The NorthMet Deposit
PolyMet acquired mineral rights to the NorthMet Deposit on the western end of the Duluth Complex in 1989. Its deposit, the second-largest deposit within the large Duluth Complex, represents nearly 25% of its known mineral resources in the area.
Much like the small percent of iron contained in nearby taconite deposits, minerals in PolyMet's NorthMet deposit are disseminated in small amounts of copper and nickel with much smaller amounts for the other metals.
The deposit is located about six miles from the Erie processing plant, and linked to it by an existing rail line.
The general trend of the sedimentary rocks at the base of the NorthMet deposit is striking east-northeast and to dipping to the southeast about 15-25°, and the Partridge River intrusion appears to follow this general trend.
The metals of interest at NorthMet are copper, nickel, cobalt, platinum, palladium and gold. The deposit has been identified over a length of approximately 2.5 miles and is covered by a thin layer of glacial till but otherwise reaches to the subsurface at the northern edge.
Resource and Reserves
Cautionary note to U.S. investors: the terms "measured and indicated resource", "mineral resource", and "inferred mineral resource" are Canadian geological and mining terms as defined in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves. We advise U.S. investors that while such terms are recognized and required under Canadian regulations, the United States Securities & Exchange Commission ("SEC") does not recognize these terms. Mineral Resources do not have demonstrated economic viability.
It cannot be assumed that all or any part of a Mineral Resource will ever be upgraded to Reserves. Under Canadian rules, estimates of inferred mineral resources may not form the basis of or be included in feasibility or other studies. U.S. investors are cautioned not to assume that any part of an inferred mineral resource exists, or is economically or legally mineable.
U.S. investors are urged to consider closely the disclosure in our Form 20-F which you can review and obtain a copy of these filings from the SEC's website at: www.sec.gov/edgar.shtml
With publication of the DFS in September 2006, summarized in a Technical Report under Canadian National Instrument 43-101, PolyMet established proven and probable mineral reserves. Proven and probable mineral reserves were estimated at 181.7 million short tons grading 0.31% copper, 0.09% nickel, and 0.01 ounces per ton ("opt") of precious metals. In September 2007, PolyMet reported an expansion in these proven and probable mineral reserves to 274.7 million short tons grading 0.28% copper, 0.08% nickel, and 0.01 opt of precious metals (palladium, platinum and gold).
These reserves, which represent only 43% of the measured and indicated mineral resources, are based on copper at $1.25 per pound, nickel at $5.60 per pound, and precious metal prices of $210, $800, and $400 per ounce respectively for palladium, platinum and gold. These assumptions are much lower than the U.S. Securities and Exchange Commission's ("SEC") standards for reserve estimation.
The reserves lie within measured and indicated mineral resources that were expanded to 638.2 million tons grading 0.27% copper, 0.08% nickel and 0.01 opt of precious metals (palladium, platinum and gold). In addition, inferred mineral resources total of 251.6 million tons grading 0.28% copper, 0.08% nickel, and 0.01 opt of precious metals. Mineral resources are not reserves and do not have demonstrated economic viability.