PolyMet Mining Corp. (TSX:POM)(NYSE MKT:PLM) ("PolyMet" or the
"Company") has filed the final prospectus with the securities
regulatory authorities in the provinces of British Columbia,
Alberta, and Ontario in Canada and an amendment to its registration
statement on Form F-10, of which the final prospectus forms a part,
with the U.S. Securities and Exchange Commission for an offering of
rights ("Rights") to holders of common shares of the Company to
raise up to approximately US$60.5 million in gross proceeds (the
"Rights Offering").
Every shareholder will receive one Right for each common share
owned on June 4, 2013, the Record Date. Two Rights will entitle the
holder to acquire one new common share of PolyMet at US$0.66 per
share. The Rights will be listed for trading on the Toronto Stock
Exchange ("TSX"), which will also list the common shares issuable
upon the exercise of the Rights. PolyMet will apply to list the
Rights and Common Shares issuable upon the exercise of the Rights
on the NYSE MKT.
Subject to applicable law, all PolyMet shareholders will have
the choice to participate and, by exercising all of their Rights,
maintain their existing levels of ownership. Rights holders can, in
whole or in part, exercise their Rights and subscribe for common
shares, or sell or assign their Rights to another party (who wishes
to subscribe for new PolyMet common shares).
On May 22, 2013, a special committee of the Board of Directors
of PolyMet (the "Board") composed entirely of independent directors
recommended the Rights Offering to the Board. In setting the terms,
the Board objectives were to act in the best interests of the
Company, by being fair to all shareholders regardless of their
level of ownership, and to select terms that will be simple to
explain and for the market to understand. The Board also considered
terms of other comparable rights offering transactions and
regulatory requirements.
The Board and senior management have committed to exercise their
Rights (or cause them to be exercised) based on current ownership
of approximately 3.0%. Glencore AG ("Glencore"), an indirect,
wholly-owned subsidiary of Glencore Xstrata plc has committed to
exercise its Rights based on its current approximate 25.6%
ownership of PolyMet common shares, as well as acquiring any common
shares not subscribed for by other PolyMet shareholders subject to
certain conditions and limitations described in the final
prospectus. Subject to these limitations, if only Glencore and
management subscribe and no other shareholders subscribe, Glencore
would own approximately 47.8% of the then-issued PolyMet common
shares.
"Our focus is transitioning from obtaining agreement on
technical aspects of the NorthMet Project for the supplemental
draft EIS to completion of the environmental review and permitting
process, completion of pre-construction engineering and preparation
for project construction," observed Jon Cherry, PolyMet's President
and CEO.
"Completion of the previously announced Rights Offering will
mean that we are well financed to complete these tasks and gives
all our loyal and supportive shareholders the first right to
participate in this financing on an equal basis," Mr. Cherry
continued.
Rights Offering Details
What is a Rights Offering?
In a Rights Offering, all eligible shareholders get the same pro
rata right to participate in the financing on the same terms.
How many common shares will I be able to subscribe for?
For each common share you hold on the Record Date you will
receive one Right. For every two Rights, you will be able to
subscribe for one new common share (subject to applicable law).
Record date/time
5:00 p.m. (Eastern time) on June 4, 2013 (the "Record
Date").
Commencement Date
June 6, 2013
What will it cost to subscribe for a share?
Upon the exercise of 2 Rights, each common share will cost
US$0.66.
Rights Expiry Date
The Rights Offering will be open until 5:00 p.m. (Eastern time)
on July 3, 2013. Holders of Rights will need to exercise their
Rights prior to that time and date ("Expiry Date").
How much will the Rights Offerings raise?
Gross proceeds of approximately US$60.5 million.
What will the funds raised be used for?
Upon closing of the Rights Offering, PolyMet expects to have
approximately US$15 million cash on hand, which, together with the
net proceeds of this Rights Offering will be used to:
-- Repay the bridge loan advanced by Glencore on April 11, 2013 - US$20
million
-- Complete environmental review and permitting - US$17 million
-- Maintain existing infrastructure - US$5 million
-- Engineering prior to start of project construction - US$10 million
-- Long lead time equipment - US$10 million
-- General corporate purposes - US$12 million.
How many common shares will be issued?
If all of the Rights are exercised, the Company expects to issue
a total of approximately 91.6 million common shares representing
50% of the currently outstanding common shares.
