Glencore Enters Into Subscription Agreement for Unsecured Convertible Debentures of PolyMet

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

BAAR, Switzerland, Feb. 14, 2022 (GLOBE NEWSWIRE) -- On February 14, 2022, Glencore AG, a wholly-owned subsidiary of Glencore plc (together “Glencore”) entered into a subscription agreement (the “Subscription Agreement”) with PolyMet Mining Corp. and its wholly-owned subsidiary Poly Met Mining, Inc. (together “PolyMet” or the “company”) providing for the issuance of unsecured convertible debentures (the “2022 Convertible Debentures”) of up to USD$40 million or C$51 million (based upon the daily rate of exchange published by the Bank of Canada on February 11, 2022 of US$1 = C$1.2702).

The 2022 Convertible Debentures are unsecured. At the option of Glencore, the 2022 Convertible Debentures are convertible into common shares (“Common Shares”) of PolyMet Mining Corp. at any time after their issuance and prior to their maturity at the conversion price described below. The 2022 Convertible Debentures contain customary adjustment provisions.

The 2022 Convertible Debentures are issuable in four tranches throughout the calendar year in 2022, all of which would be due on March 31, 2023. Interest will accrue on the 2022 Convertible Debentures at 4% per annum.

The principal amount of the first tranche (US$26 million or C$33 million (based upon the daily rate of exchange published by the Bank of Canada on February 11, 2022 of US$1 = C$1.2702)) which tranche was issued on February 14, 2022 is convertible into Common Shares at a conversion price equal to US$2.57 per Common Share. All subsequent tranches will also be priced at a conversion price equal to US$2.57 per Common Share.

In addition, as consideration of Glencore agreeing to subscribe for the 2022 Convertible Debentures, PolyMet has agreed to pay Glencore a facility fee of 5% of the principal amount of each 2022 Convertible Debenture and accrued and unpaid interest. The facility fee shall be due and payable in full on the earlier of (i) the maturity date of the 2022 Convertible Debentures; and (ii) the date of any conversion.

For illustrative purposes, assuming Glencore subscribes for the 2022 Convertible Debentures in the original principal amount of US$40 million and is paid a facility fee of US$2 million, being 5% of the original principal amount (but not giving effect to any accrued but unpaid interest), the number of shares issuable would be 16,342,412 Common Shares. Glencore may acquire up to a maximum of 20,282,257 Common Shares upon conversion of the 2022 Convertible Debentures, being approximately 19.99% of currently issued and outstanding Common Shares.

The proceeds from the issuance of the first tranche will be used by PolyMet: (i) to repay in full all of the outstanding principal and accrued and unpaid interest under the promissory note dated August 7, 2019 issued by the Company to Glencore AG in the original principal amount of US$15,000,000 (with accrued and unpaid interest of approximately US$2,830,000 as at February 14, 2022); and (ii) for working capital in accordance with PolyMet’s first quarter budget for 2022. The proceeds from the issuance of the additional 2022 Convertible Debentures will be used to fund PolyMet’s budgetary requirements for the balance of 2022 (second, third, and fourth quarters), subject to ongoing verification.

Glencore holds a convertible debenture (the “$10,000,000 Convertible Debenture”) in the aggregate principal amount of US$10,000,000. As at December 31, 2021, US$186,987 in interest had accrued on the $10,000,000 Convertible Debenture. The $10,000,000 Convertible Debenture has a conversion price of US$3.4550 per share. Accordingly, as of December 31, 2021, Glencore was entitled to 2,948,477 Common Shares upon conversion of the $10,000,000 Convertible Debenture.

Glencore holds convertible debentures (the “$30,000,000 Convertible Debentures”, and together with the 2022 Convertible Debentures and the $10,000,000 Convertible Debenture, the “Convertible Debentures”) in the aggregate principal amount of US$30,000,000. As at December 31, 2021, US$1,682,623 in interest had accrued on the $30,000,000 Convertible Debentures. The $30,000,000 Convertible Debentures have a conversion price of $2.2230 per share. Accordingly, as of December 31, 2021, Glencore was entitled to 14,252,192 Common Shares upon conversion of the $30,000,000 Convertible Debentures.

Glencore holds a purchase warrant (the “2019 Warrant”), pursuant to which Glencore is entitled to purchase 745,307 Common Shares with an exercise price of US$6.38.

Any Common Shares to be issued to Glencore in connection with any conversion of the Convertible Debentures or exercise of the 2019 Warrant would be acquired from treasury.

The foregoing description of certain terms of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement to be filed by PolyMet under its profile at www.sedar.com.

Summary of Glencore’s Current Holding of PolyMet

Prior to the entry into of the Subscription Agreement, Glencore held 72,008,404 Common Shares, representing approximately 71.0% of the issued and outstanding Common Shares. In addition, Glencore also held the 2019 Warrant, the $10,000,000 Convertible Debenture and the $30,000,000 Convertible Debentures, which would result in a total of 17,945,976 Common Shares being issuable to Glencore upon exercise of the 2019 Warrant and conversion of the $10,000,000 Convertible Debenture and the $30,000,000 Convertible Debentures. Assuming exercise of the 2019 Warrant and conversion of the $10,000,000 Convertible Debenture and the $30,000,000 Convertible Debentures, but excluding issuance of Common Shares committed under existing compensation arrangements, Glencore would have held a total of 89,954,380 Common Shares representing approximately 75.3% 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 and conversion prices described above.

If Glencore subscribes for the 2022 Convertible Debentures in the original principal amount of US$40 million and is paid a facility fee of US$2 million, being 5% of the original principal amount (but not giving effect to any accrued but unpaid interest), and is issued 16,342,412 Common Shares upon conversion of the 2022 Convertible Debentures, Glencore would hold 88,350,816 Common Shares, representing approximately 75.0% of the issued and outstanding Common Shares. Glencore also holds the 2019 Warrant, the $10,000,000 Convertible Debenture and the $30,000,000 Convertible Debentures, which will result in a total of 17,945,976 Common Shares being issuable to Glencore upon exercise of the 2019 Warrant and conversion of the $10,000,000 Convertible Debenture and the $30,000,000 Convertible Debentures. Assuming exercise of the 2019 Warrant and conversion of the Convertible Debentures, but excluding issuance of Common Shares committed under existing compensation arrangements, Glencore would hold a total of 106,296,792 Common Shares representing approximately 78.3% 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 and conversion 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 444 Cedar Street, Suite 2060, St. Paul, Minnesota 55101.

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

[email protected]

Media

Charles Watenphul

t: +41 41 709 24 62
m: +41 79 904 33 20

[email protected]

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 60 responsibly-sourced commodities that advance everyday life. The Group's operations comprise around 150 mining and metallurgical sites and oil production assets.

With a strong footprint in over 35 countries in both established and emerging regions for natural resources, Glencore's industrial activities are supported by a global network of more than 30 marketing offices. Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 135,000 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. Our ambition is to be a net zero total emissions company by 2050.