significant change in nature of these activities occurred during the year.

DIRECTORS

The names of the Group's Directors in office at any time during the financial year or since the end of the financial year are:

Current Directors

Mr Ian Middlemas Chairman

Mr Tony Swiericzuk Chief Executive Officer (CEO) & Managing Director

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

Mr Matthew Bungey Non-Executive Director (Appointed 14 May 2020)

Former Directors

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

Unless otherwise stated, Directors held their office from 1 July 2019 until the date of this report.

DIRECTORS' INTERESTS

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

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, PERFORMANCE RIGHTS AND CONVERTIBLE NOTES

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

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

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

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

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

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

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

§ 2,000,000 Incentive Options exercisable at $0.60 each on or before 1 November 2023;

§ 4,650,000 Incentive Options exercisable at $1.00 each on or before 1 November 2023;

§ 5,000,000 Incentive Options exercisable at $1.20 each on or before 1 November 2023;

§ 1,000,000 Unlisted Options exercisable at $0.702 each on or before 30 June 2023;

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

§ 18,560,398 Performance Rights which are subject to various performance conditions to be satisfied prior to the relevant expiry dates between 31 July 2020 and 1 November 2023; and

§ 10,000,000 Convertible Notes with a face value of $1.00 each.

During the year ended 30 June 2020, 4,645,000 Ordinary Shares were issued as a result of the conversion of Performance Rights and no Ordinary Shares were issued as a result of the conversion of Incentive Options or Performance Shares. Subsequent to year end and until the date of this report, no Ordinary Shares have been issued as a result of the exercise of Unlisted Options or conversion of Performance Shares or Rights.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2020

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020

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 2020

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 2020

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

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in preparing the financial report of Salt Lake Potash Limited (Salt Lake or Company) and its consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2020 are stated to assist in a general understanding of the financial report.

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

The financial report of the Group for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the Directors on 23 September 2020.

(a) Basis of Preparation

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

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

Statement of compliance

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

Going concern

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

For the year ended 30 June 2020, the Consolidated Entity incurred a net loss of $15,610,002 (2019: $26,896,121), experienced net cash outflows from operating and investing activities of $126,946,502 (2019: $18,691,308) and held cash and cash equivalents of $7,030,418 (2019: $19,304,075).

Since 30 June 2020, the Company has secured multiple sources of capital to enable the Company to fund the Company's operations through the development of the Lake Way project. On 2 July 2020, the Company secured A$15m of capital via the placement of unsecured zero-coupon Convertible Notes to corporate and institutional investors and on 5 August 2020, announced a A$203m (US$138m) debt financing and fully underwritten A$98.5m equity raising to enable first production. Equity funds have been received, whilst draw down of part of the debt financing remains subject to satisfaction of all conditions precedent. As such, the Company continues to construct the Lake Way Project on schedule and in line with the capex budget of A$264m announced 15 June 2020 and will have sufficient funds to meet currently committed expenditure.

Due to the uncertain timing of revenue receipts, and in order for the Company to begin investigating bringing additional lakes online, the Company may require additional funds to continue as a going concern. The Company has demonstrated that it can secure funds from multiple sources. It addition, the Directors have been involved in a number of recent successful capital raisings for the Company and for other listed resource companies and are satisfied that they will be able to raise additional capital if and when required to enable the Consolidated Entity to meet its obligations as and when they fall due. Accordingly, the Directors consider that it is appropriate to prepare the financial statements on the going concern basis.

In the event that the Consolidated Entity is unable to achieve the matters referred to above, uncertainty would exist that may cast doubt on the ability of the Consolidated Entity to continue as a going concern.

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

(b) New Accounting Standards Interpretations and amendments adopted by the Group (Continued)

Since 1 July 2019, the Consolidated Entity has adopted all Accounting Standards and Interpretations effective from 1 July 2019. Other than the changes described below, the accounting policies adopted are consistent with those of the previous financial year. The Consolidated Entity has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Several new and amended Accounting Standards and Interpretations applied for the first time from 1 July 2019. These did not have an impact on the consolidated financial statements of the Consolidated Entity with the exception of AASB 16 Leases.

