Karnalyte Resources Inc. Provides Update ON the Proteos Nitrogen Project
1
KARNALYTE RESOURCES INC. PROVIDES UPDATE ON THE
PROTEOS NITROGEN PROJECT
Not for distribution to U.S. news wire services or dissemination in the United States.
SASKATOON, SK (CNW - October 22, 2018) – Karnalyte Resources Inc. (“Karnalyte” or the
“Company”) (TSX: KRN) today provided an update on t he status of its Proteos Nitrogen Project.
Proteos Nitrogen Project
Further to Karnalyte’s press releases of July 30, 2 018 and August 9, 2018 with respect to the Proteos
Nitrogen Project (the “Project”), Karnalyte provide s the following update on the status of the various
aspects of development designed to explore the technical and economic viability of the Project.
Mr. Frank Wheatley, President of Karnalyte, commented that: “We are very pleased with the interest shown
by the technology providers / contractors in our Proteos Nitrogen Project, as well as the positive first phase
independent market study, both of which support and confirm our decision to pursue the development of
the Project.”
Expressions of Interest
As previously reported on July 30, 2018 Karnalyte i ssued, through its strategic partner Gujarat State
Fertilizers & Chemicals Limited (“GSFC”), an invita tion for expressions of interest (“EOI”) from a sel ect
group of international technology providers and engineering, procurement and construction contractors, for
developing the Project on a lump sum turn-key basis.
Karnalyte has received a total of 8 EOIs and togeth er with GSFC is currently classifying these EOIs in
order to short list the technology providers / EPC contractors to receive a formal Request For Proposa l
(“RFP”) for development of the Project on an EPC ba sis.
Independent Market Analysis
Karnalyte has received a draft of the final version of the first phase independent market study, prepared by
Integer Research Ltd., which was recently acquired by Argus Media (“Argus”), of the nitrogen fertilize r
industry in North America, with particular focus on Central Canada. The study confirms and validates
Karnalyte’s internal market analysis, and Karnalyte intends to retain Argus to undertake a second phas e
study at the appropriate time in order to support discussions regarding project financing for the Project.
About Argus Media
Argus is a leading energy and commodity price reporting agency providing data, news and insight as well
as conference and consulting services. Companies in more than 140 countries around the world use Argus
prices to index physical trade and as benchmarks in financial derivative markets as well as for analysis and
planning purposes. Prior to its acquisition by Arg us, Integer Research was an internationnaly recogni zed
independent consultant to the fertilizers and chemi cals industry that provided market studies, includi ng
supply/demand, trade and cost analysis and price fo recasts. With respect to nitrogen, they offered
capabilities across the nitrogen value chain, including analysis of ammonia, urea, UAN, and other nitrogen
2
products. They produced market documentation for l enders and banks in support of project financing fo r
greenfield and brownfield fertilizer projects. Through their offices in London, Beijing and Tokyo, Integer
Research offered consultancy services and industry intelligence to fertilizer and chemicals markets
worldwide.
Project Site
Karnalyte continues to narrow its list of potential project sites located in Central Saskatchewan that match
Karnalyte’s project site selection criteria, which include adequate space for the initial development, as well
as for potential future expansion, together with pr oximity to all requisite infrastructure, including natural
gas, power, water, rail and highway.
Interest from the Agricultural Industry
Karnalyte continues to receive interest in the Project from a number of agriculture industry participants and
Karnalyte is currently engaged in discussions with such industry participants. Those discussions conf irm
Karnalyte’s market thesis that there is both a desi re and a demand for an independent, alternate sourc e of
supply of nitrogen fertilizer in central Saskatchew an, however, such discussions remain preliminary in
nature and no agreements or arrangements have yet been concluded.
Milestones: Indicative project development milestones include:
• Receipt of EOIs Complete
• Receipt of Phase 1 independent market analysis Co mplete
• Project Site – selection of preferred site Fourt h Quarter 2018
• Issuance of Request for Proposal: Fourth Quarter 2018
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.
3
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.
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 ,
4
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 ).
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.