Mar. 9, 2011 (Canada NewsWire Group) --
CALGARY, March 9 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the year ended December 31, 2010.
"2010 was marked with significant company milestones including a successful initial public offering and the conversion of a portion of our property to a lease, which enables us to proceed with commercial potash development," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Karnalyte continues to execute on its development strategy by advancing the feasibility study and Environmental Impact Statement, and by further expanding our exploration program."
Karnalyte's 2010 Year End Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com.
Selected Highlights
- Received the Preliminary Assessment which includes NI 43-101 Resource Estimate estimating the Indicated Mineral Resource and Inferred Mineral Resource for the Wynyard Carnallite Project to equal approximately 56.2 and 186.3 million tonnes of potash, respectively;
- Completed IPO in December 2010, with exercise of over-allotment option in January 2011, raising gross proceeds of more than $64 million;
- Selected world-renowned engineering firm, Foster Wheeler, to lead the feasibility study, in conjunction with GeoEngineers Inc. and ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH; and
- Received approval from the Government of Saskatchewan's Ministry of Energy and Resources to convert 16,825 acres of Karnalyte's Permit KP 360 area to a Subsurface Mineral Lease (KLSA-010).
Outlook
Over the short term, the Corporation will continue to focus on the following key initiatives:
- Pursuing independent third party reports, including the feasibility study and the Environmental Impact Statement by the end of fiscal 2011;
- Analyzing the potential to enhance its resource base through additional drilling of high-potential targets;
- Characterizing its mineral holdings through additional 3D seismic analysis;
- Obtaining independent assays of product samples recovered from the pilot test facility; and
- Optimizing product quality in cooperation with machinery and equipment suppliers.
| KARNALYTE RESOURCES INC. | ||||
| BALANCE SHEETS | ||||
| ASSETS | ||||
| As at | December 31, | December 31, | ||
| 2010 | 2009 | |||
| Current assets | ||||
| Cash | $ 59,000,457 | $ 2,490,823 | ||
| Restricted cash | 125,000 | - | ||
| Investments | - | 6,147,759 | ||
| Accounts receivable | 43,276 | 279,283 | ||
| Prepaid expenses | 312,865 | 216,949 | ||
| 59,481,598 | 9,134,814 | |||
| Mineral property and deferred exploration and development costs | 10,572,459 | 6,791,804 | ||
| Capital assets | 459,376 | 396,938 | ||
| Intangible assets | 97,026 | 75,215 | ||
| TOTAL ASSETS | $ 70,610,459 | $ 16,398,771 | ||
| LIABILITIES | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | $ 2,288,123 | $ 680,795 | ||
| Current portion of capital lease liability | 6,904 | - | ||
| 2,295,027 | 680,795 | |||
| Capital lease liability | 6,904 | - | ||
| Asset retirement obligations | 37,129 | - | ||
| Total liabilities | 2,339,060 | 680,795 | ||
| SHAREHOLDERS' EQUITY | ||||
| Share capital | 71,705,231 | 18,331,857 | ||
| Warrants and rights | 1,273,605 | 293,494 | ||
| Contributed surplus | 306,978 | 6,161 | ||
| Deficit | (5,014,415) | (2,913,536) | ||
| Total shareholders' equity | 68,271,399 | 15,717,976 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | $ 70,610,459 | $ 16,398,771 | ||
| KARNALYTE RESOURCES INC. | |||
| STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT | |||
| For the Years Ended December 31, | |||
| 2010 | 2009 | ||
| Expenses | |||
| General and administrative | $ 2,840,196 | $ 1,805,852 | |
| Depreciation and accretion | 52,371 | 20,618 | |
| Loss on investments | 277 | 4,844 | |
| Loss on foreign exchange | 3,076 | 32,747 | |
| Stock-based compensation | 318,672 | - | |
| Interest and other income | (38,750) | (48,729) | |
| Loss before income taxes | (3,175,842) | (1,815,332) | |
| Income taxes | |||
| Future income tax reduction | 1,074,963 | - | |
| Net and comprehensive loss | $ (2,100,879) | $ (1,815,332) | |
| Deficit, beginning of year | (2,913,536) | (1,098,204) | |
| Deficit, end of year | $ (5,014,415) | $ (2,913,536) | |
| Loss per share | |||
| Basic and diluted | $ (0.16) | $ (0.17) | |
| KARNALYTE RESOURCES INC. | ||||
| STATEMENTS OF CASH FLOWS | ||||
| For the years ended December 31, | ||||
| 2010 | 2009 | |||
| Cash Flows from (used in) Operating Activities | ||||
| Net loss | $ (2,100,879) | $ (1,815,332) | ||
| Items not involving cash: | ||||
| Depreciation and accretion | 52,371 | 20,618 | ||
| Stock-based compensation | 318,672 | - | ||
| Loss on temporary investments | 277 | 13,305 | ||
| Loss on foreign exchange | 3,076 | 16,884 | ||
| Future income tax reduction | (1,074,963) | - | ||
| Change in non-cash working capital | 233,405 | (101,798) | ||
| (2,568,041) | (1,866,323) | |||
| Cash Flows from (used in) Investing Activities | ||||
| Increase in restricted cash | (125,000) | - | ||
| Decrease (increase) in temporary investments | 6,147,482 | (4,050,009) | ||
| Additions to intangible assets | (35,524) | (64,511) | ||
| Additions to capital assets | (85,979) | (129,718) | ||
| Additions to mineral property | (3,744,835) | (5,324,994) | ||
| Change in non-cash working capital | 981,241 | 270,511 | ||
| 3,137,385 | (9,298,721) | |||
| Cash Flows from (used in) Financing Activities | ||||
| Issuance of common shares | 60,380,600 | 14,627,850 | ||
| Share issue costs | (4,970,007) | (1,121,956) | ||
| Change in non-cash working capital | 532,773 | - | ||
| 55,943,366 | 13,505,894 | |||
| Effect of foreign exchange on cash | (3,076) | (16,884) | ||
| Change in cash and cash equivalents | 56,509,634 | 2,323,966 | ||
| Cash and cash equivalents, beginning of year | 2,490,823 | 166,857 | ||
| Cash and cash equivalents, end of year | $ 59,000,457 | $ 2,490,823 | ||
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 impact. The Corporation plans to construct and operate a solution mining facility capable of producing 2 million tonnes of potash per year. Karnalyte owns a 100% interest in Permit KP 360 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. 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
Julius Brinkman, Vice-President Corporate Development
Telephone: (403) 995-6560
E-mail: info@karnalyte.com
Website: www.karnalyte.com