The following from Corporate Finance Analysts, SP Angel. Somewhat at variance with the press assessment of 'victory to the environmentalists!
Polymet Mining* (PLM N) US$2.97c, Mkt cap $302m – Minnesota Supreme Court rules in favour of PolyMet Permit to Mine and dam safety permits
• The Minnesota Supreme Court has ruled in in favour of PolyMet Permit to Mine and dam safety permits.
• This is theory gives the Department of Natural Resources ‘DNR’ 30 days to decide if they have done sufficient work on the project.
• The court's unanimous decision affirmed the Minnesota DNR' discretion to deny contested case hearings and, importantly, affirmed its decision to deny contested case hearings on every issue raised by project opponents, save the effectiveness of bentonite clay capping for eventual closure of the tailings basin.
• The court also reversed the court of appeals' decision to require contested case hearings on PolyMet's dam safety permits.
• The DNR has spent years studying the bentonite cap issue that will be considered in a contested case, and PolyMet looks forward to presenting that evidence in a hearing. When DNR completes the contested case process, it can re-issue the Permit to Mine.
• Polymet has been working on the approvals prices for 13 years and on the project for 18 years.
• The DEIS was first produced by the DNR in accordance with regulation in 2008.
• The US EPA has since challenged the work of the DNR
• The final EIS was issued in around 2016 since when Polymet has been funding the US legal profession in its attempt to work through objections to the mine.
Conclusion: Never have we seen a project so contested and challenged so hard and for so long in the mining industry. It is particularly interesting as Polymet plans to refurbish and restart the old Erie tachonite processing plant having cleaned up much of the site. Virtually all the infrastructure was put in place >50 years ago for the taconite industry which is potentially worth >$1bn in our view. Ironically delays caused by the EPA in holding up the permits have preserved value in Northmet project in the ground making the project worth more at today’s higher metal prices than seen historically. We look forward to the development of the Northmet mine and the reopening of the Erie plant sometime soon.
*An SP Angel analyst has visited the Northmet site in Minessota
