September 2016 Quarterly Report

The Board of Salt Lake Potash Limited (the Company or Salt Lake) is pleased to present its quarterly report for the period ending 30 September 2016.

Highlights:

Ø Completion of a positive Scoping Study: which confirmed the potential of the Lake Wells Project to produce low cost SOP by solar evaporation of lake brines for domestic and international fertiliser markets. The Scoping Study (accuracy ±30%) prepared by global engineering firm, Amec Foster Wheeler, and other international experts, demonstrates excellent project fundamentals based on well-established solar evaporation and salt processing techniques. Based on the positive results of the Scoping Study, the Company will now proceed to a Pre-Feasibility Study (PFS).

Lake Wells has the potential to be one of only five large scale salt lake SOP producers around the world and the Project's estimated cash production costs of A$185 per tonne (Stage 2) would be amongst the lowest in the world. The Scoping Study is based on a two stage development plan for Lake Wells:

- Stage 1 is based on shallow trenching and bore production with 100% of brine feed drawn from the near surface Measured Resource.

- Stage 2 also includes pumping additional brine from the deeper Inferred Resource, to increase production to 400,000 tpa of SOP.

All-in capital costs total A$268 million for the 400,000 tpa production scenario, amongst the lowest capital intensity for any proposed potash project worldwide.

Ø Aircore drilling at Lake Wells: the Company continued the aircore program targeting the Lake Wells paleochannel, successfully defining the Basal Paleochannel Sediments through the entire length of the Lake, which will comprise the main productive aquifer in the deeper part of Lake Wells brine resource.

Ø Process development testwork: Three separate brine evaporation trials under both simulated and actual site conditions were under way. Institutional process development company, Hazen Research Inc. (Hazen), in Colorado, USA, and Bureau Veritas (BV) in Perth conducted laboratory trials under simulated conditions and an extensive Site Evaporation Trial (SET) was established at Lake Wells to process large volumes of brine under site conditions.

SCOPING STUDY

A Scoping Study (accuracy ±30%) was completed by global engineering firm, Amec Foster Wheeler, and other international experts, demonstrating excellent project fundamentals based on well-established solar evaporation and salt processing techniques. Based on the positive results of the Scoping Study, the Company has commenced a Pre-Feasibility Study (PFS). (See Announcement dated 30 August 2016 for full details of the Scoping Study).

Lake Wells has the potential to be one of only five large scale salt lake SOP producers around the world and the Project's estimated cash production costs of A$185 per tonne (Stage 2) would be amongst the lowest in the world.

The Project will produce SOP from hypersaline brine extracted from Lake Wells via trenches and a combination of shallow and deep production bores. The extracted brine will be transported to a series of solar evaporation ponds built on the Lake where selective evapo-concentration will precipitate potassium double salts in the final evaporation stage. These potassium-rich salts will be mechanically harvested and processed into SOP in a crystallisation plant. The final product will then be transported for sale to the domestic and international markets.

The Scoping Study is based on a two stage development plan for Lake Wells:

- Stage 1 is based on shallow trenching and bore production with 100% of brine feed drawn from the near surface Measured Resource.

- Stage 2 also includes pumping additional brine from the deeper Inferred Resource, to increase production to 400,000 tpa of SOP.

Key Scoping Study results for Stage 1 and Stage 2:

The Scoping Study utilises the Project's Mineral Resource Estimate of 80-85 Mt of SOP in 9,691 GL of brine at an average of 8.7 kg/m3 of K2SO4. The Mineral Resource Estimate includes Measured and Indicated Resources of 26 Mt of SOP in the shallowest 20m of the Lake.

The Study has established the indicative costs of a two stage production operation, initially producing 200,000 tonnes per annum (tpa) and then 400,000 tpa of dried organic SOP. Stage 1 produces 200,000 tpa but includes most of the capital works required for a 400,000 tpa operation. Stage 2 will commence after initial capex is repaid by cashflow generated from the shallow Measured and Indicated Resource.

