Karnalyte Unveils $2B Potash Plan for Saskatchewan's Wynyard Project

SASKATOON, SK – January 07, 2026 – Karnalyte Resources Inc. has taken a significant step toward developing a major new potash mine in Saskatchewan, filing an updated feasibility study that outlines a 70-year project with a potential after-tax value of over $2 billion. The comprehensive NI 43-101 technical report, now public, validates the economic and technical foundation of the company's flagship Wynyard Project, positioning it as a potentially crucial future supplier in the global fertilizer market.

The study confirms robust project economics, projecting an after-tax net present value (NPV) of $2.04 billion, calculated with an 8% discount rate, and an internal rate of return (IRR) of 12.5%. This milestone solidifies the project's technical blueprint, moving it from a long-held concept closer to a tangible development, contingent on securing significant financing and continued strength in the potash market.

"The filing of the updated feasibility study marks an important milestone as we advance the Wynyard Project towards development," said Danielle Favreau, Chief Executive Officer of Karnalyte Resources, in a statement. "With a strong foundation, positive market outlook, and clear strategy, Karnalyte is well-positioned to create long-term value for our stakeholders."

A Multi-Generational Economic Engine

The scale of the Wynyard Project outlined in the study is substantial. At full capacity, the mine is designed to produce 2.175 million tonnes of high-grade granular potash and 104,000 tonnes of hydromagnesite annually over its 70-year lifespan. The development is planned in three phases, starting with an initial output of 675,000 tonnes of potash per year.

The total initial capital expenditure required to bring all three phases to fruition is estimated at a formidable $4.19 billion. This includes $3.96 billion for the phased potash facilities and an additional $231 million for a dedicated hydromagnesite production plant. The project's payback period is estimated at 8.8 years from the start of construction. Operating costs are projected to be competitive, at $134.01 per tonne for potash.

These figures represent a significant update from a previous study completed in 2016. While the earlier report showed a higher NPV and IRR, the new study reflects a thorough re-evaluation based on current costs, market conditions, and refined engineering. This updated, more conservative assessment provides potential investors with a clearer, more current picture of the project's financial landscape.

Beyond Potash: Diversification and Sustainability

A key element of Karnalyte's strategy is its dual-product approach, which sets it apart from traditional potash operations. Alongside potash, the Wynyard Project will produce high-purity hydromagnesite, a mineral compound primarily used as a non-toxic, environmentally friendly flame retardant in plastics and other materials. The company's long-term price assumption for its hydromagnesite is US$740 per tonne, tapping into a specialty chemical market and providing a secondary revenue stream that diversifies its portfolio.

The project is also designed with a focus on environmental innovation. Karnalyte plans for the Wynyard facility to be the first potash mine in Saskatchewan to operate without surface salt tailings piles or tailings ponds, a common and significant environmental footprint for the industry. The company intends to manage waste by either backfilling spent underground mining caverns or injecting brine into approved deep geological formations, a practice for which it has already drilled and tested a disposal well. This solution mining technique, combined with responsible tailings management, signals a commitment to minimizing the project's surface impact.

The Financing Hurdle and a Strategic Partnership

With a validated technical plan and all major environmental permits in place, the most critical challenge for Karnalyte is securing the multi-billion-dollar financing required for construction. The project's advancement is explicitly dependent on the company's ability to raise this capital.

Central to this effort is Karnalyte's strategic partner and largest shareholder, Gujarat State Fertilizers & Chemicals Limited (GSFC) of India. GSFC, which holds a 47.73% stake in the company, has a vested interest in securing a stable, long-term potash supply for India's vast agricultural sector. This partnership is anchored by a crucial offtake agreement that significantly de-risks the project for potential financiers.

Under the agreement, GSFC has committed to purchasing 350,000 tonnes of potash annually from the project's first phase, representing over half of its initial output for a 20-year term. The agreement includes options for GSFC to increase its purchases to 600,000 tonnes per year after Phase 2 and potentially up to 1 million tonnes per year upon completion of Phase 3. This guaranteed sales channel provides a reliable revenue stream from day one. GSFC has previously expressed its commitment to helping structure a cost-effective financing package for the project, a pledge that will be vital in the coming months as Karnalyte approaches capital markets.

The timing appears favorable, with global potash demand projected to grow steadily, driven by the need for global food security. Market forecasts predict stable prices and increasing consumption, particularly in the Asia-Pacific region. For a project located in the stable jurisdiction of Saskatchewan, which holds the world's largest potash reserves, the Wynyard mine represents a strategic opportunity to meet that future demand.