Glencore Increases Its Shareholdings in PolyMet Following Completion of Rights Offering

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE SERVICES

BAAR, Switzerland, July 02, 2019 (GLOBE NEWSWIRE) -- On June 28, 2019, PolyMet Mining Corp, (“PolyMet”) completed an offering (the “Rights Offering”) of rights (“Rights”) exchangeable into common shares of PolyMet (“Common Shares”). Glencore AG (“Glencore”) a wholly-owned subsidiary of Glencore plc had entered into a standby purchase agreement (the "Standby Purchase Agreement”) with PolyMet in connection with the Rights Offering.

Pursuant to the Standby Purchase Agreement, Glencore, subject to certain terms and conditions and limitations, agreed to exercise its basic subscription privilege in full and to also purchase at the subscription price  under the Rights Offering, that number of common shares of PolyMet (“Common Shares”) equal to the difference, if any, between (x) the total number of Common Shares offered pursuant to the Rights Offering and (y) the number of Common Shares subscribed for pursuant to the basic subscription privilege and the additional subscription privilege (the “Standby Commitment”).

Glencore exercised its basic subscription privilege in full for all of the Rights issued to Glencore and Glencore thereby acquired beneficial ownership of 196,726,042 Common Shares (at a subscription price per share of US$0.3881 per Common Share for an aggregate subscription price of US$76,349,376.90).

Additionally, Glencore acquired 430,521,941 Common Shares (at a subscription price per share of US$0.3881 per Common Share for an aggregate subscription price of US$167,085,565.30) in connection with the Standby Commitment.

Accordingly, Glencore acquired an aggregate total of 627,247,983 Common Shares at an aggregate subscription price of US$243,434,942.20.

On June 28, 2019 the subscription price per Common Share was equal to C$0.5088 (based upon the daily rate of exchange published by the Bank of Canada on June 27, 2019 of C$1 = US$0.7627).

The Rights Offering also triggered customary anti-dilution provisions of certain purchase warrants  held by Glencore as described below.

Prior to completion of the Rights Offering, the number of Common Shares issuable pursuant to the warrant (the “2019 Warrant”) issued to Glencore in 2019 was 6,458,001 Common Shares. Following completion of the Rights Offering this amount was adjusted to 7,453,068 Common Shares. In addition, the exercise price of the 2019 Warrant was reduced from US$0.7368 to US$0.6384.

Prior to completion of the Rights Offering, the number of Common Shares issuable pursuant to a certain warrant (the “2016-1 Warrant”) issued to Glencore in 2016 was 7,055,626 Common Shares.  Following the completion of the Rights Offering this amount was adjusted to 8,142,776  Common Shares. In addition, the exercise price of the 2016-1 Warrant was reduced from US$1.000 to US$0.8665.

Prior to completion of the Rights Offering, the number of Common Shares issuable pursuant to a certain warrant (the “2016-2 Warrant”, together with the 2016-1 Warrant and the 2019 Warrant the “Purchase Warrants”) was 625,000 Common Shares. Following completion of the Rights Offering this amount was adjusted to 721,302  Common Shares. In addition, the exercise price of the 2016-2 Warrant was reduced from US$0.7797 to US$0.6756.

PolyMet used a portion of the proceeds of the Rights Offering to repay the amount that PolyMet was indebted (the “Glencore Indebtedness”) to Glencore under certain debentures which, as at June 28, 2019, was in the principal amount of US$165,000,000 plus accrued and unpaid interest of US$85,317,869. Upon repayment of the Glencore Indebtedness in full, the related exchange warrant terminated.

The Common Shares issued to Glencore under the Rights Offering were acquired from PolyMet’s treasury.

PolyMet paid Glencore a fee in cash (the “Standby Fee”) of US$7,689,536, an amount equal to 3.00% of the total funds committed by Glencore pursuant to the Standby Commitment.

In addition, Glencore and PolyMet entered into an amended and restated corporate governance agreement which eliminates the previous restrictions on the number of directors that Glencore is authorized to name to the board of directors of PolyMet.

Further details concerning the Rights Offering, including the terms of the Standby Purchase Agreement, are contained in PolyMet’s final short form prospectus available on the company's SEDAR profile and in the PolyMet’s Form F-10 filed with the SEC on EDGAR (available at www.sec.gov). The foregoing description of certain terms of the Standby Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements to be filed by PolyMet under its profile at www.sedar.com and with the Form F-10 filed with the SEC.

Summary of Glencore's Current Holding of PolyMet

Prior to the completion of the Rights Offering, Glencore held 92,836,072 Common Shares, representing approximately 28.81% of the issued and outstanding Common Shares. In addition, Glencore held an exchange warrant that, if exercised, would result in the issuance of an additional 78,823,098 Common Shares upon conversion of amounts outstanding under certain convertible debentures held by Glencore, resulting in Glencore holding 171,659,170 Common Shares representing approximately 42.80% of the outstanding Common Shares (assuming no other shares committed under existing compensation arrangements were issued by PolyMet).

Glencore also held the Purchase Warrants (see above).

Prior to the completion of the Rights Offering, assuming exercise of the exchange warrant and the Purchase Warrants, but excluding issuance of Common Shares committed under existing compensation arrangements, Glencore would have held a total of 185,797,797 Common Shares representing approximately 44.75% of the Common Shares on a partially diluted basis (assuming no other shares committed under existing compensation arrangements were issued by PolyMet). 

Following the completion of the Rights Offering, Glencore holds 720,084,055 Common Shares, representing approximately 71.6% of the issued and outstanding Common Shares.

Glencore also holds the Purchase Warrants which will result in a total of 16,317,146 Common Shares being issuable to Glencore upon exercise of all of the Purchase Warrants.  Assuming exercise of all of the Purchase Warrants, but excluding issuance of Common Shares committed under existing compensation arrangements, Glencore would hold a total of 736,486,547 Common Shares representing approximately 72.11% of the Common Shares on a partially diluted basis (assuming no other Common Shares committed under existing compensation arrangements were issued by PolyMet) with the exercise prices described above.

Investment Intent

Glencore’s decision to enter into the transactions described above was made in the context of its overall investment purposes. Glencore will continue to review its investment alternatives from time to time and may determine to increase or decrease its equity ownership in PolyMet through the acquisition or sale of additional outstanding Common Shares or other securities of PolyMet through open market or privately negotiated transactions in accordance with applicable securities laws.

The head office of PolyMet is located at 100 King Street West, Suite 5700, Toronto, Ontario M5X 1C7.

The head office of Glencore is located at Baarermattstrasse 3, CH-6340 Baar, Switzerland.

This news release does not constitute an offer to sell, nor the solicitation of an offer to buy, the securities in any jurisdiction; nor shall there be any sale of securities mentioned in this news release in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

This news release is being issued pursuant to National Instrument 62-103, persons who wish to obtain a copy of the early warning report to be filed by Glencore in connection with this transaction may obtain a copy of such report from www.sedar.com or by contacting the persons named below.

For further information, please contact:

Investors

Martin Fewings
t: +41 41 709 2880
m: +41 79 737 5642
martin.fewings@glencore.com 

Media

Charles Watenphul
t: +41 41 709 24 62
m: +41 79 904 33 20
charles.watenphul@glencore.com  

Notes for Editors

Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. Glencore's operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities.

With a strong footprint in both established and emerging regions for natural resources, Glencore's industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.

Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 158,000 people, including contractors.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.