Duluth Superior reported that PolyMet Mining Corporation which is developing Minnesota's first copper mine is running so low on cash that it may not be able to continue without outside financing.
Chartered Accountants of Vancouver, British Columbia, looked at 3 years of PolyMet's financial statements and found that the company had USD 779,000 in working capital and net current assets as of January 31st 2011. PolyMet, a publicly traded company incorporated in Canada had USD 16.3 million on January 31st 2010..
The report concluded the cash shortage could cast significant doubt about the company's ability to continue as a going concern. The accountants wrote PolyMet would need additional financing in order to meet its obligations by January 31st 2012. However outside financing could be on the way from the Swiss firm Glencore which said in November it would buy 15 million shares of PolyMet at USD 2 each in three stages. The last stage was to conclude when PolyMet receives key permits or by October 15th 2012 whichever comes first.
Ms LaTisha Gietzen spokeswoman of PolyMet said that “The companies are in talks to accelerate that investment. If it doesn't happen then we will raise additional funds elsewhere. We have done that in the past. Glencore had USD 145 billion in revenues in 2010. It has more than 57,000 employees in more than 40 countries and interests in several publicly traded companies.”
Mr Frank Ongaro ED of MiningMinnesota, an industry supported group that promotes mining for precious metals, said that “JV and partnerships were common during the expensive development phase of mining projects. This is an example of where there is a strong, global mineral investor that is participating at a greater and greater level with PolyMet. That should be seen as a positive thing.”
PolyMet's proposed open pit mine near Babbitt would produce copper, nickel, platinum and other metals. If built the operation would create 360 or more jobs for about 20 years. Environmentalists have opposed the mine and have questioned whether PolyMet had enough money to protect taxpayers from the clean up costs after the mine had run its course.
Mr Tony Sertich IRRRB Commissioner said that the Iron Range Resources and Rehabilitation Board, which has approved a USD 4 million loan to PolyMet is watching what happens with the company. It sounds like that they are optimistic about getting from Glencore by June 30th 2011.
He said that the IRRRB voted in December and April to loan PolyMet USD 4 million to help buy private property that would be exchanged for US Forest Service land at PolyMet's planned mine site near Babbitt. The loan will be secured with a mortgage on the land. If there are any issues we get access to the land.
(Sourced from www.duluthsuperior.com)
