Additional Info - PolyMet, Glencore OK Finances Pact
By CHARLES RAMSAY - Regional Editor Mesabi Daily News (12/03/11)
HOYT LAKES — The nonferrous mining company Pol Met has agreed to sell $20 million worth of common shares to its financial partner Glencore AG at $1.50 per common share, the company said.
Part of the agreement will have PolyMet issuing warrants to Glencore to buy 2.6 million common shares at $1.50 per share through the end of 2015 under several conditions.
About $7 million of sale proceeds will repay outstanding notes to Cliffs Resources Inc., with the rest to go for permitting and general corporate purposes, a PolyMet news release said Thursday. The closing is subject to approvals by regulators.
The private placement of 13.3 million common shares by PolyMet for Glencore will be “enough money to get us through” the next several years, LaTisha Gietzen, PolyMet vice president for public, government and environmental affairs said Thursday in a phone interview.
PolyMet is seeking to start up the first nonferrous mining operation in Minnesota that would process copper, nickel and precious metals like platinum and palladium. The company is going through a draft supplemental environmental impact statement to be released in the second quarter of 2012, with a final EIS out by late 2012, along with air, water, wetlands, operating and other permits approvals going on in parallel, she added. When permits are issued, perhaps by early 2013, 1.25 million man-hours of construction could begin, with production startup and 360 permanent jobs by mid-2014, if the timeline holds.
In another announcement Thursday, PolyMet said it had renegotiated some financing amendments for: Extension of the maturity date for debentures from Sept. 30, 2012, to Sept. 30, 2014, or else notification of received permits; warrants to Glengore issued in November 2010 have been amended to allow Glencore to buy 3 million common shares of PolyMet at $1.50 per share through the end of 2015, with several conditions added. The amendments are subject to approval by regulators also.
A third part of the 2010 agreement for funding, $10 million from Glencore for 5 million common shares at $2 each by no later than Oct. 15, 2012, is unaffected by the financing amendments, the company said.
The draft supplemental EIS is being done as one document, led by state and federal agencies: The Minnesota Department of Natural Resources, to arrive at a decision of adequacy; and the U.S. Army Corps of Engineers, with input from the U.S. Environmental Protection Agency, to arrive at a record of decision.
Gietzen said PolyMet has spent more than $35 million of its funds so far on the environmental review since 2004, and more than $100 million in all areas, including the purchase of the former LTV Mining plant; and an EIS can often take seven to nine years to complete.
“This is really good for the community,” Gietzen said of the new financing, “to have secured funding to get us through the next couple years.”
