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SASKATOON, SK,
June 22, 2022 /CNW/ - Karnalyte
Resources Inc. ("Karnalyte" or the "Company") (TSX:
KRN), is pleased to announce today a number of updates on
initiatives to enhance business operations, raise capital and
increase shareholder value.
"By updating our NI 43-101, embarking on our first-ever ESG
strategy, and raising capital through a rights offering, Karnalyte
is working toward its goal of becoming a low-cost, sustainable
producer of high-quality potash, with the goal of establishing the
next greenfield, environmentally innovative potash mine," said
Danielle Favreau, Interim CEO of
Karnalyte.
Corporate Update on NI 43-101 technical report
As previously announced, based on an improvement in potash
commodity price trends that began in 2021, Karnalyte decided to
proceed with an update to its NI 43-101 compliant technical report
as part of the Company's strategic development plan. And due to the
impact of potash supply constraints following Russia's invasion of Ukraine in February, 2022, present potash
price forecasts continue to support that decision. Over the past 6
months, Karnalyte has been focused on the update to its NI 43-101
compliant technical report, following the 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 ("ERCOSPLAN") 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.
The update to the technical report is progressing, and since its
last update includes key milestones such as a positive review of
core samples by ERCOSPLAN, as well as discussion and confirmation
by Saskatchewan's Ministry of
Environment that Karnalyte's 2013 environmental assessment approval
remains valid (subject to the same conditions when first approved).
The overall supply chain constraints impacting suppliers worldwide,
however, have resulted in some delays for the project at this time.
Karnalyte will provide a further update as appropriate when the
technical report is finalized.
Appointment of consulting firm for ESG strategy
development
In line with a number of strategic plans that build on
Karnalyte's environmental advantages and recent governance
advancements, the Company is pleased to announce its engagement
with Karri Howlett Consulting Inc. ("Karri Howlett
Consulting" or "KHCI") to prepare an Environmental,
Social and Governance ("ESG") strategy report. The report
will seek to enhance Karnalyte's existing policies and practices to
ensure they are up to date and in line with current and peer ESG
trends, and that the Company continues operating in the best
interests of its business and stakeholders.
KHCI will begin with a thorough analysis that identifies key
focus areas for each Karnalyte stakeholder, including the Company's
investors, employees, prospective customers, local communities and
regulators. The consulting firm will then prepare a report that
provides three to five practical recommendations for implementation
by the Company under each of the Environmental, Social and
Governance categories.
"The recommendations to come from the ESG strategy report will
be beneficial to not only the core business, but to our
shareholders and to the local communities we operate in," commented
Ms. Favreau. "We look forward to the strategies identified, which
will help to further Karnalyte's strategic position in the potash
sector and ultimately enhance the value we bring to investors."
Karri Howlett, CFA, is the lead
consultant on this project, with over 20 years of experience in
providing corporate strategy and risk analysis. Ms. Howlett
currently sits on the Board of NexGen Energy as Chair of the ESG
Committee, sits on the Board of Gold Royalty as Chair of the ESG
Committee, serves as Vice-Chair on the board of Saskatchewan Trade
Export Partnership, and sits on the board of March Consulting.
Announcement of Rights Offering to shareholders
Finally, Karnalyte's Board of Directors has approved a rights
offering (the "Rights Offering") as part of the Company's
capital raise strategy in order to provide a viable and attractive
investment opportunity for existing shareholders. The Rights
Offering is to be made only to holders of common shares of record
at the close of business on June 28,
2022 (the "Record Date"). Karnalyte intends to use
the proceeds to advance development of its Wynyard Potash
Project.
"The capital generated from the Rights Offering will go towards
advancing a core Company mission, while providing shareholders with
an attractive and mutually beneficial investment opportunity," said
Ms. Favreau. "We look forward to progressing on the Wynyard Potash
Project and unlocking its full potential."
Karnalyte will issue rights ("Rights") to subscribe for
up to an aggregate of 14,058,282 common shares at a subscription
price of $0.35 per common share,
raising approximately $4,920,398.70
million. The Company will issue one (1) Right for each
common share held. Each three (3) Rights will entitle the holder to
subscribe for one common share of Karnalyte upon payment of the
subscription price of C$0.35 per
common share.
It is expected that the Rights will trade on the Toronto Stock
Exchange under the symbol "KRN.RT" commencing on
June 28, 2022 and will trade until
12:00pm (Toronto time) on July
29, 2022 (the "Expiry Time"), after which time
unexercised Rights will be void and of no value.
Shareholders who fully exercise their Rights under the basic
subscription privilege will be entitled to subscribe for additional
common shares, if available as a result of unexercised Rights prior
to the Expiry Time, and subject to certain limitations as set out
in the Company's Rights Offering circular to be filed on SEDAR
under Karnalyte's profile at www.sedar.com. The Company expects to
close the Rights Offering on or before August 10, 2022.
For more information, please see the Rights Offering Notice and
the Rights Offering Circular available on Karnalyte's website at
www.karnalyte.com and its SEDAR profile at www.sedar.com.
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 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 Company's 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.
FORWARD-LOOKING STATEMENTS
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 Project, the
confirmation in an independent feasibility study of Karnalyte's
assumptions regarding the technical and economic viability of the
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
Board, 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 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.
