PolyMet Mining Corp. (TSX:POM)(NYSE MKT:PLM) ("PolyMet" or the
"Company") has filed a preliminary prospectus with the securities
regulatory authorities in the provinces of British Columbia,
Alberta, and Ontario in Canada and a registration statement on Form
F-10 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 US$60 million in gross proceeds (the "Rights
Offering").
Separately, Glencore AG ("Glencore", an indirect, wholly-owned
subsidiary of Glencore International plc) has agreed to provide a
US$20 million bridge loan (the "Bridge Loan") to PolyMet's
wholly-owned Minnesota subsidiary, Poly Met Mining, Inc. ("PMI"),
to fund operations and enable PolyMet to meet liquidity
requirements until the Rights Offering is completed. The Bridge
Loan will be repaid with proceeds from the Rights Offering when
completed.
The proceeds from the Rights Offering will be used for:
-- Repayment of the Bridge Loan (as described below)
-- Anticipated costs to complete the environmental review and permitting of
the NorthMet Project
-- Detailed engineering in preparation for the start of project
construction
-- Commitments to long-lead time equipment
-- Maintaining existing infrastructure
-- General corporate purposes
Jon Cherry, PolyMet's President and CEO stated, "The combination
of Bridge Loan and Rights Offering ensures that we are well
financed for completing the environmental review and permitting
phase of the NorthMet project. The financing will also provide for
the completion of preconstruction engineering design and allow for
procurement of long lead-time equipment in order to minimize the
time-line from receipt of permits to start of commercial
production."
Cherry observed that the Rights Offering is fair for all
shareholders and gives them an equal opportunity to participate in
the financing..
"It is also important to note that Glencore is demonstrating its
confidence in the project and the PolyMet team by providing us a
bridge loan and entering into the standby agreement," Mr. Cherry
continued.
Conference Call at 9:00 am CDT on Thursday April 11, 2013
Jon Cherry, President and CEO and Douglas Newby, CFO will host a
call to discuss the Rights Offering and Bridge Loan.
Dial in Number 1 (855) 353-9183 toll free from Canada and USA
+1 (403) 532-5601 international
Pass Code 81855#
Summary of Rights Offering
Under the Rights Offering, all shareholders of PolyMet (subject
to applicable law) will receive one Right for every common share of
PolyMet owned on the record date (the "Record Date"), which will be
set seven trading days after the final prospectus for the Rights
Offering is filed with the applicable securities regulatory
authorities. In accordance with the rules of the Toronto Stock
Exchange ("TSX"), the subscription price ("Rights Price") for the
common shares of PolyMet to be purchased upon exercise of the
Rights will be a discount of not less than 20% to the US dollar
equivalent of the 5-day volume weighted average price ("VWAP") of
PolyMet common shares on the TSX on the day the final prospectus is
filed.
PolyMet will apply to have the Rights listed for trading on both
the TSX and NYSE MKT. The approval of such listings is subject to
the Company fulfilling all of the listing requirements of the TSX
and NYSE MKT. The number of Rights needed to subscribe for one new
common share of PolyMet will be determined by the Rights Price and
the number of common shares in issue at the time (currently
approximately 183 million) in order to receive gross proceeds of
US$60 million.
Standby Purchase Agreement
Glencore has entered into a Standby Purchase Agreement with
PolyMet whereby Glencore will purchase any PolyMet common shares
offered under the Rights Offering that are not subscribed for by
holders of the Rights, subject to certain conditions and
limitations described below.
Under the Standby Purchase Agreement, the maximum number of
PolyMet common shares to be acquired by Glencore (including all
transactions contemplated by the standby agreement other than the
Bridge Loan - see below) (the "Standby Commitment") shall be the
lesser of such number of PolyMet common shares:
-- calculated by dividing US$53.0 million (being 24.99% of PolyMet's market
capitalization less the aggregate of the Standby Fee and the fair market
value of all other transactions contemplated by the Standby Purchase
Agreement in so far as they relate to Glencore (other than the Bridge
Loan) as determined by Polymet's board acting reasonably), and the
Rights Price;
-- so that the total number of PolyMet common shares acquired by Glencore
under the Rights Offering and the Standby Purchase Agreement, together
with the 47.0 million PolyMet common shares currently held by Glencore,
does not exceed 49.99% of the issued and outstanding PolyMet common
shares immediately following the completion of the Rights Offering and
the issue of shares under the Standby Commitment.
Glencore will receive a cash fee of approximately US$1.06
million which is 2% of the total Standby Commitment. PolyMet and
Glencore have agreed to enter into certain corporate governance
arrangements under which, effective January 1, 2014, Glencore may
appoint that number of the directors of PolyMet which is
proportionate to Glencore's ownership of PolyMet common shares (on
a fully diluted basis), subject to certain limitations including
that Glencore may not appoint more than 49% (rounding down) of the
directors.
PolyMet is not required to obtain a formal valuation or seek
approval under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI 61-101")
with respect to the Rights Offering because Sections 5.5(a) and
5.7(1)(a) exempt a transaction from such requirements in
circumstances where, at the time the transaction is agreed to, the
fair market value of the consideration involved in the transaction
does not exceed 25% of the market capitalization. The board of
directors of PolyMet has determined that the Rights Offering
satisfies this requirement and therefore is exempt from MI
61-101.
Bridge Loan
PolyMet, PMI, and Glencore have also entered an amendment to
their existing note purchase agreement pursuant to which Glencore
has agreed to lend US$20 million to PMI to fund operations until
the completion of the Rights Offering and to enable PolyMet to meet
certain liquidity tests under a fixed rate secured debenture. The
Bridge Loan is guaranteed by the Company and secured by the assets
of PolyMet and PMI on the same terms as the existing Series A-D
debentures held by Glencore. The Bridge Loan is due on May 1, 2014,
subject to mandatory repayment on closing of the Rights Offering,
and carries a fixed interest rate of 4.721% per annum. Among other
things, if the Rights Offering is not completed within 90 days of
the execution of the Standby Purchase Agreement, Glencore has the
right to declare all of the then outstanding principal and interest
under the Bridge Loan and all other debentures held by Glencore to
be due and payable.
PolyMet is not required to obtain a formal valuation under MI
61-101 with respect to the Bridge Loan, which is a related party
transaction under paragraph (j) of the definition of "related party
transaction" in MI 61-101. Section 5.4(l) of MI 61-101 provides
that only related party transactions described in paragraphs (a) to
(g) of the definition of related party transaction are subject to
the formal valuation requirement. PolyMet is exempt from the
minority approval requirement of MI 61-101 with respect to the
Bridge Loan pursuant to Section 5.7(l)(f) of MI 61-101 because,
among other things, the Bridge Loan was negotiated on an arm's
length basis and does not involve an equity or voting
component.
PolyMet will file a material change report as soon as
practicable after issuing this press release. The timing of the
filing of the material change report is, in PolyMet's view, both
necessary and reasonable because the terms of the Bridge Loan and
Rights Offering were not approved by PolyMet's board until April
10, 2013 when the preliminary prospectus for the Rights Offering
was also approved, and PolyMet requires the Bridge Loan to continue
funding its operations and meet liquidity tests.
What do Shareholders Need to Do?
At the moment, nothing. When the final prospectus is filed, it
will be mailed to all shareholders on the Record Date along with
instructions explaining how many Rights you are entitled to, how
many PolyMet common shares you can purchase for those Rights, how
to subscribe to your rights or instruct your broker how to
subscribe to rights held on your behalf, or how to sell your rights
in the market or otherwise transfer them to another party.
Summary of Glencore's Current Holding of PolyMet
As of the date hereof, PolyMet has 183,250,082 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 Rights Price will
only be determined at the time of the filing of the final
prospectus. Accordingly, this information is based upon the current
market price for the common shares and is subject to change when
the actual Rights Price of the common shares to be issued upon
exercise of the Rights has been determined.
The assumed subscription price of US$0.93 per common share is
based upon a 20% discount to US$1.16, being the US dollar
equivalent (based on the noon rate of exchange published by the
Bank of Canada on April 9, 2013 of C$1 = US$0.9841) of the 5-day
VWAP of PolyMet common shares on the TSX of C$1.19, calculated as
of the date of this announcement. The numbers below also assume
that there is no change to Glencore's holdings in PolyMet and the
outstanding common shares of PolyMet prior to completion of the
Rights Offering.
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
16,505,846 additional PolyMet common shares and as a result
Glencore would beneficially own, or exercise control or direction
over 63,473,688 common shares, representing approximately 25.6% of
the 247,649,414 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 21,625,463 and 5,907,226, respectively,
which, if exercised, would result in Glencore holding approximately
33.1% 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 set forth above, following
closing of the Rights Offering Glencore acquire 56,953,868 PolyMet
common shares and would be deemed to beneficially own, or exercise
control or direction over, 103,921,710 PolyMet common shares
representing approximately 43.3% of the 240,203,950 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 21,521,324 and 5,878,779, respectively,
which, if exercised, would result in Glencore holding approximately
49.1% 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.
Other Agreements
Glencore has waived its right of first refusal to provide
material financings other than certain forms of equity financing,
subject to regulatory approval. PolyMet has also provided notice to
the rights agent that it has waived the application of the
Shareholder Rights Plan to Glencore in connection with: (a) the
issuance of the Rights and common shares issuable upon exercise of
the Rights under the Rights Offering; and (b) Standby Purchase
Agreement.
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
For further information from Glencore AG, please contact:
--------------------------------------------------------------------------
Glencore AG Charles Watenphul (Media)
Baarermattstrasse 3 t: +41 (0)41 709 2462
Baar, 6341 m:+41 (0)79 904 3320
Switzerland e: charles.watenphul@glencore.com
--------------------------------------------------------------------------
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, but are not limited to,
statements regarding our beliefs related to the general economic
and business conditions, whether or not the above contemplated
Rights Offering will be successfully completed in the future, the
use of proceeds of the Rights Offering 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, 2012 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, 2012 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) 248-0877lgietzen@polymetmining.com
PolyMet Mining Corp. - Investors Jenny Knudson VP - Investors
Relations +1 (651) 389-4110jknudson@polymetmining.com
www.polymetmining.com
Polymet Mining (AMEX:PLM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Polymet Mining (AMEX:PLM)
Historical Stock Chart
From Apr 2023 to Apr 2024