The Scoping Study results highlight the benefits of Lake Wells' location in the Northern Goldfields, with excellent access to gas and transportation infrastructure. Total Capex of A$268 million for 400,000 tpa of SOP is amongst the lowest capital intensity of any proposed potash project worldwide.

Opportunities have been identified to further optimise capital and operating costs through equipment lease financing, further operational refinements and partnerships. The Company will also continue to investigate potential additional revenue streams for the project.

EXPLORATION

Geophysical Surveys

An extensive ground based geophysical survey was completed aimed at assessing the Lake Wells bedrock topography and generation of paleochannel aquifer drill targets. Gravity measurements were processed and merged by Western Geophysics with available regional data. The final merged residual gravity data have been used as the basis for interpretation.

The location and depth of the paleochannel has been interpreted by modelling gravity profiles across the structure.

Aircore Drilling Program

During the quarter, the aircore drilling program continued to test potential palaeochannel aquifer targets identified by geophysical surveys. The results provide further understanding of the characteristics of the paleochannel aquifer and generate locations for further test pumping bores to advance and refine the Lake Wells hydrogeological model. The program comprised of 22 drillholes with a total of 2,274 metres drilled, directed at areas where the modelled paleochannel intersected the edge of the Lake, allowing aircore drilling with a truck-mounted rig.

The stratigraphic sequence encountered at each hole was consistent with palaeovalley fill. The different stratigraphic descriptions at the various depth levels are provided below:

Quaternary Alluvium (typical Depth 0-20)

Unconsolidated, gypsiferous sand with minor silt in the upper 0.5m. This unit is dominated by fine to medium, sub-rounded, aeolian quartz, lithic and gypsum sand with a strong overprint of ferric oxides. Minor lithic fragments are found throughout and rarely the unit is very fine sand and silt dominated.

The Quaternary Alluvium comprised mainly fine grained silts and clay with some evaporite minerals in the shallower intervals. This unit yielded up to 3 L/s during aircore drilling, averaging 0.7L/s.

Plastic Clays (typical Depth 20-45)

Grey, massive, clay, the clay is very firm to indurated and is commonly described as plastic in its saturated state. It is also extremely homogenous. It is predominantly massive although there are occasional fine laminae. Occasionally the grey clay has red mottling.

Minor silt/fine sand unit (typical Depth 45-60)

Silt and very fine sand. This fine grained unit yielded water to aircore drilling at rates generally below 1 L/s. It is a low permeability aquifer and likely to be low yielding. It does produce brine samples that are useful for confirming the brine chemistry profile with depth.

Stiff Clays (typical Depth 60-100)

Black to Grey to Purple, lacustrine, massive clays. These sediments are similar to the overlying plastic clays but differ in that they commonly contain organic material. The clay is massive but with common fine clay laminae. The clay is homogenous throughout its depth and breadth, and is compact.

Basal Paleochannel Sediments

The Basal Paleochannel Sediment (BPS) is the main productive aquifer in the study area. It is a broadly fining upwards sequence which infilled the lowest part of the palaeovalley (Thalweg), and is differentiated by upper and lower units:

Upper unit (typical Depth 100-115)

The upper unit comprises silt and very fine sand with clay interbeds. The top of the unit is fairly consistent at 350m AHD, which equates to 90 to 100m below Lake Playa Surface. Thickness ranges from 4 to 30m.

Lower unit (typical Depth 115-125)

The lower unit comprises generally medium to coarse grained sands with silt, clay and minor lignite interbeds. Sands are typically angular to sub-angular quartz. The thickness of the unit ranges from 4 up to 21m. Aircore yields range up to 9 L/s averaging 3 L/s.

Basement (typical Depth >125m)

Basement comprised well indurated, fine-grained, meta-siltstone and meta-sandstone. A single drillhole, LWA048 at the southern extent of the tenement intersected granitic basement.

