Karnalyte Resources Inc. Unveils Results of Updated Feasibility Study FOR Flagship Wynyard Project, Showcasing 70-YEAR Potash MINE Life, Positive Economics, and Market Growth
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KARNALYTE RESOURCES INC. UNVEILS RESULTS OF UPDATED
FEASIBILITY STUDY FOR FLAGSHIP WYNYARD PROJECT,
SHOWCASING 70-YEAR POTASH MINE LIFE, POSITIVE
ECONOMICS, AND MARKET GROWTH
Not for distribution to U.S. news wire services or dissemination in the United States.
• Positioned for stable, de -risked returns with a secured offtake agreement, positive project
economics, and a projected 70-year mine life producing 142.2 million tonnes (2.175 million
tonnes per annum “Mt/a”) of potash and 7 million tonnes (104 kilotonnes per annum “kt/a”) of
hydromagnesite
• After-tax NPV of $2.04 billion Canadian dollars at an 8% discount rate and IRR of 12.5%
demonstrate strong project economics
• Located 175 km east of Saskatoon, with direct access to infrastructure, services, and established
potash transportation routes
• Poised to meet growing potash and hydromagnesite demand
SASKATOON, SK (CNW- November 26, 2025) – Karnalyte Resources Inc. ("Karnalyte" or the "Company")
(TSX: KRN) is pleased to announce the results of its updated feasibility study for the Wynyard deposit in
central Saskatchewan (the “Project”) showing a projected 70 -year potash mine life and positive
economics that provide the foundation for stable, de-risked long-term returns from the Project.
Karnalyte retained Wood Canada Limited (“Wood”), ERCOSPLAN Ingenieurgesellschaft (“ERCOSPLAN”),
RESPEC Consulting Inc. (“RESPEC”), and March Consulting Associates Inc. (“M ARCH”) to update the
existing feasibility study for the Project and prepare a technical report (the “Report”) under National
Instrument 43 -101 Standards of Disclosure for Mineral Projects (“NI 43 -101”). The Report, effective
November 26, 2025 and titled NI 43-101 Technical Report on the Feasibility Study of the Wynyard Project,
Saskatchewan, Canada, will be filed under the Company’s issuer profile at www.sedarplus.com within 45
days of this news release.
“The updated Feasibility Study marks a pivotal milestone for Karnalyte Resources, confirming the
expected strength and longevity of our Wynyard deposit,” said Danielle Favreau, Chief Executive Officer
of Karnalyte Resources. “Our disciplined focus on efficiency and growth has positioned us to advance the
Project toward successful development as we invest in operational planning. With a strong foundation
and clear strategy, we are ready to capitalize on opportunities that further enhance value for all
stakeholders.”
Ms. Favreau continued, “Supported by robust estimated mineral resources and mineral reserves, planned
potash production capacity, and a secured offtake agreement with our strategic partner, the Wynyard
project is designed to deliver stable returns and reliable future cash flow. As potash is essential to global
food security, our competitive cost structure and positive market fundamentals, backed by strong price
forecasts, provide a solid platform for long-term value creation.”
“Karnalyte is also well -positioned in the hydromagnesite market, with the potential to offer North
American and international buyers a high -quality, cost -effective alternative amid limited supply. Our
deposit and scalable Project design provide opportunities for future expansion into higher-value markets,
positioning Karnalyte to capture a significant share of the global hydromagnesite market. With a planned
long-term mine life and a commitment to operational excellence, Karnalyte is poised to support
agricultural productivity and industrial growth for decades to come,” concluded Ms. Favreau.
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PROJECT OVERVIEW & STRATEGIC POSITION
• 70-year projected mine life provides a strong foundation for long -term, steady returns from
supporting global food security and industrial growth.
• Strategic location in Saskatchewan, 1 75 km east of Saskatoon, and within a recognized potash
belt in proximity to established producers, with access to necessary infrastructure to serve North
American and export markets.
• Unique project that mines from a carnallite deposit that contains potassium chloride (“KCl”) as
well as magnesium chloride (“MgCl2”) and so can produce potash as well as magnesium products
like hydromagnesite.
