RNS Number : 8664H

Salt Lake Potash Limited

05 August 2019

5 August 2019

AIM/ASX Code: SO4

SALT LAKE POTASH LIMITED

Lake Way Project Financing Secured

Issue of Equity

Highlights:

· Project financing of USD150m to be provided by Taurus Funds Management for the Lake Way Project

· The financing facility provides up to c.AUD214m, or approximately 90% of the AUD237m capital estimate detailed in the recent Scoping Study

· The debt is a staged facility to enable the rapid development of the Lake Way Project. The funding is intended to be split as follows:

o Stage 1 Facility - USD30m (c.AUD43m)

o Project Development Facility - USD150m (c.AUD214m)

· The Stage 1 Facility will be utilised for early construction works and for the completion of the Bankable Feasibility Study, which is due in the September quarter

· Stage 1 Facility agreements executed and first draw down expected to be available Q3, 2019

Salt Lake Potash Limited (Salt Lake Potash or the Company) is pleased to announce that the Company has mandated Taurus Funds Management (Taurus or the Lenders), to provide USD150m project financing for the Lake Way Project.

This arrangement with Taurus is an important step in progressing the development and financing of the Lake Way Project. Following recent equity raises totalling AUD27.65m, the staged project financing enables the Company to complete the Bankable Feasibility Study (BFS), conclude the acquisition of strategic tenements from Blackham Resources Limited (Blackham) announced on 23 July 2019 and continue early construction works to advance the Lake Way Project prior to the drawdown of the main Project Development Facility (PDF).

Salt Lake Potash is rapidly developing the Lake Way Project and has made substantial construction progress over the past few months. Significant milestones for not only the Company but also for the wider SOP industry in Australia have included the completion of the first Commercial Scale on-lake evaporation pond and the commencement of the evaporation process with the dewatering of the super saturated brine from Williamson Pit.

The Stage 1 facility will enable the Company to progress works into the second stage of construction being the continued expansion of the extensive on-lake evaporation pond and trench network.

Stage 1 Facility of USD30m (c.AUD42m):

The Stage 1 Facility will provide initial access to funding for early construction works for the Lake Way Project and completion of the BFS. This Facility will partly fund civil works including the construction of key evaporation ponds, which will provide the initial harvest salts to enable the feed for plant commissioning. Given the lead-time required to generate harvest salts, this Facility is a crucial part of accelerating Lake Way's development towards commercial SOP production.

The facility also includes USD5m to partially fund the transaction with Blackham, available upon completion of that transaction.

Taurus has obtained investment committee approval for the Stage 1 Facility and the financing agreements have been executed. Drawing will occur upon satisfaction of conditions precedent typical for financings of this nature, which are well progressed.

Project Development Facility (PDF) of USD150m (c.AUD214m)

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

The Company has been in discussions with potential financiers since the beginning of the year with multiple proposals received, and the superior Taurus proposal ultimately selected. Taurus has completed substantial due diligence on the Lake Way Project and once the Stage 1 Facility is drawn, will work closely with the Company throughout the BFS in order to ensure the PDF documentation and Conditions Precedent are progressed in a timely manner.

Taurus Funds Management as manager of the Taurus Mining Finance Fund L.P., Taurus Mining Finance Annex Fund L.P. and Taurus Mining Finance Fund No.2 L.P, is a privately-owned mining finance fund manager that provides debt and equity funding to the mining sector globally. Taurus has significant experience in the financing of mining projects globally across the commodity spectrum including the precious metals, base metals, steel making raw materials and industrial metals space.

Argonaut acted as Salt Lake Potash's financial advisor in relation to this debt financing.

Salt Lake Potash's Chief Executive Office, Tony Swiericzuk, said:

"This is an exciting development for Salt Lake Potash and its stakeholders, providing a clear runway for the Company to progress the construction of the Lake Way Project.

Salt Lake Potash is delighted to have entered into this long-term partnership with Taurus and we look forward to working with them through our Bankable Feasibility Study and as we continue the construction at Lake Way. Taurus' commitment is a strong endorsement for the Lake Way Project and the exceptional team that has been built"

Taurus' Chief Investment Officer, Michael Davies, said:

"Taurus is pleased to be a part of the development of another important Australian mining project, with a well credentialed management team and Board that will seek to deliver benefits to the local communities and people of Western Australian for many years to come."

