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PolyMet Reports First Quarter Fiscal 2018 Results

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PolyMet Mining Corp ("PolyMet" or the "Company") TSX: POM; NYSE MKT: PLM
– today reported that it has filed its financial results for the three
months ended April 30, 2017. PolyMet controls 100 percent of the
development-stage NorthMet copper-nickel-precious metals ore-body and
the nearby Erie Plant, located near Hoyt Lakes in the established mining
district of the Mesabi Iron Range in northeastern Minnesota.

The financial statements have been filed at www.polymetmining.com
and on SEDAR and EDGAR and have been prepared in accordance with
International Financial Reporting Standards. All amounts are in U.S.
funds. Copies can be obtained free of charge by contacting the Corporate
Secretary at First Canadian Place, 100 King Street West, Suite 5700,
Toronto, Ontario M5X 1C7 or by e-mail at info@polymetmining.com.

HIGHLIGHTS OF FISCAL 2017 AND FISCAL 2018
TO-DATE

  • On March 3, 2016, the state determined that the Final Environmental
    Impact Statement addresses the objectives defined in the EIS scoping
    review, meets procedural requirements and responds appropriately to
    public comments. The 30-day period allowed by law to challenge the
    state's decision passed without any legal challenge being filed. The
    Final EIS demonstrates that the NorthMet Project can be constructed
    and operated in compliance with environmental and human health
    standards.
  • On June 2, 2016, the Company agreed to issue up to an additional $14.0
    million secured non-convertible debentures to Glencore AG, a wholly
    owned subsidiary of Glencore plc (together "Glencore"), to fund
    permitting and general corporate purposes. The debentures are on
    similar terms as the existing non-convertible senior secured
    debentures.
  • On July 1, 2016, the Company repaid the $4.0 million initial principal
    loan from the Iron Range Resources and Rehabilitation Board.
  • On July 11, 2016, the Company submitted applications for water-related
    permits required to construct and operate NorthMet.
  • On August 2, 2016, the Company renewed its request for Water Quality
    Certification under Section 401 of the Clean Water Act.
  • On August 24, 2016, the Company submitted the air quality permit
    application required to construct and operate NorthMet.
  • In October 2016, the Company closed, in two tranches, a private
    placement of 40,074,418 units for gross proceeds of $30.055 million
    which included pro rata participation by Glencore.
  • On November 3, 2016, the Company submitted the Permit to Mine
    application required to construct and operate NorthMet.
  • On December 15, 2016, the Company received the American Exploration
    and Mining Association's Environmental Excellence Award for its
    responsible development of the NorthMet Project.
  • On December 20, 2016, the Memorandum of Agreement of the Section 106
    Consultation under the National Historic Preservation Act was signed
    by the statutory parties.
  • On January 9, 2017, the USFS issued its Final Record of Decision
    authorizing the land exchange.
  • Loss for the three months ended April 30, 2017, was $3.225 million
    compared with $2.352 million for the prior year period. General and
    administrative expenses for the three months ended April 30, 2017,
    excluding non-cash share-based compensation, were $1.128 million
    compared with $1.213 million for the prior year period. Other expenses
    were $1.957 million, including a one-time non-cash loss of $1.324
    million on the disposal of wetland credit intangibles, compared with
    $0.512 million for the prior year period.
  • At April 30, 2017, PolyMet had cash of $11.865 million compared with
    $18.674 million at January 31, 2017. The Company is in discussion with
    Glencore regarding the convertible and non-convertible senior secured
    debentures currently due to be repaid upon the earlier of availability
    of construction finance or March 31, 2018.
  • PolyMet invested $4.937 million cash into its NorthMet Project during
    the three months ended April 30, 2017, compared with $6.868 million in
    the prior year period.
  • As of April 30, 2017, PolyMet had spent $121.547 million on
    environmental review and permitting, of which $115.096 million has
    been spent since the NorthMet Project moved from exploration to
    development stage.

GOALS AND OBJECTIVES FOR THE NEXT TWELVE MONTHS

The environmental review and permitting process is managed by the
regulatory agencies and, therefore, timelines are not within PolyMet's
control. Given these circumstances, PolyMet's objectives include:

  • Completing the approved land exchange with the USFS and transferring
    of title to the surface rights over and around the NorthMet mineral
    rights to PolyMet.
  • Obtaining a decision by the state on 401 Water Quality Certification
    and U.S. Army Corps of Engineers Final ROD and 404 wetlands permit
    under the Clean Water Act.
  • Publication of draft state permits (Permit to Mine, air, water, dam
    safety and water appropriation permits) for public comment.
  • Decisions on state permit issuances.
  • Completion of definitive cost estimate and project update following
    permits.
  • Completion of project implementation plan.
  • Repayment, restructuring, and/or conversion of Glencore loans.
  • Completion of construction finance plan including commitment of debt
    prior to the issuance of permits, subject to typical conditions
    precedent such as receipt of key permits.

"The state continues its careful and thorough review of the permit
applications PolyMet has submitted," said Jon Cherry, president and CEO.
"In addition to responding to technical questions from the state and
federal agencies about the permit applications, we are focused on
conducting pre-construction engineering."

More detail on the status of permit review can be found at: http://polymet.mn.gov/news.html.

Key Statistics

(in ‘000 US dollars, except per share amounts)

 
Balance Sheet     April 30, 2017     January 31, 2017
           
Cash & equivalents $ 11,865 $ 18,674
Working capital (103,419) 16,267
Total assets 391,972 389,049
Total liabilities 187,583 181,720
Shareholders' equity     $     204,389     $ 207,329
 
      Three months ended April 30,
Income Statement           2017       2016
 
General & administrative expense excluding non-cash share-based
compensation
$ 1,128 $ 1,213
Non-cash share-based compensation 140 627
Other Expenses:
Finance & Other 633 512
Non-cash loss on disposal of intangibles           1,324      

-

 
Loss before tax: 3,225 2,352
Other Comprehensive (Income)           (12)       (56)
 
Loss per share           0.01       0.01
Investing Activities
NorthMet Property $
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