T33, 2018 may go down as the most infamous year in Karnalyte Resources history.
- In Q1, Karnalyte had an opportunity to participate in a novel potash mining project that would have brought a $23 million dollar proof of concept pilot mine to shareholders, but was refused. Instead, a suspect nitrogen plan not accomplished in Saskatchewan in almost 3 decades was targeted at a time when other provincial nitrogen projects had failed to advance.
Three years later Karnalytes market cap is $6 million dollars with a nitrogen plan that appears to have been shelved. One of Karnalytes peers however has embarked on a very similar novel potash project as brought to Karnalyte in Q1 and has seen their market cap balloon to S180 million. Comparing apples to apples, that would have equated to $6 / share for Karnalyte shareholders.
- Several lawsuits were filed against company shareholders in Q2 days before the AGM was to be held. Tensions were so heated, police officers were present during the AGM
Several allegations of improprieties have since been claimed regarding that AGM process, and the corporation has spent millions of dollars in legal expenses and settlement payments to shareholders and past Execs.
- An unnecessary Q4 Rights Offering was completed that handed GSFC voting control of the company on a silver platter thus also allowing GSFC to populate the boardroom in their favor.
Three years later, management in sworn documentation stated the corporation did not need the cash at that time for continued operational or corporate requirements and GSFC still holds boardroom control.
- An unnecessary Q4 ten-fold increase to a decommissioning liability that had remained constant for 7 years prior at $212,000, and the company had previously reported Karnalyte had largely decommissioned the test cavern site in accordance with the operating permit from the Government of Saskatchewan.
Three years later, the corporation has reported intentions to settle that mysterious decommissioning liability increase.
- A Q4, 2018 investigation leads to the resignation of half of the Board of Directors for breaches of securities and corporate governance regulations. These directors also happened to be some of Karnalyte’s largest individual shareholders, reportedly voted in favor of the unnecessary Rights Offering that doubled their shareholdings, and gave voting control away to GSFC.
Three years later this same group is engaged in legal proceedings against Karnalyte / GSFC reps for among other things breaches of securities and corporate governance regulations.
Only in story books, they say - Ask any Karnalyte shareholder!