An anonymous director reports
KARNALYTE RESOURCES INC. ANNOUNCES 2022 SECOND QUARTER RESULTS
Karnalyte Resources Inc. has released its financial results and corporate highlights for the second quarter ended June 30, 2022.
Update to the National Instrument 43-101-compliant technical report
Based on an improvement in potash commodity price trends that began in 2021, Karnalyte, as previously announced, made the decision to proceed with an update to its NI 43-101-compliant technical report as part of its strategic development plan, and has maintained its focus on this important step throughout the second quarter of 2022. Given the impact of potash supply constraints following Russia's invasion of Ukraine in February, 2022, present potash price forecasts remain favourable, further supporting this decision.
Over the past six months, Karnalyte has taken concrete steps in advancing the update to the NI 43-101-compliant technical report, including its announcement of leading global consulting and engineering firm Wood PLC serving as independent lead author. As part of the technical report update, the company has also engaged industry-leading solution mining and engineering firm Ercosplan ingenieurgesellschaft Geotechnik und Bergbau mbH to assist with the project, including the update of the mineral resource estimation and the mine plan for brine field development as the basis for the mineral reserve estimate.
Karnalyte continues making headway on this necessary step for construction of the potash project. Since its announcement, the update to the technical report has completed a number of key milestones, including a positive review of core samples by Ercosplan, as well as discussion and confirmation by the Saskatchewan government's Ministry of Environment that Karnalyte's 2013 environmental assessment approval remains valid (subject to the same conditions when first approved).
As Saskatchewan continues to be an attractive jurisdiction for miners, the increase in commodity prices that has resulted in significant growth in Western Canada's economic activity, along with the overall supply chain constraints impacting suppliers worldwide, have resulted in some delays to the update to the technical report. Karnalyte will look to maximize the benefits of the current market conditions in the meantime, and provide a further update as appropriate when the technical report is finalized.
Appointment of consulting firm for environmental, social, governance strategy development
In line with a number of strategic plans that build on Karnalyte's environmental advantages and governance advancements, the company has engaged Karri Howlett Consulting Inc. (KHCI) to prepare an environmental, social and governance strategy report. The report will carefully analyze key focus areas per Karnalyte stakeholders, and provide practical recommendations under each of the environmental, social and governance categories. Seeking to enhance Karnalyte's existing policies and practices, the resulting recommendations will help ensure the company is up to date and in line with current and peer ESG trends, and that it continues operating in the best interests of its business and stakeholders to further strengthen its strategic position in the potash sector.
On June 22, 2022, the company announced the launch of a rights offering as part of its capital raise strategy in order to provide a viable and attractive investment opportunity for existing shareholders. On Aug. 3, the company announced the successful completion of this rights offering, following the expiry on July 29, 2022, raising a total of $3,862,000 in proceeds as additional capital for, among other things, the development of the potash project. Karnalyte is pleased to announce participation of Gujarat State Fertilizers and Chemicals Ltd. (GSFC) in the rights offering, a major agriculture sector business in India, providing additional investment in Karnalyte and further demonstrating its continuing commitment and support for the company and the potash project.
Outlook for 2022
Karnalyte will maintain momentum for the third quarter of 2022. The company will continue to focus on the completion of the update to the NI 43-101-compliant technical report, completion of the ESG strategy report for recommendations in developing a robust ESG strategy, and efforts to further support the raising of project financing and project development.
2022 second quarter results
At June 30, 2022, the company had cash of $1-million, positive net working capital of $600,000 and no debt. Karnalyte's second quarter 2022 financial statements and management's discussion and analysis are available on SEDAR and on Karnalyte's website.
The information noted herein has been summarized from the company's condensed interim unaudited financial statements.
About Karnalyte Resources Inc.
Karnalyte Resources 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 2,125,000 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.
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