CALGARY, March 30, 2012 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or
the "Corporation") (TSX: KRN) today announced that it has filed an
"Amended and Restated Reserve and Resource Estimate for the Wynyard
Carnallite Project, Subsurface Mineral Permit KP 360A and Subsurface
Mineral Lease KLSA 010, Saskatchewan, Canada" effective March 30, 2012
(the "Amended and Restated Technical Report"). As previously announced,
Karnalyte received comments from the securities commissions on its
previously filed technical report entitled "Reserve and Resources
Estimate for the Wynyard Carnallite Project, Subsurface Mineral Permit
KP 360A and Subsurface Mineral Lease KLSA 010, Saskatchewan, Canada"
effective October 21, 2011 (the "Original Technical Report"). Over the
past few months Karnalyte has responded to the comments of the
securities commissions and as a result Karnalyte is filing the Amended
and Restated Technical Report.
"The changes in the Amended and Restated Technical Report have no impact
on the feasibility status of the Wynyard Carnallite Project or on
Karnalyte's proven and probable reserves," said Robin Phinney,
President and CEO of Karnalyte. "Now that Karnalyte has filed the
Amended and Restated Technical Report, we can proceed with our strategy
to develop the first greenfield potash plant to be built in
Saskatchewan in more than 40 years."
The following is an overview of certain changes that have been made in
the Amended and Restated Technical Report:
An increase to the value of inferred resources from 56.1 to 269.3
million tonnes due to the removal of a recovery factor that had been
applied in the original report. The proven and probable reserves remain
at 62.9 and 92.0 million tonnes of KCl respectively, for a total of
154.9 million tonnes of KCl.
An increase in the accuracy range of estimated capital expenditure
(CAPEX) and operating expenditure (OPEX) costs from ±25% to ±15% for
the 2nd and 3rd phases of plant expansion from 625,000 tonnes per year (tpy) to 2.125
million tpy of granular product. This change increased estimated CAPEX
from $1,973 million to $2,002 million for the 2.125 million tpy
facility and decreased estimated OPEX from $129.20 to $125.45 per
tonne. OPEX includes annual brine field expansion and contingency.
The Corporation updated certain assumptions in the project economics to
better reflect current trends.
Our engineering firm, Foster Wheeler Canada Ltd., provided a Statement
of Certification for certain sections of the Amended and Restated
Clarification as to the basis for the discount rates used in the
economic and sensitivity analysis.
Clarification as to why a pilot operation is not required to obtain
The Amended and Restated Technical Report will be available on SEDAR at www.sedar.com in the next few days. Karnalyte anticipates the engineering and
construction phase of the Wynyard Carnallite Project to commence in the
second quarter of 2012.
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. 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.
This press release contains forward-looking statements. More
particularly, this press release contains statements concerning the
Corporation's future operations, including financings. 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 financings.
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. Mineral resources
that are not mineral reserves do not have demonstrated economic