A long section illustrating the paleochannel extent is presented as Figure 3. The inferred paleochannel extends the full length of Lake Wells, although drillhole LWA040 intersected shallow basement. The detailed structure in this area has not yet been defined.

The thickness of the Basal Paleochannel Sediments unit varies from approximately 10 to 25m. The Lower Unit comprises fine to very-coarse grained sands interbedded with silt, clay and minor lignite. The sequence is broadly fining upwards and the Upper Unit comprises predominately very fine sands and silts.

A test production bore was constructed and a pumping test was undertaken at site LWA033 as reported in ASX release dated 10 August 2016. Further test production bores and pumping tests will be completed in the current Quarter in order to measure the aquifer properties and determine production bore yields.

Brine Concentration

The average potassium concentration of brine samples from the Basal Paleochannel Sediment unit at each drillhole is summarised in Figure 4. Some drillholes terminated in basement and did not intersect the paleochannel.

Drill holes where the truck-mounted aircore rig was able to access targets on the lake edge exhibited Potassium (K) concentrations ranging from approximately 3,000 - 4,500mg/L, while drillholes that tested targets outside the immediate vicinity of the lake edge (LWA030, LWA044 and LWA048) returned Potassium (K) concentrations in the range of 2,000 - 3,000mg/L. The lower potassium concentration observed at these drillholes indicates that, as anticipated, brine concentration decreases with distance from the salt lake edge.

Shallow Auger and Trench Program

The Company has designed a program of shallow augering and test trenching (6m maximum depth) to gather further geological and hydrological data in relation to the near surface aquifer hosted by the Quaternary Alluvium stratigraphic sequence within the top 20 metres of the Lake. This aquifer is potentially a productive source of brine which would be extracted via trenching. The auger and test trench programs both commenced in October and will provide valuable data for the pre-feasibility study.

Process Development Testwork

The Company has undertaken a range of process development testwork on bulk samples of Lake Wells brine. Two bench scale trials are being conducted, the first in the USA by Hazen Research and the second in Western Australia by Bureau Veritas (BV). A large scale site evaporation trial has also commenced at the Lake Wells Project.

Bench Scale Trial - Hazen Research

Hazen Research, Inc. is a world class industrial research and development firm located in Golden, Colorado that has developed hundreds of hydrometallurgical, pyrometallurgical, and mineral beneficiation processes for most commercial metals and industrial minerals, and many inorganic and organic chemicals, including potash and other crop nutrients.

Salt Lake engaged Hazen to complete an evaporation, flotation and crystallisation trial on a representative sample of Lake Wells brine, under simulated site conditions.

The Hazen trial is intended to provide evaporation and crystallisation data to enhance the Lake Wells process model and also to improve the model for ongoing testwork to be conducted at Hazen, Bureau Veritas and at Lake Wells. The Hazen trial is intended to initially produce potassium containing salts and then to process those salts via flotation, conversion and crystallisation into Sulphate of Potash.

The Hazen evaporation test was monitored using a USBM theoretical model and comprised an initial charge of 240kg of Lake Wells Brine.

At the end of the quarter, the actual evaporation pattern was closely following the modelled theoretical pattern.

Bench Scale Trial - Bureau Veritas

The Company engaged international laboratory and testing company, Bureau Veritas (BV) in Perth, to conduct a series of tests based on evaporating brine at simulated average Lake Wells site conditions. The aim of the BV trials is to monitor the chemical composition of the brine and salts produced through the evaporation process to establish:

· Concentration thresholds in the brine chemistry which can be used to maximise the recovery of sulphate and potassium harvest salts and minimise the quantity of dilutive salts into a process plant;

· The quantity and composition of harvest salts which will be the plant feed in commercial production; and

· The potential for any internal evaporation pond recycle streams that may improve harvest salt recovery.

The first trial in the series consisted of evaporation of 90kg of brine on a load cell to monitor evaporative loss. The temperature of the brine was controlled to a constant 23oC using infra-red lamps and air flow across the brine surface was provided by a fan.

