Karnalyte Resources Inc. Announces Successful Commissioning of Brine Production Phase of Optimization Program

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

SASKATOON, Sept. 6, 2016 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Company") (TSX: KRN) is pleased to announce the successful commissioning of the second phase of the optimization program (the "Brine Production Phase") at the Company's potash solution mine at Wynyard, Saskatchewan.

"I am pleased to report that during the last week of August we successfully commissioned the Brine Production Phase of our optimization program and have now begun to operate the test cavern at design conditions," said Karnalyte's President, Robin Phinney. 

The major objective of the optimization program is to test and achieve a higher potash concentration than 9.3% as set out in Karnalyte's feasibility study which was based on laboratory dissolution tests and computer modelling. Karnalyte anticipates that any increase in potash concentration could significantly reduce projected operating costs and enhance project economics for its planned 625,000 tpy potash production facility.

The Brine Production Phase consists of a hot leaching process to produce a concentrated potash brine solution. This is accomplished by injecting heated source water from the 500 metre deep Blairmore formation into the production cavern in the 950 metre deep Belle Plaine formation. The concentrated potash brine solution is then brought to surface and analyzed for potash concentration levels in lab facilities at the Saskatchewan Research Council. All brine generated from the optimization program is disposed of in the Company's 1,500 metre deep disposal well.

"The optimization program is a critical step in the development of the Company's Wynyard potash project," said Phinney. "We believe it has the potential to make the already compelling economics of our project even stronger."

Karnalyte anticipates that the Brine Production Phase will run for approximately two months until the end of October, 2016 with a final report on the optimization program expected to be issued by December, 2016. 

The optimization program was designed by, and the results will be verified and reported on by, Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mBH of Erfurt, Germany.

ABOUT KARNALYTE RESOURCES INC.

Karnalyte is engaged in the business of exploration and development of high quality 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 construction, the Company plans to operate a solution mining facility that will initially produce 625,000 tpy, increasing to 2.125 million tpy of potash.

Karnalyte's Common Shares are traded on the TSX under the symbol KRN.

FORWARD-LOOKING STATEMENTS

Certain information included in this press release is forward-looking, within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "could", "estimate", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar words or phrases suggesting future outcomes or language suggesting an outlook.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Karnalyte, including, without limitation, assumptions as to: the outcome of the Optimization Program, projected economics for the Company's planned 625,000 tpy potash production facility, the ability of Karnalyte to obtain financing on terms favourable to the Company, and the ability of Karnalyte to receive, in a timely manner, the necessary approvals from the Company's board of directors, shareholders, regulatory authorities, and other third parties.

Karnalyte believes the expectations and assumptions upon which the forward-looking information is based are reasonable. However, no assurance can be given that these assumptions and expectations will prove to be correct. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.

Actual results may vary from the forward-looking information presented in this press release, and such variations could be material. Risks factors and uncertainties could cause actual results to vary from the forward-looking information in this press release. Additional information on forward-looking statements 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).

These forward-looking statements are made as of the date hereof and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Corporation assumes no obligation to update or revise them to reflect new events or circumstances.

SOURCE Karnalyte Resources Inc.

For further information: Karnalyte Resources Inc., 1(306) 986-1486, [email protected], www.karnalyte.com