Ms. Danielle Favreau reports

KARNALYTE RESOURCES INC. ANNOUNCES 2023 FIRST QUARTER RESULTS

Karnalyte Resources Inc. today released its financial results and corporate highlights for the first quarter ended March 31, 2023.

During the first quarter of 2023, Karnalyte continued to work diligently to advance the company's Potash project toward development.

Karnalyte remains focused on the update to its National Instrument 43-101-compliant technical report, a key precursor to any mine construction. In the most recent quarter, this included work done by Karnalyte and its advisers to identify cost-efficiencies, optimize construction and operation plans, and enhance project sustainability.

Wood PLC, a leading global consulting and engineering company, is the independent lead author of the update. Industry-leading solution mining and engineering firm Ercosplan ingenieurgesellschaft Geotechnik und Bergbau mbH is assisting 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.

In addition, the company's Proteos nitrogen project remains under consideration as part of Karnalyte's future and may diversify the company's business by adding a second fertilizer product line.

Outlook for 2023

In 2023, 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; and to increase business development activities to seek out and attract investment and strategic partners to move one or both of the company's projects forward to development.

2023 first quarter results

At March 31, 2023, the company had cash of $3.5-million and positive net working capital of $3.2-million and no debt. Karnalyte's first quarter 2023 financial statements and managements' discussion and analysis are available at SEDAR and on Karnalyte's website.

The information in the attached table 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 of high-grade granular potash, and two subsequent phases of 750,000 tonnes per year each, taking total production up to 2,125,000,000 tonnes per year. 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 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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