AASB 16 Leases

During February 2016, the AASB issued AASB 16, which replaces the leases guidance in AASB 117 Leases and related interpretations. Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify leases as either operating or finance leases using similar principles as in AASB 117. Therefore, AASB 16 did not have an impact for leases where the Group is the lessor.

The Group has applied AASB 16 for the first time on 1 July 2019, using the modified retrospective approach. Thus, no restatement of comparative information. The Group elected to use the practically expedient transition provisions which allow for the standard to be applied only to contracts that were previously identified as leases applying AASB 117 and related interpretations at the date of initial application. The Group also applied the practical expedients wherein it applied the short-term leases exemptions to leases with a lease term that ends within 12 months at the date of initial application. The Group has also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short-term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').

The Group has lease contracts over office leases, car bays, site communication equipment and a permanent village. Before the adoption of AASB 16, the Group classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease. A lease is classified as a finance lease if it transferred substantially all of the risks and rewards incidental to ownership of the leased asset to the Group otherwise it was classified as an operating lease. Finance leases are capitalised at the commencement of the lease using the inception date fair value of the assets or, if lower, the present value of the minimum lease payments. Lease payments are apportioned between interest (recognised as finance costs) and reduction of the lease liability. Under the previous standard AASB 117, in an operating lease, the leased property was not capitalised and the lease payments were recognised as rent expense in the statement of profit or loss on a straight line basis over the lease term. Any prepaid rent and accrued rent were recognised under prepayments and trade and other payables, respectively.

Upon adoption of AASB 16, the Group applied a single recognition and measurement approach for all leases that it is the lessee, except for short term leases and leases of low value assets. The standard provides specific transition requirements and practical expedients, which has been applied by the Group.

Leases previously classified as finance leases

The Group did not change the initial carrying amounts of recognised assets and liabilities at the date of initial application for leases previously classify as finance leases (i.e. the right-of-use assets and lease liabilities equal the lease assets and liabilities recognised under AASB 117). The requirements of AASB 16 were applied on these leases from 1 July 2019.

Leases previously accounted for as operating leases

The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low value assets. The Group has elected to present right-of-use assets and lease liabilities separately. On transition, the right-of-use assets were recognised based on an amount equal to the lease liabilities. Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. The discount rate applied was at the range of 3.10% - 8.74%.

The effect of adoption AASB 16 as at 1 July 2019 is as follows:

(i) Reconciliation of operating lease commitments

AASB Interpretation 23 Uncertainty over Income tax treatment

AASB Interpretation 23 addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB 112 Income Taxes (AASB 112). It does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

- Whether an entity considers uncertain tax treatments separately

- The assumptions an entity makes about the examination of tax treatments by taxation authorities;

- How an entity determines taxable profit (tax losses), tax bases, unused tax losses, unused tax credit and tax rates; and

- How an entity considers changes in facts and circumstances.

An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be followed.

The Group applies significant judgment in identifying uncertainties over income tax treatments. For the year ended 30 June 2020, the Group has assessed that the interpretation has not had an impact on the financial statements of the Group.

Due to the Group entering the phase of Mine Development, it is has been deemed probable that future profits will be able to be offset against available prior year tax losses and other deferred tax assets. The Group has recognised a deferred tax asset of $21,056,646 and income tax benefit for the 30 June 2020 period totaling $19,657,371.

(c) Principles of Consolidation

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

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

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

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

(d) Cash and Cash Equivalents

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

(e) Financial Assets

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

Classification and subsequent measurement of financial assets

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

§ Amortised cost

§ Fair value through profit or loss (FVPL)

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

§ Debt instruments at fair value through other comprehensive income

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

Financial assets at amortised cost (debt instruments)

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

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

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

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

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

Impairment

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

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

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

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

(f) Inventory

Inventories are valued at the lower of cost or net realisable value. Cost is determined primarily on the basis of average costs. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and cost necessary to make the sale. The cost of raw materials spare parts, freight and indirect costs allocation is the purchase price. The cost of partly processed and saleable products is generally the cost of production including:

§ Labour costs, materials and contractor expenses which are directly attributable to the extraction and processing of brine

§ The depreciation of mining properties and leases of property plant and equipment used in the extraction and processing of brine and production of Sulphate of Potash and production overheads.