Will this dilute my percentage share holdings?
Your shareholdings will not be diluted if you exercise your
Rights in full. If your Rights go unexercised, your percentage
share holdings will be diluted.
Can I sell my Rights?
Yes, shareholders who do not wish to exercise their Rights in
full will be able to either assign or sell some or all of their
Rights. The TSX has provided conditional approval for trading of
the Rights, which will commence on May 31, 2013 as TSX:POM.RT
subject to PolyMet's satisfaction of the listing conditions of the
TSX. PolyMet will apply to list the Rights and Common Shares
issuable upon the exercise of the Rights on the NYSE MKT. The
approval of such listing will be subject to PolyMet fulfilling all
of the listing requirements of the NYSE MKT.
Can I subscribe for more common shares?
Yes. All shareholders have an Additional Subscription Privilege
that allows those shareholders who fully exercise their Rights to
acquire any PolyMet common shares issuable under this Rights
Offering that are not subscribed for prior to the Expiry Date. The
allocation of the Additional Subscription Privilege will be pro
rata to the total number of Additional Subscriptions and the number
of common shares originally held by those who apply for Additional
Subscription.
How do I pay for my common shares?
If you are a registered shareholder you will pay the
subscription agent, being Computershare Investor Services Inc., in
Toronto, Canada, directly. If you hold your shares through an
intermediary in "street name" your intermediary should pay for the
common shares in accordance with your instructions.
When will I receive additional information?
A Rights certificate and a prospectus will be mailed to each
registered shareholder shortly following the Record Date. The
prospectus is currently available on SEDAR at www.sedar.com under
the Company's profile.
Standby Commitment
Glencore's intention is to exercise all of the Rights it
receives as a result of its 25.6% ownership of PolyMet common
shares and has entered into a standby commitment whereby Glencore
has agreed, subject to certain conditions and limitations set out
in the final prospectus, to subscribe for any common shares that
are not subscribed for under the Rights Offering (including the
Additional Subscription Privilege) on the Expiry Date, up to a
total of approximately US$53.1 million. See PolyMet's news release
issued on April 10, 2013 for additional information regarding the
standby commitment.
Summary of Glencore's Current Holding of PolyMet
As of the date hereof, PolyMet has 183,272,404 issued and
outstanding common shares. Based on information provided by
Glencore, through a series of transactions since October 31, 2008,
Glencore holds:
-- 46,967,842 PolyMet common shares representing approximately 25.6% of
PolyMet's issued and outstanding common shares.
-- $30.8 million initial principal plus capitalized interest series A-D
debentures exchangeable into 20,500,756 PolyMet common shares through
the exercise of the Exchange Warrants, and
-- Purchase Warrants issued in connection with certain of the transaction
to acquire 5,600,000 PolyMet common shares.
Both the Exchange and Purchase Warrants are exercisable at
US$1.50 per share, and expire on September 30, 2014 and December
31, 2015 respectively.
Accordingly, Glencore is deemed to beneficially own, or exercise
control or direction over 73,068,598 PolyMet common shares
representing approximately 34.9% of the total issued and
outstanding common shares on a partially diluted basis, that is
assuming the exchange only of Glencore's convertible securities and
no exchange of any securities of PolyMet that carry the right to
acquire common shares held by any party other than Glencore.
Early Warning Disclosure
Following completion of the Rights Offering, Glencore will be
deemed to beneficially own, or exercise control or direction over,
the number of common shares as set out below, in the following
circumstances. The number of PolyMet common shares to be owned by
Glencore cannot be determined at this time as the number of Standby
Shares to be acquired by Glencore will only be determined at the
Expiry Time. Accordingly, this information is subject to change
when the participation of shareholders in the Rights Offering has
been determined.
Full exercise of Rights by other shareholders
Assuming (i) holders of Rights take up their basic subscription
entitlement in full and the standby commitment is not utilized, so
Glencore exercises only its basic subscription privilege, and (ii)
no holder of securities having the right to acquire common shares
of the Company (including Glencore) exercises any such right,
following closing of the Rights Offering, Glencore would acquire
23,483,921 additional PolyMet common shares and as a result
Glencore would beneficially own, or exercise control or direction
over 70,451,763 common shares, representing approximately 25.6% of
the 274,908,606 then issued and outstanding PolyMet common
shares.
