Market Overview

PolyMet Reports Results for Period Ended December 31, 2017

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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 eleven
months ended December 31, 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.

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

Highlights of 2017 and 2018 to-date

  • In January 2017, the United States Forest Service issued its Final
    Record of Decision authorizing a land exchange to transfer title of
    the surface rights over and around the NorthMet mineral rights to
    PolyMet in exchange for certain other lands owned by PolyMet.
  • In August 2017 and September, the Minnesota Department of Natural
    Resources released six draft water appropriation permits and two draft
    dam safety permits for 30-days of public review and comment which have
    all closed.
  • In September 2017, the company issued and committed to issue to
    Glencore secured debentures with a total principal amount of $20
    million.
  • In October 2017, the company entered into an agreement with EIP Credit
    Co., LLC to reserve wetland bank credits for the NorthMet Project.
  • In November 2017, the U.S. House of Representatives approved
    bipartisan legislation introduced by Rep. Rick Nolan, D-MN-8 to ratify
    the previously approved land exchange between PolyMet and the U.S.
    Forest Service. This bill was advanced to the U.S. Senate for
    consideration.
  • In December 2017, the Board of Directors approved a change to the year
    end from January 31 to December 31 resulting in an eleven month
    transition year.
  • In January 2018, the MDNR released the draft Permit to Mine and the
    Minnesota Pollution Control Agency released the draft water quality
    permit, draft section 401 certification, and draft air emissions
    permit. The public review and comment periods for these draft permits,
    including final public hearings, have all been completed.
  • In March 2018, the company and Glencore agreed to extend the term of
    outstanding debentures until March 31, 2019, reduce the interest rate
    on the outstanding debentures, and make available $80 million in
    additional debentures during 2018. Proceeds will be used to complete
    pre- and post-permitting work, including detailed engineering,
    environmental cleanup and purchasing wetland credits.
  • In March 2018, the company issued an Updated Technical Report under NI
    43-101 incorporating process improvements, project improvements and
    environmental controls described in the Final Environmental Impact
    Statement and draft permits. The update also included detailed
    production, capital, operating and valuation estimates as well as an
    assessment of potential future opportunities.
  • Loss for the eleven months ended December 31, 2017, was $10.1 million
    compared with $9.2 million for the prior year period. Excluding
    non-cash compensation, general and administrative expenses for the
    eleven months ended December 31, 2017, were $4.8 million compared with
    $4.8 million for the prior year period.
  • PolyMet invested $21.0 million cash into its NorthMet Project during
    the eleven months ended December 31, 2017, compared with $23.4 million
    in the prior year period.
  • At December 31, 2017, PolyMet had cash of $6.9 million compared with
    $18.7 million at January 31, 2017.

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:

  • Transfer of title to the surface rights over and around the NorthMet
    mineral rights to PolyMet as part of the authorized land exchange.
  • Favorable decision by the state on 401 Water Quality Certification and
    U.S. Army Corps of Engineers Final ROD and 404 wetlands permit under
    Clean Water Act.
  • Favorable decisions on final state permits (Permit to Mine, air, water
    and dam safety permits).
  • Completion of project implementation plan.
  • Completion of construction finance plan, subject to typical conditions
    precedent such as receipt of key permits.
 

Key Statistics

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

             
     

December 31, 2017

 

January 31, 2017

Balance Sheet        
 
Cash & equivalents

$

6,931

$ 18,674
Working capital (see note)

3,278

16,267
Total assets

409,042

389,049
Total liabilities

210,367

181,720
Shareholders' equity      

$

198,675

  $ 207,329
Note: Working capital for December 31, 2017 is pro forma reflecting
the extenstion of the due date of $49.067 million convertible
debentures and $92.268 million non-convertible debentures. These
obligations are due March 31, 2019.
 
 

11 months ended
December 31, 2017

12 months ended
January 31, 2017

Income Statement        
 
General & administrative expense $ 6,125 $ 6,594
Other Expenses:
Finance & Other 2,180 2,635
Disposals         1,793     -
 
Loss before tax: 10,098 9,229
Other Comprehensive (Income) 202 (213)
 
Loss per share         0.03     0.03
Investing Activities
NorthMet Property       $ 21,030   $ 23,445
 
Weighted average shares outstanding

318,891,961

288,998,010
 

About PolyMet

PolyMet Mining Corp. (www.polymetmining.com)
is a publ

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