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Press release from CNW Group

Karnalyte engages BNP Paribas and Natixis to underwrite a project finance facility of up to US$300 million

Friday, June 14, 2013

Karnalyte engages BNP Paribas and Natixis to underwrite a project finance facility of up to US$300 million

07:00 EDT Friday, June 14, 2013

CALGARY, June 14, 2013 /CNW/ - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced that it has entered into an engagement letter (the "Engagement Letter") pursuant to which it has engaged BNP Paribas and Natixis, New York Branch, on an exclusive basis, to act as lead arrangers (the "Lead Arrangers") for a senior secured project finance facility (the "Facility") of up to US$300 million. The purpose of the Facility is to fund the construction and commissioning of the Wynyard Carnallite Project (the "Project").

The Facility will be structured on an underwritten basis whereby each Lead Arranger will underwrite 50% of the Facility subject to credit approval, due diligence and satisfactory legal documentation, and will syndicate it to banks, financial institutions and other institutional lenders.  The Engagement Letter contemplates the entering into of a definitive term sheet and commitment letters for the Facility upon the satisfaction of certain conditions.

The net proceeds from the Facility together with funds provided through Gujarat State Fertilizers and Chemicals Ltd., the Corporation's strategic investor, will provide Karnalyte with approximately 60% of the total capital required to construct the Project. Karnalyte is pursuing a financing strategy for the Project based on a combination of the Facility and equity.

Bank of Montreal is acting as Karnalyte's financial advisor in connection with the Facility.

About Karnalyte Resources Inc.

Karnalyte is engaged in the 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.

About BNP Paribas

BNP Paribas (www.bnpparibas.com) has a presence in nearly 80 countries with 190,000 employees, including 145,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Investment Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Investment Banking and Investment Solutions activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia-Pacific.

Forward-Looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the Corporation's securing of a credit facility and projected use of proceeds. 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

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