• Strategic partnership with Gujarat State Fertilizers and Chemicals Limited (“GSFC”), a major
shareholder, and a government-backed entity, assures a reliable offtake agreement and
underscores the confidence of key stakeholders in Karnalyte’s ability to deliver a stable, long -
term supply of potash.
• The Report was prepared in accordance with NI 43-101 by leading consultants Wood, ERCOSPLAN,
RESPEC, and MARCH, reflecting industry best practices and transparency.
• Positioned to meet growing North American and Indian demand for potash and world demand for
hydromagnesite, with the ability to capture premium pricing due to product quality and location.
• All amounts are in Canadian dollars unless indicated otherwise.
ECONOMICS & FINANCIALS
• After-tax net present value of $2.04 billion at an 8% discount rate, and an after-tax internal rate
of return of 12.5%.
• After-tax payback of 8.8 years reflects the Project’s strong cash flow generation, and attractive
investment profile.
• Estimated total initial capital cost: $4.19 billion, which includes:
o $3.96 billion for potash processing (over three phases) with a total planned capacity of
2.175 Mt/a.
o $231 million for the hydromagnesite production facility with a planned capacity of up to
104,000 t/a.
• Sustaining capital costs: $7.62 billion over the life of mine (“LOM”).
• Operating costs:
o Potash process facility operating costs are forecasted to remain stable and competitive
at $134.01/t.
o Hydromagnesite production facility operating costs estimated at $318.04/t.
• Long-term potash price assumptions:
o US$516/t for white 61.3% potassium oxide (“K 2O”) granular Muriate of Potash (“MOP”)
(US Corn Belt)
o US$507/t for white 61.3% K2O granular MOP (India)
o US$438/t for white 60% K2O granular MOP (Vancouver)
• Secured potash offtake agreement with GSFC (the “Offtake Agreement”) de-risks project
economics, ensuring a built -in buyer for 350,000 tonnes of potash per year from Phase 1, with
an additional 250,000 tonnes per year from Phase 2 for a total of 600,000 tonnes per year from
the date of commencement of Phase 2 production. The Offtake Agreement provides GSFC the
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potential to increase its offtake by up to 400,000 t/a from Phase 3 which could bring total annual
quantities sold pursuant to the Offtake Agreement up to 1,000,000 t/a.
• Long-term hydromagnesite price assumptions:
o Natural hydromagnesite: US$740/t (90–97% purity)
o Synthetic hydromagnesite: US$1,409/t (99–99.8% purity)
MINERAL RESOURCES ESTIMATE
• Measured, indicated, and inferred resources are reported for each potash bearing member:
o Patience Lake and Belle Plaine Members: carnallite-rich, with minor sylvite.
o Esterhazy Member: sylvite-rich, with minor carnallite.
• Below mineral resources are composite grades for all potash bearing members combined.
o Measured mineral resources: 1,162.4 million tonnes grading 47.9% carnallite, 6.1% sylvite
(equivalent to 12.0% potassium oxide (“K₂O”), and 6.9% magnesium oxide (“MgO”)).
o Indicated mineral resources: 1,789.9 million tonnes grading 50.0% carnallite, 5.1% sylvite
(equivalent to 11.7% K₂O, and 7.2% MgO).
o Inferred mineral resources: 3,902.1 million tonnes grading 45.2% carnallite, 7.2% sylvite
(equivalent to 12.2% K₂O, and 6.6% MgO).
MARKET STUDIES AND CONTRACTS
Karnalyte is positioned for stable growth in the North American potash and hydromagnesite markets,
with future opportunities to expand into alternative magnesium-based products.
• Offtake Agreement secures 42 –52% of potash sales, ensuring predictable early revenue. The
remaining output targets strategic growth in the US Corn Belt.
• Locally produced hydromagnesite offers a high-purity, eco-friendly alternative to costly imports,
aiming to capture a significant share of both current demand and future market growth in North
America.
o Karnalyte is evaluating options to extract additional magnesium products from the MgCl2
rich end brine like magnesium chloride brine, magnesium chloride hexahydrate,
magnesium hydroxide, and magnesium oxide, with potential for magnesium metal
production.
o These magnesium products could diversify revenue, pending further analysis and market
evaluation.
