Karnalyte Resources Announces Successful Completion of Rights Offering, Raising $3.9 Million IN Capital FOR Flagship Potash Project
KARNALYTE.COM
TSX: KRN
KARNALYTE RESOURCES ANNOUNCES SUCCESSFUL
COMPLETION OF RIGHTS OFFERING, RAISING $3.9 MILLION IN
CAPITAL FOR FLAGSHIP POTASH PROJECT
Not for distribution to U.S. news wire services or dissemination in the United States.
SASKATOON, SK (CNW- August 3, 2022) – Karnalyte Resources Inc. (“ Karnalyte” or the “ Company”)
(TSX: KRN), is pleased to announce today the successful closing of its previously announced rights offering
(the “Rights Offering”), raising approximately $3.9 million in proceeds that will be used for, among other
things, development of the Company’s flagship Wynyard Potash Project.
Of note, strategic partner and significant shareholder Gujarat State Fertilizers and Chemicals Limited
(“GSFC”), a major agriculture sector player in India, participated in the Rights Offering, further
demonstrating GSFC’s ongoing commitment and support for Karnalyte and the Wynyard Potash Project,
and a show of confidence in Karnalyte’s vision and strategic planning.
“We are very pleased with the outcome of the Rights Offering and would like to thank all shareholders
who participated and gave their vote of confidence in unlocking the high potential of the Wynyard Potash
Project,” said Danielle Favreau, interim CEO of Karnalyte. “This is great progress for our Company as we
continue taking the necessary steps to maximize value for all stakeholders through construction of what
will become Karnalyte’s flagship project.”
Karnalyte is currently in the process of completing the update to the NI 43-101 compliant technical report
for the Wynyard Potash Project and will be diligently pursuing project financing for its development.
Rights Offering
Upon closing of the Rights Offering, the Company issued 11,034,135 common shares at a price of $0.35
per share for gross proceeds of approximately $3.9 million. The total number of issued and outstanding
common shares of the Company upon completion of the Rights Offering is 53,283,982 common shares.
A total of 6,306,291 common shares were issued under the basic subscription privilege and a total of
4,727,844 common shares were issued under the additional subscription privilege. Of the 6,306,291
common shares issued under the basic subscription privilege, approximately 5,499,852 common shares
were issued to persons who were known to be insiders of the Company before the Rights Offering, and
806,439 common shares were issued to all other persons. Of the total 4,727,844 common shares issued
under the additional subscription privilege, 3,655,148 common shares were issued to persons known to
be insiders before the Rights Offering, and 1,072,696 common shares were issued to all other persons.
No fees or commissions were paid in connection with the issuance of the common shares under the Rights
Offering.
GSFC acquired 5,444,852 common shares under the basic subscription privilege and 3,655,148 common
shares under the additional subscription privilege for a total of 9,100,000 common shares. GSFC now
holds 25,434,558 common shares of the company representing approximately 47.73% of the issued and
outstanding common shares of the Company. GSFC acquired the additional common shares for investment
purposes. It may, in the future, acquire or dispose of its common shares of the Company, but currently
has no plans or intentions to do so.
GSFC is a major fertilizer and industrial chemicals manufacturing company in India. The strategic
partnership between Karnalyte and GSFC, established in 2013, provides a significant competitive
advantage to Karnalyte in the marketplace. GSFC’s participation in the Rights Offering attests to
Karnalyte’s efforts over the years, as Karnalyte aims to provide GSFC with a secure supply of potash for
the years to come.
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.
ABOUT KARNALYTE RESOURCES INC.
Karnalyte Resources Inc. is a development stage company focused on two fertilizer products, potash and
nitrogen, to be produced and manufactured in Saskatchewan. Karnalyte owns the 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 TPY.
Karnalyte is also exploring the development of the Company’s Nitrogen Project, which is a proposed
small-scale nitrogen fertilizer plant with a nameplate production capacity 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.
For further information, please contact:
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 applicable
Canadian securities laws. Forward-looking information is often, but not always, identified by the use of
words such as "anticipate", "believe", "could", "estimate", "expect", "plan", "intend", "forecast", "future",
"guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar words or phrases
suggesting future outcomes or language suggesting an outlook.
The forward-looking statements contained in this press release are based on certain key expectations
and assumptions made by Karnalyte, including, without limitation, assumptions as to: projected
economics for the Company's planned Potash Project, the confirmation in an independent feasibility
study of Karnalyte's assumptions regarding the technical and economic viability of the 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 approvals from the Board, 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 undue reliance on the forward-looking
statements and information contained in this press release. Without limiting the generality of the
foregoing, readers are cautioned that the Company has not received a feasibility study prepared by a
third party with respect to the Nitrogen Project.
Actual results may vary from the forward-looking information presented in this press release, and such
variations could be material. Risk factors and uncertainties could cause actual results to vary from the
forward-looking information in this press release. Additional information on forward-looking statements
and other factors that could affect Karnalyte's operations and financial results are included in documents
on file with Canadian securities regulatory authorities and may be accessed through the Company's profile
on the SEDAR website (www.sedar.com).
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.