Market Overview

PolyMet Reports Results for Period Ended June 30, 2018

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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 and six months ended June 30, 2018. 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.

2018 Highlights

  • In June 2018, the company and the U.S. Forest Service exchanged titles
    to federal and private lands, completing the land exchange and giving
    the company control over both surface and mineral rights in and around
    the NorthMet ore body;
  • 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 capital
    costs, operating costs and economic valuations for the mine plan being
    permitted as well as potential future production opportunities;
  • 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 up to $80 million in
    additional funding. Proceeds are being used to complete permitting,
    purchase wetland credits, advance detailed engineering and perform
    certain early works to prepare the site for construction;
  • In January 2018, the Minnesota Department of Natural Resources
    released the draft Permit to Mine for a public review and comment
    period, which has now closed; and
  • In January 2018, the Minnesota Pollution Control Agency released the
    draft water quality permit, draft section 401 certification and draft
    air emissions permit for public review and comment periods, which have
    all closed.

Goals and objectives for the next twelve months
The
permitting process is managed by the regulatory agencies and, therefore,
timelines are not under PolyMet control, however, decisions by the MDNR
and MPCA are expected by the end of the year. Given these circumstances,
PolyMet's objectives include:

  • Favorable decision by the U.S. Army Corps of Engineers on the Final
    Record of Decision and 404 wetlands permit under the Clean Water Act;
  • Favorable decisions on final state permits (Permit to Mine, air,
    water, and dam safety permits);
  • Completion of project implementation plan; and
  • Execution of a construction finance plan, subject to typical
    conditions precedent such as receipt of key permits.

Key Balance Sheet Statistics

   

(in ‘000 US dollars)

             
Balance Sheet     June 30, 2018     December 31, 2017
 
Cash & equivalents $ 17,595 $ 6,931
Working capital (see note) (167,309) (138,057)
Total assets 433,934 409,042
Total liabilities 245,178 210,367
Shareholders' equity   $ 188,756   $ 198,675

Note:  Working capital deficit largely reflects Glencore
debentures maturing on or before March 31, 2019.

 

At June 30, 2018, PolyMet had cash of $17.595 million compared with
$6.931 million at December 31, 2017. An additional $60 million of
debentures is available from Glencore as described above.

As of June 30, 2018, PolyMet had spent $128.642 million on environmental
review and permitting since the NorthMet Project moved from exploration
to development stage.

Key Income and Cash Flow Statement
Statistics

   

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

           
Three months ended Six months ended
Income and Cash Flow Statement June 30,   July 31, June 30,   July 31,
      2018     2017     2018     2017
 
General & administrative expense excluding non-cash share-based
compensation
$ 1,233 $ 1,408 $ 2,824 $ 2,536
 

Non-cash share-based compensation

276

672

1,455

812

 
Other expenses:
Finance & other 594 608 1,505 1,241
Non-cash loss on land exchange 553 - 553 -
Non-cash loss on intangible disposal - - - 1,324
Non-cash loss on debenture modification - -
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