KARNALYTE RESOURCES INC. RECEIVES SUBSURFACE MINERAL LEASE FOR WYNYARD CARNALLITE PROJECT

CALGARY, Feb. 28 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced that the Government of Saskatchewan's Ministry of Energy and Resources has approved the conversion of 16,825 acres of Karnalyte's Permit KP 360 area to a Subsurface Mineral Lease (KLSA-010). The Lease enables Karnalyte to proceed with the commercial development of potash mineral resources in the area. The remaining 68,301 acres will continue to be held by Karnalyte under Permit KP 360 and will be available for conversion into leases at appropriate future dates.

"Obtaining this lease from the Ministry represents a significant step forward in the execution of our potash development and commercialization plan," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "The lease will define the area for the development of the Environmental Impact Statement and feasibility study for the production of potash, with an expected initial volume of 500,000 tonnes per year, expanding to 2 million tonnes over 6 years."

In addition to allowing the Corporation to commercially develop the potash mineral resources on the Karnalyte property, the lease removes restrictions on Karnalyte's production of minerals and resources from the lease area and defines an area for consideration in the Environmental Impact Statement and feasibility study.

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 Company 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.

SOURCE Karnalyte Resources Inc.

For further information:

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


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