PolyMet reveals mixed financial news
BusinessNorth
5/31/2011
In its annual report, PolyMet Mining Co. revealed mixed news about the company’s financial future.
The Canadian firm, which hopes to mine the NorthMet copper, nickel, precious minerals deposit, there said there are financial obstacles “that cast significant doubt” on its ability to continue as a going concern.
Based on the underlying value of the project, however, company officials said they anticipate existing or outside investors will come forward with additional equity.
“The company has incurred losses since inception and has an accumulated deficit of $78,832,000 at January 31, 2011,” PolyMet said in the notes addendum to its financial statements. “PolyMet Mining Corp. will need to raise sufficient funds to meet its current obligations as well as fund ongoing development, capital expenditures and administration expenses, in accordance with the company’s spending plans for the next year.”
PolyMet previously announced an agreement to sell a $30 million private placement to the Swiss firm Glencore AG. Completion of that deal was to occur in three separate phases. To meet all of its financial obligations, including repayment of long term debt, all three must conclude by January 2012, or the firm will have to investigate other alternatives.
Management said it’s in the latter stage of discussions with Glencore and believes an agreement will be reached by June 30, providing $20 million in equity funding to meet financial obligations.
