May 12, 2011 (Canada NewsWire Group) --
CALGARY, May 12 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the quarter ended March 31, 2011.
"This quarter, Karnalyte accomplished several key goals that are essential to the progression of the Wynyard Carnalite Project," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "The Subsurface Mineral Lease we obtained encompasses the area for the Environmental Impact Statement and feasibility study that Foster Wheeler, GeoEngineers and ERCOSPLAN will complete this year. The drilling licenses we received enable us to continue the exploration and development of our lease and permit holdings so that we may prepare for the construction of a commercial potash facility and pursue additional potash resources."
Karnalyte's First Quarter 2011 Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com.
Selected Highlights
- Closed the over-allotment option granted in connection with its December 2010 initial public offering in January 2011, raising an additional $4,042,000 for total gross proceeds of more than $64 million;
- Selected engineering firm, Foster Wheeler, in January 2011, to lead the feasibility study, in conjunction with GeoEngineers Inc. and ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH;
- Completed two drill holes required for the feasibility study, which are currently undergoing caprock analysis;
- Received approval from the Government of Saskatchewan's Ministry of Energy and Resources in February 2011 to convert 16,825 acres of Karnalyte's Permit KP 360 area to a Subsurface Mineral Lease (KLSA-010); and
- Received seven additional drilling licenses from the Province of Saskatchewan, permitting drilling and exploration of the Corporation's potash resources. To date, three of the seven drill holes have been completed.
Outlook
Over the short term, the Corporation will continue to focus on the following key initiatives:
- Pursuing completion of a third party feasibility study and filing the Environmental Impact Assessment;
- Finalizing the current drilling program and obtaining full analysis of drill cores;
- Continue exploration and development of 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 SHEET | |||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| As at | March 31, 2011 | December 31, 2010 | January 1, 2010 | ||||
| Current assets | |||||||
| Cash | $ 56,384,392 | $ 59,000,457 | $ 2,490,823 | ||||
| Investments | - | - | 6,147,759 | ||||
| Trade and other receivables | 328,786 | 43,276 | 279,283 | ||||
| Prepaid expenses | 814,275 | 312,865 | 216,949 | ||||
| 57,527,453 | 59,356,598 | 9,134,814 | |||||
| Restricted cash | 125,000 | 125,000 | - | ||||
| Capital assets | 1,371,939 | 459,376 | 396,938 | ||||
| Intangible exploration and evaluation and other assets | 15,286,412 | 10,748,278 | 6,867,019 | ||||
| TOTAL ASSETS | $ 74,310,804 | $ 70,689,252 | $ 16,398,771 | ||||
| LIABILITIES | |||||||
| Current liabilities | |||||||
| Trade and other payables | $ 2,386,860 | $ 2,288,123 | $ 680,795 | ||||
| Current portion of capital lease liability | 6,904 | 6,904 | - | ||||
| 2,393,764 | 2,295,027 | 680,795 | |||||
| Capital lease liability | 5,178 | 6,904 | - | ||||
| Provisions | 117,034 | 116,039 | - | ||||
| Total liabilities | 2,515,976 | 2,417,970 | 680,795 | ||||
| SHAREHOLDERS' EQUITY | |||||||
| Share capital | 76,621,317 | 72,313,190 | 17,771,007 | ||||
| Warrants and rights | 1,260,227 | 1,273,605 | 293,494 | ||||
| Contributed surplus | 2,872,662 | 2,359,264 | 6,161 | ||||
| Deficit | (8,959,378) | (7,674,777) | (2,352,686) | ||||
| Total shareholders' equity | 71,794,828 | 68,271,282 | 15,717,976 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | $ 74,310,804 | $ 70,689,252 | $ 16,398,771 | ||||
| KARNALYTE RESOURCES INC. | ||||
| STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | ||||
| Three months ended March 31, | ||||
| (Unaudited) | ||||
| 2011 | 2010 | |||
| Expenses | ||||
| General and administrative | $ 810,425 | $ 610,796 | ||
| Depreciation and amortization | 56,656 | 10,221 | ||
| Share-based payment expense | 458,204 | 1,374,281 | ||
| 1,325,285 | 1,995,298 | |||
| Other (income) and expense | ||||
| Other income | (60,668) | (15,864) | ||
| Other expense | 19,984 | 2,165 | ||
| Net other income | (40,684) | (13,699) | ||
| Net and comprehensive loss | (1,284,601) | (1,981,599) | ||
| Loss per share | ||||
| Basic and diluted | $ (0.06) | $ (0.16) | ||
| KARNALYTE RESOURCES INC. | ||||||
| STATEMENTS OF CASH FLOWS | ||||||
| Three months ended March 31, | ||||||
| (Unaudited) | ||||||
| 2011 | 2010 | |||||
| Cash Flows from (used in) Operating Activities | ||||||
| Net loss for the period | $ (1,284,601) | $ (1,981,599) | ||||
| Items not involving cash: | ||||||
| Depreciation and amortization | 56,656 | 10,221 | ||||
| Share-based payment expense | 458,204 | 1,374,281 | ||||
| Net other income | (40,684) | (13,699) | ||||
| Interest and other income received | 60,668 | 11,736 | ||||
| Changes in non-cash working capital: | ||||||
| Trade and other receivables | (286,206) | (16,988) | ||||
| Trade and other payables | 51,210 | (97,252) | ||||
| Prepaid expenses | 13,179 | 2,630 | ||||
| (971,574) | (710,670) | |||||
| Cash Flows from (used in) Investing Activities | ||||||
| Additions to intangible assets | (4,372,419) | (1,090,998) | ||||
| Additions to capital assets | (959,736) | (55,436) | ||||
| Decrease in temporary investments | - | 139,541 | ||||
| (5,332,155) | (1,006,893) | |||||
| Cash Flows from (used in) Financing Activities | ||||||
| Issuance of common shares | 4,564,897 | 11,500 | ||||
| Share issue costs | (858,244) | - | ||||
| 3,706,653 | 11,500 | |||||
| Effect of foreign exchange on cash | (18,989) | (2,165) | ||||
| Change in cash | (2,616,065) | (1,708,228) | ||||
| Cash, beginning of period | 59,000,457 | 2,490,823 | ||||
| Cash and cash equivalents, end of period | $ 56,384,392 | $ 782,595 | ||||
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. Using a staged approached to potash plant construction, the Corporation plans to operate a solution mining facility that will initially produce 500,000 tonnes of potash per year, increasing to 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