Karnalyte Resources of Canada has inked a major deal with the Indian fertilizer company, Gujarat State Fertilizers and Chemicals Ltd. (GSFC) to build a new potash mine in Saskatchewan. The deal with GSFC will finance construction of the first phase of Karnalyte’s 625,000 tons per year potash mine, located half a kilometre south of Highway 16 near Wynyard, Sask. The two parties also agreed to spin-out Karnalyte’s secondary mineral assets and 241 kilometres of unexplored lands into separate entities. The financing package amounts to USD700 million, including senior secured debt, subordinated unsecured debt, and an equity infusion to be backstopped by GSFC. GSFC, which has agreed to fund any cost overruns on constructing the mine, has agreed to lots of conditions. A key condition is that GSFC is required to maintain a 51% voting stake in Karnalyte while the secured debt is outstanding. The deal sent stock of Karnalyte Resources skyrocketing, with an 80% gain on the Toronto main board.