The triggering of the customary anti-dilution provisions of
Glencore's Exchange Warrant and Purchase Warrants by the Rights
Offering would adjust the number of common shares issuable to
Glencore thereunder to 23,717,410 and 6,470,847, respectively,
which, if exercised, would result in Glencore holding approximately
33.0% of the outstanding common shares of PolyMet on a partially
diluted basis.
No exercise of Rights by other shareholders
Assuming none of the holders of Rights, other than Glencore,
exercise their basic subscription entitlement and accordingly
Glencore acquires all common shares offered under the Rights
Offering, subject to the limitations described in the final
prospectus, following closing of the Rights Offering Glencore would
acquire 80,398,727 PolyMet common shares and would be deemed to
beneficially own, or exercise control or direction over,
127,366,569 PolyMet common shares representing approximately 48.3%
of the 263,671,131 then issued and outstanding common shares.
The triggering of the customary anti-dilution provisions of
Glencore's Exchange Warrant and Purchase Warrants by the Rights
Offering would adjust the number of common shares issuable to
Glencore thereunder to 23,404,393 and 6,386,196, respectively,
which, if exercised, would result in Glencore holding approximately
53.6% of the outstanding common shares of PolyMet on a partially
diluted basis.
Investment Intent
Glencore AG's decision to participate in the Rights Offering and
provide the standby commitment has been made for investment
purposes. Glencore AG will continue to review its investment
alternatives from time to time and may determine to increase or
decrease its equity ownership in PolyMet through the acquisition or
sale of additional outstanding common shares or other securities of
PolyMet through open market or privately negotiated transactions in
accordance with applicable securities laws.
This news release shall not constitute an offer to sell, nor the
solicitation of an offer to buy, any securities in the United
States; nor shall there be any sale of securities mentioned in this
news release in any state of the United States in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
About PolyMet
PolyMet Mining Corp. (www.polymetmining.com) is a
publicly-traded mine development company that owns 100% of Poly Met
Mining, Inc., a Minnesota corporation that controls 100% of the
NorthMet copper-nickel-precious metals ore body through a long-term
lease and owns 100% of the Erie Plant, a large processing facility
located approximately six miles from the ore body in the
established mining district of the Mesabi Range in northeastern
Minnesota. Poly Met Mining, Inc. has completed its Definitive
Feasibility Study and is seeking environmental and operating
permits to enable it to commence production. The NorthMet project
is expected to require approximately two million hours of
construction labor, creating approximately 360 long-term jobs, a
level of activity that will have a significant multiplier effect in
the local economy.
POLYMET MINING CORP.
Jon Cherry, CEO
This news release contains certain forward-looking statements
concerning anticipated developments in 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 proceeds and closing of the Rights
Offering, budgets, work programs, capital expenditures, our ability
to receive environmental and operating permits, job creation,
actions by government authorities, 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. 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.
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, 2013 and
in our other filings with Canadian securities authorities and the
U.S. Securities and Exchange Commission for a discussion of some of
the risk factors and other considerations underlying
forward-looking statements.
PolyMet has filed a registration statement (including a
prospectus) with the U.S. Securities and Exchange Commission, for
the offering to which this communication relates. Before investing,
prospective investors should read the prospectus in that
registration statement and other documents the issuer has filed
with the U.S. Securities and Exchange Commission, for more complete
information about PolyMet and this offering. The documents are
available free of charge by visiting EDGAR on the U.S. Securities
and Exchange Commission website at www.sec.gov. Alternatively,
PolyMet will arrange to send you the prospectus if you request it
by calling 1-416 - 915-4149.
The TSX has not reviewed and does not accept responsibility for
the adequacy or accuracy of this release.
Contacts: PolyMet Mining Corp. - Corporate Douglas Newby Chief
Financial Officer +1 (651) 389-4105dnewby@polymetmining.com PolyMet
Mining Corp. - Media LaTisha Gietzen VP - Public, Gov't &
Environmental Affairs +1 (218) 225-4417lgietzen@polymetmining.com
PolyMet Mining Corp. - Investor Relations Jenny Knudson VP -
Investor Relations +1 (651) 389-4110jknudson@polymetmining.com
www.polymetmining.com MZ North America Pascal Nigen Senior
Vice-President +1 (212) 301-7149pnigen@mzgroup.us
www.mzgroup.us
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