Polymet Mining, Cleveland Cliffs Finalize Minnesota Asset Swap

Business Wire, Feb 16, 2004

Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--Feb. 16, 2004

Polymet Mining Corp. (TSX:POM) (OTCBB:POMGF) announced today that it has finalized its agreement with Cleveland Cliffs, Inc. (Cliffs: NYSE:CLF) to acquire specific mining assets in northeastern Minnesota at the former LTV Steel Mining Company property, now called Cliffs Erie.

For payment of $500,000 (USD) and one million common shares of Polymet, Cliffs will maintain designated elements of the facility, while Polymet develops its feasibility study with a view to putting into production its Northmet polymetallic deposit situated some five miles by railroad from the Cliffs Erie facility.

The agreement provides for acquisition of plant, equipment and land, as well as access to water, electricity and use of the railroad. Cliffs is expected to provide ore delivery by rail, and has also expressed interest in becoming plant operator, as well as contract miner.

The definitive agreement clears the way for the Vancouver-based company to aggressively pursue final feasibility work on its large non-ferrous Northmet metals deposit some 5 miles south of the town of Babbitt, MN. The estimated 800-million ton Northmet deposit is adjacent to the Mesabi Iron Range and is regarded as the largest undeveloped non-ferrous metal project in North America. The low-grade polymetallic deposit contains copper, nickel, platinum, palladium, cobalt, gold and silver.

Mr. William Murray, Polymet's president and chief executive officer, said he is delighted to have a company of the caliber and experience of Cleveland Cliffs as a shareholder and looks forward to working with Cliffs to bringing the project to fruition.

The option agreement with Cliffs allows Polymet to assume ownership of certain land, crushing and concentrating facilities, as well as shops, warehouses and other assets at the Cliffs Erie location. Polymet also gains access to already established roads, tailings disposal, water, electricity, rail service and offices at the former LTV Steel Mining Company property.

"The opportunity to acquire these mothballed assets dramatically lowers our capital costs by providing about 80 percent of the physical assets we need to develop Minnesota's first non-ferrous mine," Murray said.

Murray added, "We are especially looking forward to working with State of Minnesota permitting agencies to help expedite mine development, so we all can benefit from the current robust recovery of global metals markets."

More than 400 new jobs would be created at the NorthMet mine and hold the prospect for diversification of Minnesota's vital mining economy.

Polymet plans to recover a bulk concentrate from Northmet containing copper, nickel, cobalt, platinum groups metals, gold and silver by treatment of the ore through the Cliffs Erie facility. The company plans to use the patented PlatSol(TM) hydrometallurgical processing technology that applies water-based pressure oxidation to leach all valuable metals from concentrate. Copper is to be recovered on site as metallic copper with nickel and cobalt recovery as a precipitate for toll refining. Precious metals will be recovered in a concentrated mixed precipitate. A toll refinery will perform final refining of precious metals through to pure metals and product.

The PlatSol(TM) process is environmentally benign compared to traditional smelting methods. PlatSol(TM) is specifically designed for and has been successfully piloted on concentrate from the Northmet deposit, thus lowering technical risk.

Polymet began a scoping study January 5, 2004 that is intended to integrate the Cliffs Erie plant and infrastructure into the pre-feasibility study produced in 2001. The scoping study will be signed-off by independent and qualified persons in accordance with Canadian stock exchange 43-101 reporting requirements. This study will allow the company to inform state officials, regulators and investors and form the foundation for a Bankable Feasibility Study.

The Cliffs Erie facility represents well-proven material handling, crushing, milling and flotation processes to be followed by hydrometallurgical operations for extraction of metals. Bateman of Australia are experts in hydrometallurgy and have built a number of plants involving copper, nickel, cobalt and platinum group metals. Bateman will audit the scoping study.

Polymet expects work to commence on the Bankable Feasibility Study in July 2004 and the scope of work will include process design, pilot plant testing, mine planning, environmental work and permitting; all expected to be completed within three years or less.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.