PolyMet Reports Third Quarter Fiscal 2018 Results

December 7, 2017

ST. PAUL, Minn.–(BUSINESS WIRE)–PolyMet Mining Corp (“PolyMet” or the “company”) TSX: POM; NYSE
AMERICAN: PLM – today reported that it has filed its financial results
for the three and nine months ended October 31, 2017.

PolyMet controls 100 percent of the development-stage NorthMet
copper-nickel-precious metals ore body and the nearby former LTV Steel
Mining Company site, located near Hoyt Lakes in the established mining
district of the Mesabi Iron Range in northeastern Minnesota.

The financial statements have been filed at www.polymetmining.com
and on SEDAR and EDGAR and have been prepared in accordance with
International Financial Reporting Standards. All amounts are in U.S.
funds. Copies can be obtained free of charge by contacting the Corporate
Secretary at First Canadian Place, 100 King Street West, Suite 5700,
Toronto, Ontario M5X 1C7 or by email at [email protected].

Recent 2017 Highlights

  • In August, the Minnesota Department of Natural Resources (“MDNR”)
    released six draft water appropriation permits for 30-days of public
    review and comment.
  • In September, the MDNR released two draft dam safety permits for 30
    days of public review and comment.
  • Also In September, the company issued and committed to issue to
    Glencore secured debentures with a total principal amount of $20.0
    million;
  • In October, the company entered into an agreement with EIP Credit Co.,
    LLC (“EIP Credit”) to reserve wetland bank credits the company can use
    for the NorthMet Project; and
  • In November, the U.S. House of Representatives passed bipartisan
    legislation introduced by Rep. Rick Nolan, D-MN-8, directing the
    secretary of agriculture to move forward with the land exchange
    between PolyMet and the U.S. Forest Service. This bill has advanced to
    the Senate for consideration.

Goals and Objectives for the Next Twelve Months

The permitting process is managed by the regulatory agencies. Therefore,
timelines are not under PolyMet control. Given these circumstances,
PolyMet’s objectives include:

  • Transfer of title to the surface rights over and around the NorthMet
    mineral rights to PolyMet as part of the authorized land exchange.
  • Favorable decisions by the state on 401 Water Quality Certification
    and U.S. Army Corps of Engineers Final Record of Decision and 404
    wetlands permit under the Clean Water Act.
  • Publication of draft state Permit to Mine, National Pollution
    Discharge & Elimination System water discharge permit and air permit
    for public comment.
  • Favorable decisions on state permit issuances (Permit to Mine, air,
    water and dam safety permits).
  • Completion of definitive cost estimate and project update following
    permits.
  • Completion of project implementation plan.
  • Repayment, restructuring and/or conversion of Glencore loans.
  • Completion of construction finance plan, subject to typical conditions
    precedent, such as receipt of key permits.

Key Balance Sheet Statistics

(in ‘000 US dollars)

Balance Sheet October 31, 2017 January 31, 2017
Cash & equivalents $ 11,248 $ 18,674
Working capital (130,219) 16,267
Total assets 414,216 389,049
Total liabilities 213,253 181,720
Shareholders’ equity $ 200,963 $ 207,329

At October 31, 2017, PolyMet had cash of $11.248 million compared with
$18.674 million at January 31, 2017. The company is in discussion with
Glencore regarding the convertible and non-convertible senior secured
debentures currently due to be repaid upon the earlier of availability
of construction finance or March 31, 2018.

As of October 31, 2017, PolyMet had spent $127.134 million on
environmental review and permitting, of which $120.683 million has been
spent since the NorthMet Project moved from exploration to development
stage.

Key Income and Cash Flow Statement
Statistics

(in ‘000 US dollars, except per share amounts)

Three months ended Nine months ended
October 31, October 31,
Income and Cash Flow Statement 2017 2016 2017 2016
General & administrative expense excluding non-cash share-based
compensation 		$ 910 $ 856 $ 3,446 $ 3,014

Non-cash share-based compensation

283

137

1,095

997

Other Expenses:
Finance & Other 589 1,101 1,830 1,990
Non-cash loss on disposals 469 – 1,793 –
Loss for the period: 2,251 2,094 8,164 6,001
Other Comprehensive (Income) (50) (57) (45) (161)

Loss per share

0.01

0.01

0.03

0.02

Investing Activities:
NorthMet Property $ 6,997 $ 6,339 $ 18,100 $ 17,750

Weighed average shares outstanding

319,139,686

282,365,628

318,800,431

279,271,703

Loss for the three months ended October 31, 2017, was $2.251 million
compared with $2.094 million for the prior year period. General and
administrative expenses for the three months ended October 31, 2017,
excluding non-cash share-based compensation, were $0.910 million
compared with $0.856 million for the prior year period. Other expenses
were $1.058 million compared with $1.101 million for the prior year
period.

Loss for the nine months ended October 31, 2017, was $8.164 million
compared with $6.001 million for the prior year period. General and
administrative expenses for the nine months ended October 31, 2017,
excluding non-cash share-based compensation, were $3.446 million
compared with $3.014 million for the prior year period. Other expenses
were $3.623 million compared with $1.990 million for the prior year
period.

PolyMet invested $6.997 million cash into its NorthMet Project during
the three months ended October 31, 2017, compared with $6.339 million in
the prior year period, and invested $18.100 million during the nine
months ended October 31, 2017, compared with $17.750 million in the
prior year period.

Financial year-end change

The company further reports that the board of directors has agreed to
change the company’s financial year-end from January 31 to December 31
to better align with industry peers.

The company’s transition year will consist of an eleven-month period
ended on December 31, 2017. For more details regarding the length and
ending dates of the financial periods, including the comparative
periods, of the interim and annual financial statements to be filed for
the company’s transition year and its new financial year, please refer
to the company’s Notice of Change of Year End filed pursuant to National
Instrument 51-102 and Management Discussion and Analysis for the three
and nine months ended October 31, 2017. The Notice of Change of Year End
is available on SEDAR. The Management Discussion and Analysis is
available on SEDAR and EDGAR and on the company’s website at www.polymetmining.com.

About PolyMet

PolyMet Mining Corp. (www.polymetmining.com)
is a publicly traded mine development company that owns 100 percent of
Poly Met Mining, Inc., a Minnesota corporation that controls 100 percent
of the NorthMet copper-nickel-precious metals ore body through a
long-term lease and owns 100 percent of the former LTV Steel Mining
Company site, a large processing facility located approximately six
miles from the ore body in the established mining district of the Mesabi
Iron Range in northeastern Minnesota. Poly Met Mining, Inc. has
completed its Definitive Feasibility Study. The NorthMet Final EIS was
published in November 2015, preparing the way for decisions on permit
applications. NorthMet is expected to require approximately two million
hours of construction labor, create approximately 360 long-term jobs
directly, and generate a level of activity that will have a significant
multiplier effect in the local economy.

PolyMet Disclosures

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 the ability to receive
environmental and operating permits, job creation, and the effect on the
local economy, 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 risk factors and other considerations
underlying forward-looking statements discussed in PolyMet’s most
recent Annual Report on Form 40-F for the fiscal year ended January 31,
2017, 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 and nine months ended October 31, 2017.

The Annual Report on Form 40-F also contains the company’s mineral
resource and other data as required under National Instrument 43-101.

The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.

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Contacts

PolyMet Mining Corp
Media
Bruce Richardson, +1
651-389-4111
Corporate Communications
[email protected]
or
Investor
Relations
Jenny Knudson, +1 651-389-4110
Investor Relations
[email protected]

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