Report: PolyMet Needs More Cash for MN Mining

A review of PolyMet's financial condition indicates that the company is low on cash-but it's in discussions about receiving early payments related to a previously planned financing deal.

PolyMet Mining Corporation is running out of cash and will likely need to secure additional financing in order to move forward on plans for the first copper-nickel mining operation in Minnesota, according to a report by the Duluth News Tribune.

The newspaper cites an independent audit report by the Chartered Accountants of Vancouver, British Columbia, which examined three years of PolyMet's financial statements and found that the company will need more cash if it's to meet its financial obligations by early 2012.

Additional funding could come from Swiss-based Glencore, which has previously said that it will buy 15 million shares of PolyMet stock at $2 each. PolyMet closed on the first of three planned phases of that funding in January, receiving $10 million in financing.

Richmond, British Columbia-based PolyMet told the Duluth News Tribune that it is in discussions with Glencore about receiving the second and third $10 million installments early in order to meet its financial obligations. If Glencore doesn't agree to early payments, “then we will raise additional funds elsewhere,” a PolyMet spokeswoman told the newspaper.

The mining company has plans for nonferrous mining-the mining of copper, nickel, and other precious metals-in northern Minnesota. The state's Iron Range has long been home to taconite mining, but PolyMet's project would be the first copper-nickel mining operation in Minnesota. PolyMet's proposed project is still under environmental review.

Proponents of the planned operation near Babbitt say that there are vast resources untapped in the area, and the project could revitalize the region. If built, the operation would create an estimated 360 or more jobs for about 20 years. Eveleth-based Iron Range Resources recently approved a $4 million loan to PolyMet, and it is reportedly monitoring what happens with the company and its financing.

To learn more about PolyMet's plans-and its financial condition-read the full Duluth News Tribune story here.