Karnalyte Resources Inc. to review development strategy for flagship Wynyard Project

Date:10-02-2024

Karnalyte Resources Inc. (″Karnalyte″ or the ″Company″) (TSX: KRN) recently announced it will begin a review of its development strategy to evaluate the economic potential of increasing magnesium chloride production at the Company’s Wynyard Project by developing the magnesium assets at the same time as the development of the potash project.

″We have initiated preliminary studies to determine the economic opportunity of co-developing magnesium and potash production from the Company’s underground deposits,″ said Danielle Favreau, Chief Executive Officer.

Carnallite, also known as hydrated potassium magnesium chloride, is abundant within the Company’s mineral deposit. The studies are determining the economic balance of developing carnallite for the co-production of magnesium chloride and potassium chloride with the aim of significantly increasing magnesium chloride production, compared to previous studies, through the application of advanced solution mining technologies.

″Our goal is to create the most economically feasible operation we can while delivering value to shareholders. In light of the increasing importance of magnesium as one of the building blocks for the green and digital economy, we are reevaluating our strategy and we believe we should review the inclusion of concurrent and optimized magnesium and potash deposit development in our plans for the benefit of all stakeholders,″ Ms. Favreau added.

The Government of Canada lists magnesium as one of Canada’s 34 critical minerals. Magnesium also appears on critical minerals lists in other jurisdictions, such as the United States of America, the European Union, Japan, South Korea and Australia. Magnesium is a key mineral in the clean technologies and advanced manufacturing value chains.

Magnesium chloride serves as a key raw material in the production of various chemicals, including magnesium metal, magnesium hydroxide, magnesium oxide, and magnesium carbonate. These chemicals are used in high-tech applications such as semiconductor manufacturing, lithium-ion battery production, and in industries such as metallurgy, pharmaceuticals, agriculture, wastewater treatment, and advanced materials synthesis, driving the demand for magnesium chloride.

The Company plans to make progress on its NI 43-101 technical report through the remainder of the year, which is a key precursor to any mine construction. The company also expects to complete the study on the review of its development strategy by the first quarter of 2025.