This financing was initially announced last summer in conjunction with PolyMet’s joint venture agreement with Teck Resources to develop the NorthMet and Mesaba projects, which represent approximately one-half of the known 8-billion-tonne Duluth Complex resource in northeastern Minnesota.
To kickstart the newly formed NewRange Copper Nickel JV, of which PolyMet and Teck each own 50%, Glencore committed to support PolyMet’s portion of the initial $170 million work program and other expenses in the amount of approximately $100 million. For this, Glencore agreed to fully backstop a rights offering by PolyMet to raise additional funding.
Glencore also agreed to exercise its basic subscription right in full and purchase all unsubscribed common shares — 87,798,370 — under the rights offering pursuant to a standby commitment. Following completion of the rights offering, Glencore now owns 159,806,774 common shares, representing approximately 82.19% of PolyMet’s share capital.
The proceeds of the rights offering and standby commitment have been used to repay all of PolyMet’s unsecured and secured and convertible debt owed to Glencore, as well as costs related to the rights offering.
As mentioned, they are also intended to fund the company’s portion of the NewRange JV, which is looking to become the first to commercially mine copper, nickel, cobalt and other platinum group metals from Minnesota’s Duluth Complex.
“We now have a balance sheet free of debt and a strong cash position to support our interest in NewRange Copper Nickel as it progresses towards a sanctioning and construction decision for the NorthMet project and further assesses the Mesaba resource,” PolyMet CEO Jon Cherry said in a news release.
The NorthMet project has received its permits, and the JV partners are working through litigation towards development, construction and operation of a 32,000 t/d mine and mineral processing facility. The nearby Mesaba deposit is in early stages of design, engineering and evaluation, and will be assessed for potential future development based on a thorough set of social and environmental baseline studies, PolyMet said.
