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.

Robin Phinney, President & Chief Executive Officer
Ron Love, Executive Vice-President Finance &Chief Financial Officer
Telephone: [phone]
E-mail: [email protected]
Website: www.karnalyte.com