Karnalyte Resources Inc. Announces First Quarter 2014 Results
FOR IMMEDIATE RELEASE
KARNALYTE RESOURCES INC. ANNOUNCES FIRST QUARTER 2014 RESULTS
Calgary, Alberta (May 15, 2014) - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN today announced its financial results and operational highlights for the quarter ended March 31, 2014.
“During this challenging environment, Karnalyte’s focus will be on minimizing expenditures to protect its strong cash position,” said Thomas Drolet, President and CEO of Karnalyte Resources Inc. “We will continue to utilize our internal resources to progress the detailed engineering while actively searching for project financing.”
As at March 31, 2014, the Company had net working capital of $45.9 million compared to $59.5 million at March 31, 2013, including $45.8 million and $61.9 million, respectively, in cash. Karnalyte's First Quarter 2014 Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com.
STATEMENTS OF FINANCIAL POSITION
ASSETS
| (CAD thousands, unaudited) | March 31, | December 31, 2013 |
|---|---|---|
| 2014 | ||
| Current assets Cash Trade and other receivables Prepaid expenses | $ 46,161 1,480 139 | |
| $ 45,779 | ||
| 307 | ||
| 123 | ||
| Restricted cash Deferred financing costs Capital assets (note 4) Intangible exploration and evaluation and other assets (note 5) | 46,209 | 47,780 375 1,606 18,745 42,951 |
| 375 | ||
| 1,640 | ||
| 19,036 | ||
| 42,960 | ||
| ASSETS | $ 111,457 | |
| $ 110,220 | ||
| LIABILITIES Current liabilities Trade and other payables | $ 746 | |
| $ 317 | ||
| Provisions | 317 | 746 135 |
| 143 | ||
| Total liabilities | 460 | 881 |
| SHAREHOLDERS' EQUITY Share capital (note 6) Contributed surplus Deficit | 129,774 7,778 (26,976) | |
| 129,774 | ||
| 8,216 | ||
| (28,230) | ||
| Total shareholders' equity | 109,760 | 110,576 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | $ 111,457 | |
| $ 110,220 |
STATEMENTS OF COMPREHENSIVE LOSS
(CAD thousands except per share amounts, unaudited) 2014 2013 Expenses
| General and administrative | $ 944 | $ 1,082 |
| Depreciation and amortization | 217 | 206 |
| Stock-based compensation expense (note 7) | 312 | 424 |
| Other income and expenses | (31) | (12) |
1,442 1,700
| Finance income | (192) | (77) |
| Finance expense | 4 | 27 |
| Net finance income | (188) | (50) |
| Comprehensive loss | (1,254) | (1,650) |
Loss per share (note 6(b))
Basic and diluted $ (0.05) $ (0.07)
STATEMENTS OF CASH FLOWS
| (CAD thousands, unaudited) | 2014 | 2013 |
| Cash Flows from (used in) Operating Activities Net loss for the period Add/deduct: Depreciation and amortization Stock-based compensation expense Net finance income Interest income received Changes in non-cash working capital: Trade and other receivables Trade and other payables Prepaid expenses | $ (1,650) 207 424 (62) 89 3 15 (492) | |
| $ (1,254) | ||
| 217 | ||
| 312 | ||
| (188) | ||
| 192 | ||
| (102) | ||
| 178 | ||
| 22 | ||
| (623) | (1,466) | |
| Cash Flows from (used in) Investing Activities Additions to intangible assets Proceeds on sale of intangible assets Additions to capital assets | (3,395) - (502) | |
| (100) | ||
| 1,244 | ||
| (868) | ||
| 276 | (3,897) | |
| Cash Flows from (used in) Financing Activities Issuance of common shares Share issue costs Deferred financing costs | 44,746 (2,344) (217) | |
| - | ||
| - | ||
| (33) | ||
| (33) | 42,185 | |
| Effect of foreign exchange on cash Change in cash Cash, beginning of period | (26) 36,796 25,115 | |
| (2) | ||
| (382) | ||
| 46,161 | ||
| Cash and cash equivalents, end of period | $ 45,779 | $ 61,911 |
STATEMENTS OF CHANGES IN EQUITY
(Expressed in thousands)
| 2014 | 2013 Number Amount | ||
| Number | Amount | ||
| Share Capital Balance, beginning of period Common shares issued Share issue costs | 21,989 $ 87,473 5,490 44,746 - (2,432) | ||
| 27,477 | $ 129,774 | ||
| - | - | ||
| - | - | ||
| Balance, end of period | 27,477 | 129,774 | 27,479 129,787 |
| Contributed Surplus Balance, beginning of period Stock-based compensation expense (note 7) | 4,906 594 | ||
| 7,778 | |||
| 438 | |||
| Balance, end of period | 8,216 | 5,500 | |
| Deficit Balance, beginning of period Loss for the period | (20,235) (1,650) | ||
| (26,976) | |||
| (1,254) | |||
| Balance, end of period | (28,230) | (21,885) | |
| Total Shareholders' Equity | |||
| Balance, end of period | $ 109,760 | $ 113,402 |
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. Once financing is obtained 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 Statements
This press release contains forward-looking statements. More particularly, this press release contains statements concerning the Corporation's future operations and its access to capital markets. The forwardlooking 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 and its ability to secure additional capital. 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 forwardlooking 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, failure to obtain necessary capital financing, 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.
For further information, please contact:
Thomas Drolet, President & Chief Executive Officer Ron Love, Executive Vice-President Finance &Chief Financial Officer Telephone: (403) 995-6560 E-mail: [email protected] Website: www.karnalyte.com
- 30 -