Karnalyte Resources potash update
‘We want to see this succeed’: Karnalyte plans to pursue Wynyard potash mine despite CEO’s abrupt exit
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: July 28, 2017 | Last Updated: July 28, 2017 6:21 PM CST
The site of Karnalyte Resources Inc.’s proposed potash mine near Wynyard.
KARNALYTE RESOURCES INC.
The collapse of a $700 million financing agreement and the unexpected departure of its founder and longtime president have not halted a Saskatoon-based junior miner’s plan to secure the funds needed to build a potash mine near Wynyard, according to its new interim chief executive.
Todd Rowan, who was earlier this month appointed to lead Karnalyte Resources Inc. as it looks for a permanent CEO, said while he could not disclose details of the company’s plans, it is “working towards” building the proposed 625,000-tonnes-per-year solution mine about 175 kilometres west of Saskatoon.
“We need financing; that’s the only hurdle left,” said Rowan, who also sits on Karnalyte’s board of directors. He declined to comment on whether the company will seek a new deal with its former financing partner, Gujarat State Fertilizer & Chemicals Ltd. (GSFC), or look elsewhere for the money.
GSFC representatives did not immediately respond to a request for comment on Wednesday.
Rowan said he also could not comment on the abrupt exit of Robin Phinney, who founded Karnalyte in 2007 and championed its project near Wynyard before leading a group of concerned shareholders after the company’s board decided to suspend work at the site in 2015. Reached by phone, Phinney, whose exit was announced last month, also declined to comment.
Karnalyte’s plan to build the mine, the first phase of which is expected to cost $789 million to build, began to move quickly last year after it announced an agreement in principle to finance the project with GSFC. Three years earlier, the Indian company had invested $44.7 million into Karnalyte.
Phinney said at the time that the deal — which involved GSFC underwriting the mine’s construction and buying 56 per cent of its production for 20 years in exchange for a temporary 51 per cent voting stake in the company — meant he could have “dirt flying” by late 2016. That changed last summer when the companies said they had not been able to reach an agreement.
Wynyard chief administrative office Jason Chorneyko said while it’s unlikely that Karnalyte’s plan to forge ahead will attract investment to the town of 1,800 until a mine is built, the prospect of temporary construction jobs and permanent mining positions would be significant.
“Any news of this type is good news,” he said.
Karnalyte is not the only junior miner planning to build a new potash mine in Saskatchewan. Vancouver-based Encanto Potash Corp. is working toward establishing a mine on Muskowekwan First Nation, while a new joint venture aims to have a mine near Tugaske operational sometime in 2019.
“We want to see this succeed,” Rowan said.