PolyMet Mining’s long-awaited plans for a copper-nickel mine in Minnesota’s Iron Range received welcome news Wednesday when a Swiss-based commodity trading and mining firm pledged to invest $20 million and help raise another $60 million in new equity financing.
The involvement from Glencore AG, which includes $20 million in bridge loans and up to $60 million in new equity, is expected to be finalized in June, pending regulatory approvals in the United States and Canada.
The investment will allow PolyMet to complete the lengthy environmental review and permitting process that has already been six years in the making at a cost of $50 million to date. Environmental permits and state regulatory approvals are required before mill work and mine construction can begin.
“So this is a pretty exciting day for us,” said PolyMet CEO Jon Cherry. Glencore’s financing arrangement will involve the issuance of new stock to existing and new shareholders through a secondary offering process known as “a summary of rights offering.” It is not yet known how many PolyMet shares Glencore will ultimately own, but it will not exceed 49.99 percent.
Glencore is no stranger to PolyMet. Over the past five years, it has loaned or invested about $100 million in PolyMet, said Douglas Newby, PolyMet’s chief financial officer.
PolyMet ultimately plans to build a large open-pit mine near Hoyt Lakes and a full-scale water treatment plant in Hoyt Lakes.
It also will rehabilitate the ore-crushing mill that was the former site of the LTV Steel taconite plant in Hoyt Lakes. Once finished, the mill will crush rock shipped in from the Mesabi Iron Range near Babbitt and partially extract copper, nickel, platinum, palladium, cobalt and gold.
If successful, the newest influx of cash will help achieve PolyMet’s vision of creating 600 construction jobs, 360 factory and mining jobs, $350 million in annual revenues and $200 million in earnings before taxes. Construction of the mine and mill rehab work should begin in mid- to late 2014, with the first metal extracts being produced 15 months later, Cherry said.
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