The Energy Report

Karnalyte Resources Inc. TICKER: KRN:TSX Visit Company Website Karnalyte Resources is engaged in the exploration and development of high-quality agricultural, industrial potash and magnesium products. The company aims to become a leading low-cost producer of high-quality potash using proprietary improvements to a known-solution mining process that has minimal environmental impact. Karnalyte plans to produce high-quality, low-sodium, uniform-sized granular potash pellets and industrial-grade compacted potash flakes for the agricultural market.

The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Analysis

The Energy Report Interview with Jaret Anderson (2/9/12) "Karnalyte Resources Inc. is focused on a different type of project that will seek to extract carnallite mineralization at its Wynyard property. . .Karnalyte's engineers have designed a plant that can be built in stages, which offers some advantages in terms of capital expenditures. . Its shares now represent good value." More >

Nelson Mah, Laurentian Bank Securities (2/7/12) "In a brief news release yesterday, Karnalyte Resources Inc. management reported that it provided a written response to the December 2011 comments made by the Alberta Securities Commission and received a further comment letter from the securities regulators. We anticipate there may be further feedback and correspondence as the two parties work through technical aspects of the feasibility report; the company utilized well-respected engineering firms Foster Wheeler and Ercosplan to complete the report. . .we are maintaining our Speculative Buy rating . . .Karnalyte is one of the few potash developments with a completed feasibility study and this may enhance production potential or merger and acquisition activity."

The Energy Report Interview with Corey Dias (1/24/12) "Karnalyte Resources Inc. is focusing on extracting potash from the potash-bearing carnallite layer, which is unusual for Saskatchewan because other producers and developers target the sylvinite layer that is usually closest to the surface. Karnalyte's deposit is based on an anomaly where there is a significant carnallite layer that is relatively near-surface vis-à-vis the sylvinite layer. The technology that it is planning to use also could provide a magnesium byproduct and sodium chloride byproduct, both of which the Company could potentially market and sell in the future. Karnalyte has a number of things going for it; I think management is very strong. The fact that it has four patents pending for its technology could mean that what it ends up with is going to be very unique. It has a massive land holding and has only conducted advanced exploration on 20% of it. Fnially, it plans to expand its plant by using cash flow generated from its initial buildout." More >

Kelvin Cheung, Clarus Securities (1/6/12) "We continue to highlight the opportunity in Karnalyte Resources Inc.'s shares after the recent decline in price. . .project milestones are expected early this year, and we see this as an investment window into an innovative potash mine developer and reiterate our Speculative Buy rating."

Kelvin Cheung, Clarus Securities (12/15/11) "We are initiating coverage of Karnalyte Resources Inc. with a Speculative Buy recommendation and a 12-month target price of $20/share. . .the company will offer a superior product in the North American potash markets, affording it high prices in the potash spectrum. . .Karnalyte's product has premium characteristics such as high purity, low sodium content, granular size and uniform shape without comparable capital costs. . .Karnalyte should deliver investment outperformance with its soonest-junior-to-production prospects, proprietary innovations and the benefits from its commercialized carnallite (and sylvinite) mining plans."

• Corporate Presentation (5/31/11)
• Corporate Fact Sheet (6/7/11)

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