Can I please please please mine in Minnesota

Oct 28th, 2009 – Comment

PolyMet Mining has been actively developing the opportunity at their property in Minnesota and have done just about all you can do to satisfy the regulatory process.


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Hi Lou,

I would like to get your comments on the short- and long-term potential for PolyMet Mining (TSX-POM). Do you think the Environmental Impact Statement (draft EIS) submitted by PolyMet will get accepted by the Minnesota Department of Natural Resources (DNR)?

Thanks in advance,

Felix
Quebec

Hi Felix,

POM (Click to Zoom)

POM (Click to Zoom)

PolyMet Mining Corp ( POM TSX) has been actively developing the opportunity at their property in Minnesota and have done just about all you can do to satisfy the regulatory process. They are currently at the Draft Environmental Impact Study phase which is will then be cycled through public consultations. PolyMet has spent $20M on the review process over the years.

When you read the news releases, annual reports, and presentations from POM they tell the tale of a very long and detailed regulatory process that is required to get through the gateway. Your question as to the probability of getting all the permits needed to begin mining operations is a good one but very hard to assess.

Application risk can never be ignored but from my reading it appears that POM has been very diligent in meeting the letter and spirit of the process. All of the company’s communications say it loud and proud that they are committed to being responsible developers when it comes to the environment.

The object of the exercise is the NorthMet deposit and the Erie Plant that POM owns. Once the project is given the go ahead they will require over $600M to reach full production and have estimated a 20 year mine life. The deposit will produce copper, nickle, cobalt, platinum, palladium, and gold.

Click to Zoom

Click to Zoom

The three year chart gives a good view of the resistance at $3.00 and that volume has supported the move.

The three month chart gives a better look at the resistance at $3.00 and the support at $2.75 since mid September. The MACD is not indicating a return to the upside just yet suggesting consolidation as the market waits for the results of the approval process.

The PolyMet story is one of application risk before you even get to the technical or financial risk associated with mining any deposit. Management has taken a very detailed and professional approach to moving their applications forward and that is the best you can hope for under these circumstances.

If you are not already invested in POM you might want to wait until it builds a base above $3.00 to take some of the risk off the table.

MAKE IT A BIG HALLOWEEN AND HAPPY CAPITALISM!

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