Minnesota Commitment | Global Opportunity · March 2016. Cautionary Statement ... In connection...
Transcript of Minnesota Commitment | Global Opportunity · March 2016. Cautionary Statement ... In connection...
Minnesota Commitment | Global Opportunity
March 2016
Cautionary StatementThis presentation contains certain forward-looking statements concerning anticipated developments in PolyMet Mining Corp. (“PolyMet”)’s operations in the future. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words. These forward-looking statements may include statements regarding our beliefs related to the expected project timelines, exploration results and budgets, reserve estimates, mineral resource estimates, continued relationships with current strategic partners, work programs, capital costs and expenditures, actions by government authorities, including changes in government regulation, the market price of natural resources, estimated production rates, costs, ability to receive environmental and operating permits, construction costs and hours created, job creation and other economic benefits, or other statements that are not a statement of fact.
Forward-looking statements address future events and conditions and therefore involve inherent known and unknown risks and uncertainties. These risks, uncertainties and other factors include, but are not limited to, adverse general economic conditions, operating hazards, inherent uncertainties in interpreting engineering and geologic data, fluctuations in commodity prices and prices for operational services, government regulation and foreign political risks, fluctuations in the exchange rate between Canadian and US dollars and other currencies, as well as other risks commonly associated with the industry. Actual results may differ materially from those in the forward-looking statements due to risks facing PolyMet or due to actual facts differing from the assumptions underlying its predictions.
In connection with the forward-looking information contained in this presentation, PolyMet has made numerous assumptions, regarding, among other things: the geological, metallurgical, engineering, financial and economic advice that PolyMet has received is reliable, and is based upon practices and methodologies which are consistent with industry standards. While PolyMet considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies.
PolyMet’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and PolyMet does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations and opinions should change.
Specific reference is made to PolyMet’s most recent Annual Report on Form 20-F for the fiscal year ended January 31, 2015 and in our other filings with Canadian securities authorities and the U.S. Securities and Exchange Commission, including our Report on Form 6-K providing information with respect to our operations for the three months ended October 31, 2015 for a discussion of some of the risk factors and other considerations underlying forward-looking statements.
PolyMet’s financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts are in U.S. funds.
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A Minnesota Copper Growth Story
§ NorthMet Project:
- Measured & Indicated 694M tons @0.74% CuEq
- Mine Plan 224M tons @0.77% CuEq
§ EIS is complete – State of Minnesota has validated
§ Next steps include federal Records of Decision, permits and construction
§ Commercial production expected ~24 months after receiving permits
§ NorthMet cash flows remain attractive at current commodities prices
§ Continued support from Glencore – financial, commercial and technical
§ Construction financing is on-going
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The NorthMet Project
§ Established within the Duluth Complex, adjacent to the Mesabi Iron Range.
§ Final EIS is complete and validated.
§ PolyMet controls 100% of the NorthMet project.
§ MN is geopolitically stable and mining friendly.
§ Skilled mining community in place.
§ Experienced management team with a track record of permitting, building and operating responsible mining operations.
20 Year Operating Plan | 224M Tons32,000 Tons/Day Production Plan
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Existing tailing facility
Cliff NR –Northshore Mine
Waste Rock Storage
Existing Plant Site
Rail Line
North
EAST PIT
WEST PIT
6 miles
PolyMet – NorthMet Mine Operation
The NorthMet Project
§ Using existing Erie Plant and infrastructure located near the ore body and connected by existing rail.
§ Low cost for production of Cu makes this an attractive & competitive project.
§ PolyMet controls 100% of the mineral resource.
§ Offtake agreements in place with Glencore for all Cu | Ni concentrate production.
§ ~1,000 total jobs created in MN.
