CALGARY, March 6, 2015 /CNW/ - Karnalyte Resources Inc.
("Karnalyte" or the "Corporation") (TSX: KRN) noted
the documents issued yesterday from dissident shareholder
Robin L. Phinney. Based on a
preliminary review of the documents, Karnalyte notes a number of
distortions, mischaracterizations and confusing statements. For
example, Mr. Phinney promotes "an aggressive capital conservation
strategy" on the first page of his letter and then proposes
significant capital spends in the form of "proof of concept"
studies, construction of production wells and further engineering
work, on the following page.
In addition, at the time the Board of Directors of Karnalyte
terminated Mr. Phinney, he argued that the Corporation should focus
on the development of magnesium. Also, Mr. Phinney spent
shareholder capital on this strategy, yet (at least in the
documents distributed) he is silent on this now.
The Corporation will address these and other concerns when it
files its management information circular in due course. Further,
the Corporation believes that Mr. Phinney may be breaching his
agreements with the Corporation, including his Termination
Agreement. The Corporation reserves the right to seek associated
damages.
The Board of Directors remains committed to evaluating all
realistic alternatives for enhancing shareholder value. As
Karnalyte noted in its press release of February 11, 2015, it also remains open to
engaging with the dissident in constructive dialogue regarding
credible value-creation plans. To date, Mr. Phinney has not
accepted this offer.
The Corporation does not believe that the dissident's hollow
rhetoric, rainbows (as they appear on the cover of the dissident
circular and website) and suggestions of significant capital
expenditures – in lieu of a budget and clear strategy – constitute
a credible plan to create value for shareholders. Rather, Mr.
Phinney has created a sideshow distraction to management's efforts
to enhance shareholder value already underway.
There is no action for shareholders to take at this time.
About Karnalyte Resources Inc.
Karnalyte is engaged in the business of exploration and
development of high quality agricultural and industrial potash and
magnesium products. Karnalyte intends to develop and extract a
carnallite – sylvite mineral deposit through a known solution
mining process at competitive costs and with minimal environmental
impacts. Once financing is obtained to potash plant construction,
the Corporation plans to operate a solution mining facility that
will initially produce 625,000 tonnes of potash per year,
increasing to 2.125 million tonnes of potash per year. Karnalyte
owns a 100% interest in Subsurface Permit KP 360A and Subsurface
Mineral Lease KLSA-010 located near Wynyard, Saskatchewan, comprising a total of
85,126 acres.
Forward-Looking Statements
This press release contains forward-looking statements. The
forward-looking statements contained in this document are based on
certain key expectations and assumptions made by Karnalyte,
including with respect to the Corporation's future operations and
its ability to secure additional financing. Although
Karnalyte believes that the expectations and assumptions on which
the forward-looking statements are based are reasonable, undue
reliance should not be placed on the forward-looking statements
because Karnalyte can give no assurance that they will prove to be
correct. Since forward-looking statements address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, but are not limited to, the failure to obtain necessary
regulatory approvals, failure to obtain necessary financing, risks
associated with the mining industry in general (e.g., operational
risks in development, exploration and production; delays or changes
in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price and exchange rate
fluctuations. Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these 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
SEDAR website (www.sedar.com). The forward-looking statements
contained in this document are made as of the date hereof and
Karnalyte undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE Karnalyte Resources Inc.