Minnesota mining firm PolyMet Mining Corp. (POM:TSX; PLM:NYSE.MKT), today announced "it has entered into an agreement with Teck American Inc., a subsidiary of Teck Resources Ltd., to form a 50:50 joint venture (JV) that will place their respective NorthMet and Mesaba resources containing high-demand copper, nickel, cobalt and platinum group metals (PGMs) under single management."
The company stated that NorthMet has a Measured and Indicated (M&I) resource of 795 Mt (million tons) and additional Inferred resources of 458 Mt. The firm advised that Mesaba has a M&I resource of 1,740 Mt along with further Inferred resources of 1,612 Mt.
Under the terms of the JV agreement, PolyMet and Teck will each hold equal stakes in PolyMet Mining Inc., which is to be renamed NewRange Copper Nickel LLC.
PolyMet Mining Corp. will continue trading as a public company so after the new JV company is established investors will have direct access to making investments in NewRange Copper Nickel through ownership of shares in PolyMet Mining Corp.
PolyMet Mining's Chairman, President and CEO Jon Cherry commented, "This extraordinary venture links the expertise, experience and financial resources of PolyMet, Teck and Glencore to develop the NorthMet mine when the remaining permit proceedings are complete, and to study the mine development options for Mesaba…Following closing of the transaction, Glencore will retain its majority equity interest in PolyMet."
Cherry continued, "With both projects representing approximately half of the known resources of Minnesota's Duluth Complex under NewRange Copper Nickel, Minnesota emerges as a global leader and major force in developing strategic minerals to feed the North American supply chain for clean energy technologies, electric mobility and modern societal use."
Cherry noted that together the NorthMet and Mesaba deposits represent one of the largest clean energy mineral resources in the world and added that, "the successful completion of this transaction is expected to more than double the resources attributable to PolyMet shareholders."
The company mentioned it has successfully maneuvered the NorthMet Project through a lengthy and complex regulatory review process to obtain the permits required to construct and operate the 32,000 tpd mine and processing facility. The firm is now working on securing the final three permits needed at the site.
The firm said that Teck's Mesaba Project is now moving forward with environmental studies, resource definition and mineral processing evaluations.
The company advised that Glencore International Plc (GLNCY:OTCMKTS) has agreed to provide financing of up to US$105 million for PolyMet's share of the initial work program and related expenses. It is further expected that that upon closing of the JV, PolyMet will undertake a rights offering that will be backstopped fully by Glencore.
The company advised that its Board of Directors has unanimously approved the JV arrangement which remains subject to ordinary closing conditions and regulatory approval.
PolyMet is a resource development company headquartered in St. Paul, Minn. that is focused on mining copper, nickel and precious metals at its NorthMet property near Hoyt Lakes, Minn. The company noted that its wholly owned NorthMet Project is the first large-scale project in the Duluth Complex to receive permits at what is considered as one the world's major, undeveloped copper, nickel and PGM mining regions. The firm claimed that NorthMet offers a significant amount of proven and probable copper, nickel and palladium reserves along with marketable quantities of cobalt, platinum and gold.
Glencore Plc. is one of the world's largest diversified natural resource companies with a market cap of over US$67B (billion). The firm is engaged in all phases of producing, refining processing, storing, transporting and marketing metals, minerals and energy products globally. The company operates in more than 35 countries and including contractors employs over 135,000 people worldwide. Glencore owns greater than 72 million common shares of PolyMet's common stock which equates to about a 71.0% ownership in the company.
PolyMet Mining started the day with a market cap of around $278.0 million with approximately 101.5 million shares outstanding. PLM shares opened 2.5% higher today at $2.81 (+$0.07, +2.55%) over yesterday's $2.74 closing price. The stock traded today between $2.80 and $3.17 per share and closed for trading at $2.95 (+$0.21, +7.66%).
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