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CALGARY, May 14, 2012 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the quarter ended March 31, 2012.
"Karnalyte's near-term plan is to establish an office in Saskatchewan and assemble an engineering team to commence detailed engineering activities," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "As detailed engineering work advances, we intend on initiating site preparation activities before the end of the year."
As at March 31, 2012, the Company had net working capital of $31,390,734 compared to $55,133,689 at March 31, 2011, including $32,032,143 and $56,384,392, respectively, in cash. Karnalyte's First Quarter 2012 Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com.
Outlook
Over the short term, the Corporation will continue to focus on the following key initiatives:
- Pursuing a strategic partnership for potential project financing, off-take arrangements and/or marketing assistance;
- Completing its pre-feasibility level study on production and marketing of magnesium compounds;
- Hiring of internal engineering staff for detailed engineering activities and commencement of operations at its Saskatoon office;
- Working with the Government of Saskatchewan to obtain the environmental approvals required for construction;
- Pursuing debt and/or equity financing to obtain the total funding required to bring the project forward to plant and mine construction; and
- Optimizing product quality in cooperation with machinery and equipment suppliers.
| KARNALYTE RESOURCES INC. | |||||||
| STATEMENTS OF FINANCIAL POSITION | |||||||
| ASSETS | |||||||
| As at | March 31, | December 31, | |||||
| 2012 | 2011 | ||||||
| Current assets | |||||||
| Cash | $ | 32,032,143 | $ | 34,251,529 | |||
| Trade and other receivables | 104,106 | 711,774 | |||||
| Prepaid expenses | 103,087 | 99,807 | |||||
| Deferred financing expenses | 405,201 | 102,893 | |||||
| 32,644,537 | 35,166,003 | ||||||
| Restricted cash | 375,000 | 375,000 | |||||
| Capital assets | 3,135,400 | 3,223,921 | |||||
| Intangible exploration and evaluation and other assets | 38,307,124 | 37,082,201 | |||||
| ASSETS | $ | 74,462,061 | $ | 75,847,125 | |||
| LIABILITIES | |||||||
| Current liabilities | |||||||
| Trade and other payables | $ | 1,248,625 | $ | 2,365,895 | |||
| Capital lease liability | 5,178 | 6,904 | |||||
| 1,253,803 | 2,372,799 | ||||||
| Provisions | 181,454 | 185,617 | |||||
| Total liabilities | 1,435,257 | 2,558,416 | |||||
| SHAREHOLDERS' EQUITY | |||||||
| Share capital | 83,048,638 | 82,105,674 | |||||
| Warrants and rights | 934,950 | 934,950 | |||||
| Contributed surplus | 3,162,562 | 3,276,698 | |||||
| Deficit | (14,119,346) | (13,028,613) | |||||
| Total shareholders' equity | 73,026,804 | 73,288,709 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 74,462,061 | $ | 75,847,125 | |||
| See accompanying notes to the financial statements. | |||||||
| KARNALYTE RESOURCES INC. | ||||||
| STATEMENTS OF COMPREHENSIVE LOSS | ||||||
| For the three months ended March 31, | ||||||
| 2012 | 2011 | |||||
| Expenses | ||||||
| General and administrative | $ | 798,307 | $ | 810,425 | ||
| Depreciation and amortization | 193,345 | 56,656 | ||||
| Share-based payments | 130,521 | 458,204 | ||||
| Other income | (25,678) | (22,480) | ||||
| Transaction costs | 108,984 | - | ||||
| 1,205,479 | 1,302,805 | |||||
| Finance income | (117,775) | (38,188) | ||||
| Finance expense | 3,029 | 19,984 | ||||
| Net finance income | (114,746) | (18,204) | ||||
| Comprehensive loss | (1,090,733) | (1,284,601) | ||||
| Loss per share | ||||||
| Basic and diluted | $ | (0.05) | $ | (0.06) | ||
| See accompanying notes to the financial statements. | ||||||
| KARNALYTE RESOURCES INC. | ||||||||||
| STATEMENTS OF CASH FLOWS | ||||||||||
| For the three months ended March 31, | ||||||||||
| 2012 | 2011 | |||||||||
| Cash Flows from (used in) Operating Activities | ||||||||||
| Loss for the period | $ | (1,090,733) | $ | (1,284,601) | ||||||
| Add/deduct: | ||||||||||