Summary of Key Terms:

Table 1: Key Stage 1 Facility Terms

Facility Amount	US$30m - $5m conditional upon completion of Blackham Transaction
Tenor	12 months
Interest Rate	9.75% per annum
Options	9,000,000 options
Royalty	0.5% Net Revenue Royalty
Conditions Precedent	Customary CP's for a facility of this kind

Table 2: Key PDF Terms

Facility Amount	US$150m
Tenor	6 years (2-year availability period + 4-year repayment period)
Interest Rate	9.0% per annum on drawn amounts
Options	7,500,000 options
Royalty	1.5% Net Revenue Royalty
Conditions Precedent	Including repayment of Stage 1 Facility, off-take agreements in a form acceptable to Lender and other customary CP's for a facility of this kind

Completion of Institutional Placement to Fund Acquisition

The Institutional placement of 10.58 million Salt Lake Potash ordinary shares of no par value ("Ordinary Shares") to Fidelity International at A$0.70 each to raise A$7.4 million before costs, as announced on 23 July 2019, will settle today, with completion to occur on 6 August 2019.

Settlement and dealings

Application has been made to the AIM Market of the London Stock Exchange ("AIM") for the 10,582,857 Ordinary Shares which rank pari passu with the Company's existing issued Ordinary Shares, to be admitted to trading. Dealings on AIM are expected to commence at 8:00am on or around 6 August 2019.

Issue of Remuneration Shares

The Company will also issue 266,258 Ordinary Shares nil paid to key executives as part of remuneration entitlements under their service agreements following the expiry of vested performance rights on 31 July 2019. The Company was unable to convert the vested performance rights into shares prior to expiry due to restrictions on the executives acquiring shares whilst in possession of inside information. Application has been made for the admission of these Ordinary Shares to AIM with admission requested for 8 August 2019.

Total Voting Rights

For the purposes of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (DTRs), following issue of the 10,582,857 Ordinary Shares and the 266,258 Ordinary Shares referred to above, the Company will have 255,986,980 Ordinary Shares in issue with voting rights attached. The Company holds no shares in treasury. This figure of 255,986,980 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the ASX Listing Rules or the DTRs.

The Company will also seek shareholder approval at the AGM expected to be held in November 2019 to issue 266,258 shares to Managing Director, Mr Tony Swiericzuk following the expiry of an equivalent number of vested performance rights that have also expired due to dealing restrictions. A Notice of Annual General Meeting will be released in due course.

An Appendix 3B, issued under the ASX Listing Rules relating to the issue of options in accordance with the Stage 1 Facility Agreement on 5 August 2019 is set out below.

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

Tony Swiericzuk/Clint McGhie	Salt Lake Potash Limited	Tel: +61 8 6559 5800
Jo Battershill	Salt Lake Potash Limited	Tel: +44 (0) 20 7478 3900
Colin Aaronson/Richard Tonthat/Ben Roberts	Grant Thornton UK LLP (Nominated Adviser)	Tel: +44 (0) 20 7383 5100
Derrick Lee/Beth McKiernan	Cenkos Securities plc (Joint Broker)	Tel: +44 (0) 131 220 6939
Rupert Fane / Ingo Hofmaier / Ernest Bell	Hannam & Partners (Joint Broker)	Tel: +44 (0) 20 7907 8500

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.

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement,

application for quotation of additional securities

and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

SALT LAKE POTASH LIMITED

ABN

98 117 085 748

We (the entity) give ASX the following information.

Part 1 ‑ All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1	+Class of +securities issued or to be issued		(a) Options

2	Number of +securities issued or to be issued (if known) or maximum number which may be issued		(a) 9,000,000

3	Principal terms of the +securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)		(a) Unlisted options exercisable at A$0.702 each on or before 4 August 2024

4	Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities? If the additional +securities do not rank equally, please state: · the date from which they do · the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment · the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment		(a) N/A - unlisted

5	Issue price or consideration		(a) Nil

6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)		(a) Options issued in accordance with the terms of the Stage 1 Facility Agreement

6a	Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b - 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i		Yes

6b	The date the security holder resolution under rule 7.1A was passed		30 November 2018

