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Press release from CNW Group

Karnalyte Resources Inc. to conduct pre-feasibility study for the production of magnesium compounds

Tuesday, July 19, 2011

Karnalyte Resources Inc. to conduct pre-feasibility study for the production of magnesium compounds07:30 EDT Tuesday, July 19, 2011CALGARY, July 19, 2011 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced that it has selected Lyntek Incorporated ("Lyntek") to perform a NI 43-101 compliant pre-feasibility study on magnesium chloride (MgCl2) process streams at the same facility Karnalyte intends to construct for potash production. This potash facility is expected to initially produce 500,000 tonnes of potash per year and ultimately increase to 2 million tonnes of potash per year."The solution mining process we intend to use to extract potash resources also recovers magnesium resources, which represents an opportunity to produce magnesium products as a second product line," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Karnalyte has recognized this opportunity, and this pre-feasibility study is the first step to determining the potential and cost to process this magnesium stream."Under the terms of the contract, Lyntek will delineate the magnesium chloride production process flow, determine the equipment requirements and provide a capital and operating cost estimate for the production stream. Karnalyte anticipates the pre-feasibility study will be completed prior to December 31, 2011.In 2010, the Corporation received a technical report entitled "Preliminary Assessment Study, Wynyard Carnallite Project, Subsurface Mineral Permit KP 360, Saskatchewan, Canada" (the "Preliminary Assessment") prepared by ERCOSPLAN Ingenieurgessellschaft Geotechnik und Bergbau mbH, North Rim Exploration Ltd. and Foster Wheeler USA Corporation in accordance with National Instrument 43-101 ("NI 43-101"). The Preliminary Assessment estimates that the Wynyard Carnallite Project has Indicated and Inferred Mineral Resource of approximately 50.2 million tonnes of MgCl2 (3% - 15% grade range) and 130.9 million tonnes of MgCl2 (3% - 15% grade range), respectively.Magnesium compounds, made from the magnesium chloride are used in a very wide range of applications, including raw materials for steel and cement industry refractories and for the chemical, petrochemical and detergent industries; as well as a mineral supplement for livestock, additives and fillers for rubber and other polymers, and in the pulp and paper industry.About LyntekLyntek is located in Lakewood, Colorado and has been in existence since 1982. Lyntek offers a full range of engineering and construction services to the natural resources and environmental remediation industries. Lyntek provides services from process engineering and feasibility studies through detailed engineering, procurement, construction management, plant start-up, and pilot plants. Our projects range all over the globe, and have been developed on all seven continents from the Arctic Circle to the South Pole. For more information about Lyntek, please visit 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 500,000 tonnes of potash per year, increasing to 2 million tonnes of potash per year. Karnalyte owns a 100% interest in Permit KP 360 and Subsurface Mineral Lease KLSA-010 located near Wynyard, Saskatchewan, comprising a total of 85,126 acres.Reader AdvisoryThis press release contains forward-looking statements. More particularly, this press release contains statements concerning the Corporation's future operations and the completion of its feasibility study. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Karnalyte, including with respect to the anticipated timing for the feasibility study. 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. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 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.For further information: Robin Phinney, President & Chief Executive Officer Ron Love, Chief Financial Officer & Vice-President Finance Julius Brinkman, Vice-President Corporate Development Telephone: (403) 995-6560 E-mail: Website: