KARNALYTE RESOURCES INC. UNVEILS RESULTS OF UPDATED FEASIBILITY STUDY FOR FLAGSHIP WYNYARD PROJECT, SHOWCASING 70-YEAR POTASH MINE LIFE, POSITIVE ECONOMICS, AND MARKET GROWTH

Executive Summary

• Karnalyte released an NI 43‑101 technical report showing a 70‑year mine life for the Wynyard potash project with after‑tax NPV of C$2.04 billion (8% discount) and IRR of 12.5%.
• Total initial capital cost is estimated at $4.19 billion (potash $3.96 bn, hydromagnesite $231 m) with sustaining capital of $7.62 billion over life‑of‑mine.
• A secured off‑take agreement with Gujarat State Fertilizers & Chemicals Ltd. guarantees 350‑k t/yr of potash in Phase 1 (rising to up to 1 Mt/yr in later phases).

Key Details

• Project Scope
• Projected production: 2.175 Mt/a of potash (2.175 Mt total over life) and 7 Mt of hydromagnesite.
• Mine life: 70 years; 244 permanent jobs + ~1,100 construction jobs.
• Economic Highlights
• After‑tax NPV (8%): C$2.04 bn
• After‑tax IRR: 12.5%
• Payback period: 8.8 years
• Capital Expenditure
• Initial capex: $4.19 bn total
  • Potash processing: $3.96 bn (three phases, 2.175 Mt/a capacity)
  • Hydromagnesite plant: $231 m (up to 104 kt/yr)
• Sustaining capex LOM: $7.62 bn
• Operating Costs
• Potash processing: US$134.01 per tonne
• Hydromagnesite processing: US$318.04 per tonne
• Off‑take Agreement (GSFC)
• Phase 1: 350,000 t/yr potash
• Phase 2: additional 250,000 t/yr (total 600,000 t/yr)
• Option for up to 400,000 t/yr in Phase 3 (potential total 1 Mt/yr)
• Price Assumptions
• Potash (MOP): US$516/t (U.S. Corn Belt), US$507/t (India), US$438/t (Vancouver)
• Hydromagnesite: Natural US$740/t; Synthetic US$1,409/t
• Mineral Resources & Reserves
• Measured resources: 1,162.4 Mt (47.9% carnallite, 6.1% sylvite)
• Indicated resources: 1,789.9 Mt (50.0% carnallite, 5.1% sylvite)
• Inferred resources: 3,902.1 Mt (45.2% carnallite, 7.2% sylvite)
• Proven reserves: 313.2 Mt; Probable reserves: 463.8 Mt; Total proven + probable: 777.1 Mt
• Infrastructure
• Existing road access, rail load‑out to CP main line (3 km spur), truck transport for hydromagnesite.
• Power requirement: Phase 1 – 32 MW; each additional phase – +36 MW; magnesium plant – 2.1 MW.
• Environmental & Permitting
• Comprehensive EIA approved (2013); amendment to be filed for Phases 2‑3.
• Brine disposal via Deadwood formation wells; solid waste backfilled in mined caverns.
• Market Opportunities
• Potash: targeted to North American and Indian markets; 42–52% of sales covered by off‑take.
• Hydromagnesite: positioned for North American demand, with potential expansion into synthetic grades and other Mg‑based products (MgCl₂ brine, magnesium chloride hexahydrate, MgO).

Notable Quotes

“The updated Feasibility Study marks a pivotal milestone… confirming the expected strength and longevity of our Wynyard deposit.” – Danielle Favreau, CEO

“Our secured off‑take agreement with GSFC de‑risks project economics and ensures stable cash flow from day one.” – Danielle Favreau, CEO