Karnalyte Resources Inc. announces 2012 year end results

CALGARY, March 18, 2013 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the year ended December 31, 2012.

"In 2012, Karnalyte focused on initial site preparation and detailed engineering activities, as well as preparing the Wynyard Carnallite Project's Environmental Impact Statement (EIS) for submission to the Saskatchewan Ministry of Environment (MOE)," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Subsequent to year-end, we received EIS approval from the MOE, entered into a strategic partnership and off-take agreement with Gujarat State Fertilizers and Chemicals and closed the associated $44.7 million private placement. These achievements have made the Corporation the most advanced junior potash developer, which puts Karnalyte in a strong position as we pursue additional Project funding."

As at December 31, 2012, the Company had net working capital of $22.3 million compared to $32.8 million at December 31, 2011, including $25.1 million and $34.3 million, respectively, in cash. Karnalyte's 2012 Year End 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:

  • Advancing site preparation and detailed engineering activities to enable commencement of full construction activities at the site;
  • Pursuing debt and/or equity financing to obtain the total funding required to bring the Project forward to plant and mine construction;
  • Pursuing additional strategic partnerships that complement the arrangement with Gujarat State Chemicals and Fertilizers; and
  • Hiring personnel required to construct the plant and mine.

 
KARNALYTE RESOURCES INC.
 
STATEMENTS OF FINANCIAL POSITION
             
ASSETS            
             
As at   December 31,   December 31,
    2012   2011
Current assets            
  Cash   $ 25,114,959   $ 34,251,529
  Trade and other receivables     225,363     711,774
  Prepaid expenses     128,927     99,807
  Deferred financing costs     843,897     102,893
      26,313,146     35,166,003
Restricted cash       375,000     375,000
Capital assets     6,404,557     3,223,921
Intangible exploration and evaluation and other assets     43,197,551     37,082,201
             
ASSETS   $ 76,290,254   $ 75,847,125
             
LIABILITIES            
             
Current liabilities            
  Trade and other payables   $ 3,996,019   $ 2,365,895
  Capital lease liability     -     6,904
      3,996,019     2,372,799
Provisions     149,956     185,617
Total liabilities     4,145,975     2,558,416
             
SHAREHOLDERS' EQUITY            
             
Share capital     87,473,052     82,105,674
Warrants and rights     -     934,950
Contributed surplus      4,905,686     3,276,698
             
Deficit     (20,234,459)     (13,028,613)
Total shareholders' equity     72,144,279     73,288,709
             
LIABILITIES AND SHAREHOLDERS' EQUITY   $ 76,290,254   $ 75,847,125
             

       
     
 
KARNALYTE RESOURCES INC.
 
STATEMENTS OF COMPREHENSIVE LOSS
 
For the years ended December 31,
         
    2012   2011
Expenses    
     
  General and administrative   $  4,156,447   $ 3,312,688
  Depreciation and amortization     747,590     535,444
  Share-based payments     1,919,477     1,722,291
  Restructuring expenditures     895,645     -
  Transaction costs     108,984     696,408
  Other income and expenses     (178,458)
  (536,484)
      7,649,685     5,730,347
  Finance income     (448,237)     (401,245)
  Finance expense     4,398
  24,734
Net finance income     (443,839)     (376,511)
             
Comprehensive loss     (7,205,846)
  (5,353,836)
             
Loss per share            
  Basic and diluted   $ (0.33)
$ (0.26)
               

 

 
 
   
 
KARNALYTE RESOURCES INC.
 
STATEMENTS OF CASH FLOWS
 
For the years ended December 31,
               
      2012   2011
Cash Flows from (used in) Operating Activities              
Net loss for the period     $ (7,205,846)   $ (5,353,836)
Add/deduct:              
  Depreciation and amortization       747,590     535,444
  Share-based payment expense       1,919,477     1,722,291
  Net finance and other income        (622,297)     (376,511)
  Interest and other income received       635,007     391,061
Changes in non-cash working capital:              
  Trade and other receivables       98,393     (255,113)
  Trade and other payables       (438,270)     1,118,733
  Prepaid expenses       (29,120)     (12,253)
        (4,895,066)     (2,230,184)
               
Cash Flows from (used in) Investing Activities              
Additions to intangible assets       (3,467,662)     (26,589,103)
Additions to capital assets       (3,847,304)     (3,278,718)
Change in restricted cash       -     (250,000)
        (7,314,966)     (30,117,821)
               
Cash Flows from (used in) Financing Activities              
Issuance of common shares       -     4,042,000
Exercise of options and warrants       3,613,731     4,347,999
Share issue costs       -     (775,078)
Deferred financing costs       (539,786)     (2,893)
        3,073,945     7,612,028
               
Effect of foreign exchange on cash       (483)     (12,951)
Change in cash       (9,136,570)     (24,748,928)
Cash, beginning of period       34,251,529     59,000,457
Cash and cash equivalents, end of period     $ 25,114,959   $ 34,251,529
               

 

 
     
 

 
KARNALYTE RESOURCES INC.
                   
STATEMENTS OF CHANGES IN EQUITY
                       
Years ended December 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     261,115     735,874   609,500     3,060,100
  Common shares issued on exercise of broker warrants     309,053     2,657,856   245,296     1,507,899
                         
  Transfer from contributed surplus on options exercised     -     1,188,128   -     1,097,522
  Transfer from warrants on broker warrants exercised     -     785,520   -     410,435
  Share issue costs     -     -   -     (325,472)
                         
Balance, end of period     21,988,704     87,473,052   21,418,536     82,105,674
                       
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     (309,053)     (785,520)   (245,296)     (410,435)
Broker warrants and rights expired     (59,475)     (149,430)   -     -
                         
Balance, end of period     -     -   368,528     934,950
                       
Contributed Surplus                      
Balance, beginning of period           3,276,698         2,359,264
  Share-based payment expense           2,804,663         2,014,956
  Transfer to share capital on exercise           (1,188,128)         (1,097,522)
  Option adjustments           (136,977)         -
  Broker warrants expired           149,430         -
Balance, end of period           4,905,686         3,276,698
                       
Deficit                      
Balance, beginning of period           (13,028,613)         (7,674,777)
  Loss for the period           (7,205,846)         (5,353,836)
Balance, end of period           (20,234,459)         (13,028,613)
                       
Total Shareholders' Equity                      
Balance, end of period         $ 72,144,279       $ 73,288,709
                       

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.

SOURCE: Karnalyte Resources Inc.

For further information:

Robin Phinney, President & Chief Executive Officer
Ron Love, Executive Vice-President Finance &Chief Financial Officer
Telephone: (403) 995-6560
E-mail: info@karnalyte.com
Website: www.karnalyte.com


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