Karnalyte Resources Inc. announces first quarter 2012 results

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.

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.