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Experienced Leadership
Jon Cherry, President, CEO, DirectorLeader in mining environmental policy and new mining projects, 20 years with Rio Tinto in the U.S.; 25 years experience in the industry
Brad Moore, VP Environmental & Gov. AffairsPermitting and regulatory expert, former senior Minnesota government official
Douglas Newby, Chief Financial OfficerMine finance expert, former Chairman/CEO of Western Goldfields (now New Gold) ~30 years experience
Andrew Ware, Chief GeologistExpert on the Duluth Complex and the mid-ContinentRift, broad experience in SE Asia and Mexico. 25 years with Rio Tinto
Jim Tieberg, Mine ManagerOver 20 years experience in mine operations, engineering, drilling/blasting & tailings basin construction.
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EPA RatingEPA EIS rating scale
LO:
Lack
of
Obj
ectio
ns
EC
: En
viro
nmen
tal
Con
cern
s
EO
: En
viro
nmen
tal
Obj
ectio
ns
EU
: En
viro
nmen
tally
Uns
atis
fact
ory
2009 EPA Rating
EC-2 *MN PolyMet’s NorthMet Project*MN Light Rail Project*MN St. Croix River Bridge
2014 EPA Rating
3
2
1
3
2
1
3
2
1
typically conservation& wilderness projects
**
* 2012 Mount Hope* 2012 Hollister Silver
* 2012 Rosemont Copper
EPA Comment On Final EIS
“Our extensive discussions with the co-lead and cooperating agencies have helped to resolve virtually all of our previous comments, and to review important questions about project
modeling.”
— EPA Office of Enforcement and Compliance Assurance, 08/05/2015
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Path To Permits
Final EIS2015
Records of Decision
State Permits
Federal Permits
Adequacy Decision
2016
✓ ConstructionSDEIS2013
Draft EIS2009
EIS Scoping
2005 ✓✓✓✓
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The NorthMet Resource
TonnageMillion ST
Tonnage Million MT
% CopperCu Equivalent
Million Pounds Cu Equivalent *
Mineral Resource **
MeasuredIndicated
M+I
203492694
184446630
0.79%0.72%0.74%
3,2047,052
Inferred 230 208 0.75% 3,446
Reserves 275 249 0.79% 4,340
* Metals converted to copper based on 2008 DFS update metals prices** $7.42/Net metal value cut-off – January 2013, 43-101 ($1.25/lb copper)20 Year Mine Plan subject to permit applications ($1.25/lb copper)
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Unit 4/5
Unit 6
Unit 1
Unit 7
Unit 2/3
Section 35400ME (Looking North East)
Pit wall
0.5 CuEq and Above
0.25 to 0.5 CuEq
World Class Copper District
§ Disseminated, Polymetallic Deposit § Low Strip (waste:ore) Ratio (1.4:1 life-of-mine), § Minimal Over-Burden§ Based on $1.25/Pound Copper / cut-off grade
NorthMet Ore Body
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Investment to date
Strategic Alliance With Glencore
§ Financial support $186M to date
§ Commercial offtake agreement in place
§ Technical support
Glencore Support
$ in
Mill
ions
$34.9M
$96M
$13M
Equity at $1.38/share weighted average
Glencore loan facility: $42M
Glencore convertible debt: $34M @ 1.29/share
$30M
Purchase of all 9.2 million shares previously owned by Cliffs Natural Resources
0
20
40
60
80
100
120
140
160
180
200
$42M
$96M
$13M
$34M
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Shareholder Data
Share & Balance Sheet Information
Share price (NYSE MKT: PLM) as of 3/2/16 US $1.13
Share price (TSX: POM) as of 3/2/16 C $1.51
Common shares outstanding 277.3M
Fully diluted shares:§ Float: 60.3%§ Glencore: 33.8%§ Management: 5.9%
332.5M
Market capitalization US $313M
*Cash and cash equivalents $9.3M
*Total debt $47.1
*Figures are as of the most recent financial statement
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Summary
§ 694M tons M+I @0.74% CuEq | Mine Plan 224M tons @0.77% CuEq
§ EIS Complete – next steps include permits and construction
§ Experienced management team with proven track record
§ NorthMet Project economics remain attractive
§ Construction financing is on-going
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