Karnalyte Resources Inc. has announced its financial results and operational and corporate highlights for the third quarter of 2019. First of all, during 3Q19, the company continued its process of optimizing capital costs for the Wynyard Potash Project in central Saskatchewan in order to position the Karnalyte Resources Inc. to advance the development of this project when it becomes economically feasible to do so. The company is upbeat about the long-term outlook for potash and this was supported by increases in potash prices through the first three quarters of 2019.
However, Karnalyte is maintaining caution as the industry continues to face headwinds with major potash mines in Saskatchewan shuttering production during 3Q19. The Canada-based company 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. Meanwhile, Karnalyte also began the development of a pre-feasibility study for 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 Karnalyte engaged Argus Media 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. Ending 3Q19, 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.