Site Evaporation Trial

A large scale, continuous Site Evaporation Trial (SET) was established at Lake Wells to refine the process design criteria for halite evaporation ponds and subsequent harvest salt ponds. The SET will process up to 1 ton of brine per day and produce substantial ongoing quantities of potassium and sulphate salts. These salts will then be further processed to produce samples of SOP for potential customers and partners.

The objectives of the SET are to:

· Refine the solar evaporation pathway, under actual site conditions, for Lake Wells brine. The analysis of this pathway will define the salting points of the various salts along the evaporation pathway allowing for the completion of a detailed mass balance for the pond system;

· Refine the quality and quantity of brine and salts produced at the various points along the evaporation path;

· Define the distribution in various salts of potassium, magnesium and sulphate through the evaporation system;

· Provide design information for brine in-flow requirements, pond area, required number of ponds and flow requirements between ponds for a commercial facility; and

· Determine opportunities for recycle of bittern or salt that may improve potassium, magnesium or sulphate recovery to the harvest salts.

The outputs of the ongoing test work will also provide key inputs into prefeasibility study costings for the halite and harvest salt evaporation ponds for the Lake Wells SOP project and assist in the development of a more extensive test work program including:

· Halite Evaporation Pond Design: On-lake pond construction trial;

· Harvest Salt Pond Design

· Conversion Test Work: Collected harvest salts will provide the inputs for conversion design trials;

· Flotation Test Work: Outputs from the conversion trials above will provide inputs for flotation work;

· Crystallisation Trials: Outputs from the flotation trials above will provide inputs for crystallisation test work.

The SET will comprise two trains each of six plastic lined ponds, designed to operate continuously under all weather conditions for up to 12 months. Brine is introduced to the first Halite Pond, H1, via a small surface trench. The brine progresses on a continuous basis through a series of six ponds as it concentrates through evaporation: two halite ponds; two transition ponds; and two harvest salt ponds.

Train 1 has been completed and will process approximately 500kg of fresh brine per day. Train 2 will double that volume when established. At the end of the quarter, Train 1 had several tonnes of brine in circulation and was producing initial salts.

An Automatic Weather Station (AWS) will be established at the SET site, providing comprehensive, continuous data for temperature, solar radiation, pan & theoretical evaporation, relative humidity and wind velocity and direction. The AWS data combined with actual evaporation records from the nearby SET will allow for sizing and detailed production modelling of commercial scale evaporation ponds.

REGIONAL LAKES

Lake Lewis

During the quarter, the Company conducted an initial reconnaissance and pit sampling program at Lake Lewis located in the Northern Territory. A traverse of shallow pit samples was completed across the eastern and northern parts of the lake (Figure 8), highlighting the potential of the lake to contain large volumes of highly saline brine with elevated levels of potassium and sulphate. A total of 24 pit samples have been collected at Lake Lewis encountering brine at a standing water level from less than 1 metre from surface and the average brine chemistry of the samples was:

Lake Lewis has a highly strategic location in the Northern Territory being located adjacent to a sealed road, and in close vicinity to the Adelaide-Darwin railway line and an existing gas pipeline.

Table 1 - Summary of Exploration and Mining Tenements

As at 30 September 2016, the Company holds interests in the following tenements:

Australian Projects:

Other Projects:

