Salt Lake Potash : Trenching at Lake Wells Confirms Brine Production Potential

ASX ANNOUNCEMENT‌‌‌

25 January 2017 TRENCHING AND PUMP TESTING AT LAKE WELLS CONFIRM BRINE PRODUCTION POTENTIAL OF THE SHALLOW AQUIFER

Salt Lake Potash Limited (SO4 or the Company) is pleased to advise that initial pump testing of trial trenches at the Lake Wells Project (the Project) has returned excellent results, substantially increasing the Company's confidence in the hydrogeological model for extraction of brine from trenches for production of Sulphate of Potash (SOP) by solar evaporation.

Surface Aquifer Exploration Program Highlights:

• An 8.5 tonne amphibious excavator has completed 207 shallow test pits and 8 trial trenches at the Lake Wells Project.

• Sustained pump tests have been completed on two trenches in the southern part of the Lake. Highlights include:

  • Flow rates above 1 litre per second (L/s) from a 50m long trial trench recorded during the duration of the test.‌

  • Modelled annual flow rates of 1.1 - 1.3L/s based on a 1 year simulated model of the results recorded during the 50m trial trench pump test.

• The results from these initial trench pump tests have confirmed the potential of trenching to produce sufficiently large volumes of brine and will provide valuable data for the pre-feasibility study.

• The Company gained valuable geotechnical information about the material stability and the competency of the open trenches while brine flowed into them from the surrounding aquifer.

• The trench excavating process also yielded valuable geological, hydrogeological and geotechnical results for siting and designing on-lake evaporation ponds.

• Work is ongoing on both the surface aquifer, and drilling and test pumping of the deeper paleochannel aquifer, to refine the brine production model for the Project.

CEO Matt Syme commented "We are very pleased with the results of the initial trenching campaign at Lake Wells. The sustained pump tests results provide a high level of confidence in the potential for substantial brine production from shallow trenches. The test pits and trenches are also providing a wealth of very important geological and geotechnical data which will be very important for the ongoing feasibility studies for the Project." Enquiries: Matthew Syme

Telephone: [phone]

Surface Aquifer Exploration Program

In November 2016, the Company mobilised an 8.5 tonne amphibious excavator to gather further geological and hydrological data about the shallow brine aquifer hosted by the Quaternary Alluvium stratigraphic sequence in the top 20 meters of Lake Wells.

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 is also providing important geological and geotechnical information for potential siting and construction of on-lake brine evaporation ponds.

The program to date included the excavation of 207 test pits in three tranches over the lake playa (refer to Figure 1). The test pits were generally excavated to 1 meter x 1.5 meters and a depth of 4 meters and are representative of the shallow stratigraphy of the Lake playa.

Trench P3a

Trench P2a TrenchP2b

Trench P1d Trench P1c

Trench P1b

Trench P1e

Trench P1a

Figure 1: Map of Lake Wells Trench Locations

The test pits were logged for geology, hydrology and brine chemistry during the excavation process. Particle Size Distribution (PSD) samples and brine samples were taken from each pit.

The test pits were also subject to short duration pumping tests in order to analyse the recovery of the brine levels in the test pits.

Based on the geology and hydrological information from the test pits, a number of sites for excavation of larger test trenches were chosen, reflecting the variability of the geology and hydrogeology encountered in the lake playa sediments.

A total of eight trenches were excavated on the chosen sites, each approximately 4.5 meters deep and between 25 meters to 50 meters long. Benching was used to provide geotechnical stability for the trench sidewalls and the resulting trenches are approximately 5m wide at the surface and 1m wide at the base.

Five of the trenches were located in the southern end of the Lake Wells, in close proximity to the Evaporation Trial Site (see Figure 3).

To date two trenches have been test pumped (P1a and P1c in Figure 3).

Figure 2: Test Trench Excavation at Lake Wells

Evaporation Trial Site

Figure 3: Trench and Test Pits in the southern part of Lake Wells

Geology of the shallow sediments

Based on the widespread test pits the shallow aquifer geology is reasonably uniform across the Lake. The shallow sediment is generally composed of Cenozoic (Quaternary - Holocene) brown to white to red, unconsolidated, gypsiferous sand, silt and clay with a strong overprint of ferric oxides from 0.5 to around 3 - 8m depth. Dominated by sub-angular, well sorted, very fine to medium quartz sand, the sand commonly grades progressively to a more silt and clay dominated sediment with depth, with occasional interbedded sand lenses. Authigenic prismatic and tabular gypsum is common, growing in discontinuous, vein-like structures throughout the unit, with a large variety of crystal sizes. Minor, medium-grained lithic fragments can be found throughout this gypsum.