PolyMet Mining Corp. (NYSE American: PLM) announced the filing of an updated technical report on the NorthMet Project. The company said the report reaffirms the economic and technical viability of the NorthMet copper-nickel-precious metals project located near Hoyt Lakes.
Entitled "NorthMet Copper-Nickel Project Feasibility Update", it contains original plans but updated cost estimates for construction and operation of the NorthMet Project. Dated Dec. 30, 2022, this report supersedes the previously filed NorthMet Project Technical Report published March 26, 2018.
This report provides technical and economic details for development of the mining operation in two distinct phases. Phase I involves development of 225 million tons - less than 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 and using state-of-the-art wastewater treatment to clean up water issues from legacy iron-ore operations at the site.
The revised capital costs for Phase I are estimated at US$1.2 billion and include refurbishment of the existing primary crushing circuit and replacing the existing rod and ball mill circuits with a modern semi-autogenous grinding (SAG) mill, ball mill and flotation circuit. It also includes rail and electrical system upgrades and mining equipment.
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 have been fully permitted, pending litigation. Phase II would increase project capital costs by approximately $325 million.
"This report once again reaffirms the technical and financial viability of the 32,000 tpd case for which the project was permitted. An improved market forecast created by soaring demand for clean energy metals such as copper, nickel and cobalt more than offsets inflationary pressures and improves the project's valuations and returns," said Jon Cherry, chairman, president and CEO.
"Our focus remains on closing the proposed joint venture with Teck, clearing up outstanding litigation, meeting our environmental obligations under the terms of our permits, and financing and building the project," Cherry said. The company in July entered into an agreement with Teck Resources Limited to form the NewRange Copper Nickel LLC joint venture, placing their respective NorthMet and Mesaba deposits of clean energy metals under single management. The joint venture is expected to close by the end of Q1 2023, and is subject to receipt of customary closing conditions and receipt of certain regulatory approvals.
Total Proven and Probable Mineral Reserves for the NorthMet project are estimated to be 289 million tons, with copper equivalent grade of 0.597 percent (after dilution).
Measured and Indicated Mineral Resources total 702 million tons, with a copper equivalent grade of 0.513 percent.
Inferred Mineral Resources are estimated at 441 million tons, with an estimated copper equivalent grade of 0.509 percent.
After tax, net present value of future cash flow discounted at 7 percent is $304 million for Phase I, and $487 million inclusive of Phase II.
After tax, internal rate of return is 10.5 percent for Phase I and 11.5 percent inclusive of Phase II.
Improvements in metal price assumptions have helped offset increases in capital and operating expenses.
Under Phase I, payable metals in copper and nickel concentrates 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, 1.1 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 expected to increase to 1.2 billion pounds of copper, 179 million pounds of nickel, 1.7 million combined ounces of platinum, palladium and gold, 1.1 million ounces of silver and 6.4 million pounds of cobalt. Palladium is the predominant precious metals group (PGM) product, totaling 1.3 million ounces.
The report is based on feasibility-study-level engineering as well as the Final Environmental Impact Statement (from November 2015) and state and federal environmental permits obtained for NorthMet. PolyMet retained M3 Engineering & Technology Corporation, Independent Mining Consultants, SENET (Pty) Ltd., Hard Rock Consulting, LLC, and Barr Engineering Company to contribute to the Study. This report is available for review under the company's profile on SEDAR (www.sedar.com) and on the company's website (www.polymetmining.com).
Plans for the project have been challenged in court by several environmental groups, with judgments on some of the litigation still pending.