Karnalyte Resources is in the process of building a solution mining facility near Wynyard Saskatchewan. Karnalyte’s focus is on the high-grade carnallite and low-grade sylvinite beds at the Wynyard deposit, which can be extracted using a known solution mining process and enable plant construction using “off-the-shelf” equipment. The Company is using a staged approach to potash plant construction that will initially produce 625,000 tonnes of potash per year at completion of the first phase and increase to 2.125 million tonnes of potash per year at the third stage. The result will be production at a competitive cost and with minimal environmental impact.
Karnalyte Resources Inc. became a publicly traded company on December 14, 2010 and is traded on the Toronto Stock Exchange (TSX) under the symbol KRN.
Vision and Strategy
Karnalyte Resources’ vision is to become a leading low-cost producer of high quality, low sodium potash for agricultural and industrial markets. To achieve this, we identified a high quality mineral deposit in the world’s leading potash production jurisdiction. The resource has been defined, permitted and the mine and production plant design has been completed. To move the project into production we have partnered with a major agribusiness company to both finance the mine and secure a long-term offtake agreement.
With these pieces in place, Karnalyte’s vision is close to becoming a reality.
In 2013, GSFC, one of India’s largest fertilizer and industrial chemicals manufacturing companies, made a strategic investment in Karnalyte of approximately $44.7 million, resulting in GSFC holding a 19.98% ownership stake in Karnalyte (the “Private Placement”).
In connection with the Private Placement, Karnalyte and GSFC executed an off-take agreement (the “Offtake Agreement) for GSFC’s purchase of approximately 350,000 tpy from Phase 1. The offtake commences with commercial production from Phase 1 with the result that Karnalyte has secured sales for approximately 56% of its potash production from Phase 1 for approximately 20 years.
The Offtake Agreement also provides GSFC with the option to increase its off-take by 250,000 tpy to 600,000 tpy from the date of commencement of Phase 2 commercial production. The Offtake Agreement provides GSFC the potential to increase its offtake by up to 400,000 tpy from Phase 3 such that the total annual quantity of potash to be sold pursuant to the Offtake Agreement shall be up to 1,000,000 tpy.
The strategic partnership between Karnalyte and GSFC provides Karnalyte with a significant competitive advantage in the marketplace, and is anticipated to provide GSFC with a secure supply of potash for many years to come.
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