PEOPLE & COMMUNITY
• Project expected to create approximately 244 permanent operating jobs, and 1,100 construction
jobs.
• The Wynyard Project received approval for its comprehensive Environmental Impact Statement
(“EIS”) in 2013 for Phase 1 . Karnalyte will submit an amendment to the approved EIS during
detailed engineering for Phase 1 to incorporate Phases 2 & 3, following provincial requirements
to ensure ongoing compliance.
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OPERATIONAL IMPROVEMENTS
Operational improvements such as transitioning to compacted product and adopting proven production
methods underscore our commitment to efficiency and excellence. The Phase 1 production was also
increased from 625,000 t/a to 675,000 t/a, this results in an overall production increase from 2.125 Mt/a
to 2.175 Mt/a. These advances demonstrate our ability to capture premium pricing, maximize long-term
value, and support a more sustainable future for agriculture and industry.
NI 43-101 TECHNICAL REPORT ON THE FEASIBILITY STUDY
QUALIFIED PERSONS
The following individuals are each Qualified Persons ( “QPs”), as defined under NI 43 -101, and have
reviewed and approved the scientific and technical information in this news release:
• Ms. Tabetha Stirrett, P.Geo., President, RESPEC
• Dr. Sebastiaan van der Klauw, EurGeol, Consulting Geologist, ERCOSPLAN
• David Mitchell, P.Eng., Senior Process Engineer, Wood
• David Myers, P.Eng., Technical Director Mining and Minerals (Saskatoon), Wood
• Kyle Krushelniski, P.Eng., Senior Project Manager, MARCH
DATA VERIFICATION
QP Stirrett visited the Project site. She has reviewed the re -assaying results, verified the Karnalyte
exploration drill hole data and associated geochemical data and carried out quality control measures to
ensure the accuracy and integrity of the core.
QP van der Klauw visited the Project site and inspected drill sites and drill core and observed the start
of the solution mining test. He discussed the results of the 3D seismic survey with those who conducted
the survey, directed the rock mechanical and dissolution test work and visited the laboratories where
the tests were conducted.
QP Myers completed a site visit and confirmed site access, assessed existing infrastructure and observed
conditions at site.
QP Mitchell reviewed the metallurgical test work reports, the analytical procedures, qualification of the
laboratory and presentation of test results , concluding that all items reviewed have followed industry
accepted practice.
QP Krushelniski reviewed the Offtake Agreement as well as the independent market study reports
commissioned by Karnalyte for potash and hydromagnesite.
PROJECT RISKS AND OPPORTUNITIES
The following opportunities have been identified:
• Selling a MgCl2 brine for road dust suppression or de-icing directly to municipalities or through
a distributor. The current plant has the ability to supply up to 100,000 tonnes of MgC l2 brine
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annually. If market conditions are favourable, MgCl2 brine production can be increased with
minimal capital investment.
• Ongoing market disruptions due to world events may improve opportunities for North American
domestic producers to access the US Corn Belt market, which imports a portion of its potash
consumption from Russia.
• The hydromagnesite market study shows rapid growth in the demand for hydromagnesite
particularly in North America where supply currently relies on imports. If market supply
remains restricted as indicated in the market study, hydromagnesite production can be
increased and sold into the world market to help reduce supply limitations.
• The synthetic world hydromagnesite market is supply limited. Karnalyte may capture a portion
of the world synthetic hydromagnesite market resulting in increased revenue.
• Investigating alternative magnesium-based products to determine economic production and
potential markets. Any new magnesium products would utilize excess MgC l2-rich end brine
and would be in addition to planned hydromagnesite production.
The following risks have been identified:
• There is a risk that the hydromagnesite processing plant will not perform as designed based on
bench scale testing at a prefeasibility level. A larger scale test should be performed (e.g. pilot
plant) to confirm its process design and capital cost. This ri sk has been mitigated with the
inclusion of a higher percent contingency for this part of the overall project capital cost.
