Highlights potential for Minnesota’s first copper-nickel-precious metals
mine
Company Website:
http://www.polymetmining.com/
ST. PAUL, Minn. -- (Business Wire)
Poly Met Mining Inc., a wholly-owned subsidiary of PolyMet Mining Corp.
(together “PolyMet” or the “company”) TSX: POM; NYSE AMERICAN: PLM –
reports it has filed an updated technical report with Canadian and U.S.
securities agencies that reaffirms the economic and technical viability
of the NorthMet copper-nickel-precious metals project located near Hoyt
Lakes, Minnesota.
The updated NorthMet Technical Report, NI 43-101, dated March 26, 2018,
(“2018 Technical Report”) contains plans and cost estimates for
construction and operation of the NorthMet Project. It updates a
Definitive Feasibility Study originally published in 2006 and last
updated in 2012 and amended in 2013 that details the economics for the
mine and processing operation.
The report provides technical and economic details for development of
the mining operation in two distinct phases. Phase I involves
development of 225 million tons – nearly one-third of NorthMet’s known
resource – into an operating mine processing 32,000 tons per day over a
20-year mine life. It also includes rehabilitating the former LTV Steel
Mining Company processing plant.
Capital costs for Phase I are estimated at $945 million and include
refurbishment of the existing primary crushing circuit and replacing the
existing rod and ball mill circuits with a new, modern semi-autogenous
grinding (SAG) mill, ball mill and flotation circuit. It also includes
rail upgrades, mining equipment and a state-of-the-art wastewater
treatment plant.
Phase II involves construction and operation of a hydrometallurgical
plant to treat nickel sulfide concentrates into upgraded nickel-cobalt
hydroxide and recover additional copper and platinum-group metals. While
development of Phase II will be at the company’s discretion, both phases
are currently being permitted and are included in the Final
Environmental Impact Statement and draft permits. Phase II would
increase the project’s capital costs by approximately $259 million.
“This report reaffirms the technical and financial viability of the
32,000 tpd case for which the final EIS and draft permits have been
issued. Our focus remains on obtaining final permits under the 32,000
tpd permit case, meeting our environmental and financial assurance
obligations under the terms of those permits, and obtaining the
necessary financing to build the project,” said Jon Cherry, president
and CEO. “We are making significant progress on all of those fronts.”
Technical Report Key Points
-
Total Proven and Probable mineral reserves for the project are
estimated to be 255 million tons within the pit footprint evaluated in
the FEIS and draft permits, with recovered copper equivalent grade of
0.584 percent (after dilution and recoveries).
-
Measured and Indicated resources total 649 million tons, with
recovered copper equivalent grade of 0.496 percent.
-
Inferred Resources are estimated at 509 million tons, with an
estimated recovered copper equivalent grade of 0.489 percent.
-
After tax, net present value of future cash flow discounted at 7
percent is $173 million for Phase I, and $271 million inclusive of
Phase II.
-
After tax, internal rate of return is 9.6 percent for Phase I and 10.3
percent inclusive of Phase II.
-
Improvements in metal price assumptions (based on market consensus
pricing) has helped offset increases in capital, operating and
financial assurance expenses.
-
Under Phase I, which only includes revenues based on concentrate
sales, payable metals in the concentrate are estimated at 1.1 billion
pounds of copper, 133 million pounds of nickel, a combined 1.1 million
ounces of platinum, palladium and gold, 1.0 million ounces of silver
and 5.6 million pounds of cobalt.
-
Under Phase II, payable metals in enriched copper concentrates and
products from the hydrometallurgical plant are estimated at 1.2
billion pounds of copper, 174 million pounds of nickel, 1.6 million
combined ounces of platinum, palladium and gold, 1.0 million ounces of
silver and 6.2 million pounds of cobalt. Palladium is the predominant
precious metals group (PGM) product, totaling 1.2 million ounces.
A summary of PolyMet’s mineral reserves and mineral resources is
provided in the tables below. Please refer to the 2018 Technical Report
for important disclaimers on the viability or otherwise of reported
mineral resources.