6c	Number of +securities issued without security holder approval under rule 7.1		9,000,000

6d	Number of +securities issued with security holder approval under rule 7.1A		Nil

6e	Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)		Nil

6f	Number of +securities issued under an exception in rule 7.2		Nil

6g	If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.		Not Applicable

6h	If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements		Not Applicable

6i	Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A - complete Annexure 1 and release to ASX Market Announcements		7.1 - 14,089,911 7.1A - 24,403,769

7		+Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.	5 August 2019

			Number	+Class
8		Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)	245,137,865	Ordinary Shares

		Number	+Class
9	Number and +class of all +securities not quoted on ASX (including the +securities in section 2 if applicable)	7,500,000 10,000,000 750,000 1,000,000 250,000 500,000 750,000 400,000 9,375,000 1,700,000 2,750,000 3,000,000 9,000,000 20,412,500	Class B Performance Shares Class C Performance Shares Incentive Options exercise price $0.50, expiry date 29 April 2020 Incentive Options exercise price $0.60, expiry date 29 April 2021 Incentive Options exercise price $0.40, expiry date 30 June 2021 Incentive Options exercise price $0.50, expiry date 30 June 2021 Incentive Options exercise price $0.60, expiry date 30 June 2021 Incentive Options exercise price $0.70, expiry date 30 June 2021 Unlisted Options exercise price $0.85, expiry date 30 June 2023 Incentive Options exercise price $0.60, expiry date 1 November 2023 Incentive Options exercise price $1.00, expiry date 1 November 2023 Incentive Options exercise price $1.20, expiry date 1 November 2023 Unlisted Options exercise price $0.85, expiry date 30 June 2023 Performance rights which are subject to various performance conditions to be satisfied prior to the relevant expiry dates between 31 December 2019 and 1 November 2023

10	Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Not Applicable

Part 2 ‑ Pro rata issue

11	Is security holder approval required?	Not Applicable

12	Is the issue renounceable or non-renounceable?	Not Applicable

13	Ratio in which the +securities will be offered	Not Applicable

14	+Class of +securities to which the offer relates	Not Applicable

15	+Record date to determine entitlements	Not Applicable

16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	Not Applicable

17	Policy for deciding entitlements in relation to fractions	Not Applicable

18	Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7.	Not Applicable

19	Closing date for receipt of acceptances or renunciations	Not Applicable


20	Names of any underwriters	Not Applicable

21	Amount of any underwriting fee or commission	Not Applicable

22	Names of any brokers to the issue	Not Applicable

23	Fee or commission payable to the broker to the issue	Not Applicable

24	Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders	Not Applicable

25	If the issue is contingent on security holders' approval, the date of the meeting	Not Applicable

26	Date entitlement and acceptance form and offer documents will be sent to persons entitled	Not Applicable

27	If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	Not Applicable

28	Date rights trading will begin (if applicable)	Not Applicable

29	Date rights trading will end (if applicable)	Not Applicable

30	How do security holders sell their entitlements in full through a broker?	Not Applicable

31	How do security holders sell part of their entitlements through a broker and accept for the balance?	Not Applicable

How do security holders dispose of their entitlements (except by sale through a broker)?

Not Applicable

+Issue date

Not Applicable

Part 3 ‑ Quotation of securities

You need only complete this section if you are applying for quotation of securities

Type of +securities

(tick one)

(a)

+Securities described in Part 1

(b)

All other +securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35		If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

36		If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37		A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38	Number of +securities for which +quotation is sought	Not Applicable

39	+Class of +securities for which quotation is sought	Not Applicable

40	Do the +securities rank equally in all respects from the +issue date with an existing +class of quoted +securities? If the additional +securities do not rank equally, please state: · the date from which they do · the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment · the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment	Not Applicable

41	Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another +security, clearly identify that other +security)	Not Applicable

		Number	+Class
42	Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

Quotation agreement

1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.

2 We warrant the following to ASX.

· The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.

· There is no reason why those +securities should not be granted +quotation.

· An offer of the ⁺securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

· Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

· If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.

3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: ........................................................... Date: 5 August 2019

(Director/Company secretary)

Print name: Clint McGhie

== == == == ==

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

MSCLIFFETDIEIIA ]]>