Karnalyte Resources Inc. press release
KARNALYTE RESOURCES INC. UNVEILS RESULTS OF UPDATED FEASIBILITY STUDY FOR FLAGSHIP WYNYARD PROJECT, SHOWCASING 70-YEAR POTASH MINE LIFE, POSITIVE ECONOMICS, AND MARKET GROWTH
TSX - Toronto Stock Exchange · Potash · Magnesium · Canada
KARNALYTE RESOURCES INC. UNVEILS RESULTS OF UPDATED FEASIBILITY STUDY FOR FLAGSHIP WYNYARD PROJECT, SHOWCASING 70-YEAR POTASH MINE LIFE, POSITIVE ECONOMICS, AND MARKET GROWTH Canada NewsWire
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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, Nov. 26, 2025 /CNW/ - 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. ("MARCH") 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.
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, 175 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:
$3.96 billion for potash processing (over three phases) with a total planned capacity of 2.175 Mt/a.
$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:
Potash process facility operating costs are forecasted to remain stable and competitive at $134.01/t.
Hydromagnesite production facility operating costs estimated at $318.04/t.
Long-term potash price assumptions:
US$516/t for white 61.3% potassium oxide ("K2O") granular Muriate of Potash ("MOP") (US Corn Belt)
US$507/t for white 61.3% K2O granular MOP (India)
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 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:
Natural hydromagnesite: US$740/t (90–97% purity)
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:Patience Lake and Belle Plaine Members: carnallite-rich, with minor sylvite.
Esterhazy Member: sylvite-rich, with minor carnallite.
Below mineral resources are composite grades for all potash bearing members combined.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")).
Indicated mineral resources: 1,789.9 million tonnes grading 50.0% carnallite, 5.1% sylvite (equivalent to 11.7% K₂O, and 7.2% MgO).
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.
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.
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.
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 MgCl2 brine 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 MgCl2-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 risk 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 increase 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 establishment 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 Mineral 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
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 by the mineralogical composition typically (1.7 to 1.9 g/cm3 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 K2O 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 K2O 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 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.