CALGARY, March 23, 2015 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) announced today that it anticipates it will be unable to file its annual financial statements, management's discussion and analysis, related Chief Executive Officer and Chief Financial Officer certificates, and its annual information form for its fiscal year ended December 31, 2014 (the "Required Filings") before the March 31, 2015 filing deadline. The Corporation also announces that it has applied to the Alberta Securities Commission for a management cease trade order ("MCTO").
The delay in completing the Required Filings is necessary because of ongoing discussions to obtain financing for the construction of the Wynyard Carnallite Project. The Corporation is continuing active discussions with certain Indian financial institutions for financing. The outcome of these discussions will likely have significant impacts on certain accounting disclosures, particularly with respect to the carrying value of the Corporation's Wynyard Carnallite project. Further discussions between the Corporation, its auditors and other professional advisors will be required pending results of the financing discussions. There can be no assurance that the financing discussions that are currently underway will result in a financing proposal or that any such proposal will be completed so as to allow the commencement of construction of the Wynyard Carnallite project.
The Corporation anticipates that it will be in a position to remedy the default within the two-week time allotted that the Corporation has applied for under the MCTO and file the Required Filings on or before April 14, 2015. The Corporation expects to be able to announce further details regarding the potential financing and resolve its accounting issues in the coming weeks after which it expects to be able to meet its continuous disclosure obligations in the normal course.
The MCTO restricts all trading in securities of the Corporation, whether direct or indirect, by management of the Corporation. If approved, the MCTO will be in effect until the Required Filings are filed or until it is revoked or varied.
The Corporation intends to satisfy the provisions of the alternative information guidelines set out in sections 4.3 and 4.5 of National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults so long as the Required Filings are outstanding.
The Corporation has not taken any steps towards any insolvency proceeding and the Corporation has no material information to release to the public.
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. Once financing is obtained 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.
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 Corporation's future operations and its ability to secure additional financing. 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, failure to obtain necessary financing, 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: Investors: Ron Love, Executive Vice-President Finance & Chief Financial Officer, Telephone: (403) 995-6560, E-mail: [email protected], Website: www.karnalyte.com; Media: Joel Shaffer, Longview Communications, 416-649-8006