| Depreciation and amortization | 193,345 | 56,656 | ||||||||
| Share-based payment expense | 130,521 | 458,204 | ||||||||
| Net finance and other income | (140,424) | (40,684) | ||||||||
| Interest and other income received | 143,453 | 60,668 | ||||||||
| Changes in non-cash working capital: | ||||||||||
| Trade and other receivables | 231,153 | (286,206) | ||||||||
| Trade and other payables | (928,463) | 51,210 | ||||||||
| Prepaid expenses | 13,920 | 13,179 | ||||||||
| (1,447,228) | (971,574) | |||||||||
| Cash Flows from (used in) Investing Activities | ||||||||||
| Additions to intangible assets | (1,284,257) | (4,372,419) | ||||||||
| Additions to capital assets | (79,539) | (959,736) | ||||||||
| (1,363,796) | (5,332,155) | |||||||||
| Cash Flows from (used in) Financing Activities | ||||||||||
| Issuance of common shares | - | 4,564,897 | ||||||||
| Exercise of options | 886,000 | - | ||||||||
| Share issue costs | - | (858,244) | ||||||||
| Deferred financing costs | (292,234) | - | ||||||||
| 593,766 | 3,706,653 | |||||||||
| Effect of foreign exchange on cash | (2,128) | (18,989) | ||||||||
| Change in cash | (2,219,386) | (2,616,065) | ||||||||
| Cash, beginning of period | 34,251,529 | 59,000,457 | ||||||||
| Cash, end of period | $ | 32,032,143 | $ | 56,384,392 | ||||||
| See accompanying notes to the financial statements. |
|
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| KARNALYTE RESOURCES INC. | ||||||||||||||
| STATEMENTS OF CHANGES IN EQUITY | ||||||||||||||
| Three months ended March 31, | ||||||||||||||
| 2012 | 2011 | |||||||||||||
| Number | Amount | Number | Amount | |||||||||||
| Share Capital | ||||||||||||||
| Balance, beginning of period | 21,418,536 | $ | 82,105,674 | 20,093,740 | $ | 72,313,190 | ||||||||
| Common shares issued | - | - | 470,000 | 4,042,000 | ||||||||||
| Common shares issued on exercise of share options | 133,200 | 666,000 | 32,600 | 163,000 | ||||||||||
| Common shares issued on exercise of broker warrants | - | - | 33,502 | 288,117 | ||||||||||
| Transfer of contributed surplus | - | 276,964 | - | 55,325 | ||||||||||
| Transfer on broker warrants exercised | - | - | - | 85,158 | ||||||||||
| Share issue costs | - | - | - | (325,473) | ||||||||||
| Balance, end of period | 21,551,736 | 83,048,638 | 20,629,842 | 76,621,317 | ||||||||||
| Warrants and Rights | ||||||||||||||
| Balance, beginning of period | 368,528 | 934,950 | 585,624 | 1,273,605 | ||||||||||
| Broker warrants and rights issued | - | - | 28,200 | 71,780 | ||||||||||
| Broker warrants and rights exercised | - | - | (33,502) | (85,158) | ||||||||||
| Balance, end of period | 368,528 | 934,950 | 580,322 | 1,260,227 | ||||||||||
| Contributed Surplus | ||||||||||||||
| Balance, beginning of period | 3,276,698 | 2,359,264 | ||||||||||||
| Share-based payment expense | 162,828 | 568,723 | ||||||||||||
| Transfer to share capital on exercise | (276,964) | (55,325) | ||||||||||||
| Balance, end of period | 3,162,562 | 2,872,662 | ||||||||||||
| Deficit | ||||||||||||||
| Balance, beginning of period | (13,028,613) | (7,674,777) | ||||||||||||
| Loss for the period | (1,090,733) | (1,284,601) | ||||||||||||
| Balance, end of period | (14,119,346) | (8,959,378) | ||||||||||||
| Total Shareholders' Equity | ||||||||||||||
| Balance, end of period | $ | 73,026,804 | $ | 71,794,828 | ||||||||||
| See accompanying notes to the financial statements. | ||||||||||||||
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. Using a staged approached 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. More particularly, this press release contains statements concerning the Corporation's future operations. 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. 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, 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 maybe 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.
Robin Phinney, President & Chief Executive Officer
Ron Love, Chief Financial Officer & Vice-President Finance
Telephone: (403) 995-6560
E-mail: info@karnalyte.com
Website: www.karnalyte.com