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SASKATOON, SK, May 14, 2021 /CNW/ - Karnalyte Resources Inc.
("Karnalyte" or the "Company") (TSX: KRN) today
announced its financial results and corporate highlights for the
first quarter ended March 31,
During the first quarter of 2021, the Company focused on the
activities surrounding the strategic review that was initiated in
2020 including analysis, valuation and market sounding activities
for the Wynyard Potash Project, review and analysis of the proposed
nitrogen project (the "Proteos Nitrogen Project"), and
external/independent review of the pre-feasibility study completed
internally with assistance from the Company's strategic partner,
Gujarat State Fertilizers and Chemicals ("GSFC").
The Company has been in contact with multiple potential partners
for the Wynyard Potash Project. The Company has also been in
contact with several potential partners for the Proteos Nitrogen
Project. Discussions with these potential partners are ongoing.
Management expects to provide an update as to these discussions and
the conclusions of the strategic review in the coming weeks.
POTASH - MARKET UPDATE
The agricultural industry is showing strength worldwide, with
strong crop prices increasing demand for fertilizer. The
supply/demand gap for potash appears to be tightening as signalled
by recent modest price increases. Overall, the prospects for
increases in potash prices are positive given these factors and an
overall positive outlook for commodities. The Company continues to
closely monitor the global market conditions for potash.
NITROGEN – MARKET UPDATE
With respect to nitrogen, strength in the agricultural industry
worldwide, strong crop prices and the resulting affordability of
fertilizer to growers coupled with some global production outages
has resulted in significant increases to nitrogen prices. The
Company continues to monitor the market conditions for nitrogen
OUTLOOK FOR 2021
During the second quarter of 2021, the Company plans to complete
the strategic review that was initiated in 2020 and solidify a
strategic direction for the Company. The Company expects to
announce the results of this over the coming weeks. It will also be
necessary in 2021 for the Company to spend time and financial
resources in dealing with various court actions commenced against
2021 FIRST QUARTER RESULTS
At March 31, 2021, the Company had
cash of $3.3 million and positive net
working capital of $3.1 million and
no debt. The Company has adequate cash to fund any existing
commitments in 2021 as well as to meet short term operating and
capital requirements. The Company is considering strategic
alternatives as the ability of the Company to continue as a going
concern will require further equity issuances or other forms of
financings. Karnalyte's First Quarter 2021 Financial Statements and
Managements' Discussion and Analysis are available at www.sedar.com
and on Karnalyte's website at www.karnalyte.com.
The following information has been summarised from the Company's
Condensed Interim Unaudited Financial Statements.
Net and comprehensive
Basic and diluted per
ABOUT KARNALYTE RESOURCES INC.
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 construction ready 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.
ABOUT THE WYNYARD POTASH
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.
ABOUT THE PROTEOS NITROGEN PROJECT
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.
ABOUT GUJARAT STATE FERTILIZERS & CHEMICALS
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.
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.sedar.com).
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.
SOURCE Karnalyte Resources Inc.