• There is a risk that the brine sent from the potash facility to feed the magnesium facility may
have higher than designed impurities (sulphates, calcium). This is a small risk to operational
costs of the hydromagnesite plant and would require a small incre ase in water and reagent
usage.
• There is a risk that the Company’s ability to capture a share of the existing potash market for
the new potash supply provided by the Project could be impacted given local emerging
competitors. New planned production was taken into consideration for the es tablishment of
long-term pricing.
• There is a risk that Karnalyte's entry into the hydromagnesite market could affect pricing due
to the scale of production relative to current market size.
• There is a risk that the possible introduction of a royalty framework for magnesium will directly
impact the Project NPV.
MINERAL RESOURCE ESTIMATE
The mineral resource estimate presented in the table below assumes the solution mining of carnallite
and sylvite and is reported in accordance with 2014 Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards for Mineral Resources and M ineral Reserves (“2014 CIM Definitions
Standards”). The mineral resource is reported at a cut-off of approximately 55% carnallite for carnallitite
and 20% sylvite for sylvinite determined based on operating costs, process recovery and a potash price
of US$516/t. The Project will mine carnallite from the Patience Lake and Belle Plaine members and
sylvite from the Esterhazy member.
Classification
Category
Tonnes
(Mt)
Carnallite Grade
(%)
Sylvite Grade
(%)
Avg. K2O
(%)
Avg. MgO
(%)
Measured
Patience Lake 324.5 60.2 3.9 12.7 8.7
Upper Belle
Plaine
392.9 67.7 1.2 12.2 9.8
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Lower Belle
Plaine
267.8 29.9 4.3 7.8 4.3
Esterhazy 177.2 8.6 23.7 16.4 1.3
Total Measured 1,162.4 47.9 6.1 12.0 6.9
Indicated
Patience Lake 532.3 61.4 3.5 12.6 8.9
Upper Belle
Plaine
627.5 67.1 1.1 12.1 9.7
Lower Belle
Plaine
428.2 30.1 4.4 7.9 4.4
Esterhazy 201.9 8.8 23.3 16.2 1.3
Total Indicated 1,789.9 50.0 5.1 11.7 7.2
Inferred
Patience Lake 1,160.1 57.4 4.8 12.8 8.3
Upper Belle
Plaine
1,203.6 65.8 1.5 12.1 9.5
Lower Belle
Plaine
814.9 30.0 4.4 7.8 4.3
Esterhazy 723.5 8.2 23.5 16.2 1.2
Total Inferred 3,902.1 45.2 7.2 12.2 6.6
Notes:
(1) The effective date of the mineral resource is November 26, 2025. The QP for the mineral resource is Sebastiaan van der
Klauw, an employee of ERCOSPLAN.
(2) Mineral resources are reported in accordance with 2014 CIM Definition Standards.
(3) Mineral resources are reported inclusive of those mineral resources that have been converted to mineral reserves.
(4) Mineral resources are assumed to be extracted using solution mining.
(5) Mineral resource tonnage is determined by measuring the area of the resource using the polygonal method, calculating
the volume by applying the thickness of the potash bearing member determined from the well and multiplying by the
density determined b y the mineralogical composition typically (1.7 to 1.9 g/cm 3 for carnallitite, depending on relative
amounts of sylvite in the rock, and between 2.01 and 2.1 g/cm3 for sylvinite, depending on the relative amount of carnallite
in the rock).
(6) Cut-off grades are approximately 55% carnallite for carnallitite and 20% sylvite for sylvinite. Using these defined cut -
offs the maximum mining, process and G&A operating costs ($134.01/t), process recovery of 90% and an assumed MOP price
of US$516/t the Project generates positive cash flows. The Lower Belle Plaine Member does not make the cut -off grades;
however, the brine from the Lower Belle Plaine Member is considered as part of the mineral resource as it is used as solvent
for solution mining of the Upper Belle Plaine and Patience Lake Members.
(7) The average K 2O content for the mineralized material is obtained by the sum of the carnallite grade multiplied by a
factor of 0.17 and sylvite grade multiplied by a factor of 0.63 representing the K 2O content of 100% carnallite and 100%
sylvite, respectively. The average MgO content of the mineral resource is obtained by the product of the carnallite grade
multiplied by the factor of 0.145 representing the MgO content of 100% carnallite.
