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Press release from CNW Group

Karnalyte Resources Inc. announces 2012 year end results

Monday, March 18, 2013

Karnalyte Resources Inc. announces 2012 year end results19:27 EDT Monday, March 18, 2013CALGARY, March 18, 2013 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the year ended December 31, 2012."In 2012, Karnalyte focused on initial site preparation and detailed engineering activities, as well as preparing the Wynyard Carnallite Project's Environmental Impact Statement (EIS) for submission to the Saskatchewan Ministry of Environment (MOE)," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Subsequent to year-end, we received EIS approval from the MOE, entered into a strategic partnership and off-take agreement with Gujarat State Fertilizers and Chemicals and closed the associated $44.7 million private placement. These achievements have made the Corporation the most advanced junior potash developer, which puts Karnalyte in a strong position as we pursue additional Project funding."As at December 31, 2012, the Company had net working capital of $22.3 million compared to $32.8 million at December 31, 2011, including $25.1 million and $34.3 million, respectively, in cash. Karnalyte's 2012 Year End Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com.OutlookOver the short term, the Corporation will continue to focus on the following key initiatives:Advancing site preparation and detailed engineering activities to enable commencement of full construction activities at the site;Pursuing debt and/or equity financing to obtain the total funding required to bring the Project forward to plant and mine construction;Pursuing additional strategic partnerships that complement the arrangement with Gujarat State Chemicals and Fertilizers; andHiring personnel required to construct the plant and mine. KARNALYTE RESOURCES INC. STATEMENTS OF FINANCIAL POSITION       ASSETS             As at December 31, December 31,  2012 2011Current assets       Cash $25,114,959 $34,251,529 Trade and other receivables  225,363  711,774 Prepaid expenses  128,927  99,807 Deferred financing costs  843,897  102,893   26,313,146  35,166,003Restricted cash    375,000  375,000Capital assets  6,404,557  3,223,921Intangible exploration and evaluation and other assets  43,197,551  37,082,201       ASSETS $76,290,254 $75,847,125       LIABILITIES             Current liabilities       Trade and other payables $3,996,019 $2,365,895 Capital lease liability  -  6,904   3,996,019  2,372,799Provisions  149,956  185,617Total liabilities  4,145,975  2,558,416       SHAREHOLDERS' EQUITY             Share capital  87,473,052  82,105,674Warrants and rights  -  934,950Contributed surplus   4,905,686  3,276,698       Deficit  (20,234,459)  (13,028,613)Total shareholders' equity  72,144,279  73,288,709       LIABILITIES AND SHAREHOLDERS' EQUITY $76,290,254 $75,847,125               KARNALYTE RESOURCES INC. STATEMENTS OF COMPREHENSIVE LOSS For the years ended December 31,       2012 2011Expenses      General and administrative $ 4,156,447 $3,312,688 Depreciation and amortization  747,590  535,444 Share-based payments  1,919,477  1,722,291 Restructuring expenditures  895,645  - Transaction costs  108,984  696,408 Other income and expenses  (178,458) (536,484)   7,649,685  5,730,347 Finance income  (448,237)  (401,245) Finance expense  4,398 24,734Net finance income  (443,839)  (376,511)       Comprehensive loss  (7,205,846) (5,353,836)       Loss per share       Basic and diluted $(0.33)$(0.26)              KARNALYTE RESOURCES INC. STATEMENTS OF CASH FLOWS For the years ended December 31,           2012 2011Cash Flows from (used in) Operating Activities       Net loss for the period  $(7,205,846) $(5,353,836)Add/deduct:        Depreciation and amortization   747,590  535,444 Share-based payment expense   1,919,477  1,722,291 Net finance and other income    (622,297)  (376,511) Interest and other income received   635,007  391,061Changes in non-cash working capital:        Trade and other receivables   98,393  (255,113) Trade and other payables   (438,270)  1,118,733 Prepaid expenses   (29,120)  (12,253)    (4,895,066)  (2,230,184)        Cash Flows from (used in) Investing Activities       Additions to intangible assets   (3,467,662)  (26,589,103)Additions to capital assets   (3,847,304)  (3,278,718)Change in restricted cash   -  (250,000)    (7,314,966)  (30,117,821)        Cash Flows from (used in) Financing Activities       Issuance of common shares   -  4,042,000Exercise of options and warrants   3,613,731  4,347,999Share issue costs   -  (775,078)Deferred financing costs   (539,786)  (2,893)    3,073,945  7,612,028        Effect of foreign exchange on cash   (483)  (12,951)Change in cash   (9,136,570)  (24,748,928)Cash, beginning of period   34,251,529  59,000,457Cash and cash equivalents, end of period  $25,114,959 $34,251,529               KARNALYTE RESOURCES INC.          STATEMENTS OF CHANGES IN EQUITY            Years ended December 31,              2012 2011   Number Amount Number Amount            Share Capital                         Balance, beginning of period  21,418,536 $82,105,674 20,093,740 $72,313,190 Common shares issued   -  - 470,000  4,042,000 Common shares issued on exercise of share options  261,115  735,874 609,500  3,060,100 Common shares issued on exercise of broker warrants  309,053  2,657,856 245,296  1,507,899              Transfer from contributed surplus on options exercised  -  1,188,128 -  1,097,522 Transfer from warrants on broker warrants exercised  -  785,520 -  410,435 Share issue costs  -  - -  (325,472)             Balance, end of period  21,988,704  87,473,052 21,418,536  82,105,674            Warrants and Rights                        Balance, beginning of period  368,528  934,950 585,624  1,273,605Broker warrants and rights issued  -  - 28,200  71,780Broker warrants and rights exercised  (309,053)  (785,520) (245,296)  (410,435)Broker warrants and rights expired  (59,475)  (149,430) -  -             Balance, end of period  -  - 368,528  934,950            Contributed Surplus           Balance, beginning of period     3,276,698    2,359,264 Share-based payment expense     2,804,663    2,014,956 Transfer to share capital on exercise     (1,188,128)    (1,097,522) Option adjustments     (136,977)    - Broker warrants expired     149,430    -Balance, end of period     4,905,686    3,276,698            Deficit           Balance, beginning of period     (13,028,613)    (7,674,777) Loss for the period     (7,205,846)    (5,353,836)Balance, end of period     (20,234,459)    (13,028,613)            Total Shareholders' Equity           Balance, end of period    $72,144,279   $73,288,709            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 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 (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 Finance &Chief Financial Officer Telephone: (403) 995-6560 E-mail: info@karnalyte.com Website: www.karnalyte.com