The Board of Salt Lake Potash Limited (the Company or SLP) is pleased to present its Quarterly Report for the period ending 30 June 2017.  Highlights for the quarter and subsequently include:

LAKE WELLS

Surface Aquifer

Ø  The Lake Wells surface aquifer exploration program was completed, comprising a total of 250 shallow test pits and 10 test trenches. This work provides very high quality data for the hydrogeological model for the surface aquifer of the Lake, giving the Company a high level of confidence about the potential brine production from low cost surface trenching. 

Ø  The first trench test pumped in the Northern part of the Lake demonstrated very high brine flows and consistent brine chemistry.

Evaporation Pond Testwork

Ø  The Company commenced construction of a number of test evaporation ponds of different designs to support the Company's model for cost-effective on-lake evaporation pond construction. The Lake Wells playa includes a pervasive brown silt with a high clay content averaging 55cm below surface, which potentially offers a major advantage for construction of low cost unlined evaporation ponds on the Lake.

Process Testwork

Ø  The Site Evaporation Trial (SET) at Lake Wells has now processed approximately 215 tonnes of brine and produced 3.4 tonnes of harvest salts.

Ø  The Company continues a range of process development testwork to enhance the Lake Wells process model. Raw brine or Lake Wells harvest salts have already produced substantial samples of SOP. Ongoing work at SGS (Perth), Bureau Veritas (Perth) and Saskatchewan Research Council (Canada) continues to enhance the process flowsheet and produce further customer and testwork samples.

Pilot Plant

Ø  The Company and its consultants have substantially advanced the Pilot Plant study for the GSLP.

LAKE BALLARD

Ø  A surface aquifer exploration program has commenced at Lake Ballard with the mobilisation of an amphibious excavator. The Company also completed further surface brine sampling and reconnaissance work at Lake Ballard and Lake Marmion.

Process Testwork

Ø  Initial evaporation testwork on Lake Ballard brine also indicates excellent potential to produce Sulphate of Potash (SOP) and additional co-products.

The Company's primary focus is to construct a Pilot Plant at the Goldfields Salt Lakes Project (GSLP), intended to be the first salt-lake brine Sulphate of Potash (SOP) production operation in Australia. While proceeding with the analysis of options to construct a 20-40,000 tpa SOP Pilot Plant at Lake Wells, the Company is exploring the other lakes in the Goldfields Salt Lakes Project, starting with Lake Ballard and Lake Marmion.

LAKE WELLS

Surface Aquifer Exploration Program

The Company has completed a substantial program of work investigating the geological and hydrogeological attributes of the Shallow Lake Bed Sediment hosted brine resource at Lake Wells. The information and data generated will be utilised in the design of the brine extraction system for the GSLP Pilot Plant.

The total program includes 250 test pits and 10 trenches over the lake playa. The test pits are generally 1m wide x 1.5m long and 4.5m deep and confirm lithology and permeability of upper lake bed sediments and demonstrate spatial continuity of the surface aquifer. 

Geological setting of the Shallow Aquifer

The general setting for the lake consists of Cenozoic (Quaternary - Holocene) brown to white to red, unconsolidated, gypsiferous sands, silts and clay units. These units have varying silt and clay compositions.

Two distinct domains of geological deposition for the shallow aquifer were identified in the recent assessments.  This is roughly correlated to the southern half of the lake playa and the northern half of the lake playa. The transition between the two domains does not occur at a hard boundary but rather a wide transition zone that may be correlated to the frequency of surface water inundation of the lake. Satellite imagery analysis by Geoscience Australia indicates that the northern part of the lake is inundated with surface water more frequently than in the south. This is supported by anecdotal discussions with the local landowners and experience during exploration activities.

Long Term Pumping Test - Test Trench P3b

A 50m long trench (P3b) was constructed and test pumped over a 7 day period. This is the first trench pump test conducted in the Northern part of the Lake. The brine yield into the trench was very high and a 6L/s pump could not dewater the trench sufficiently to stress the surrounding aquifer. Adding an additional 3L/s pump to the system was only able to draw down the brine level temporarily in the trench. 

During the full duration of the pumping test an average flow rate of 6.3 litres per second (L/s) was achieved, demonstrating very high inflows from the Lake Bed Aquifer, substantially higher than achieved in other trench pumping tests at Lake Wells. Note that the brine yield from this trench is not representative of the whole shallow aquifer in this area.

The geological logs for the trench recorded a coarse grained (massive) evaporative sand horizon that occurs from 1m to 1.5m below surface. This unit is the main contributor to the high permeability encountered at the trench.

This layer contains a crystalline zone with large crystals visually yielding very large volumes of brine during trench dewatering. This zone was also encountered in two adjacent test pits (LWTT209 and 211) located 200m either side of the trench.

Results from the trench testing are summarised as follows:

·      The pumping rate averaged 545m³/day (6.3 L/s) and remained relatively constant for the duration of the test.

·      The cumulative pumping volume during the test was 3,800m³ (or 3.8 megalitres ML).

·      Drawdown was observed at all observation bores and after 7 days ranged from 0.6m at an observation point 10m from the trench to 0.2m at an observation point 50m from the trench.

·      The relatively high flow rate and extensive cone of drawdown indicate that the trench is excavated into a highly permeable part of the lake.

·      This local geological setting is not representative of the whole shallow aquifer.

Brine was sampled daily over the duration of the test. The brine chemistry remained consistent over the test period with an average grade of potassium of 4,311 Mg/L, ranging from 4,000 to 4,800 Mg/L. 

The P3b trench pump test will be repeated shortly, when pumping equipment is available to adequately stress the aquifer.

Evaporation Ponds Testwork

The Lake Wells geological setting typically includes a pervasive brown silt layer with a high clay content around 55cm below the surface. An initial assessment by MHA Geotechnical Engineers indicates that this clay material appears to be suitable for on lake pond base and embankment construction.

In conjunction with international consultants and geotechnical specialists, SLP has developed a series of on lake pond designs suitable for the stratigraphy at Lake Wells, which are expected to minimise brine losses and optimize capital costs.

During the quarter, a 30 tonne excavator was mobilised to Lake Wells to commence construction of the different pond designs, as well as a control pond to support infiltration measurement analysis. Each of the trial ponds are 25m by 25m and the ultimate berm height will be 1.5m.

The 30 tonne excavator is operating efficiently on the Lake and has excavated the first berm lift for all of the trial ponds. Upon completion of construction of the ponds, test work will be performed to determine the optimal pond design to contain brine leakage. Subsequent to the end of the quarter, the Company filled the first pond in the series. Initial leakage is relevant to the conditioning of the pond.

Environmental Studies

An experienced Western Australian environmental consultancy company, Phoenix Environmental Sciences Pty Ltd, undertook a detailed flora and vegetation survey and a Level 1 terrestrial fauna survey at the Lake Wells Project. The work was focused on providing information to support environmental approval for the Pilot Plant

The study covered an area of approximately 1,777 hectares. The surveys included a detailed desktop review, systematic quadrat and transect sampling and mapping of vegetation communities, fauna habitat assessment and mapping, and targeted searches for significant flora, vertebrate fauna and short range endemic invertebrates (SREs).

No threatened or priority flora were recorded in the survey.

Suitable habitat was identified for several conservation significant vertebrate species; however, no highly restricted habitats were recorded.

Pilot Plant

As announced on 20 April 2017, Amec Foster Wheeler have been engaged to prepare an analysis of the alternatives for the Company to construct a Pilot Plant at the Goldfields Salt Lakes Project.

International brine and salt processing experts Carlos Perucca Processing Consulting Ltd (CPPC) and AD Infinitum Ltd (AD Infinitum) are also engaged for the Study.

Substantial progress continues on pond and trench design, mass balance modelling, process flowsheet design, major equipment quotations, costings and transportation alternative studies.

Process Testwork

The Company continues a range of process development testwork to enhance the Lake Wells process model.

Site Evaporation Trial

A large scale, continuous Site Evaporation Trial (SET) continued at Lake Wells to refine process design criteria for the halite evaporation ponds and subsequent harvest salt ponds. The SET has to date processed approximately 215 tonnes of brine and produced 3.4 tonnes of harvest salts.

With the onset of winter, the evaporation rate and harvest salt production has decreased in line with expectations. Approximately 1,800kg of harvest salt was harvested in April and May, at an average potassium grade of 7%. Optimum harvests have recorded potassium grades up to 9.9%. Harvest salts have been transported to Perth and are currently being processed at the Bureau Veritas laboratory for grading and preparation for further processing. The harvest salts recovered from the SET contain approximately 50% Kainite (KMg(SO₄)Cl.3(H2O)), a potassium double salt which the Company has previously successfully processed into SOP.

Process Testwork -  Saskatchewan Research Council (SRC)

The Company has engaged Saskatchewan Research Council (SRC) in Saskatoon, Canada to further optimise the attrition, flotation, conversion and crystallisation process for production of SOP from harvest salts. SRC are global experts in the refinement and testing of salt based processes, particularly in the area of potash resources. 

The aims of the work at SRC are to validate and refine the process parameters used in the process flowsheet for the production of commercial grade SOP, including feed composition analysis, flotation system arrangement and process plant recovery factors.

The harvest salts sent to both SGS and SRC for processing have undergone XRD analysis to identify the key salt crystals in the sample. A 90kg sample of Lake Wells harvest salts was despatched to SRC for testwork. The sample contains 57.1% Kainite which is within the expected range for harvest salts at the Lake Wells operation and ideal for processing and conversion to SOP.

Process Testwork - SGS Laboratories

SGS laboratories in Perth have also been engaged to process a further 200kg of salt harvested from the Lake Wells Site Evaporation Trial. This new test work program includes some process refinements from previous work and is expected to produce a substantial quantity of SOP product samples for evaluation and further testwork.

LAKE BALLARD

Lake Ballard is located in the Goldfields region of Western Australia approximately 140km north of Kalgoorlie. SLP's holding comprises 788km² of granted and 66km² of exploration license applications, substantially covering the Lake Ballard playa. The Company recently completed a heritage clearance survey over the area, and has now initiated a comprehensive exploration program and continued process testwork.

Surface Aquifer Exploration Program

After the successful completion of the surface aquifer exploration program at Lake Wells, the Company mobilised an 8.5 tonne amphibious excavator to Lake Ballard to gather geological and hydrological data about the shallow brine aquifer hosted by the Quaternary Alluvium stratigraphic sequence in the upper levels of the Lake.

The aim of the program is to evaluate the geology of the shallow Lake Bed Sediments, and to undertake pumping trials to provide estimates of the potential brine yield from trenches in the shallow sediment.

The excavator program will also provide important geological and geotechnical information for potential siting and construction of trenches and on-lake brine evaporation ponds.

Three transects of test pits have been completed in the eastern portion of Lake Ballard that have revealed a varied stratigraphy. The shallow test pits, most less than 3.5m, have mainly encountered clayey lacustrine sediments with minor groundwater inflows; however, there have been a number of test pits that encountered higher groundwater inflow associated with zones of indurated and laminated clayey sediments and karstic calcrete (a limestone). Short-term groundwater inflows associated with test pits in the calcrete are between 10 to 15 L/sec. The distribution of the calcrete will continue to be resolved with test pit investigations, but its nature is cavernous and is considered prospective for trenching development. Deeper test pits to a depth of 6m are planned to fully penetrate the calcrete for improved hydraulic assessment of its long-term yield potential.  

Sampling Program and Reconnaissance Work

During the quarter, the Company undertook further surface brine sampling of the near surface aquifer at both Lake Ballard and Lake Marmion. To date the average potassium grade for samples taken for Lake Ballard is 1,793Mg/L and at Lake Marmion the average potassium grade is 1,783Mg/L.

Process Development Testwork

Two bulk evaporation trials of Lake Ballard brine were conducted at Bureau Veritas, following on from the initial trial reported in the March Quarter. The feed brines for the trials (see table below) were extracted at different locations on the Lake and during a period of high rainfall and give an indication of the different crystallisation pathways possible when dilution and other effects produce variable brine chemistry. The specifications of the feed samples represented in the table below:

Table 1: Brine Chemistry of Feed Brines

The main conclusions from the trials were:

·      High purity halite (>97% on a dry basis) is produced initially in substantial quantities;

·      There is a clear transition to production of double salts;

·      Significant potassium-magnesium double salts are produced in the final harvest phase (>90% evaporation), with speciation to be confirmed by XRD analysis. It is anticipated these salts will be readily amenable for processing into SOP and potential co-products, in a similar process to Lake Wells.

Due to the different feed chemistry observed in these bulk trials, different evaporation pathways were observed. In trials Bulk 1 and Bulk 2 the evaporation pathway, following bulk halite removal, favours kainite production immediately. Magnesium sulphate, in these cases, is co-produced with the double salts. Mineralogy work on the harvested salts showed that the composition was largely magnesium sulphate and potassium bearing salts (kainite and carnallite). Additional evaporation trials are being conducted to further define the evaporation pathway.

The graphs below show the sharp transition from halite dominated salts to sulphate mixed salts for the two bulk trials.

Mineralogy results from these two trials the Company will assist in developing a strategy to maximise the potential co-product streams from Lake Ballard. 

CORPORATE

Placement Raising A$17.6 million

The Company completed a placement of 41,000,000 ordinary shares at an issue price of A$0.43 (25 pence) to a range of strategic, institutional and sophisticated investors in Australia and overseas raising a total of A$17.6m (£10.25m) before costs.

Proceeds from the placement will be used to accelerate the Company's exploration programs at the GSLP.

Experienced Chemical Engineer Strengthens Board

The Company appointed Mr Bryn Jones as a Non-Executive Director, Mr Jones is a Chemical Engineer with over 20 years management experience in industrial processing in commercial and mining operations around the world, including potash and phosphate projects. Mr Jones has been closely involved with the development of the Goldfields Salt Lakes Project to date, as a senior consultant and Project Manager.

Competent Persons Statement

The information in this Announcement that relates to Exploration Results, or Mineral Resources for Lake Wells, Lake Ballard and Lake Marmion is extracted from the report entitled 'Work Accelerates at the Goldfields Salt Lakes Project' dated 20 June 2017.  The information in the original ASX Announcement that related to Exploration Results, or Mineral Resources for Lake Wells, Lake Ballard and Lake Marmion 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 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 Announcement that relates to Process Testwork Results is extracted from the report entitled 'Work Accelerates at the Goldfields Salt Lakes Project' dated 20 June 2017.  The information in the original ASX Announcement that related to Process Testwork Results is based on, and fairly represents, information compiled by Mr Bryn Jones, BAppSc (Chem), MEng (Mining) who is a Fellow of the AusIMM, a 'Recognised Professional Organisation' (RPO) included in a list promulgated by the ASX from time to time. Mr Jones is a Director of Salt Potash Limited. Mr Jones 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 Jones 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 the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement

Table 2 - Summary of Exploration and Mining Tenements

As at 30 June 2017, the Company holds interests in the following tenements:

Australian Projects:

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