Karnalyte Resources Inc. Announces 2011 Year End Results
FOR IMMEDIATE RELEASE
KARNALYTE RESOURCES INC. ANNOUNCES 2011 YEAR END RESULTS
Calgary, Alberta (March 30, 2012) - Karnalyte Resources Inc. ("Karnalyte" or the "Corporation") (TSX: KRN) today announced its financial results and operational highlights for the year ended December 31, 2011.
“Karnalyte executed on key components of our growth strategy in 2011,” said Robin Phinney, President and CEO of Karnalyte Resources Inc. “Karnalyte is focused on completing initiatives that will enable us to begin construction of our planned potash facility.”
Karnalyte’s 2011 Year End Financial Statements and Management’s Discussion and Analysis (MD&A) are available at www.sedar.com.
Outlook
Over the short term, the Corporation will continue to focus on the following key initiatives:
- Continue detailed engineering leading up to ground breaking upon Environmental Impact Statement approval and establish an operations office in Saskatchewan;
- Continue working with the government to obtain the environmental approvals required for the next phase of the Project;
- Continue moving the debt financing through due diligence and establish a banking syndicate for debt financing;
- Pursue key strategic investors to play a role in the project financing and provide the Corporation with key deliverables such as off-take arrangements, marketing assistance or financial stability; and
- Complete a pre-feasibility level study on potential production and marketing of magnesium compounds.
STATEMENTS OF FINANCIAL POSITION
ASSETS
| As at Current assets Cash Investments Trade and other receivables Prepaid expenses Deferred financing expenses | December 31, | December 31, January 1, 2010 2010 $ 59,000,457 $ 2,490,823 - 6,147,759 43,276 279,283 312,865 216,949 - - | |
|---|---|---|---|
| 2011 | |||
| $ 34,251,529 | |||
| - | |||
| 711,774 | |||
| 99,807 | |||
| 102,893 | |||
| Restricted cash Capital assets Intangible exploration and evaluation and other assets | 35,166,003 | 59,356,598 9,134,814 125,000 - 459,376 396,938 10,748,278 6,867,019 | |
| 375,000 | |||
| 3,223,921 | |||
| 37,082,201 | |||
| ASSETS | $ 70,689,252 $ 16,398,771 | ||
| $ 75,847,125 | |||
| LIABILITIES Current liabilities Trade and other payables Current portion of capital lease liability | $ 2,288,123 $ 680,795 6,904 - | ||
| $ 2,365,895 | |||
| 6,904 | |||
| Capital lease liability Provisions | 2,372,799 | 2,295,027 680,795 6,904 - 116,039 - | |
| - | |||
| 185,617 | |||
| Total liabilities | 2,558,416 | 2,417,970 680,795 | |
| SHAREHOLDERS' EQUITY Share capital Warrants and rights Contributed surplus Deficit | 72,313,190 17,771,007 1,273,605 293,494 2,359,264 6,161 (7,674,777) (2,352,686) | ||
| 82,105,674 | |||
| 934,950 | |||
| 3,276,698 | |||
| (13,028,613) | |||
| Total shareholders' equity | 73,288,709 | 68,271,282 15,717,976 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | $ 70,689,252 $ 16,398,771 | ||
| $ 75,847,125 |
STATEMENTS OF COMPREHENSIVE LOSS
2011 2010
Expenses
| General and administrative | $ 3,312,688 | $ 2,840,196 |
| Depreciation and amortization | 535,444 | 51,062 |
| Share-based payments | 1,722,291 | 2,464,804 |
| Loss on disposition of assets | 25,997 | - |
| Other income | (562,481) | (12,120) |
| Transaction costs | 696,408 | - |
5,730,347 5,343,942
| Finance income | (401,245) | (26,630) |
| Finance expense | 24,734 | 4,779 |
| Net finance income | (376,511) | (21,851) |
| Comprehensive loss | (5,353,836) | (5,322,091) |
Loss per share Basic and diluted $ (0.26) $ (0.41)