Mineral Reserve Statement – January 2018 |
Class |
| Tonnage (x 1,000) |
| Grades (Diluted) |
| | Copper |
| Nickel |
| Platinum |
| Palladium |
| Gold |
| Cobalt |
| Silver |
| NSR |
| Cu-Eq |
|
| (%) |
| (%) |
| (ppb) |
| (ppb) |
| (ppb) |
| (ppm) |
| (ppm) |
| $/ton |
| (%) |
Proven
|
|
121,849
|
|
0.308
|
|
0.087
|
|
82
|
|
282
|
|
41
|
|
74.81
|
|
1.11
|
|
19.87
|
|
0.612
|
Probable
|
|
132,820
|
|
0.281
|
|
0.081
|
|
78
|
|
256
|
|
37
|
|
74.06
|
|
1.02
|
|
18.02
|
|
0.559
|
Total |
| 254,669 |
| 0.294 |
| 0.084 |
| 80 |
| 268 |
| 39 |
| 74.42 |
| 1.06 |
| 18.90 |
| 0.584 |
Notes: |
(1) |
| Mineral reserve tonnage and contained metal have been rounded
to reflect the accuracy of the estimate, and numbers may not add
due to rounding. |
(2) | | All reserves are stated above a $7.98 NSR cutoff and bound
within the final pit design. |
(3) | | Tonnage and grade estimates are in imperial units. |
(4) | | Total tonnage within the pit is 628,499 ktons; average waste:
ore ratio = 1.47. |
(5) | | Cu-Eq values are based on the metal prices in Table 15-2 and
total mill recoveries in Table 15-3 of the 2018 Technical Report
and diluted mill feed. |
(6) | | Copper equivalent (CuEq) = ((Cu head grade x recovery x Cu
Price) + (Ni head grade x recovery x Ni Price) + (Pt head grade x
recovery x Pt Price) + (Pd head grade x recovery x Pd Price) + (Au
head grade x recovery x Au Price) + (Co head grade x recovery x Co
Price) + (Ag head grade x recovery x Ag Price)) / (Cu head grade x
recovery x Cu Price). |
(8) | | NSR values include post property concentrate transportation,
smelting and refining costs and payable metal calculations. |
| |
|
Summary Mineral Resource Statement for the NorthMet Project
Inclusive of Mineral Reserves |
Class |
| Tonnage (Mt) |
| Grades (Undiluted) |
| | Copper |
| Nickel |
| Platinum |
| Palladium |
| Gold |
| Cobalt |
| Silver |
| NSR |
| Cu-EQ |
|
| (%) |
| (%) |
| (ppb) |
| (ppb) |
| (ppb) |
| (ppm) |
| (ppm) |
| $/ton |
| (%) |
Measured
|
|
237.2
|
|
0.270
|
|
0.080
|
|
69
|
|
241
|
|
35
|
|
72
|
|
0.97
|
|
19.67
|
|
0.541
|
Indicated
|
|
412.2
|
|
0.230
|
|
0.070
|
|
63
|
|
210
|
|
32
|
|
70
|
|
0.87
|
|
16.95
|
|
0.470
|
M&I
|
|
649.3
|
|
0.245
|
|
0.074
|
|
65
|
|
221
|
|
33
|
|
71
|
|
0.91
|
|
17.94
|
|
0.496
|
Inferred
|
|
508.9
|
|
0.240
|
|
0.070
|
|
72
|
|
234
|
|
37
|
|
66
|
|
0.93
|
|
17.66
|
|
0.489
|
Source: Hard Rock Consulting, LLC, January 2018
|
Notes: |
(1) |
| Mineral resources are not mineral reserves and do not have
demonstrated economic viability. |
(2) | | All resources are stated above a $7.35 NSR cut-off. Cut-off is
based on estimated mining, processing and G&A costs. Metal Prices
and metallurgical recoveries used for the development of cut-off
grade are presented in Table 14-33 of the 2018 Technical Report. |
(3) | | Mineral resource tonnage and contained metal have been rounded
to reflect the accuracy of the estimate, and numbers may not add
due to rounding. |
(4) | | Cu-Eq (copper equivalent grade) is based on the mill recovery
to concentrates and metal prices presented in Table 14-33 of the
2018 Technical Report. |
(5) | | The Measured and Indicated mineral resources are inclusive of
the mineral reserves. |
| |
|
In addition to updating the economics of the 225 million ton, 32,000 tpd
case for which draft permits have been released, the report evaluates
preliminary economic assessments of mining an intermediate case of 290
million tons of classified resources (96.5 percent Measured and
Indicated and 3.5 percent Inferred) at a rate of 59,000 tpd, and a
full-scale case that would mine 730 million tons (65.4 percent M&I and
34.6 percent Inferred) at a production rate of 118,000 tpd.
The 59,000 tpd and 118,000 tpd upside cases suggest potential valuations
that range from $750 million to more than $2 billion (NPV) and IRRs that
range from 18 percent to 24 percent (including both Phase I and II). The
59,000 tpd and 118,000 tpd upside cases, however, would be subject to
additional engineering and environmental review and permitting. Any such
opportunities would be subject to various regulatory requirements and
would require additional capital investment. The included Inferred
Resources would have to be successfully converted to Measured and
Indicated before any prefeasibility studies could commence.
“We felt it important to quantify at a preliminary level what the
potential economics of the entire NorthMet resource could be as we move
forward with plans for the 32,000 tpd case,” Cherry said.
“We have already invested 13 years and more than $300 million in this
project – most of that spent in Minnesota – and we are now poised to
bring nearly $1 billion in new investment, hundreds of new jobs, and
generate hundreds of millions of dollars in annual economic benefits for
the region,” Cherry said. “We know how important this project is to the
Iron Range and we have to do it right.”