Competent Persons Statement

The information in this report that relates to Exploration Results, or Mineral Resources for Lake Wells is based on information compiled by Mr Ben Jeuken, who is a member Australian Institute of Mining and Metallurgy. Mr Jeuken is employed by Groundwater Science Pty Ltd, an independent consulting company. Mr Jeuken has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Jeuken consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this Announcement that relates to Exploration Results on geophysical and test pumping results for Lake Wells, is extracted from the reports entitled Geophysics and Test Pumping Reinforce Lake Wells Potential ' dated 10 August 2016 and 'Excellent Initial Pump Test Results at Lake Wells ' dated 12 May 2016 and is available to view on the Company's website www.saltlakepotash.com.au. The information in the original ASX Announcement that related to Exploration Results on geophysical and test pumping results for Lake Wells based on information compiled by Mr Adam Lloyd, who is a member of the Australian Institute of Geoscientists and International Association of Hydrogeology. Mr Lloyd was an employee of Salt Lake Potash Limited. Mr Lloyd has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Lloyd consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to Exploration Results for Lake Lewis is based on information compiled by Mr Charles Nesbitt, who is a member Australian Institute of Mining and Metallurgy. Mr Nesbitt is employed by Redbelly Resources Pty Ltd, an independent consulting company. Mr Nesbitt has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Nesbitt consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Cautionary Statement and Important Information

The information in the Report that relates to the Scoping Study is extracted from the report entitled 'Scoping Study Confirms Potential Confirms Lake Wells Potential' dated 30 August 2016 (Scoping Study Announcement). The announcement is available to view on www.saltlakepotash.com.au. The Scoping Study has been prepared and reported in accordance with the requirements of the JORC Code (2012) and relevant ASX Listing Rules.

The primary purpose of the Scoping Study is to establish whether or not to proceed to a Pre-Feasibility Study ("PFS") and has been prepared to an accuracy level of ±30%, the Scoping Study results should not be considered a profit forecast or production forecast. As defined by the JORC Code, a "Scoping Study is an order of magnitude technical and economic study of the potential viability of Mineral Resources. It includes appropriate assessments of realistic assumed Modifying Factors together with any other relevant operational factors that are necessary to demonstrate at the time of reporting that progress to a Pre-Feasibility Study can be justified." (Emphasis added)

The Modifying Factors included in the JORC Code have been assessed as part of the Scoping Study, including mining (brine extraction), processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and government factors. The Company has received advice from appropriate experts when assessing each Modifying Factor.

Following an assessment of the results of the Scoping Study, the Company has formed the view that a PFS is justified for the Lake Wells project, which it will now commence. The PFS will provide the Company with a more comprehensive assessment of a range of options for the technical and economic viability of the Lake Wells project.

The Company has concluded it has a reasonable basis for providing any of the forward looking statements included in this announcement and believes that it has a reasonable basis to expect that the Company will be able to fund its stated objective of completing a PFS for the Lake Wells project. All material assumptions on which the forecast financial information is based are set out in the Scoping Study Announcement.

In accordance with the ASX listing rules, the Company advises the Scoping Study referred to in the Scoping Study Announcement is based on lower-level technical and preliminary economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.

Production Target

The Production Target stated in this Report is based on the Company's Scoping Study for the Lake Wells Project as released to the ASX on 30 August 2016. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 was included in the Company's ASX Announcement released on 30 August 2016. The Company confirms that the material assumptions underpinning the Production Target referenced in the 30 August 2016 release continue to apply and have not materially changed.

The Production Target referred to in this Report and the Scoping Study Announcement is based on 100% Measured Mineral Resources for Stage 1 and 70% Measured Mineral Resources and 30% Inferred Mineral Resources for Stage 2. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Measured or Indicated Mineral Resources or that the production target or preliminary economic assessment will be realised.

Forward Looking Statements

This Report contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to pre-feasibility and definitive feasibility studies, the Company's business strategy, plans, development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'potential', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast', 'evolve' and similar expressions. Persons reading this news release are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in Schedule 2 of the Company's Notice of General Meeting and Explanatory Memorandum dated 8 May 2015.

APPENDIX 1 - LAKE WELLS DRILLHOLE DATA

Notes: 1) Stratigraphic Unit - Q = Quaternary, S = Silt/fine sand unit, P = Paleochannel unit, B = Basement

APPENDIX 2 - LAKE LEWIS TEST PIT RESULTS

APPENDIX 3 - JORC TABLE ONE

Section 1: Sampling Techniques and Data

Section 2: Reporting of Exploration Results

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