Karnalyte Resources Inc. Announces 202 5 First Quarter Results and Restatement of 2024 Year End Financial Statements and Md&a
KARNALYTE.COM
TSX: KRN
KARNALYTE RESOURCES INC. ANNOUNCES 202 5 FIRST
QUARTER RESULTS AND RESTATEMENT OF 2024 YEAR END
FINANCIAL STATEMENTS AND MD&A
Not for distribution to U.S. news wire services or dissemination in the United States.
SASKATOON, SK (CNW- May 15, 2025) – Karnalyte Resources Inc. ("Karnalyte" or the "Company") (TSX:
KRN) today announced its financial results and corporate highlights for the first quarter ended March
31, 2025. The Company also announced the filing of restated financial statements and restated
management discussion and analysis for the year ended December 31, 2024 (the “Restatement”).
Q1 2025 HIGHLIGHTS
During the quarter, Karnalyte continued to advance its NI 43-101 compliant technical report—a critical
milestone toward demonstrating the value of the Company’s assets and progressing toward mine
development. While no major new developments occurred, work continued steadily with the review and
refinement of key technical sections. The Company engaged qualified professionals to perform final reviews,
ensuring the accuracy and robustness of the report.
Additionally, efforts were made to update key inputs such as price forecasts and market entry strategies,
aligning the project with current market conditions and strategic priorities.
The report remains on track for completion in 2025, setting the stage for new corporate development
opportunities. Karnalyte remains committed to the advancement of its potash project, driven by strong
global demand and supported by a robust offtake agreement. Potash’s role as a critical agricultural input
continues to reinforce the Company’s long-term strategy.
Review of Development Strategy
In 2024, Karnalyte announced a review of its development strategy to evaluate the economic potential of
increasing magnesium chloride production at the Company’s Wynyard Project by developing magnesium
assets alongside the Potash Project. This work included an assessment of the potential for co-production of
magnesium chloride and potassium chloride using advanced solution mining technologies.
Carnallite, also known as hydrated potassium magnesium chloride, is abundant within the Company’s mineral
deposit. As part of its review, the Company has been studying and evaluating the economic opportunity of
developing carnallite for the co-production of magnesium chloride and potassium chloride. The aim is to
significantly increase magnesium chloride production, compared to previous studies, through the use of
advanced solution mining technologies.
Magnesium is listed as one of Canada’s 34 critical minerals and is a key mineral in the clean technologies and
advanced manufacturing value chains. Additionally, Magnesium chloride serves as a key raw material in the
production of various chemicals, including magnesium metal, magnesium hydroxide, magnesium oxide, and
magnesium carbonate. These chemicals are used in high-tech applications such as semiconductor
manufacturing, lithium-ion battery production, and in industries including metallurgy, pharmaceuticals,
agriculture and wastewater treatment, driving the demand for magnesium chloride
The study has been progressing as scheduled and the Company anticipates the review to be completed in
2025.
Asset Sales
On March 13, 2025, Karnalyte listed three parcels of farmland for sale that are not core to the focus on
advancing the Potash Project. In April 2025, the Company closed on the sale of these three parcels for net
proceeds totally $1,409,000. The proceeds from the sale will be directed towards supporting the company’s
development activities, advancing its project plan and to fund working capital requirements.
OUTLOOK FOR 2025
In 2025, Karnalyte Resources Inc. plans to complete the update to its NI 43-101 technical report, optimize
construction and operation plans, and enhance project sustainability. The Company also plans to complete
the review of its development strategy. The Company will continue to optimize its asset portfolio, ensuring
efficient resource allocation to support project development. Karnalyte is committed to delivering value to
its stakeholders through strategic initiatives, disciplined financial management, and sustainable growth.
Additionally, the Company will intensify its business development activities, seeking strategic partnerships
and investment opportunities to advance its projects and move them forward to development.
2025 FIRST QUARTER RESULTS
At March 31, 202 5, the Company had cash of $ 498,000 to settle trade and other payables of $1,060,000.
Subsequent to the period end, three parcels of land were sold for net proceeds totaling $1,409,000. The
Company has no debt. Karnalyte’s First Quarter 202 5 Financial Statements and Managements’ Discussion and
Analysis are available at www.sedarplus.com and on Karnalyte’s website at www.karnalyte.com.
The following information has been summarised from the Company's Condensed Interim Unaudited Financial
Statements.
March 31, 2025 March 31, 2024
(restated)
Total revenue - -
Net and comprehensive loss (564) (522)
Basic and diluted per share (0.01) (0.01)
Total current assets 1,464 2,589
Total assets 6,691 8,248
Total liabilities 2,667 2,492
Total shareholders’ equity 4,024 5,756
RESTATEMENT
The Company has restated its financial statements as at and for the year ended December 31, 2024 to increase
the previously reported amount of decommissioning liability from $1,289,000 to $1,571,000, which then
impacted other financial statement items. The provision discrepancy arose from a calculation error when
determining the required adjustment to the decommissioning liability in each reporting period. In addition,
the provision discrepancy also resulted in adjustments to the expected income tax amou nt and the change in
unrecognized deferred tax assets. The Company has determined this error to be material to the previously
issued financial statements and, as such, has restated its financial statements, as applicable. Since the
material error also related to prior periods, IFRS requires the correction of t he comparative information
presented in the financial statements. As such, the comparative periods have also been restated. There is no
impact on the previously reported total cash flows used in operating activities or the loss per share, basic and
diluted for the years ended December 31, 2024 and 2023.
The Company does not expect any adverse affect on the Company’s day to day operations as a result of the
restatement.
The decommissioning liability reports the discounted amount of estimated costs required to settle the
Company’s obligations to dismantle, decommission and to complete activities to remediate site disturbance
which are expected to be incurred in 2038. Provisions are made for the estimated cost of site restoration and
capitalized in the relevant asset category. Decommissioning provisions are measured at the present value of
management’s best estimate of expenditure required to settle the present obligations a t the reporting date.
Subsequent to the initial measurement, the provisions are adjusted at the end of each period to reflect the
passage of time and changes in the estimated future cash flows underlying the obligation. The increase in the
provision due to the passage of time is recognized as finance costs whereas changes in the estimated future
cash flows are either capitalized or recognized immediately in other income.
Karnalyte’s restated December 31, 2024 Financial Statements and restated Management Discussion and
Analysis are available at www.sedarplus.com
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 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
TPY. Karnalyte is also exploring the development of the Proteos 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.
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 625,000 TPY of high grade granular potash, and two
subsequent phases of 750,000 TPY each, taking total production up to 2.125 million TPY. All environmental
permits remain valid, preliminary detailed engineering is complete, and the existing offtake agreement with
Gujarat State Fertilizers & Chemicals Limited remains in effect. Further development is dependent on the
continued strength of potash prices and obtaining financing.
ABOUT GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
Gujarat State Fertilizers & Chemicals Limited (“GSFC”) 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 that was commissioned in the year 2000, and two urea plants that were established in 1969, at its
fertilizer production complex in Vadodara, Gujarat State, India.
As the Company’s strategic partner and single largest shareholder, GSFC remains committed to the Company
and the Wynyard Potash Project, and is fully 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:
Danielle Favreau
CEO
Karnalyte Resources Inc.
1(639) 638-2537
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 production facility, the 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 approvals 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 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 Proteos 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 Plus website (www.sedarplus.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.