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Press release from CNW Group

Karnalyte Resources Inc. Announces 2011 Year End Results

Friday, March 30, 2012

Karnalyte Resources Inc. Announces 2011 Year End Results19:37 EDT Friday, March 30, 2012CALGARY, March 30, 2012 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the year ended December 31, 2011."Karnalyte executed on key components of our growth strategy in 2011," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Karnalyte is focused on completing initiatives that will enable us to begin construction of our planned potash facility."Karnalyte's 2011 Year End Financial Statements and Management's Discussion and Analysis (MD&A) are available at the short term, the Corporation will continue to focus on the following key initiatives:Continue detailed engineering leading up to ground breaking upon Environmental Impact Statement approval and establish an operations office in Saskatchewan;Continue working with the government to obtain the environmental approvals required for the next phase of the Project;Continue moving the debt financing through due diligence and establish a banking syndicate for debt financing;Pursue key strategic investors to play a role in the project financing and provide the Corporation with key deliverables such as off-take arrangements, marketing assistance or financial stability; andComplete a pre-feasibility level study on potential production and marketing of magnesium compounds.KARNALYTE RESOURCES INC.          STATEMENTS OF FINANCIAL POSITION          ASSETS                   As at  December 31,  December 31,  January 1,   2011  2010  2010          Current assets              Cash $           34,251,529 $      59,000,457 $        2,490,823     Investments                              -                      -             6,147,759     Trade and other receivables                   711,774            43,276                279,283     Prepaid expenses                    99,807           312,865                216,949     Deferred financing expenses                  102,893                       -                           -              35,166,003      59,356,598             9,134,814Restricted cash                  375,000        125,000                            -Capital assets               3,223,921            459,376                 396,938Intangible exploration and evaluation and other assets             37,082,201       10,748,278               6,867,019          ASSETS $          75,847,125 $        70,689,252 $         16,398,771          LIABILITIES                   Current liabilities              Trade and other payables $            2,365,895 $          2,288,123 $            680,795     Current portion of capital lease liability                    6,904                  6,904                              -                 2,372,799       2,295,027                680,795Capital lease liability                            -               6,904                            -Provisions                  185,617            116,039                            -Total liabilities               2,558,416            2,417,970                680,795          SHAREHOLDERS' EQUITY                   Share capital             82,105,674        72,313,190          17,771,007Warrants and rights            934,950          1,273,605                293,494Contributed surplus             3,276,698           2,359,264                      6,161Deficit        (13,028,613)          (7,674,777)            (2,352,686)Total shareholders' equity             73,288,709            68,271,282           15,717,976          LIABILITIES AND SHAREHOLDERS' EQUITY $         75,847,125 $          70,689,252 $         16,398,771          KARNALYTE RESOURCES INC.      STATEMENTS OF COMPREHENSIVE LOSS      For the years ended December 31,        2011  2010      Expenses          General and administrative$            3,312,688 $            2,840,196     Depreciation and amortization                 535,444                     51,062     Share-based payments              1,722,291                2,464,804     Loss on disposition of assets                   25,997                             -     Other income           (562,481)              (12,120)     Transaction costs                 696,408                             -               5,730,347               5,343,942     Finance income           (401,245)             (26,630)     Finance expense                    24,734                      4,779Net finance income           (376,511)             (21,851)      Comprehensive loss       (5,353,836)        (5,322,091)      Loss per share          Basic and diluted$            (0.26) $             (0.41)KARNALYTE RESOURCES INC.    STATEMENTS OF CASH FLOWS    For the years ended December 31,      20112010Cash Flows from (used in) Operating Activities   Loss for the period $    (5,353,836)$    (5,322,091)Add/deduct:        Depreciation and amortization                       535,444                      51,062     Share-based payment expense                    1,722,291                2,464,804     Net finance income           (376,511)            (21,851)     Interest income received                       365,064                     26,630     Loss on disposition of assets                         25,997                             -Changes in non-cash working capital:        Trade and other receivables           (255,113)                   238,544     Trade and other payables                     1,118,733                     21,458     Prepaid expenses             (12,253)            (26,597)         (2,230,184)       (2,568,041)    Cash Flows from (used in) Investing Activities   Additions to intangible assets      (26,589,103)       (2,822,659)Additions to capital assets        (3,278,718)            (62,438)Change in restricted cash           (250,000)          (125,000)Decrease in temporary investments                                  -                6,147,482       (30,117,821)                3,137,385    Cash Flows from (used in) Financing Activities   Issuance of common shares                   4,042,000              59,985,000Exercise of options                    2,840,100                   395,600Exercise of warrants                    1,507,899                              -Share issue costs           (775,078)       (4,437,234)Deferred financing costs               (2,893)                              -                     7,612,028              55,943,366    Effect of foreign exchange on cash             (12,951)              (3,076)Change in cash      (24,748,928)              56,509,634Cash, beginning of year                  59,000,457                2,490,823Cash, end of year $               34,251,529$           59,000,457KARNALYTE RESOURCES INC.       STATEMENTS OF CHANGES IN EQUITY       Years ended December 31,               20112010 Number AmountNumberAmount      Share Capital      Balance, beginning of year       20,093,740 $      72,313,19012,663,800$       17,771,007     Common shares issued             470,000           4,042,000  6,975,000          59,985,000     Common shares issued on exercise of share options            609,500           3,060,100     176,400               395,600     Common shares issued on exercise of broker warrants            245,296           1,507,899     278,540                 83,562     Transfer of contributed surplus                     -             1,097,522                 -               111,701     Transfer on broker warrants exercised                     -               410,435                 -                         -       Share issue costs                     -            (325,472)                 -         (6,033,680)Balance, end of year       21,418,536        82,105,67420,093,740          72,313,190      Warrants and Rights      Balance, beginning of year            585,624          1,273,605  2,952,524               293,494     Broker warrants and rights issued              28,200               71,780     418,500            1,063,673     Broker warrants and rights exercised       (245,296)           (410,435)(2,785,400)              (83,562)Balance, end of year           368,528             934,950     585,624            1,273,605      Contributed Surplus     Balance, beginning of year           2,359,264                    6,161     Share-based payment expense           2,014,956             2,464,804     Transfer to share capital on exercise        (1,097,522)             (111,701)Balance, end of year           3,276,698             2,359,264      Deficit     Balance, beginning of year        (7,674,777)          (2,352,686)     Loss for the year        (5,203,467)          (5,322,091)Balance, end of year      (12,878,244)          (7,674,777)      Total Shareholders' Equity     Balance, end of year  $      73,439,078 $       68,271,282About 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 StatementsThis 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 ( 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: