KRN Admin

March 25, 2024

Not for distribution to U.S. news wire services or dissemination in the United States.

SASKATOON, SK (CNW- March 25, 2024) – Karnalyte Resources Inc. (“Karnalyte” or the “Company“) (TSX: KRN) today announced its financial results and corporate highlights for the financial year ended December 31, 2023.


In 2023, Karnalyte continued work on the update to its NI 43-101 Compliant Technical Report including additional work to identify cost efficiencies, optimize construction and operation plans and enhance project sustainability.


Market Update – The market conditions for potash softened in 2023 but remain positive. While capacity in Russia and Belarus following the Russian invasion of Ukraine are returning to normal, new projects in this region are still expected to face significant delays as compared to pre-sanction timelines. And in the long-term, demand is expected to stay strong especially for Canadian potash as continued geopolitical uncertainty make the Saskatchewan region an attractive supply jurisdiction.


In January of 2022, the Company announced the appointment of Wood PLC (“Wood”), a leading global consulting and engineering company, as lead author of an update to its NI 43-101 compliant technical report (“Technical Report” or “Report”). Wood was appointed after a significant improvement in the market conditions for potash which began in 2021 and continued through 2022 and 2023.

Karnalyte has made diligent progress on this important step toward construction of its Wynyard Potash Project, despite unforeseen challenges that have resulted in delays.

There has been significant growth in Western Canada’s economic activity over the past two years, and this, in conjunction with supply chain constraints impacting suppliers worldwide is, among other factors, causing delays to the update to the Technical Report. In conjunction with the update Karnalyte is also investigating certain capital cost efficiencies, opportunities to enhance sustainability and working towards getting more comfort on the assumptions used given the current market and economic conditions.  In furtherance of these efforts, in the second quarter Karnalyte tasked Wood PLC with undertaking additional evaluation of costs savings related to the compaction, drilling and insulation areas of the potash operation. Significant progress was made during this evaluation during the last half of the year and to date. Karnalyte will provide a further update as appropriate once the Technical Report is finalized.

“Karnalyte continues to focus on advancing the update to the NI 43-101 Compliant Technical Report and has continued making steady progress, despite challenges the mining industry is facing beyond our control and the Company’s desire to move forward in a responsible way.” said Danielle Favreau, interim Chief Executive Officer of Karnalyte. “The Company remains committed to following best practices as we work through this critical step, which will serve as a strong foundation for our Wynyard Potash Project.”

To date, Karnalyte has achieved a number of key milestones in relation to the update to the Report. This includes engaging industry leading solution mining and engineering firm ERCOSPLAN ingenieurgesellschaft Geotechnik und Bergbau mbH (“ERCOSPLAN”), which provided Karnalyte with a positive review of core samples, and confirmation from Saskatchewan’s Ministry of Environment that Karnalyte’s previous Environmental Impact Study approval from 2013 remains valid.


The Proteos Nitrogen Project remains under consideration as part of Karnalyte’s future and may diversify our business by adding a second fertilizer product line. The Proteos Nitrogen Project is a proposed regional-scale nitrogen fertilizer plant to be located in central Saskatchewan, with a nameplate capacity of 700 metric tonnes per day (“mtpd”) ammonia and 1,200 mtpd urea. Our primary target market is local, independent wholesalers within a ~400-kilometre radius of Saskatoon, Saskatchewan, with a secondary target market of Midwest USA wholesalers near the Canadian border. There were no significant developments to report on this project in 2023.


In February of 2024, the Company retained IR Labs, a leading investor relations firm in Canada to provide investor relations services. Danielle Favreau, Karnalyte’s Chief Executive Officer stated, “We are pleased to retain IR Labs as part of our strategy to increase business development activities and enhance communication with investors – both existing investors and outreach aimed at growing our shareholder base. Our strategy includes engaging in investor webinars and other events with a goal to communicate the strength of Karnalyte and its projects and to outline the opportunities for growth to potential investors.”


the Company plans to complete the update to its NI 43-101 technical report, to continue to work on identifying cost efficiencies, optimizing construction and operation plans, and enhancing project sustainability. Furthermore, the Company plans to increase business development activities to seek out and attract investment and strategic partners to move one or both Company’s projects forward to development.


During the year ended December 31, 2023, the Company’s focus was on updating its NI 43-101 Compliant Technical Report. On December 31, 2023, the Company had cash of $2.3 million, a positive working capital of $2.1 million, and no debt.

The following information has been summarised from the Company’s audited financial statements. Karnalyte’s 2023-year end financial statements, management’s discussion and analysis, and annual information form are available at www.sedarplus.ca or on the Company’s website at www.karnalyte.com.

Selected annual results
(CAD $ thousands)
 Year ended December 31
Total revenue
Interest and other income1336219
Net and comprehensive loss(1,422)(1,728)(2,193)
Basic and diluted per share(0.03)(0.04)(0.05)
Total current assets2,7164,2092,498
Total assets8,3789,8838,393
Total current liabilities572628884
Total liabilities1,8912,0062,630
Total shareholders’ equity6,4877,8775,763


Karnalyte Resources Inc. is a development stage company focused on two fertilizer products, potash and nitrogen, to be produced and manufactured in Saskatchewan. Karnalyte owns the Wynyard Potash Project, with planned phase 1 production of 625,000 tonnes per year (“TPY”) of high grade granular potash, and two subsequent phases of 750,000 TPY each, taking total production up to 2.125 million TPY. Karnalyte is also exploring the development of the Proteos Nitrogen Project, which is a proposed small-scale nitrogen fertilizer plant with a nameplate production capacity of approximately 700 metric tonnes per day (“MTPD”) of ammonia and approximately 1,200 MTPD of urea, and a target customer market of independent fertilizer wholesalers in Central Saskatchewan. Also under consideration is the secondary magnesium compounds, on Canada’s critical minerals list.


The Wynyard Potash Project is a construction ready solution mining potash project located in Wynyard, Saskatchewan, with planned phase 1 production of 625,000 TPY of high grade granular potash, and two subsequent phases of 750,000 TPY each, taking total production up to 2.125 million TPY. All environmental permits remain valid, preliminary detailed engineering is complete, and the existing offtake agreement with Gujarat State Fertilizers & Chemicals Limited remains in effect. Further development is dependent on improved potash prices and obtaining financing.


The Proteos Nitrogen Project is an advanced stage development project consisting of a proposed small-scale nitrogen fertilizer plant to be located in Central Saskatchewan, having a nameplate production capacity of approximately 700 MTPD of ammonia and approximately 1,200 MTPD of urea, and designed to produce two products – anhydrous ammonia (82-0-0) and granular urea (46-0-0). Karnalyte’s primary target market is independent local Saskatchewan fertilizer wholesalers within a 400-kilometer radius of Saskatoon, Saskatchewan. A secondary target market is the US Midwest fertilizer wholesalers near to the Canadian – United States border. The proposed plant would be the first greenfield nitrogen fertilizer plant built in Canada in the last 26 years.


Gujarat State Fertilizers & Chemicals Limited (“GSFC”) is a leading Indian Fortune 500 chemicals and fertilizer company that has been in business for more than 50 years. GSFC currently operates one ammonia plant that was commissioned in the year 2000, and two urea plants that were established in 1969, at its fertilizer production complex in Vadodara, Gujarat State, India.

As the Company’s strategic partner and single largest shareholder, GSFC remains committed to the Company and the Wynyard Potash Project and is fully supportive of the Company pursuing the development of the Proteos Nitrogen Project. GSFC has also confirmed to the Company that it will continue to support the structuring of the most cost-effective financing package for the development of the Wynyard Potash Project, as GSFC has consistently offered to the Company since becoming a shareholder in 2013.

For further information, please contact:

Danielle Favreau

Interim CEO
Karnalyte Resources Inc.
1(639) 398-6478


Certain information included in this press release is forward-looking, within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “plan”, “intend”, “forecast”, “future”, “guidance”, “may”, “predict”, “project”, “should”, “strategy”, “target”, “will” or similar words or phrases suggesting future outcomes or language suggesting an outlook.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Karnalyte, including, without limitation, assumptions as to: projected economics for the Company’s planned potash production facility, the confirmation in an independent feasibility study of Karnalyte’s assumptions regarding the technical and economic viability of the Proteos Nitrogen project, the ability of Karnalyte to obtain financing on terms favourable to the Company, and the ability of Karnalyte to receive, in a timely manner, the necessary approvals from the Company’s board of directors, shareholders, regulatory authorities, and other third parties.

Karnalyte believes the expectations and assumptions upon which the forward-looking information is based are reasonable. However, no assurance can be given that these assumptions and expectations will prove to be correct. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Without limiting the generality of the foregoing, readers are cautioned that the Company has not received a feasibility study prepared by a third party with respect to the Proteos Nitrogen project.

Actual results may vary from the forward-looking information presented in this press release, and such variations could be material. Risk factors and uncertainties could cause actual results to vary from the forward-looking information in this press release. Additional information on forward-looking statements and other factors that could affect Karnalyte’s operations and financial results are included in documents on file with Canadian securities regulatory authorities and may be accessed through the Company’s profile on the SEDAR+ website (www.sedarplus.ca).

These forward-looking statements are made as of the date hereof and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Company assumes no obligation to update or revise them to reflect new events or circumstances.