5/04/2014

Below Net Cash .. Takeover Potential



Karnalyte Resources(KRLTF)or Canadian exchange (KRN.TO

 ... negative enterprise value

KRLTF current price (05/02/14) is $1.10 per share, you get per share values of cash 1.53, book value 3.67, EV -.421


Karnalyte Resources focuses on exploration, development of agricultural and industrial potash as well as magnesium products. Furthermore, Karnalyte intends to develop and extract a carnallite - sylvite mineral deposit. Significant magnesium received a positive pre-feasibility study for the production of magnesium compounds. The construction of a magnesium product facility is contingent upon the development of the 625,000 tonnes per year. Study indicated viability of producing magnesium products as a second product line.

Noted advantages taken from Karnalyte Resources website are as follows:  “strong potash industry fundamentals; a significant potash resource with existing infrastructure; low capital expenditures and operating costs; near-term production of 625,000 tonnes per year, with plans to expand to 2.125 million tonnes per year; and an opportunity for expansion of both production and resource base.”

A strategic investment and agreement with Gujarat State Fertilizers & Chemicals ("GSFC") received environmental permits to start construction of the Wynyard Carnallite Project. The Company’s near-term objectives get additional financing to fund the first phase construction along with identifying other strategic partnership opportunities.

Gujarat StateFertilizers & Chemicals(GSFC india) was willing to take a 19.8% stake in the company paying 44.7M or 8.15 per share in a private placement. That was January 2013.

KRLTF
52-Week Change:  -83.65%
Market Cap:30.45M
Enterprise Value (May 5, 2014): -11.59M   







  "Karnalyte met key strategic milestones in 2013 by entering into a strategic partnership and off take agreement and receiving Environmental Impact Study approval for the Wynyard Carnallite Project from the Saskatchewan Ministry of Environment," said Robin Phinney, President and CEO of Karnalyte Resources Inc. "Despite these important accomplishments, the global potash market remains challenged. Karnalyte intends to manage costs and explore other product lines while advancing discussions with potential strategic partners and pursuing new strategic partners in this unique market environment."
The Corporation has identified other potentially economical product lines and is determining how to pursue these potential product lines to enhance shareholder value. The Corporation continues to investigate the possibility of magnesium production from its property, including product development, independent testing of product and discussions with key industry players.

“As at December 31, 2013, the Corporation had net working capital of $47.0 million compared to $21.4 million at December 31, 2012, including $46.1 million and $25.1 million, respectively, in cash. Karnalyte's 2013 Year End Financial Statements and Management's Discussion and Analysis (MD&A) are available at www.sedar.com.”

Note: holding a small long position of KRLTF

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