As the saying goes, "slow and steady wins the race," and that's just what the cards look like for Minnesota-focused PolyMet Mining (TSX:POM), which is currently in the permitting phase for its NorthMet copper-nickel-precious metals project. PolyMet is developing the NorthMet deposit in Northeastern Minnesota. NorthMet is one of several ore bodies in the Duluth Complex, a 30-mile-long geological formation that hosts one of the largest undeveloped copper-nickel-precious metals resources in the world. Located adjacent to the Mesabi Iron Range — a region with a well-developed history of over 100 years of iron mining — the Duluth Complex has only recently become the focus of mineral exploration and development efforts. PolyMet's CEO, Jon Cherry, explained to Copper Investing News (CIN) that up until now, no other company has been in a position to design and permit a mining venture to take advantage of the Duluth Complex. According to Cherry, the mineral wealth found in the Duluth Complex has been known for several decades. But until recently, the polymetallic nature of the ore bodies made it difficult for companies to economically separate the various metals (copper, nickel, gold, platinum, palladium, cobalt and silver). However, "in the past 10 years," Cherry explained, "the technology [to separate the ores] has advanced to a point where it can be done economically." And that's exactly what PolyMet is looking to do. The PolyMet advantage PolyMet is using its location to its benefit. With roughly 125 years of iron mining history and nearly 10 different iron ore mining operations and facilities along the Iron Range, PolyMet purchased an ore-processing facility called the Erie Mill out of bankruptcy for pennies on the dollar in 2005. The 100,000-ton-per-day mill, idle since 2001, is conveniently located 6 miles west of the NorthMet ore body.
PolyMet intends to develop its mine and use the existing iron ore-processing facility to crush and grind the rock before sending the ore through the flotation process to separate the individual metals.The mill is a boon for the company in several ways, one of which is the cost savings of reusing infrastructure instead of starting from scratch. Furthermore, a pre-existing mill means that Polymet will be able to move from permitting to first production in a shorter time period. The company estimates first production as soon as the first half of 2016. As far as permitting is concerned, the mill also gives the company a leg up over other companies in its class. "The plant gives us a big advantage from a permitting standpoint," Cherry said, "because it is really a brownfield redevelopment or probably the largest recycling program in the State of Minnesota." Cherry went on to explain that not only is the company repurposing and rehabilitating the old mill, but it will also be able to take advantage of the existing 2-square-mile tailings footprint. Where they are now? It has been a long and rigorous permitting process for PolyMet to get to this point , but when all of its permits are granted, NorthMet will be the first copper-nickel mine in the State of Minnesota. "Just as iron mining has been going for 100 years, we think copper-nickel mining could be opened up for another 100 years in this area," Cherry surmised. With a local community that supports the NorthMet project, Cherry told CIN that PolyMet is "very encouraged by the public and community support" he has seen thus far, adding that he firmly "believes [PolyMet's] SDEIS demonstrates we can meet all the federal and state environmental standards. We are very confident that we have a strong project that meets all the laws and demonstrates that it can move forward on that basis."
Comments from Hoyt Lakes' mayor, Mark Skelton, during PolyMet's Supplemental Draft Environmental Impact Statement conference, made it clear that the town is looking forward to the NorthMet project moving forward. According to Skelton, Hoyt Lakes is a mining town without a mine, and they cannot wait for the opportunities that NorthMet will bring.PolyMet's Economic Impact Study, completed for the project by the University of Minnesota in Duluth, shows that when NorthMet reaches full-time operations it will create upwards of 1,000 jobs for the St. Louis county alone. Additionally, the county could see roughly $720 million in wages and benefits over the 20-year life of the mine, and about $10 billion of total economic impact to the county over the life of the mine. As far as tax revenue is concerned, the State of Minnesota and local governments can expect to see somewhere in the area of $300 million in tax revenue for the life of the mine, whereas the federal government will receive roughly $900 million. To remain accessible to the public, PolyMet has put together an advocacy site (www.gopolymet.com) where any interested party can learn more about the company and project or can have a leaf through the SDEIS. Furthermore, seeing as how the company is currently in the public hearing stage, the public is encouraged to submit any comments or questions they may have. Strategic investment Beyond the Erie plant and public support, PolyMet has also caught the attention of one of the largest commodity trader and fourth-largest commodity miner. For PolyMet, that interest comes in the form of a strategic investment by non other than Glencore Xstrata (LSE:GLEN), which has both signed an offtake agreement with PolyMet and invested roughly $140 million in the NorthMet project. Cherry highlighted that from the offtake agreement, Glencore has also agreed to purchase all of PolyMet's product to be sold at market terms. With Glencore's commitment, the company won't have to spend a lot of effort looking for future buyers when it brings NorthMet into production in 2016.
"It's a great position for us to be in," Cherry told CIN.Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned. Editorial Disclosure: PolyMet Mining is an advertising client of the Investing News Network. This article was not written as part of the company's advertising campaign. This is not paid-for content. Minnesota's First Copper-Nickel Mine in the Making from Nickel Investing News