Brine inventory quantities are assessed primarily through pumping and flow physicals together with grade from assays. If the contained Sulphate of Potash calculated in the brine will not be processed within 12 months after the balance sheet date, it is included within non-current assets.

(g) Property, Plant and Equipment

(i) Recognition and measurement

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

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

(ii) Depreciation and Amortisation

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

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

(iii) Derecognition

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

(h) Exploration, Evaluation and Pre-Development Expenditure

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

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

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

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

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

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

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

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

(i) Impairment

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

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

(i) Mine Development

Expenditure is distinguished between 'Exploration and evaluation assets' and 'Mine Development' once the work completed to date supports the future development of the project and such development receives appropriate approvals. Following this point, all subsequent expenditure on the construction, installation or completion of ponds and other infrastructure facilities is capitalised in 'Mine Development'. Development expenditure is net of proceeds from the sale of ore extracted during the development phase to the extent that it is considered integral to the development of the mine. Any costs incurred in testing the assets to determine if they are functioning as intended, are capitalised, net of any proceeds received from selling any product produced while testing. After production starts, all assets included in the 'Mine Development' are then transferred to 'Producing mines' and amortisation commences.

Borrowing costs that are directly attributable to the acquisition, construction or production of mine development assets, are also capitalised. Capitalisation of borrowing costs ceases once productions start and assets included in 'Mine Development' are transferred to 'Producing Mines' or are otherwise ready for their intended use or sale.

(j) Payables

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

(k) Provisions

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

Rehabilitation

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

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

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

The ultimate cost of rehabilitation is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new rehabilitation techniques or experience at other sites. The expected

(k) Provisions

timing of expenditure can also change. Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results.

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

(l) Interest Income

Interest income is recognised as it accrues in the Statement of Profit or Loss, using the effective interest method. This methodology exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of the financial asset.

(m) Income Tax

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

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

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

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

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

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

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

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

Tax consolidation

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

(n) Employee Entitlements

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

(o) Earnings per Share

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

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

(p) Goods and Services Tax

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

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

(q) Research & Development Incentive Rebate

Any rebate received for eligible Research and Development activities are offset against the area where the costs were initially incurred. For R&D expenditure that has been capitalised, any claim received will be offset against 'Exploration and Evaluation' or 'Mine Development' in the Consolidated Statement of Financial Position. For R&D expenditure that has been expensed, any claim received will be recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

(r) Acquisition of Assets

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

(s) Impairment of Non-Current Assets

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

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

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

(t) Issued and Unissued Capital

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

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

(u) Foreign Currencies

(i) Functional and presentation currency

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

(ii) Transactions and balances

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

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

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

(iii) Group companies

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

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

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

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

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

(v) Government Grant Income

Government grants are recognised in the profit or loss on a systematic basis over the period in which the entity recognises as expenses the related costs for which the grants are intended to compensate; i.e matching income and expenses.

If the grant relates to expenses or losses already incurred by the entity, or to provide immediate financial support to the entity with no future related costs, the income is recognised in the period in which it becomes available

(w) Share-Based Payments

Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These share-based payments are measured at the fair value of the equity instrument at the grant date. Fair value of options is determined using the Binomial option pricing model. Further details on how the fair value of equity-settled share based payments has been determined can be found in Note 23.

The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Company's estimate of equity instruments that will eventually vest. At each reporting date, the Company revises its

(w) Share-Based Payments

estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the share based payments reserve.

