Calgary-based potash microcapper, Karnalyte Resources (TSX:T.KRN
, Stock Forum
) announced Thursday that it has received a ‘Water Rights Licence to Use Ground Water and Approval to Operate Works’ for the source water well at the 100% owned Wynyard Carnallite Project, from the Saskatchewan Water Security Agency.
The company required the WRL for the right to withdraw brackish ground water from the Blairmore formation to support production on the project.
The company, which plunged 74% in the wake of the Uralkali (OTO:URALY
, Stock Forum
) crisis in late July, has found new support from value-focused investors of late as the tightly-held $38m market cap company nears first-phase production and distances itself from the European situation.
Karnalyte intends to develop and extract a carnallite - sylvite mineral deposit through a known solution mining process at competitive costs and with minimal environmental impacts.
Using a staged approached to potash plant construction, the Corporation plans to operate a solution mining facility that will initially produce 625,000 tonnes of potash per year, increasing to 2.125 million tonnes of potash per year.
"Karnalyte successfully tested a full production-capacity disposal well and a production-size source water well earlier this year, demonstrating sufficient source water deliverability for the first-phase production facility," said Robin Phinney, President and CEO of Karnalyte, in a company news release.
He added, "Receipt of the WRL and ATO support an acceptable environmental footprint."
Shares in Karnalyte rose 8% on the news, up from $1.35 at the opening of trading Wednesday to $1.43 Thursday.
There are 27.4 million shares outstanding.
FULL DISCLOSURE: Karnalyte Resources is a Stockhouse Publishing client, but has not paid for this article