PolyMet completes US$195 million rights offering
PolyMet Mining Corp. [POM-TSX, PLM-NYSE] said Monday it has completed a US$195 million rights offering.
The proceeds of the rights offering and standby commitment have been used to repay all of PolyMet’s unsecured and secured, and convertible debt owed to Glencore Ag and costs related to the rights offering. Proceeds are also intended to fund the company’s portion of the NewRange Copper Nickel LLC joint venture with Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE. Teck and PolyMet are equal partners in NewRange Copper Nickel, an entity set up to manage two undeveloped clean energy projects in Minnesota.
They include PolyMet’s NorthMet and Teck’s Mesaba projects, which together account for approximately one half of the known resources of copper, nickel, cobalt and PGMs in Minnesota’s Duluth Complex.
“We now have a balance sheet free of debt and a strong cash position to support our interest in NewRange Copper Nickel as it progresses towards a sanctioning and construction decision for the NorthMet project and further assesses the Mesaba resource,’’ said PolyMet Chairman, President and CEO Jon Cherry.
The rights offering expired at 5:00 p.m. on April 4, 2023. The company issued the full allotment of 92.6 million common shares generating gross proceeds of approximately US$195 million.
Glencore Plc, the Swiss metals trading giant, acquired 87.8 million shares under the rights offering, leaving it with an 82.19% stake in PolyMet.
Teck has said the will the joint venture will help to unlock a new domestic supply of critical metals for the low-carbon transition through responsible mining.
According to a 2019 estimate, NorthMet contains measured and indicated resource of 795 million tons of 0.234% copper, 0.071% nickel, 69.0 g/t cobalt, 0.062 g/t platinum, 0.214 g/t palladium, 0.031 g/t gold, and 0.87 g/t silver. NorthMet is also estimated to contain 290.4 million tons of proven and probable reserves.
In on overview of the NorhMet project, PolyMet said major state and federal permits have been received for what is expected to be an open pit mining operation, including permit to mine, air and water permits and federal wetlands. The project covers 19,000 contiguous acres, including mine and processing sites, transportation corridor, existing tailings basin and buffer.
Mesaba is estimated to contain a measured and indicated resource of 1,740 million tonnes of 0.43% copper, 0.10% nickel, 73 g//t cobalt, 0.035 g/t platinum, 0.097 g/t palladium, 0.03 g/t gold and 1.1 g/t silver according to a estimated that was published this year.
NorthMet is expected to produce copper and nickel-copper concentrates, which Glencore has substantial experience in marketing.
PolyMet shares moved lower on the news, easing 1.4% or $0.04 to $2.81. The shares are currently trading in a 52-week range of $4.93 and $2.78.