During 3Q19, 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. However, the company is maintaining caution as the industry continues to face headwinds with major potash mines in Saskatchewan shuttering production during 3Q19. Karnalyte continues to monitor potash prices and continues to discuss with its strategic partner Gujarat State Fertilizers & Chemicals Ltd (GSFC) the optimal path forward to develop the Wynyard Potash Project.
During the quarter, Karnalyte began the development of a pre-feasibility study for the Proteos Nitrogen Project which will include an in-depth analysis of the market for nitrogen, continued investigation of land assembly for the project site and continued discussions with local agricultural industry partners regarding their potential participation in the Proteos Nitrogen Project. Management believes that the industry fundamentals for nitrogen fertilizer will remain strong in both the short and long terms as demand growth is expected to outpace net capacity additions in North America. In 2018, the company engaged Argus Media (formerly Integer Research) to prepare an independent market study of the nitrogen fertilizer industry in North America. The report was positive supporting the decision to continue investigating this opportunity. In preparing a pre-feasibility study, the company intends to study the target market in more depth in order to better assess the market for nitrogen in central Canada.
At the Company’s most recent annual general meeting (AGM), the company received the requisite approval to change the company’s name to “Alere Chemicals and Fertilizers Inc.”. Since then the company has been working towards the development of a new brand identity, brand collateral and website related to this name change. Significant progress is being made on this project however management is the appropriate timing for the rollout of the name and brand identity.
At 30 September 2019, the company had cash of CAN$8.2 million, a positive working capital of CAN$7.8 million and no debt. The company has adequate cash to fund any existing commitments in 2019, as well as to meet short term operating and capital requirements. Karnalyte’s 3Q19 Financial Statements and Managements’ Discussion and Analysis are available at www.sedar.com and on Karnalyte’s website at www.karnalyte.com.
Outlook for 2019
During the balance of 2019, the company will continue to optimise the project costs for the Wynyard Potash Project with a view to re-activating the development of the project if the improving potash price environment results in the Wynyard Potash Project becoming economically viable and financeable. In addition, the Company plans to complete the pre-feasibility study for the Proteos Nitrogen Project with a view towards making a decision on how to take the project forward.
Read the article online at: https://www.worldfertilizer.com/potash/06112019/karnalyte-resources-announce-3q19-results/
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