(8) Mineral resources are estimated in -situ with no allowances for mine or process recoveries. A limiting factor will be
applied to the magnesium product to reflect the capacity constraint of the market.
(9) Areas covered by 2D seismic that are outside the 3D seismic boundary have a 25% deduction applied to the tonnage to
account for anomalies that might not have been detected by the 2D seismic investigations. Areas within the 3D seismic
have a 10% deduction applied to the tonnage to account for anomalies that might not have been detected by the 3D seismic
investigations.
(10) Figures may not sum due to rounding.
MINING AND MINERAL RESERVE ESTIMATE
Modifying factors were applied to measured and indicated mineral resources to convert them to proven
and probable mineral reserves based on the leaching of potash -bearing carnallite and sylvite members
using a non-selective solution mining method. The table below presents the mineral reserves classified
in accordance with 2014 CIM Definition Standards that reflects a mine plan developed over three project
phases amounting to the production of 2.175 Mt/a 97% KCl. The point of reference is delivery of the
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production brine at the tank farm at the process facilities. Mineral reserves are defined for the minerals
carnallite and sylvite that can be processed to MOP fertilizer and MgCl2-rich brine which can be processed
to a magnesium product. The Project will utilize only a portion of the MgO reserves in the production of
a magnesium product.
Karnalyte Mineral Reserve Statement
Confidence Category Tonnes
(Mt)
Carnallite
Grade
(%)
Sylvite
Grade
(%)
Avg. K2O
(%)
Avg. MgO
(%)
Proven Mineral
Reserves
Patience Lake 103.8 60.3 3.8 12.6 8.7
Upper Belle Plaine 125.9 67.6 1.3 12.3 9.8
Lower Belle Plaine 30.3 29.7 4.2 7.7 4.3
Esterhazy 53.2 8.8 23.9 16.6 1.3
Sub-total Proven 313.2 51.5 6.2 12.7 7.5
Probable Mineral
Reserves
Patience Lake 166.9 61.4 3.5 12.6 8.9
Upper Belle Plaine 200.9 67.1 1.1 12.1 9.7
Lower Belle Plaine 48.5 29.9 4.4 7.8 4.3
Esterhazy 47.5 10.5 23.3 16.5 1.5
Sub-total Probable 463.8 55.4 4.6 12.3 8.0
Total Proven and
Probable
777.1 53.8 5.2 12.4 7.8
Notes:
(1) The effective date of the mineral reserve is November 26, 2025. The QP for the mineral reserve is Dr Sebastiaan van
der Klauw, an employee of ERCOSPLAN.
(2) Mineral reserves are reported in accordance with 2014 CIM Definition Standards.
(3) Mineral reserves have been determined by counting the number of solution mining caverns with their centre point
within the mineral resource radius of influence for the measured and indicated categories for each well. The number of
caverns was then multiplied by the dissolved tonnage of carnallite and sylvite for each member to obtain the tonnage and
average grade that could be solution mined from this area.
(4) To ensure optimal plant operation the mine plan has been designed to maintain a sylvinite: carnallitite ratio between
25:75 and 10:90. To achieve this, not all indicated and measured mineral resources of the Esterhazy member were
converted to proven and probable mineral reserves.
(5) Cut-off grades are approximately 55% carnallite for carnallitite and 20% sylvite for sylvinite. Using these defined cut -
offs the maximum mining, process and G&A operating costs ($134.01/t), process recovery of 90% and an assumed MOP price
of US$516/t the Project generates positive cash flows. The Lower Belle Plaine Member does not make the cut -off grades;
however, the brine from the Lower Belle Plaine Member is considered as part of the mineral reserve as it is used as solvent
for solution mining of the Upper Belle Plaine and Patience Lake Members.
(6) The average K2O content for the mineral reserve is obtained by the sum of the carnallite grade multiplied by a factor
of 0.17 and sylvite grade multiplied by a factor of 0.63 representing the K 2O content of 100% carnallite and 100% sylvite,
respectively. The average MgO content of the mineral reserve is obtained by the product of the carnallite grade multiplied
by a factor of 0.145 representing the MgO content of 100% carnallite.
