GSFC signs agreement with Canada's KRN to facilitate debt financing

To enable Karnalyte Resources Inc, Canada, (KRN) achieve the financial closure for its Wynyard Potash Project phase I, Gujarat State Fertilizers & Chemicals Ltd (GSFC), as the largest shareholder of KRN, has entered into an in-principle agreement with KRN to facilitate debt financing by procuring standby letter of credit (SBLC) form Indian banks and backstop the untied equity/mezzanine financing subject to the required Indian regulatory approvals.
 
Karnalyte Resources is engaged in the business of exploration and development of high quality potash and magnesium products. In the first phase, KRN intends to produce 625000 tonnes of potash per year, increasing to 2.125 million tonnes per year on completion of all the three phases.
   
Karnalyte wholly owns Subsurface Permit KP 360A and Subsurface Mineral Lease KLSA-010 located near Wynyard, Saskatchewan, comprising a total of 85,126 acres.
 
Currently, GSFC holds 19.98 percent stake in KRN acquired in 2013 with an investment of CAD 45 million along with an offtake agreement for getting 350,000 metric tonne per annum (MTPA) muriate of potash (MOP) from phase I production and further 250,000 from phase 2 production.