Market Overview

PolyMet Reaffirms Economic and Technical Viability Of NorthMet Project

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Highlights potential for Minnesota's first copper-nickel-precious metals
mine

Poly Met Mining Inc., a wholly-owned subsidiary of PolyMet Mining Corp.
(together "PolyMet" or the "company") TSX: POM; NYSE AMERICAN: PLM –
reports it has filed an updated technical report with Canadian and U.S.
securities agencies that reaffirms the economic and technical viability
of the NorthMet copper-nickel-precious metals project located near Hoyt
Lakes, Minnesota.

The updated NorthMet Technical Report, NI 43-101, dated March 26, 2018,
("2018 Technical Report") contains plans and cost estimates for
construction and operation of the NorthMet Project. It updates a
Definitive Feasibility Study originally published in 2006 and last
updated in 2012 and amended in 2013 that details the economics for the
mine and processing operation.

The report provides technical and economic details for development of
the mining operation in two distinct phases. Phase I involves
development of 225 million tons – nearly one-third of NorthMet's known
resource – into an operating mine processing 32,000 tons per day over a
20-year mine life. It also includes rehabilitating the former LTV Steel
Mining Company processing plant.

Capital costs for Phase I are estimated at $945 million and include
refurbishment of the existing primary crushing circuit and replacing the
existing rod and ball mill circuits with a new, modern semi-autogenous
grinding (SAG) mill, ball mill and flotation circuit. It also includes
rail upgrades, mining equipment and a state-of-the-art wastewater
treatment plant.

Phase II involves construction and operation of a hydrometallurgical
plant to treat nickel sulfide concentrates into upgraded nickel-cobalt
hydroxide and recover additional copper and platinum-group metals. While
development of Phase II will be at the company's discretion, both phases
are currently being permitted and are included in the Final
Environmental Impact Statement and draft permits. Phase II would
increase the project's capital costs by approximately $259 million.

"This report reaffirms the technical and financial viability of the
32,000 tpd case for which the final EIS and draft permits have been
issued. Our focus remains on obtaining final permits under the 32,000
tpd permit case, meeting our environmental and financial assurance
obligations under the terms of those permits, and obtaining the
necessary financing to build the project," said Jon Cherry, president
and CEO. "We are making significant progress on all of those fronts."

Technical Report Key Points

  • Total Proven and Probable mineral reserves for the project are
    estimated to be 255 million tons within the pit footprint evaluated in
    the FEIS and draft permits, with recovered copper equivalent grade of
    0.584 percent (after dilution and recoveries).
  • Measured and Indicated resources total 649 million tons, with
    recovered copper equivalent grade of 0.496 percent.
  • Inferred Resources are estimated at 509 million tons, with an
    estimated recovered copper equivalent grade of 0.489 percent.
  • After tax, net present value of future cash flow discounted at 7
    percent is $173 million for Phase I, and $271 million inclusive of
    Phase II.
  • After tax, internal rate of return is 9.6 percent for Phase I and 10.3
    percent inclusive of Phase II.
  • Improvements in metal price assumptions (based on market consensus
    pricing) has helped offset increases in capital, operating and
    financial assurance expenses.
  • Under Phase I, which only includes revenues based on concentrate
    sales, payable metals in the concentrate are estimated at 1.1 billion
    pounds of copper, 133 million pounds of nickel, a combined 1.1 million
    ounces of platinum, palladium and gold, 1.0 million ounces of silver
    and 5.6 million pounds of cobalt.
  • Under Phase II, payable metals in enriched copper concentrates and
    products from the hydrometallurgical plant are estimated at 1.2
    billion pounds of copper, 174 million pounds of nickel, 1.6 million
    combined ounces of platinum, palladium and gold, 1.0 million ounces of
    silver and 6.2 million pounds of cobalt. Palladium is the predominant
    precious metals group (PGM) product, totaling 1.2 million ounces.

A summary of PolyMet's mineral reserves and mineral resources is
provided in the tables below. Please refer to the 2018 Technical Report
for important disclaimers on the viability or otherwise of reported
mineral resources.

Mineral Reserve Statement – January 2018

Class   Tonnage

(x 1,000)

  Grades (Diluted)
Copper   Nickel   Platinum   Palladium   Gold   Cobalt   Silver   NSR   Cu-Eq
    (%)   (%)   (ppb)   (ppb)   (ppb)   (ppm)   (ppm)   $/ton   (%)
Proven   121,849   0.308   0.087   82   282   41   74.81   1.11   19.87   0.612
Probable   132,820   0.281   0.081   78   256   37   74.06   1.02   18.02   0.559
Total   254,669   0.294   0.084   80   268   39   74.42   1.06   18.90   0.584

Notes:

(1)

 

Mineral reserve tonnage and contained metal have been rounded
to reflect the accuracy of the estimate, and numbers may not add
due to rounding.

(2)

All reserves are stated above a $7.98 NSR cutoff and bound
within the final pit design.

(3)

Tonnage and grade estimates are in imperial units.

(4)

Total tonnage within the pit is 628,499 ktons; average waste:
ore ratio = 1.47.

(5)

Cu-Eq values are based on the metal prices in Table 15-2 and
total mill recoveries in Table 15-3 of the 2018 Technical Report
and diluted mill feed.

(6)

Copper equivalent (CuEq) = ((Cu head grade x recovery x Cu
Price) + (Ni head grade x recovery x Ni Price) + (Pt head grade x
recovery x Pt Price) + (Pd head grade x recovery x Pd Price) + (Au
head grade x recovery x Au Price) + (Co head grade x recovery x Co
Price) + (Ag head grade x recovery x Ag Price)) / (Cu head grade x
recovery x Cu Price).

(8)

NSR values include post property concentrate transportation,
smelting and refining costs and payable metal calculations.

 

Summary Mineral Resource Statement for the NorthMet Project
Inclusive of Mineral Reserves

Class   Tonnage

(Mt)

  Grades (Undiluted)
Copper   Nickel   Platinum   Palladium   Gold   Cobalt   Silver   NSR   Cu-EQ
    (%)   (%)  
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