Karnalyte Completes Rights Offering
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KARNALYTE COMPLETES RIGHTS OFFERING
Not for distribution to U.S. news wire services or dissemination in the United States.
SASKATOON, SK (CNW- December 24, 2018) – Karnalyte Resources Inc. (“ Karnalyte ” or the
“ Company ”) (TSX: KRN) today announced the successful closin g of its rights offering (“ Rights
Offering ”) following the expiry of the rights on December 2 0, 2018.
Highlights
• Fully subscribed Rights Offering with 14,058,282 co mmon shares issued for a total of
approximately $2.3 million in proceeds
• Provides additional working capital for development of Proteos Nitrogen
• Gujarat State Fertilizer and Chemicals Limited’s (“ GSFC ”) additional investment in Karnalyte
demonstrates GSFC’s ongoing commitment and support of Karnalyte, Wynyard Potash and Proteos
Nitrogen
Mr. Frank Wheatley, President of Karnalyte, comment ed: “I would like to thank all shareholders that
participated in the Rights Offering and for their v ote of confidence in our strategic plan to diversif y our
business into two fertilizer product lines – potash and nitrogen. We look forward to 2019 and proceed ing
with the development of Proteos Nitrogen and, if po tash prices continue to improve, the development of
Wynyard Potash.”
Rights Offering
The Rights Offering was fully subscribed and the Company issued a total of 14,058,282 common shares at
a price of $0.17 per share for gross proceeds of ap proximately $2.3 million. The total number of issu ed
and outstanding common shares of the Company upon c ompletion of the Rights Offering is 42,174,847
common shares.
A total of 5,548,339 common shares were issued unde r the basic subscription privilege and a total of
8,509,943 common shares were issued under the addit ional subscription privilege. Of the 5,548,339
common shares issued under the basic subscription p rivilege, approximately 3,022,930 common shares
were issued to persons who were known to be insider s of the Company before the Rights Offering, and
2,525,409 common shares were issued to all other persons. Of the total of 8,509,943 common shares issued
under the additional subscription privilege, 7,265, 767 common shares were issued to persons who were
known to be insiders before the Rights Offering, an d 1,244,176 common shares were issued to all other
persons.
No common shares were issued under the stand-by com mitment provided by GSFC and no fees or
commissions were paid in connection with the issuance of the common shares under the Rights Offering.
GSFC acquired 3,022,930 common shares under the bas ic subscription privilege and 7,265,767 common
shares under the additional subscription privilege for a total of 10,288,697 common shares. GSFC now
holds 16,334,558 common shares of the company repre senting approximately 38.8% of the issued and
outstanding common shares of the Company. GSFC acquired the additional common shares for investment
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purposes and may acquire or dispose of its common shares of the Company in the future but has no current
plans or intentions to do so.
Use of Proceeds
The net proceeds of the Rights Offering will be used as set out in the Company’s Rights Offering Circular,
including but not limited to development of the Wynyard Potash Project and the Proteos Nitrogen Project.
About Karnalyte Resources Inc.
Karnalyte Resources Inc. is an advanced development stage company focused on two fertilizer products,
potash and nitrogen, to be produced and manufactured in Saskatchewan. Karnalyte owns the construction
ready Wynyard Potash Project, with planned phase 1 production of 625,000 tonnes per year (tpy) of high
grade granular potash, and two subsequent phases of 750,000 tpy each, taking total production up to 2.125
million tonnes per year (Mtpy). Karnalyte is also exploring the development of the Proteos Nitrogen
Project, which is a proposed small-scale nitrogen f ertilizer plant with a nameplate production capacit y of
approximately 700 metric tonnes per day (mtpd) of ammonia and approximately 1,200 mtpd of urea, and a
target customer market of independent fertilizer wholesalers in Central Saskatchewan.
About the Wynyard Potash Project
The Wynyard Potash Project is a construction ready solution mining potash project located in Wynyard,
Saskatchewan, with planned phase 1 production of 62 5,000 tpy of high grade granular potash, and two
subsequent phases of 750,000 tpy each, taking total production up to 2.125 Mtpy. All environmental
permits remain valid, preliminary detailed engineering is complete, and the existing offtake agreement with
Gujarat State Fertilizers & Chemicals Limited remai ns in effect. Further development is dependent on
improved potash prices.