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

(x) Interest Bearing Loans

Non-derivative financial liabilities other than financial guarantees are initially measured at fair value net of directly attributable transaction costs. These are subsequently measured at amortised cost. Transaction costs that relate to these instruments are included in the calculation of the amortised cost using the effective interest method. Any gains or losses are recognised in profit or loss through the amortisation process and when the financial liabilities is derecognised.

(y) Leases

Pre 1 July 2019 policy

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

(i) Operating Leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense in profit and loss on a straight-line basis over the lease term.

Contingent rentals are recognised as an expense in the financial year in which they are incurred.

(ii) Finance Leases

Leases which effectively transfer substantially all the risks and benefits incidental to ownership of the leased item to the Consolidated Entity are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit and loss. Capitalised leased assets are depreciated over the estimated useful life of the asset or where appropriate, over the estimated life of the mine.

The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter.

Post 1 July 2019 policy

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identifiable asset for a period of time in exchange for consideration.

Right-of-use Assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees and do not include non-lease components of a contract. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the substance of fixed lease payments or a change in the assessment to purchase the underlying asset.

Short-term leases and leases of low value assets

The Group applies the short term lease recognition exemption to its short term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low value assets recognition exemption to leases of office equipment that are considered of low value (i.e. below $5,000). Lease payments on short term leases and leases of low value assets are recognised as an expense on a straight line basis over the lease term.

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

The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

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

(i) Deferred Tax Assets (Note 4)

Following completion of the Bankable Feasibility Study for the Lake Way Project that demonstrated the technical feasibility and commercial viability of the Project in October 2019, the Group has determined that it is appropriate for the Company to transfer the Lake Way Project 'Exploration and evaluation assets' to 'Mine Development' with effect from 1 November 2019.

Due to the Group entering the phase of Mine Development, it has been deemed probable that future profits will be able to be offset against available prior year tax losses and other deferred tax assets. The Group has recognised a deferred tax asset of $21,056,646 and income tax benefit for the 30 June 2020 period totalling $19,657,371.

In determining the recoverability of deferred tax assets, management prepare and review an analysis of estimated future results which support the future realisation of deferred tax assets. The estimated future profitability results are judgmental and involves a number of key assumptions. These assumptions are also used for impairment assessments referred to in the notes below. To the extent that cash flows and taxable income differ significantly from estimates, the ability of the Group to realise recognised deferred tax assets would be impacted.

(ii) Research and Development (Note 6)

The Group is entitled to claim R&D tax incentives in Australia. The R&D tax incentive is calculated using the estimated R&D expenditure multiplied by 43.5% non-refundable tax offset. For the 2020 financial year, the Group has accounted for this incentive as other income in within the Statement of Profit or Loss and Other Comprehensive Income.

(iii) Inventory (Note 7)

Certain estimates, including expected Sulphate of Potash recoveries are calculated by engineers using available industry, engineering and scientific data. Estimates are periodically reassessed by the Group taking into account technical analysis and historical performance. Changes in estimates are adjusted for on a prospective basis.

(iv) Right of Use Assets and Lease Liabilities (Note 9 and Note 14)

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Group has the option, under some of its leases to lease the assets for additional terms of one to four years. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew (e.g. a change in business strategy).

(v) Exploration and Evaluation Expenditure (Note 10)

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

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

(vi) Mine Rehabilitation (Note 15)

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

(vii) Share-Based Payments (Note 23)

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

(viii) Impairment of Non-Financial Assets

The recoverability of mine development and property, plant and equipment is dependent on a number of factors, including the level of proved and probable reserves, production levels, future cash costs and the future technological changes which could impact the cost, future legal changes (including changes to environmental restoration obligations) and changes in commodity prices. Non-financial assets are reviewed for impairment if there is any indication that the carrying amount may not be recoverable.

2. SEGMENT INFORMATION

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

3. EXPENSES

4. INCOME TAX

* Following completion of a Bankable Feasibility Study for the Lake Way Project in October 2019 that demonstrated the economic returns of the project, the Group has determined that it is now considered probable that sufficient taxable income will be generated in future periods and therefore deferred tax assets have been recognised for the first time during the year ended 30 June 2020 for temporary differences and unused tax losses.

