Slide 1: Partnering to Build the Next-Generation Potash Producer
PARTNERING TO BUILD THE NEXT-GENERATION TSX : KRN POTASH PRODUCER STRATEGIC PARTNER MARCH 2016
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS TSX : KRN Certain statements in this presentation may constitute "forward-looking" statements which involve known and unknown risks, uncertainties STRATEGIC PARTNER and other factors which may cause the actual results, performance or achievements Karnalyte Resources Inc. (
Slide 3: Agreement in Principle for ~US$700M to Finance Phase 1 of Wynyard Potash Mine
AGREEMENT IN PRINCIPLE FOR ~US$700M TO TSX : KRN FINANCE PHASE 1 OF WYNYARD POTASH MINE STRATEGIC PARTNER • Signed Agreement in Principle with Gujarat State Fertilizers and Chemicals Limited (GSFC) • Fully funds phase 1 of Wynyard potash mine, targeting 625k tonnes per year (“tpy”) production • Back
Slide 4: Agreement in Principle
AGREEMENT IN PRINCIPLE TSX : KRN STRATEGIC • US$500M+ senior secured debt, 20-year term PARTNER – Standby letter of credit from GSFC will be used to secure for Karnalyte a foreign currency loan from a syndicate of Indian banks and financial institutions – This standby letter of credit will act as a
Slide 5: Secured Long-Term Partnership with India's Leading Agribusiness Company
SECURED LONG-TERM PARTNERSHIP WITH INDIA’S TSX : KRN LEADING AGRIBUSINESS COMPANY STRATEGIC PARTNER • Gujarat State Fertilizers and Chemicals Limited is a fertilizer and industrial products manufacturer established in 1962 • Annual revenue of US$835M* • AA+ credit rating • In January 2013, GFSC inve
Slide 6: Supported by State Bank of India
SUPPORTED BY STATE BANK OF INDIA TSX : KRN STRATEGIC PARTNER • India’s largest bank and a Fortune 500 company • Large lender to the greenfield natural resource sector and primary industries • SBI Capital Partners: leading Asia-Pacific investment bank – Lead Arranger in US$23.9B loans 2015 – #4 in Gl
Slide 7: Why Karnalyte?
WHY KARNALYTE? TSX : KRN STRATEGIC • Karnalyte is a “next-generation” potash producer PARTNER • Located in the heart of potash country • 100% granular product with premium qualities and a higher purity (97%+) • Low capex project • Low cost potash producer • Environmentally responsible • Strong strat
Slide 8: Karnalyte Potash Project - Location
KARNALYTE POTASH PROJECT - LOCATION TSX : KRN • Located in the heart of “The Potash Belt of Saskatchewan” STRATEGIC PARTNER • The Karnalyte Potash Project encompasses 100% interest in Subsurface Permit KP 360A and Subsurface Mineral Lease KLSA-010 (Karnalyte has 85,126 acres, or 344 km2 of mineral r
Slide 9: Karnalyte's Premium Potash Product
KARNALYTE’S PREMIUM POTASH PRODUCT TSX : KRN STRATEGIC PARTNER Minimum Grade 97% purity 95% purity Sodium Chloride Content • Less than 1% • 3.5% – 4% Less sodium increases crop yields • Uniform size • Irregular shape – Shape • Spherical shape – compaction process granulation process • Lower caking •
Slide 10: Construction Ready
CONSTRUCTION READY TSX : KRN STRATEGIC PARTNER • Detailed engineering designs in progress • Conceptual layouts for underground and surface facilities have been completed • Environmental Impact Statement approved • Plant site surface has been stripped and ready for construction • Water and disposal w
Slide 11: Karnalyte's Potash Project – Environmental Milestone
KARNALYTE’S POTASH PROJECT – TSX : KRN ENVIRONMENTAL MILESTONE STRATEGIC PARTNER • Saskatchewan Ministry of Environment approved Karnalyte’s Environmental Impact Statement in 2013 • Industry leading environmental program • Karnalyte will have the only potash mine in Saskatchewan that does not produc
Slide 12: Potash Solution Mining Facility
POTASH SOLUTION MINING FACILITY TSX : KRN STRATEGIC • There are 3 potash bearing zones that Karnalyte can solution mine: PARTNER • Patience Lake Member • Belle Plaine Member • Esterhazy Member • Produced brine is processed in an evaporation-crystallization process Brinefield Brine Processing Ground
Slide 13: Construction Ready – Phase 1 Schematic
CONSTRUCTION READY – PHASE 1 SCHEMATIC TSX : KRN • Modular approach STRATEGIC PARTNER Phase 1 Initial 625 ktpy Phase 2 Expansion Option 750 ktpy Phase 3 Expansion Option 750 ktpy Total 2.125 Mtpy • Dry processing portion of Phase 1 surface facility shown 13
Slide 14: Potash Market Fundamentals
POTASH MARKET FUNDAMENTALS TSX : KRN STRATEGIC • Nutrient deficiencies in soils require increased fertilization to PARTNER maintain productivity • Increasing emerging markets results in increasing demand for meat which requires higher grain inputs • Continued market management being undertaken by ma
Slide 15: Potash Demand Continuing to Increase
POTASH DEMAND CONTINUING TO INCREASE TSX : KRN STRATEGIC • Projected annual demand growth of 2.9% per year1 PARTNER Million Tonnes Potassium Chloride (KCI) or Equivalent 100 90 +20% +2.9% 80 70 60 50 40 30 20 10 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Rest of World Ch
Slide 16: The Saskatchewan Potash Picture
THE SASKATCHEWAN POTASH PICTURE TSX : KRN STRATEGIC • The “Potash Belt” in Saskatchewan has exceptionally large, PARTNER high quality deposits of potash • Favourable regulatory regime and taxes, politically stable, strong corporate governance practices • Approximately 45% of Saskatchewan potash expo
Slide 17: Management Team with Proven Skills
MANAGEMENT TEAM WITH PROVEN SKILLS TSX : KRN Karnalyte’s team has decades of experience in designing, constructing and optimizing potash facilities in Saskatchewan, as well as a wealth of knowledge within the capital STRATEGIC PARTNER markets and in raising project financing Robin L. Phinney, P.Eng
Slide 18: Capital and Financial Highlights
CAPITAL AND FINANCIAL HIGHLIGHTS TSX : KRN STRATEGIC PARTNER Share Price Close on March 15, 2016: $4.15 Share Price (52 Week Range): $0.52 – $4.15 Shares Outstanding: 27.5 million Fully Diluted Shares Outstanding: 28.7 million GSFC Ownership: 19.98% Management & Directors Ownership: 16.53% Cash Posi
Slide 19: Karnalyte Resources Inc.
TSX : KRN STRATEGIC PARTNER Karnalyte Resources Inc. 3150B Faithfull Avenue Saskatoon, SK S7K 8H3 investors@karnalyte.com Tel: 1(306)986-1486 www.karnalyte.com