PolyMet paves the way on big Minnesota copper-nickel-pgm-gold projects

As the first of the prospective polymetallic miners on the Duluth Complex, PolyMet's publication of its draft EIS is a major step on the way for perhaps three or four mining operations.

LONDON - 

Recently Mineweb reported on progress being made by Duluth Metals, holder of perhaps the biggest position on the Duluth Complex, which is reckoned to host one of the world's largest undeveloped repositories of copper, nickel and PGMs, including the world's third largest accumulation of nickel sulphides, and one of the world's largest accumulations of polymetallic copper and platinum group metals.  However by far the most advanced project development there is that of PolyMet Mining, which has effectively been paving the way for the companies following behind in terms of geological data, metallurgical testing and now has published its draft Environmental Impact Statement (EIS) on its NorthMet mining project, the next stage in developing a mine in this exciting area (mineralogically) of the U.S.  Altogether, including PolyMet and Duluth Metals there are four prospective major mine developments in prospect on the Complex.

In effect the Polymet draft EIS becomes the start of the public comment period on its NorthMet project.  U.S. Federal rules require a minimum of a 45-day public comment period.  As lead Agencies covering the state and federal aspects of any development, the Minnesota Department of Natural Resources and the U.S. Army Corps of Engineers have decided on a 90-day public comment period ending at 4:30 pm on February 3, 2010.  PolyMet is confident that the duration of the public comment period will affect its expectation of a 6-9 month process to complete permitting for what will be one of the most important new mine developments in the U.S. for some years.

While there is bound to be some environmental opposition to the project - no new mine can get by in the U.S. without this - in general the local population is thought to be very much in favour of this and the other potential mining projects in the area.  The decline of taconite mining in this part of Minnesota means that it has a very mining-aware population suffering very high unemployment levels - and perhaps importantly for the developers, there is a potentially highly-skilled available workforce.

PolyMet itself is a publicly-traded mine development company that controls 100% of the NorthMet copper-nickel-precious metals ore body through a long-term lease.  It also owns the Erie Plant, a large originally taconite processing facility located approximately six miles from the orebody which would be converted to process the NorthMet ore making this part of the project a brownfields, rather than a greenfields, redevelopment.  PolyMet has completed its definitive feasibility study and is thus seeking the necessary environmental and operating permits to enable it to commence production.  The NorthMet project is expected to require approximately 1.5 million man hours of construction labour and create at least 400 long-term jobs, a level of activity which the company reckons will have a significant multiplier effect in the local economy.

PolyMet's environmental review started in February 2004.  In October 2005, following a public comment period, the State of Minnesota published the final Environmental Assessment Worksheet that has guided development of the draft EIS, which  marks the culmination of four years of intensive testing and technical studies by recognised world experts.  PolyMet has invested more than $20 million into the environmental review process.  Based on the extensive and comprehensive studies and review, PolyMet is confident the draft EIS is thorough and accurate and provides regulatory agencies with information needed to develop and issue operating permits.

The PolyMet project is surrounded by former and active mines on the eastern end of the Mesabi Iron Range. The proposed project will reuse much of the existing infrastructure at the brown field site. Ore will be transported from the open pit mine along existing rail track to the Erie Plant. The Erie Plant and existing infrastructure include large-scale crushing and grinding facilities, extensive tailings capacity that will be reused without disturbing additional land, an electrical substation, and water supply.

Local infrastructure includes power, road, rail, major equipment suppliers, and a large pool of skilled labour that lives in nearby towns.   The University of Minnesota has independently estimated the total economic impact to be approximately $250 million a year.

Proven and probable mineral reserves have been estimated at 274.7 million short tons grading 0.28% copper, 0.08% nickel, and 0.01 oz/ton of precious metals (palladium, platinum and gold).

These reserves, which represent only 43% of the measured and indicated mineral resources, were 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 were at the time much lower than the U.S. Securities and Exchange Commission's ("SEC") standards for reserve estimation and, of course hugely below current price levels for most of the metals involved.

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 oz/ton of precious metals (palladium, platinum and gold). In addition, inferred mineral resources total 251.6 million tons grading 0.28% copper, 0.08% nickel, and 0.01 oz/ton of precious metals.

As the pioneer on exploiting the Duluth Complex's mining potential, PolyMet has spent considerable sums not only on defining the orebody on its holdings, but also in metallurgical testwork on a complex ore material.  The process was developed by PolyMet with SGS Lakefield laboratories in Canada to come up with a metallurgical flowsheet which will likely be followed by other producers as the various Duluth Complex projects move to production over the next few years - assuming all the necessary permits are forthcoming.

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exporatory drilling in no. mn. I am a retired engineer that used to work for Erie mining. There has been test dtilling going on in the area for over 10 years and over a thousand holes have been drilled. We have known for a long time the massive deposits that exist there. by stan hendrickson on November 04 2009, 10:05 Find this comment inappropriate? Report it

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