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Karnalyte Resources announces 2019 financial results

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World Fertilizer,

Karnalyte Resources Inc. has announced its financial results and corporate highlights for the financial year ended 31 December 2019.

In 2019, Karnalyte continued to make progress in investigating the economic and technical viability of its proposed nitrogen project (the Proteos nitrogen project). Karnalyte also continued to prepare its potash project (the Wynyard potash project) for improvement in market conditions such that when the Wynyard potash project becomes economically viable, it could be advanced to the next development stage.

Wynyard potash project

In 2019, the company continued its process of optimising capital costs for the Wynyard potash project in order to position the company to advance the development of this project when it becomes economically feasible to do so. The company is optimistic about the long-term outlook for potash and this was supported by increases in potash prices through the first three quarters of 2019. Furthermore, global potash demand continues to grow and is projected to rebound in 2020 to around 66.6 million metric t with projections to grow to 80 million metric t by 2030. However, the company is maintaining caution as the industry continues to face headwinds with major potash mines in Saskatchewan shuttering production during 3Q19 and 4Q19 and some into 1Q20 in order to bolster prices after forecasted North American demand in 4Q19 did not materialise due to a delayed harvest season. More recently, the uncertainty around the impact of the global coronavirus pandemic on the economy and capital markets has deepened the company’s sense of caution. The company continues to monitor potash prices, the state of the capital markets and the economy generally and continues to discuss with its strategic partner Gujarat State Fertilizers & Chemicals Limited the optimal path forward to develop the Wynyard potash project.

Proteos nitrogen project

In 2019, progress on investigating the viability of the Proteos nitrogen project included the preparation of a pre-feasibility study for the project. At the end of 2019, the company received the first draft of the study. The study includes investigation and analysis of project location and site selection, an evaluation of the production process and technology options, a project description, analysis of process selection for both the ammonia and urea plants, an analysis of raw material, utility and product specifications, an analysis of environmental implications, a financial analysis, and identification and analysis of the risks inherent in the project. The study also contemplates a project implementation plan and time schedule. The report is still in a draft stage and the company is preparing to finalise the report in 2020.


The company continues to move towards the development of the Wynyard potash project as well as conclude some preliminary investigation of the viability of the Proteos nitrogen project. For the Wynyard potash project, the company plans to continue to optimise the project costs with a view to re-activating the development of the project if an improving potash price environment results in the Wynyard potash project becoming economically viable and financeable.

For the Proteos nitrogen project, the company plans to complete the pre-feasibility study for the project with a view towards making a decision on how to take the project forward including exploring and securing an offtake partner. The company continues to have discussions with a number of agricultural industry participants who have shown interest in the project.

2019 year end results

The company exercised fiscal restraint in 2019 as it continued to wait for the potash price environment to improve before proceeding with further development of the Wynyard potash project. The costs incurred by the company in 2019 related to further cost optimisation of the Wynyard project and revalidation of certain technical aspects of the project as well as further investigation and evaluation of the Proteos nitrogen project. As a result, at 31 December 2019, the company had cash of CAN$7.5 million, a positive working capital of CAN$7.2 million, and no debt. The company had adequate cash to fund all existing commitments in 2019. Furthermore, the company has sufficient cash to meet short term operating and capital requirements.

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