Polymet Mining Corp (PLM)

[Connsm]

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Executive Council Approves Lease Amendments for Mesabi Metallics site
On June 19, 2017, the Minnesota State Executive Council approved the modification of 32 taconite ore leases held by Mesabi Metallics Company, LLC (formerly held by Essar Steel Minnesota, LLC). The lease amendments reflect the terms that were approved in federal bankruptcy court on June 13, 2016 and supported by the Department of Natural Resources and the buyer of the Mesabi Metallics assets, Chippewa Capital Partners, LLC. The terms are captured in a Master Lease Agreement. Key provisions and requirements include:

• Obtaining full financing of the project by August 31, 2017
• Completing pellet plant construction by the end of 2019

• Completing value added iron ore facility construction by the end of 2021

• Minimum royalty payments and other economic requirements designed to ensure completion of value added production at the site

• Adjustments to the royalty calculation method to minimize the State’s risk during down cycles in iron ore markets

The modified mineral leases represent a proactive effort by the State to ensure construction of a new value added iron ore facility in Minnesota, which was the goal of the original Essar project.