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Press release from CNW Group

Karnalyte Resources Inc. Signs Agreement for Wynyard Carnallite Project Detailed Engineering and Site Preparation

Thursday, September 06, 2012

Karnalyte Resources Inc. Signs Agreement for Wynyard Carnallite Project Detailed Engineering and Site Preparation07:00 EDT Thursday, September 06, 2012CALGARY, Sept. 6, 2012 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced that it has entered into an Engineering, Procurement and Construction Management ("EPCM") Services Agreement (the "Agreement") with Foster Wheeler Canada Limited ("FWCL"), whereby FWCL will provide EPCM services for the Wynyard Carnallite Project(the "Project"). The proposed Project involves the construction of a facility that will initially produce 625,000 tonnes of potash per year, increasing to 2.125 million tonnes of potash per year."Karnalyte is proceeding with the Wynyard Carnallite Project and is looking forward to continuing our collaboration with Foster Wheeler, a world-renowned engineering firm," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Foster Wheeler will help us achieve the Project's next major milestones, which include beginning detailed engineering work, followed by preparation of the site where Karnalyte plans to build its potash production facility."Under the terms of the Agreement, the services to be provided by FWCL include:EngineeringProcurementConstruction managementCommissioning supportFoster Wheeler will also coordinate with ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH ("ERCOSPLAN") of Erfurt Germany which will provide engineering, cavern development, mine plan and commissioning services for the solution mining of the project. Karnalyte expects to commence the site preparation and detailed engineering work in September 2012, and continues to pursue financing opportunities to fund further advancement of the Project.About Foster WheelerFoster Wheeler Canada Limited is a subsidiary of Foster Wheeler AG, which is a global engineering and construction contractor and power equipment supplier delivering technically advanced, reliable facilities and equipment. The company employs approximately 13,000 talented professionals with specialized expertise dedicated to serving its clients through one of its two primary business groups. The company's Global Engineering and Construction Group designs, engineers and constructs leading-edge processing facilities and related infrastructure for the upstream oil & gas, LNG and gas-to-liquids, refining, chemicals & petrochemicals, pharmaceuticals, biotechnology & healthcare, mining & metals, environmental and power industries. The company's Global Power Group is a world leader in combustion and steam generation technology that designs, manufactures and erects steam generating and auxiliary equipment for power stations and industrial facilities and also provides a wide range of aftermarket services. The company is based in Zug, Switzerland, and its operational headquarters office is in Geneva, Switzerland. For more information about Foster Wheeler, please visit http://www.fwc.com.About ERCOSPLAN ERCOSPLAN is a private engineering company with more than half a century of experience in the potash and mineral salt industries. The Company employs 125 engineers, scientists, technicians, economists and computer experts. ERCOSPLAN offers a wide variety of services with expertise in both conventional and solution mining; mineral salt exploration, evaluation, extraction and processing; and environmental sustainability of resource mines and processing plants.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 tpy of potash, increasing to 2.125 million tpy of potash.  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, including site preparation and detailed engineering work.  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 (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: Robin Phinney, President & Chief Executive Officer Ron Love, Executive Vice-President & Chief Financial Officer Telephone: (403) 995-6560 E-mail: info@karnalyte.com Website: www.karnalyte.com