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CALGARY, March 11, 2016 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Company") (TSX: KRN) today announced the filing of restated financial
statements and restated Management's Discussion and Analysis for the
three and nine months ended September 30, 2015 (the "Restatement").
In the course of preparing the Company's consolidated financial
statements for the year ended December 31, 2015 inaccuracies were
discovered in the Company's third quarter financial statements and
Management's Discussion and Analysis for the three and nine months
ended September 30, 2015 (the "Review"). The Company's Board of Directors, upon the recommendation of the
Audit Committee, has determined that the Restatement is required. The
financial results of the Restatement are as follows:
An increase in additions to mineral properties of $151,000 and patents
of $3,000 resulting in an increase in the impairment loss of $154,000
for the three and nine months ended September 30, 2015;
An increase in general and administrative expenses of $204,000 for the
three and nine months ended September 30, 2015;
A decrease in cash of $659,000 as at September 30, 2015; and
A net decrease in trade and other accounts payable of $301,000 as at
September 30, 2015.
The Company does not expect any adverse effect on the Company's
day-to-day operations as a result of the Restatement.
In the second quarter of 2015, the majority of the current directors and
officers of the Company were appointed subsequent to a settlement
following a proxy contest. As a result, the Company has dealt with a
lack of continuity of personnel and business processes. The Company has
since undertaken a review of its accounting records, vendor invoices,
minutes of meetings of the board of directors and its subcommittees,
among other records of the Company, to partly mitigate the risks.
The Company has previously disclosed material weaknesses in the
Company's internal controls over financial reporting, as specifically
described in the Management's Discussion and Analysis for the three and
nine months ended September 30, 2015. The Company has since taken steps
to mitigate material weaknesses, including hiring a permanent
Controller who is also acting Interim Chief Financial Officer to
oversee the accounting affairs of the Company, however, such mitigating
steps do not constitute compensating controls for the purposes of
National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.
Karnalyte's restated Third Quarter 2015 Financial Statements and
restated Management's Discussion and Analysis are available at www.sedar.com.
Karnalyte Resources Inc. 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 Company
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.
Karnalyte's common shares are traded on the Toronto Stock Exchange (TSX)
under the symbol KRN.
This press release contains forward-looking statements. The
forward-looking statements contained in this document are based on
certain key expectations and assumptions made by Karnalyte, including
with respect to the Company's future plans and 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, 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 may be 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:
Karnalyte Resources Inc.