Ms. Danielle Favreau reports

KARNALYTE RESOURCES INC. ANNOUNCES 2023 SECOND QUARTER RESULTS

Karnalyte Resources Inc. has released its financial results and corporate highlights for the second quarter ended June 30, 2023.

The achievements are a show of the company's commitment to developing its Wynyard potash project, dedication to good governance and continued focus on increasing value for investors.

As previously announced, Karnalyte continues to work on the update to its National Instrument 43-101 compliant technical report, a critical step toward capital investment and eventual construction of the potash project. The company has now tasked leading global consulting and engineering company Wood PLC, the independent lead author of the updated technical report, to undertake additional evaluation of cost savings to ensure maximum value for investors.

The company also announced this quarter the election of a highly qualified new board director, Ritu Malhotra, who will bring valuable expertise in engineering and leadership to the Karnalyte board. In addition to this, Karnalyte achieved a significant lawsuit settlement, enabling it to continue its efforts in advancing company initiatives.

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 costs 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 second quarter results

At June 30, 2023, the company had cash of $2.7-million and positive net working capital of $2.7-million with no debt. Karnalyte's second quarter 2023 financial statements and managements' discussion and analysis are available on SEDAR+ and on Karnalyte's website.

The information 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 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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