For greater certainty, the preliminary economic assessments for the two
upside cases referred to herein are preliminary in nature, include
inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that
would enable them to be categorized as mineral reserves, and there is no
certainty that the results of these preliminary economic assessments
will be realized. Mineral resources that are not mineral reserves do not
have demonstrated economic viability and there is no certainty that
mineral resources will become mineral reserves.
The NorthMet Technical Report, NI 43-101, dated March 26, 2018, was
produced by Tucson, Arizona-based M3 Engineering & Technology
Corporation. The report is based on detailed engineering studies as well
as the Final Environmental Impact Statement and recently released draft
environmental permits for NorthMet. PolyMet also retained Independent
Mining Consultants, SENET, Hard Rock Consulting and Barr Engineering to
contribute to the study. The report has been filed on SEDAR and EDGAR
and is on the company’s website at www.polymetmining.com.
This release has been reviewed and approved by: Zachary Black, SME-RM,
Hard Rock Consulting, Jennifer Brown, P.G., Hard Rock Consulting;
Nicholas Dempers, Pr.Eng., SAIMM, SENET; Thomas Drielick, P.E., M3
Engineering; Art Ibrado, P.E., M3 Engineering; Erin Patterson, P.E., M3
Engineering; Thomas Radue, P.E., Barr Engineering Co.; and, Herbert
Welhener, SME registered member, Independent Mining Consultants; who are
all Independent Qualified Persons within the meaning of NI 43-101.
Investor call
PolyMet will host an investor call and webcast to discuss the updated
feasibility study at 10 a.m. Central on Wednesday, March 28, 2018.
To join the call, please dial 1.877.705.6003 (U.S.) or 1.201.493.6725
(international) approximately 15 minutes prior to start time. The
earnings call and slide presentation also will be broadcast live over
the internet and can be accessed on the Investor Relations page of the
company’s website at www.polymetmining.com.
At the time of the call, click on this link to view the presentation: http://public.viavid.com/index.php?id=128967.
About PolyMet
PolyMet Mining Corp. (www.polymetmining.com)
is a publicly traded mine development company that owns 100 percent of
Poly Met Mining, Inc., a Minnesota corporation that controls 100 percent
of the NorthMet copper-nickel-precious metals ore body through a
long-term lease and owns 100 percent of the former LTV Steel Mining
Company site, a large processing facility located approximately six
miles from the ore body in the established mining district of the Mesabi
Iron Range in northeastern Minnesota. The NorthMet Final Environmental
Impact Statement was published in November 2015, preparing the way for
decisions on permit applications. NorthMet is expected to require
approximately two million hours of construction labor, create
approximately 360 long-term jobs directly, and generate a level of
activity that will have a significant multiplier effect in the local
economy.
PolyMet Disclosures
This news release contains certain forward-looking statements and
forward-looking information concerning anticipated developments in the
operations of PolyMet in the future, including, without limitation, the
statements regarding the ongoing development of PolyMet’s NorthMet
Project and the results of the feasibility study on the permitted base
case for the NorthMet Project as well as results of the preliminary
economic assessments (PEA) on two expansion cases for the NorthMet
Project. 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 PolyMet’s beliefs related to
the expected project development timelines, exploration results and
budgets, reserve estimates, mineral resource estimates, continued
relationships with current strategic partners, work programs, estimated
capital and operating costs and expenditures, actions by government
authorities, including changes in government regulation, the market
price of natural resources, estimated production rates, ability to
receive and timing of environmental and operating permits, estimated
construction costs, job creation and other economic benefits, or other
statements that are not a statement of fact. In addition, and for
greater certainty, the results of (i) the feasibility study on the
permitted base case of the NorthMet Project, and (ii) the PEAs on the
two expansion cases for the NorthMet Project constitute forward-looking
information, and include future estimates of internal rates of return,
net present value, future production, estimates of cash cost, proposed
mining plans and methods, mine life estimates, cash flow forecasts,
metal recoveries, and estimates of capital and operating costs.
Forward-looking statements and forward-looking information 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 mining industry. Actual results may differ
materially from those in the forward-looking statements and
forward-looking information 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
news release, PolyMet has made numerous assumptions, regarding, among
other things, that 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, that PolyMet will be able to obtain additional financing on
satisfactory terms to fund the development and construction of the
NorthMet Project and that the market prices for relevant commodities
remain at levels that justify construction and/or operation of the
NorthMet Project. 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 risk factors and other considerations
underlying forward-looking statements discussed in PolyMet’s most
recent Annual Report on Form 40-F for the fiscal year ended January 31,
2017, 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 and nine months ended October 31, 2017.
The Annual Report on Form 40-F also contains the company’s mineral
resource and other data as required under National Instrument 43-101.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180327005751/en/
Contacts:
PolyMet Mining Corp.
Media
Bruce Richardson, +1
651-389-4111
Corporate Communications
polymetcommunications@polymetmining.com
or
Investor
Relations
Tony Gikas, +1 651-389-4110
Investor Relations
investorrelations@polymetmining.com
Source: PolyMet Mining Corp.
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