About the Proteos Nitrogen Project
The Proteos Nitrogen Project is an advanced stage d evelopment project consisting of a proposed small-
scale nitrogen fertilizer plant to be located in Ce ntral Saskatchewan, having a nameplate production
capacity of approximately 700 mtpd of ammonia and a pproximately 1,200 mtpd of urea, and designed to
produce two products – anhydrous ammonia (82-0-0) a nd granular urea (46-0-0). Karnalyte’s primary
target market is independent local Saskatchewan fer tilizer wholesalers within a 400-kilometer radius o f
Saskatoon, Saskatchewan. A secondary target market is the US Midwest fertilizer wholesalers near to the
Canadian – United States border. The proposed plan t would be the first greenfield nitrogen fertilizer plant
built in Canada in the last 26 years.
About Gujarat State Fertilizers & Chemicals Limited
Gujarat State Fertilizers & Chemicals Limited (“GSF C”) is a leading Indian Fortune 500 chemicals and
fertilizer company that has been in business for more than 50 years. GSFC currently operates one ammonia
plant of 445,000 Mtpy nameplate capacity, which was commissioned in the year 2000 based on Linde’s
technology (after the two old ammonia plants establ ished in 1969 were retired due to higher energy
consumption), and two urea plants, with a total of 370,590 Mtpy nameplate capacity which were established
in 1969, at its fertilizer production complex in Va dodara, Gujarat State, India. GSFC’s urea plants h ave
consistently operated at optimum capacity over the past five decades.
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As t he Company’s strategic partner and single largest s hareholder, GSFC remains committed to the
Company and the Wynyard Potash Project, and is full y supportive of the Company pursuing the
development of the Proteos Nitrogen Project. GSFC has also confirmed to the Company that it will continue
to support the structuring of the most cost-effective financing package for the development of the Wynyard
Potash Project, as GSFC has consistently offered to the Company since becoming a shareholder in 2013.
For further information, please contact:
Frank D. Wheatley
President
Karnalyte Resources Inc.
1(306) 986-1486
www.karnalyte.com
FORWARD-LOOKING STATEMENTS
Certain information included in this press release is forward-looking, within the meaning of applicabl e
Canadian securities laws. Forward-looking informati on is often, but not always, identified by the use of
words such as “anticipate”, “believe”, “could”, “es timate”, “expect”, “plan”, “intend”, “forecast”, “f uture”,
“guidance”, “may”, “predict”, “project”, “should”, “strategy”, “target”, “will” or similar words or ph rases
suggesting future outcomes or language suggesting an outlook.
The forward-looking statements contained in this pr ess release are based on certain key expectations a nd
assumptions made by Karnalyte, including, without limitation, assumptions as to: projected economics for
the Company’s planned potash production facility, t he confirmation in an independent feasibility study of
Karnalyte’s assumptions regarding the technical and economic viability of the Proteos Nitrogen Project ,
the ability of Karnalyte to obtain financing on terms favourable to the Company, and the ability of Karnalyte
to receive, in a timely manner, the necessary appro vals from the Company’s board of directors,
shareholders, regulatory authorities, and other third parties.
Karnalyte believes the expectations and assumptions upon which the forward-looking information is based
are reasonable. However, no assurance can be given that these assumptions and expectations will prove to
be correct. Accordingly, readers should not place u ndue reliance on the forward-looking statements and
information contained in this press release. Withou t limiting the generality of the foregoing, readers are
cautioned that the Company has not received a feasi bility study prepared by a third party with respect to
the Proteos Nitrogen Project.
Actual results may vary from the forward-looking in formation presented in this press release, and such
variations could be material. Risk factors and unce rtainties could cause actual results to vary from t he
forward-looking information in this press release. Additional information on forward-looking statement s
and other factors that could affect Karnalyte’s ope rations and financial results are included in docum ents
on file with Canadian securities regulatory authorities and may be accessed through the Company’s profile
on the SEDAR website (www.sedar.com).
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These forward-looking statements are made as of the date hereof and are expressly qualified in their entirety
by this cautionary statement. Subject to applicable securities laws, the Company assumes no obligation to
update or revise them to reflect new events or circumstances.