STATEMENTS OF CASH FLOWS
| Cash Flows from (used in) Operating Activities Loss for the period Add/deduct: Depreciation and amortization Share-based payment expense Net finance income Interest income received Loss on disposition of assets Changes in non-cash working capital: Trade and other receivables Trade and other payables Prepaid expenses | 2011 | 2010 $ (5,322,091) 51,062 2,464,804 (21,851) 26,630 - 238,544 21,458 (26,597) |
| $ (5,353,836) | ||
| 535,444 | ||
| 1,722,291 | ||
| (376,511) | ||
| 365,064 | ||
| 25,997 | ||
| (255,113) | ||
| 1,118,733 | ||
| (12,253) | ||
| (2,230,184) | (2,568,041) | |
| Cash Flows from (used in) Investing Activities Additions to intangible assets Additions to capital assets Change in restricted cash Decrease in temporary investments | (2,822,659) (62,438) (125,000) 6,147,482 | |
| (26,589,103) | ||
| (3,278,718) | ||
| (250,000) | ||
| - | ||
| (30,117,821) | 3,137,385 | |
| Cash Flows from (used in) Financing Activities Issuance of common shares Exercise of options Exercise of warrants Share issue costs Deferred financing costs | 59,985,000 395,600 - (4,437,234) - | |
| 4,042,000 | ||
| 2,840,100 | ||
| 1,507,899 | ||
| (775,078) | ||
| (2,893) | ||
| 7,612,028 | 55,943,366 | |
| Effect of foreign exchange on cash Change in cash Cash, beginning of year | (3,076) 56,509,634 2,490,823 | |
| (12,951) | ||
| (24,748,928) | ||
| 59,000,457 | ||
| Cash, end of year | $ 34,251,529 | $ 59,000,457 |
STATEMENTS OF CHANGES IN EQUITY
Years ended December 31,
| Share Capital Balance, beginning of year Common shares issued Common shares issued on exercise of share options Common shares issued on exercise of broker warrants Transfer of contributed surplus Transfer on broker warrants exercised Share issue costs | 2011 | 2010 Number Amount 12,663,800 $ 17,771,007 6,975,000 59,985,000 176,400 395,600 278,540 83,562 - 111,701 - - - (6,033,680) | |||
| Number | Amount | ||||
| 20,093,740 | $ 72,313,190 | ||||
| 470,000 | 4,042,000 | ||||
| 609,500 | 3,060,100 | ||||
| 245,296 | 1,507,899 | ||||
| - | 1,097,522 | ||||
| - | 410,435 | ||||
| - | (325,472) | ||||
| Balance, end of year | 21,418,536 | 82,105,674 | 20,093,740 72,313,190 | ||
| Warrants and Rights Balance, beginning of year Broker warrants and rights issued Broker warrants and rights exercised | 2,952,524 293,494 418,500 1,063,673 (2,785,400) (83,562) | ||||
| 585,624 | 1,273,605 | ||||
| 28,200 | 71,780 | ||||
| (245,296) | (410,435) | ||||
| (245,296) | (410,435) | ||||
| Balance, end of year | 368,528 | 934,950 | 585,624 1,273,605 | ||
| Contributed Surplus Balance, beginning of year Share-based payment expense Transfer to share capital on exercise | 6,161 2,464,804 (111,701) | ||||
| 2,359,264 | |||||
| 2,014,956 | |||||
| (1,097,522) | |||||
| Balance, end of year | 3,276,698 | 2,359,264 | |||
| Deficit Balance, beginning of year Loss for the year | (2,352,686) (5,322,091) | ||||
| (7,674,777) | |||||
| (5,203,467) | |||||
| Balance, end of year | (12,878,244) | (7,674,777) | |||
| Total Shareholders' Equity | |||||
| Balance, end of year | $ 73,439,078 | $ 68,271,282 |
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 Statements
This 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.
For further information, please contact:
Robin Phinney, President & Chief Executive Officer Ron Love, Chief Financial Officer & Vice-President Finance Julius Brinkman, Vice-President Corporate Development Telephone: (403) 995-6560 E-mail: [email protected] Website: www.karnalyte.com
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