Kalium Lakes Limited provided an update with respect to its operational status at the Beyondie SOP Project and broader corporate activities. Borefield & Trenching Operations and Brine Production: As previously announced aggregate brine flow rate from the borefield and trenching operations to the pre-concentration ponds has now been restored to near the 90Ktpa SOP target level. Aggregate brine supply also continues to deliver potassium grades above design targets.

The 120Ktpa expansion drilling program has commenced with twenty-five new production bores planned to be progressively brought online by November this year. The drilling program is scheduled for completion by August, with 9 out of 27 exploration holes and 4 out 25 new production bores completed to date. Pond Operations and KTMS Production: Blockages of the Sunshine transfer pipeline (from the Sunshine preconcentration pond to the primary evaporation ponds) have been substantially cleared and flow rates restored to 83% of design capacity.

This is sufficient to meet brine transfer requirements for March and April as evaporation rates start to decline. Works have commenced on procurement and preparation for installation of the second transfer pipeline. Installation is set to commence in early March and scheduled to be completed during April.

This is expected to provide ample brine transfer capacity to bring all primary evaporation ponds back online and progress brine supply for the eventual 120Ktpa SOP production target. Brine filling of a third primary evaporation train commenced during February, with all five primary evaporation trains forecast to be back in production by the end of May. Pre-concentration ponds are still being operated at approximately 50% capacity and will continue to do so until all primary evaporation ponds are back in production.

As previously announced, it has been confirmed that a consistently higher-grade KTMS supply (`start-up grade'), higher than for normal operations, is required during commissioning. This higher salt feed grade is required to enable the schoenite conversion, flotation, cooling crystallisation, centrifuges and fluid bed dryer to be commissioned at nameplate capacity. Diligence is being exercised in ensuring that a sufficient quantity of the required start-up grade KTMS is harvested before the SOP purification plant is re-started to complete commissioning and commence commercial SOP production.

This diligence requires careful grade control sampling, selective KTMS harvesting practices and robust ROM stockpile management. While most harvested KTMS is expected to eventually be processed through the SOP purification plant during steady state operations, the level of selectivity required for start-up grade KTMS means that sufficient stocks of this particular specification are only expected to be accumulated by June, being predominantly generated from new KTMS produced specifically for this purpose during the next four months. Current processable KTMS inventories are estimated at approximately 131kt, of which 30kt at between 8-9% K (`medium grade') is harvested and stockpiled on the ROM pad, with the balance being in the evaporation ponds and scheduled for harvesting during the next four months.

An additional 44kt of lower grade KTMS is stockpiled on the ROM pad which may be used for future blending during steady state operations. Kalium Lakes continues to work with international potash industry experts to strengthen operating capability and increase understanding of pond chemistry dynamics and harvesting techniques. Forecast long term harvested potassium salt output is not expected to be affected.

Purification Plant and SOP Production: The SOP purification plant is expected to remain idled as the BSOPP establishes a sufficient inventory of start-up grade and processable KTMS before recommencing feed to the plant by June, with commercial SOP sales expected to commence in July 2022. Equipment rectification and optimisation works on the SOP purification plant is 77% complete. These works include rectification of manufacturer defects, as well as changes to key process equipment to improve efficiencies or operability based on lessons learned from initial commissioning efforts.

These works are expected to be completed during March, followed by controlled test runs to verify effectiveness and allow further upgrades, if necessary, prior to the planned plant re-start in June. Some risk remains that equipment performance testing cannot be completed until targeted commercial scale SOP production commences. While the delay in commencement of SOP production and associated sales is disappointing, it is important to note that overall SOP production for CY2022 calendar year is already limited by available KTMS inventory.

This means that any acceleration to the plant start-up date would be expected to offer little benefit to total SOP production and sales for CY2022. Deferring plant start-up until June also brings significant logistical and other risk mitigation benefits in terms of critical commissioning works associated with the plant re-start, which will now take place after the anticipated late March peak of Omicron wave disruptions in Western Australia, providing greater certainty in being able to mobilise international equipment specialists and EBTEC GbR personnel to site. Kalium Lakes continues to be supported, both on site and remotely, by EBTEC through its leading SOP production technical expertise.

The systematic recommencement of SOP purification plant operations as part of the commissioning process is being jointly planned by the Kalium Lakes and EBTEC teams, in conjunction with international experts with SOP processing operations experience. Full nameplate operation of the plant is expected to be facilitated technically by EBTEC in accordance with the performance guarantees it has provided. Commissioning of the compaction plant is expected to follow immediately after successful commissioning of the SOP purification plant.