Tax Consolidation

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

5. CASH AND CASH EQUIVALENTS

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 2020. GST receivables are due from the ATO. The Group has assessed the probability of default as low and the expected credit loss is insignificant.

7. INVENTORY

Notes:

1 The Company has determined the tonnes of Sulphate of Potash equivalent at 30 June 2020 by estimating the tonnes of harvestable salts that could be used for processing at Lake Way. There has been no write-downs of inventories for the year ended 30 June 2020.

8. PROPERTY, PLANT AND EQUIPMENT

9. RIGHT OF USE ASSETS

10. 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.

2 The Company completed the acquisition of tenements from Blackham Resources Limited on 8 October 2019. The cost of acquisition was initially recognised as an 'Exploration and evaluation asset' before being transferred to Mine Development assets following completion of a bankable feasibility study for the Lake Way Project with effect from 1 November 2019.

SOP Project

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

11. MINE DEVELOPMENT

Notes:

1Following completion of the bankable feasibility study on the Lake Way Project in October 2019, the Group has determined that it is appropriate to transfer the Lake Way Project from 'Exploration and evaluation assets' to 'Mine development' with effect from 1 November 2019 and for all subsequent expenditure on the construction, installation or completion of infrastructure facilities to be capitalised in 'Mine development'. This date marks the first month-end post completion of the BFS and the commencement of the second stage of on-lake construction at Lake Way.

12. TRADE AND OTHER PAYABLES

Terms and conditions of the above financial liabilities:

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

13. INTEREST BEARING LIABILITIES

Notes:

1This balance relates to the extended Stage 1 Facility with Taurus Funds Management. The Facility was extended from US$30 million to US$45 million as announced to the market on 6 December 2019 and as at balance date has been fully drawn down. The Facility is secured and interest is payable at 9.75% pa and is expected to be repaid. Since balance date, the Company executed a binding agreement to obtain access to the Project Development Facility (PDF). The PDF will be used to refinance the Stage 1 Facility and for project development and working capital purposes. Draw down of the PDF will be subject to a number of Conditions Precedent. The PDF will be secured and interest will be payable at 9.00% pa.

2Transaction costs for the Stage 1 Facility include 9,000,000 unlisted options issued to Taurus Funds Management which are exercisable at $0.702 on or before 4 August 2024. These options were valued at $0.379 per option using a Binomial option valuation model on the date of grant (2 August 2019). The share price on the date of grant was $0.790. Refer to Note 17(c) for further details of the terms and conditions of unlisted options.

14. LEASE LIABILITIES

Notes:

1 This amount represents the closing balance of finance leases for vehicles as 30 June 2019 and excludes operating leases which were recongised on balance sheet for the first time at 1 July 2019.

2 The Company had total cash outflows for lease liabilities related to right of use assets of $411,539 (2019: $13,629).

15. PROVISIONS

Notes:

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 2020.

The mine rehabilitation provision represents the present value of rehabilitation costs relating to Lake Way, which are expected to be incurred at the end of the project life, when the producing ponds cease operations. Assumptions based on the current economic environment have been made, which management believe is a reasonable basis upon which to estimate the future liability. The timing of rehabilitation is like to depend on when the ponds cease to produce at economically viable rates. This, in turn, will depend on future potash prices, which are inherently uncertain.

1During the year, there was a reassessment of the disturbed area and cost estimate which resulted in an impact of $410,528 to the statement of profit and loss and other comprehensive income.

16. CONTRIBUTED EQUITY

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

Notes:

1 Shares issued relating to performance shares that could not be issued at the time of vesting as a result of the Company being in a Blackout Period.

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

3As a result of performance shares relating to the acquisition of the Company's SOP Project (Note 10) expiring, each holder of performance shares was issued one share.

(b) Rights Attaching to Ordinary Shares:

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

Ordinary Shares issued following the exercise of Unlisted Options in accordance with Note 17(c) or Performance Shares in accordance with Note 17(d) or Performance Rights in accordance with Note 17(e) will rank equally in all respects with the Company's existing Ordinary Shares.