(7) Mineral reserves include allowances for solution mining recovery, but not for process recovery. Each well has their own
cavern solution recoveries that range from 84% to 91% for the Patience Lake Member, from 89% to 91% for the Upper Belle
Plaine Member, from 30% to 33% for the Lower Belle Plaine Member, from 88% to 92% for the Upper Esterhazy Member and
from 88% to 91% for the Lower Esterhazy Member. A limiting factor of marketing capacity will be applied to the magnesium
by-products from MOP production to reflect the capacity constraint of the market.
(8) Areas covered by 2D seismic that are outside the 3D seismic boundary have a 25% deduction applied to the tonnage to
account for anomalies that might not have been detected by the 2D seismic investigations. Areas within the 3D seismic
have a 10% deduction applied to the tonnage to account for anomalies that might not have been detected by the 3D seismic
investigations.
(9) Figures may not sum due to rounding.
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PROCESS: METALLURGICAL PROCESS AND RECOVERY METHODS
Metallurgical Test Work
Since 2011, Karnalyte has completed dissolution testing, evaporation and crystallization test work,
thermodynamic modelling of the evaporation and crystallization circuit, pilot solution mining testing,
and performed laboratory work to confirm the process of creating hydromagnesite. The test work,
combined with standard industry knowledge, allowed for a predicted recovery to be estimated based on
the deposit.
Dissolution test work was conducted on samples from the Patience Lake, Belle Plaine and Esterhazy
members with most samples showing a low content of insoluble minerals which can have considerable
impact on the dissolution rate and cavern shape development. Test work also showed correlation
between KCl brine grade and the carnallite/sylvite content of the carnallite with carnallite providing KCl
saturation values of approximately 80% at 50 oC.
In 2016 Karnalyte performed a pilot solution mining test operation consisting of an initial cavern
preparation phase using cold water from the Blairmore aquifer followed by a production leaching phase
where the prepared cavern was injected with heated Blai rmore water. The pilot operation concluded
that carnallite solution mining of the Belle Plaine Member is technically feasible and the results were
sufficient to support the concepts used to estimate the production brine composition. Combined testing
and design criteria illustrate that a suitable brine can be recovered for processing in the designed mill
to produce a 97% pure KCl product at 90% recovery.
In 2014, the Saskatchewan Research Council completed laboratory work that produced two samples of
hydromagnesite from the brine that are comparable to current products in the high purity market.
A brine disposal test was completed in 2013. It showed the disposal of excess MgCl2 brine and NaCl brine,
from redissolved solid NaCl, in the Deadwood Formation is feasible. The brine disposal well was also
successfully used to dispose all brines produced during the pilot solution test operation in 2016. Planned
disposal to meet Phase 1 and Phase 2 should be obtained with two disposal wells and a third as
standby. Subsequently, Phase 3 would require one additional active injection well.
Recovery Methods
The potash plant design was developed from the test work completed since 2011. The basis of design is
on the production of 675,000 t/a of KCl product with a KCl grade of 97%. This initial phase (Phase 1) will
be expanded in Year 3 with the commissioning of a separate facility capable of producing 750,000 t/a of
97% KCl (Phase 2) after a ramp up commissioning phase. A third facility (Phas e 3) will be capable of
producing a further 750,000 t/a of 97% KCl in Year 5 after another ramp up commissioning phase.
All three potash processing facilities utilize the same flowsheet by first removing insoluble and blanketing
fluid from production brine followed by evaporation, NaCl and KCl crystallization, and drying and
compacting producing a high-purity granular agricultural grade product.
The solid salt produced from the evaporation and crystallization circuit is dissolved into a n NaCl brine
and injected into the Deadwood Formation via disposal wells.
A portion of the MgC l2 rich end brine from potash production is used to produce up to 104,000 t/a of
hydromagnesite in a separate facility. The process involves treating the brine with Epsom salt and then
ammonia. Hydromagnesite is then produced through carbonation. The resulting slurry is then dewatered
and dried before sale.