Mining and commodities giant Glencore has offered PolyMet Mining to buy the company’s shares it does not already own for $2.11 in cash each, or about $71 million.
The move will give the Swiss giant a direct ownership of NorthMet, poised to be Minnesota’s first copper-nickel mine. It will also make it Teck Resources’50-50 partner in the NewRange Copper Nickel joint venture, which own NorthMet and the Mesaba copper, nickel, cobalt, and platinum group metal deposits.
Glencore attempted in April to acquired Teck, Canada’s largest diversified miner, for $23 billion. After being rejected several times and faced scrutiny from Ottawa, the firm approached Teck in June with a proposal to buy its steelmaking coal business for an undisclosed valuation.
The bid price for the rest of PolyMet is at par with the Minnesota-based miner’s rights offering in April, which increased Glencore’s ownership stake in the company to about 82.2%.
NorthMet and Mesaba contain measured and indicated resources of 637 million tonnes and 2 billion tonnes respectively. Additional inferred resources sit at 400 million tonnes for NorthMet and 1.3 billion tonnes for Mesaba.
In total, the two assets represent approximately one-half of the known 7.25-billion-tonne Duluth Complex resource in northeastern Minnesota.
NorthMet is expected to produce 29,000 tonnes of ore per day over a 20-year permitted mine life, with first production targeted for 2026. Over its first full five years of operations, it is expected to deliver annual payable production of 30,000 tonnes of copper, 3,600 tonnes of nickel, 58,000 oz. of palladium, and 12,000 oz. of platinum. Estimates for Metsaba are currently unclear.
Shares of PolyMet more than doubled in pre-market trading in New York to $1.87. The company has a market capitalization of almost $153 million.