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

(i) Shares

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

(ii) Meetings of Members

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

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

(iii) Voting

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

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

(iv) Changes to the Constitution

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

(v) Listing Rules

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

17. RESERVES

(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:

(b) Terms and Conditions of Unlisted Options 

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

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

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

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

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

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

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

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

- 1,000,000 Unlisted Options exercisable at $0.70 each on or before 30 June 2023;

- 2,000,000 Unlisted Options exercisable at $0.60 each on or before 1 November 2023;

- 4,650,000 Unlisted Options exercisable at $1.00 each on or before 1 November 2023;

- 5,000,000 Unlisted Options exercisable at $1.20 each on or before 1 November 2023; and

- 9,000,000 Unlisted Options exercisable at $0.70 each on or before 4 August 2024.

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

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

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

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

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

(d) Terms and Conditions of Performance Shares

As a result of performance hurdles not being met during the 30 June Financial Period, all 17,500,000 outstanding Performance Shares on issue at the beginning of the financial year expired. Each tranche of Performance Shares were converted to four Fully Paid Ordinary shares upon cancellation. As two tranches expired in the 12 month period, a total of eight shares were issued.

(e) Terms and Conditions of Performance Rights

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

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

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

§ The Performance Rights have the following expiry dates:

- 1,197,500 Performance Rights subject to the Production Milestone expiring on 30 June 2021;

- 3,772,500 Performance Rights subject to the Plant Construction Milestone expiring on 1 November 2021;

- 4,550,000 Performance Rights subject to the Plant Commissioning Milestone expiring on 1 November 2022;

- 4,900,000 Performance Rights subject to the Nameplate Capacity Milestone expiring on 1 November 2023;

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

- 1,400,000 Performance Rights subject to the Reduce Capex Milestone expiring on 31 December 2021;

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

- 500,000 Performance Rights subject to the Product Marketing and Offtake Milestone expiring on 31 December 2020; and

- 690,398 Performance Rights subject to the Short Term Incentive Milestone expiring on 31 July 2020.

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

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

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

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

18. STATEMENT OF CASH FLOWS

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

19. EARNINGS PER SHARE

(a) Non-Dilutive Securities 

As at balance date, 24,550,000 Unlisted Options (which represent 24,550,000 potential Ordinary Shares) and 18,560,398 Performance Rights (which represent 18,560,398 potential Ordinary Shares) were considered non-dilutive as they would decrease the loss per share.

(b) Conversions, Calls, Subscriptions or Issues after 30 June 2020 

The Company has issued 10,849,115 Ordinary Shares and no Unlisted Options or Performance Rights since 30 June 2020.

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

20. RELATED PARTIES

(a) Subsidiaries

(b) Ultimate Parent

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

(c) Transactions with Related Parties

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Transactions with Key Management Personnel, including remuneration, are included at Note 21.

21. KEY MANAGEMENT PERSONNEL

(a) Details of Key Management Personnel

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

Directors

Mr Ian Middlemas Chairman

Mr Tony Swiericzuk Chief Executive Officer (CEO) & Managing Director

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

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

Mr Matthew Bungey Executive Director (appointed 14 May 2020)

Other KMP

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

Mr Clint McGhie Company Secretary

Mr Stephen Cathcart Project Director - Technical

Unless otherwise disclosed, the KMP held their position from 1 July 2019 until the date of this report.

(b) Loans from Key Management Personnel

No loans were provided to or received from Key Management Personnel during the year ended 30 June 2020 (2019: Nil).

(c) Other Transactions

No other related party transactions were entered into in the 2020 Financial year (2019: $100,000).

22. PARENT ENTITY DISCLOSURES

(c) Other information

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

Refer to Note 26 for details of contingent assets and liabilities.

23. SHARE-BASED PAYMENTS

(a) Recognised Share-based Payment Expense

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

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

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

(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: