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Duluth Metals Confirms 12 Million Indicated Ounces And 6 Million Inferred Ounces Of Contained Palladium, Platinum And Gold

Duluth Metals News Release
October 30, 2009

TORONTO, Ontario, October 30, 2009 – Duluth Metals Limited ("Duluth") (TSX: DM) (TSX:DM.U) today confirms 12 million Indicated ounces and 6 million Inferred ounces of contained platinum, palladium and gold (Total Precious Metal or TPM) in the Nokomis Deposit as reported by Scott Wilson RPA's latest NI 43-101 Resource Estimate (see Duluth Metals press release dated October 26, 2009). This 3 million ounce increase in Indicated Resources represents a 34% increase in the TPM ounces over the Scott Wilson RPA June 2008 NI 43-101 Resource Estimate.

Contained Precious Metals

Metal1

June 2008 Indicated Resources

October 26, 2009Indicated Resources

Incremental Cange2

Palladium

5.17 million ounces

6.93 million ounces

+1.76 million ounces

Platinum

2.30 million ounces

3.11 million ounces

+0.81 million ounces

Gold

1.21 million ounces

1.63 million ounces

+0.42 million ounces

TPM

8.68 million ounces

11.67 million ounces

+2.99 million ounces

Metal1

June 2008 Inferred Resources

October 26, 2009 Inferred Resources

Incremental Change2

Palladium

3.94 million ounces

3.60 million ounces

-0.34 million ounces

Platinum

1.75 million ounces

1.63 million ounces

-0.12 million ounces

Gold

0.88 million ounces

0.80 million ounces

-0.08 million ounces

TPM

6.57 million ounces

6.03 million ounces

-0.54 million ounces

1.Silver has not been included in this analysis 
2.The decrease in the Inferred Resources represents a net tonnage conversion to the Indicated Resource category.

"The overall contained precious metals increase confirms that Duluth Metals has a significant stake in precious metals as well as base metals and should be viewed in the context of having only explored approximately 60% of the Nokomis Property" said Christopher Dundas, Chairman of Duluth Metals. "We have the potential to separate and monetize the precious metal revenue stream from our substantial base metal revenue stream. This potential for separation is enhanced by the proposed utilization of PlatsolTM or other similar hydromet processes which separate the precious metal concentrate prior to marketing to precious metal refineries."

This significant increase in the total precious metals content of the deposit is due to the 2008-2009 drilling that filled-in and expanded multiple higher grade zones within the overall deposit particularly in three areas — known as the Eastern, Central and Western Higher Grade Areas. These three Higher Grade Areas have a cumulative total of 92 million Indicated tonnes of 1.023 g/t TPM (1.80 CuEq% at a 1% CuEq cut-off grade) and 22 million Inferred tonnes of 1.005 g/t TPM (1.81 CuEq% at a 1% CuEq cut-off grade). Cumulatively, the Eastern, Central and Western Higher Grade Areas exhibit 55% higher TPM grades in the Indicated Resource category compared to the global Indicated Resource TPM grades, and 47% higher TPM grades in the Inferred Resource category compared to the global Inferred Resource TPM grades. In addition, there are three other higher grade areas that have been identified to date in the Nokomis Deposit, known as Areas A, B and C. The combined resource for these additional areas totals 48 million tonnes of 0.802 g/t TPM (1.75% CuEq at a 1.0% CuEq cutoff grade) and an additional 12 million tonnes of 0.972 g/t TPM (1.68% CuEq at a 1.0% CuEq cutoff grade). 

All of these higher grade areas are important for future mine planning and initial operations in order to enhance rapid payback of capital investment. As the 40,000 tonne per day operation featured in the NI 43-101 January 2009 Preliminary Assessment utilizes 14 million tonnes of feed per year, the higher grade areas need to be studied carefully during pre-feasibility in order to enhance and optimize cash flow in the initial years of operation. The combined resource estimates for the Eastern, Central and Western Higher Grade Areas are highlighted in the Table below. 

RESOURCE ESTIMATES FOR THE COMBINED EASTERN, CENTRAL AND WESTERN HIGHER GRADE AREAS 

Metal1

June 2008 Indicated Resources

October 26, 2009Indicated Resources

Incremental Cange2

Palladium

5.17 million ounces

6.93 million ounces

+1.76 million ounces

Platinum

2.30 million ounces

3.11 million ounces

+0.81 million ounces

Gold

1.21 million ounces

1.63 million ounces

+0.42 million ounces

TPM

8.68 million ounces

11.67 million ounces

+2.99 million ounces

 

 

 

Indicated Resources1-10

Cut-off

Tonnes

Cu

Ni

Co

Au

Pt

Pd

TPM

CuEq

Grade

(000's)

%

%

%

g/t

g/t

g/t

g/t

%

1.0% CuEq

91,548

0.754

0.213

0.010

0.137

0.272

0.614

1.023

1.80

0.5% Cu

90,419

0.757

0.213

0.010

0.138

0.273

0.617

1.028

1.81

0.6% Cu

81,234

0.780

0.218

0.010

0.140

0.283

0.639

1.062

1.86

0.7% Cu

57,728

0.832

0.228

0.010

0.148

0.305

0.682

1.135

1.97

0.8% Cu

32,404

0.899

0.237

0.010

0.158

0.326

0.728

1.212

2.10

 

Inferred Resources1-10

Cut-off

Tonnes

Cu

Ni

Co

Au

Pt

Pd

TPM

CuEq

Grade

(000's)

%

%

%

g/t

g/t

g/t

g/t

%

1.0% CuEq

22,002

0.760

0.216

0.010

0.126

0.272

0.607

1.005

1.81

0.5% Cu

21,894

0.763

0.216

0.010

0.126

0.273

0.610

1.009

1.82

0.6% Cu

20,101

0.780

0.220

0.010

0.130

0.284

0.629

1.043

1.86

0.7% Cu

15,440

0.817

0.229

0.011

0.134

0.305

0.660

1.099

1.95

0.8% Cu

8,431

0.868

0.237

0.011

0.139

0.331

0.696

1.166

2.05

1. CIM definitions were followed for Mineral Resource estimation and classification.
2. Mineral Resources are estimated at a zone definition (wireframe) cut-off grade of approximately 1.0% Cu equivalent grade (CuEq). 
3. The approximately 1.0% CuEq cut-off grade includes all material in the wireframed zones.
4. Bulk density is 3.01 t/m3.
5. Resources were estimated to a maximum depth of approximately 1,350 m.
6. Copper equivalent (CuEq%) is based on Net Smelter Return Factors as determined for the Preliminary Economic 
Assessment by Scott Wilson RPA dated January 18, 2008. 
7. Metal Prices used were $1.75/lb copper, $7.00/lb nickel, $10.00/lb Co, $600/oz Au, $1100/oz Pt and $350/oz Pd.
8. Copper equivalent (CuEq%) = Cu% + 3.03 x Ni% + 0.63 x Co% + 0.30 x Au g/t + 0.76 x Pt g/t + 0.24 x Pd g/t based on expected metal prices and process recovery and refining charges.
9. TPM is Au g/t + Pt g/t + Pd g/t.
10. Co, Au, Pt, Pd grades, that are lacking in historic drill holes, have been entered in the resource database based on regression of assay grades from DML drill hole assays.

A map showing the Eastern, Central and Western Higher Grade Areas within the Nokomis Deposit can be found on the Company website at http://www.duluthmetals.com/ under press releases.


click to enlarge

The resource estimate for each of the Eastern, Western and Central higher grade areas at a 1.0% CuEq cut-off grade is as follows:

 

 

Indicated Resources1-10*

Higher

Tonnes

Cu

Ni

Co

Au

Pt

Pd

TPM

CuEq

Grade Area

(000's)

%

%

%

g/t

g/t

g/t

g/t

%

Eastern

62,509

0.750

0.214

0.010

0.146

0.282

0.651

1.079

1.82

Western

15,740

0.707

0.203

0.010

0.106

0.203

0.456

0.765

1.63

Central

13,298

0.829

0.217

0.010

0.134

0.305

0.621

1.060

1.91

 

Inferred Resources1-10*

Higher

Tonnes

Cu

Ni

Co

Au

Pt

Pd

TPM

CuEq

Grade Area

(000's)

%

%

%

g/t

g/t

g/t

g/t

%

Eastern

7,939

0.731

0.213

0.010

0.131

0.272

0.634

1.037

1.78

Western

5,642

0.714

0.208

0.010

0.112

0.200

0.494

0.806

1.65

Central

8,502

0.819

0.225

0.011

0.130

0.320

0.657

1.107

1.95

*Footnotes 1-10 as listed under previous table.

Christopher Moreton, Ph.D., P.Geo., of Scott Wilson RPA, Toronto, Canada, is the Independent Qualified Person who prepared the Interim Resource Estimate dated October 26, 2009, and reviewed this press release. A NI 43-101 compliant Technical Report will be delivered by Scott Wilson RPA and filed on SEDAR within 45 days from October 26, 2009.

The Resource Estimate contains all of Duluth Metals in-fill and step-out drill holes (155) as well as all (67) of its wedge holes from the 2006-2009 drill programs. Half core samples were prepared at ALS Chemex Ltd. Laboratories in Thunder Bay and then shipped to its analytical facilities in Vancouver. Samples were analyzed for Au, Pt, and Pd using a standard fire assay with an ICP finish and for 27 other elements using a four acid (near total) digestion and a combination of ICPMS and ICPAES. ICP over limits were re-analyzed using sodium peroxide fusion, acid dissolution followed by ICPAES. The remaining half core samples are being stored in Minnesota.

David Oliver, P. Geo. is the Qualified Person and Project Manager for Duluth, in accordance with NI 43-101 of the Canadian Securities Administrators, and is responsible for the technical content of this press release and quality assurance of the exploration data and analytical results. 

About Duluth Metals

Duluth is committed to acquiring, exploring and developing copper, nickel and platinum group metal (PGM) deposits. Duluth's principal property is the Nokomis Property located within the rapidly emerging Duluth Complex mining camp in northeastern Minnesota. The Duluth Complex hosts 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. 

This document may contain forward-looking statements (including "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to Duluth's operations or to the environment in which it operates. Such statements are based on operations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and may be beyond Duluth's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in forward-looking statements, including those set forth in other public filings. In addition, such statements relate to the date on which they are made. Consequently, undue reliance should not be placed on such forward-looking statements. Duluth disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.

Iron Range copper mine project inches ahead

Minneapolis Star Tribune
October 29, 2009

Minnesota's first copper mine took a step forward Wednesday as state officials released a 1,500-page environmental impact study for the Iron Range proposal. The $600 million project, to be built by PolyMet Mining Inc., would include an open-pit mine near Babbitt and a processing plant near Hoyt Lakes, connected by an existing 6-mile railroad spur.

Company officials said the mine would create 400 permanent jobs for more than 20 years, and would produce nickel, cobalt, platinum and other valuable metals.

However, environmentalists said similar mines in other states have created sulfuric acid runoff, and similar problems could poison Minnesota water.

The study, done by the Minnesota Department of Natural Resources and the U.S. Army Corps of Engineers, does not approve the project or recommend that it be built. Rather, it provides a detailed record of facts that must be deemed accurate and complete before the mine and processing plant can receive air and water quality permits.

Environmental leaders are worried about the project, and point to similar mines in South Dakota, northern Wisconsin and elsewhere that have contaminated nearby water despite earlier promises not to do so.

"This is a new kind of mining that has never been done in Minnesota before," said Mary Marrow, staff attorney at the Minnesota Center for Environmental Advocacy. PolyMet would mine rock that contains sulfur, she said, which is transformed into sulfuric acid when the waste rock is exposed to oxygen and water.

"We're very concerned because PolyMet wants to do sulfide mining in Minnesota's water-rich environment, right next to the Boundary Waters Canoe Area Wilderness and Lake Superior," she said.

The draft environmental study estimates that the mine would remove an average 91,200 tons per day of rock, and generate nearly 400 million tons of waste rock over its life.

PolyMet vice president of public affairs LaTisha Gietzen said that ore contains only very low amounts of sulfur, and that waste rock would be placed on liners where runoff would be collected, treated and reused. "We have a very low potential for acid rock drainage," said Gietzen. "What we're proposing to do is environmentally safe."

First project for PolyMet

Gietzen said that problems at copper mines in other states are either old examples, when few pollution regulations existed, or different cases in which there was a significantly higher percentage of sulfur in the rock.

PolyMet is a Canadian firm with headquarters in Hoyt Lakes, Minn., and this is its first project, Gietzen said. PolyMet purchased the former LTV Steel taconite plant after it closed in 2001, and plans to transform it into the processing center for copper and other metals.

The environmental impact study cost more than $20 million, financed by the company, and took the DNR and the Army Corps more than three years to complete. Other effects detailed in the report include potential increases in mercury in fish, additional greenhouse gas emissions, potential loss of habitat for Canadian lynx and wolves, decreased flow in the nearby Partridge River, and destruction of 854 acres of wetlands and more than 1,700 acres of other vegetation.

Other firms watching process

Half a dozen other firms that have leases in the area and interest in copper-nickel mining are watching the environmental review process closely.

The public can find the draft environmental study on the DNR's website, and can provide comments in writing or at two public meetings soon to be scheduled on the Iron Range and in the Twin Cities. The agencies will consider those comments before publishing a final version of the study next year.

Gietzen said PolyMet expects to receive permits and begin building the mine in the second half of 2010, and to be processing ore a year after that.

Aside from the environmental questions, the project also faces a land dispute. The mining site is located on national forest land, where PolyMet has leased mineral rights. The company and Forest Service disagree on whether the lease includes the right to open-pit mine. Both are exploring the feasibility of a land exchange to resolve the issue.

Proposed Iron Range mine offers threat, promise

Pioneer Press
October 29, 2009

A proposed open-pit copper-nickel mine and processing plant on Minnesota's Iron Range would increase sulfate levels in several northeastern rivers, a long-awaited environmental review concluded Wednesday.

More than four years in the making, the draft environmental impact statement provides an overview of Polymet Mining's proposed NorthMet mine and processing project, analyzes its possible effects and outlines how it would operate under federal and state rules.

Polymet wants to operate the state's first copper mine, but environmental groups have pushed back, noting widespread pollution at such mines elsewhere in the world. The company, however, contends safeguards built into the sulfide mining process would minimize or eliminate those problems.

Company officials, backed by northern legislators, have long touted the $600 million project's benefits to the economically depressed region, saying it would create about 400 jobs over 20 years. It also could lead the way for other such projects in the region.

The proposed mine south of Babbit and a processing center at the former LTV Steel taconite plant north of Hoyt Lakes would convert lower-grade sulfide ores into copper, nickel, cobalt and other concentrates.

Critics have warned that sulfuric acid, created when sulfur-bearing rock is exposed to water and air, could pollute rivers, lakes and groundwater.

The company, however, contends new, better techniques and technology will minimize that possibility.

The draft evaluation, released ahead of schedule by the Minnesota Department of Natural Resources and the Army Corps of Engineers because of high interest in the project, outlines the effect on a number of resources.

For example, it projects increased sulfate levels in the Partridge, Embarrass and St. Louis rivers. Sulfate is found naturally in water, but elevated levels can cause diarrhea and dehydration when the water is consumed by humans or animals. Sulfate also helps turn mercury into the more toxic methylmercury, which can move through the food chain and cause health problems for people.

The assessment also projects an increase in air emissions, including heat-trapping greenhouse gases, but it said there would be no significant effect on regional air quality.

The evaluation said the mine would provide an economic boost to the area because of increases in employment, tax revenues and spending.

LaTisha Gietzen, Polymet's vice president of public, governmental and environmental affairs, said concerns raised during the draft evaluation will be addressed as the next evaluation stage unfolds.

"This looks at the potential impacts and then comes up with ways to minimize significant impacts,'' Gietzen said.

Environmental groups said the proposal must be watched closely.

"We have to pay serious attention to this proposal,'' said Betsy Daub, policy director of Friends of the Boundary Waters Wilderness. "We know it's in a water-rich environment and it's near the Boundary Waters.''

"PolyMet's project represents a new kind of mining, which has never been done in Minnesota," said Mary Marrow, staff attorney at the Minnesota Center for Environmental Advocacy.

At earlier legislative hearings, some lawmakers have urged protections be adopted so taxpayers never pay for any cleanups at the site.

PolyMet has a lease on the mineral rights at the mine site, but the U.S. Forest Service owns the land and contends Polymet doesn't have rights to pursue an open pit mine. The two sides are exploring a land exchange to resolve the issue.

The draft evaluation will be open for public comment Monday, when it will be published in the Environmental Quality Board Monitor. Then, assuming a final evaluation is completed, the company could seek air, water and other permits. If it gets them, construction could start.

It's not clear yet how long public comments will be accepted.

Another step forward for state’s first copper mine

Duluth News Tribune
October 29, 2009

Minnesota's first-ever copper mine came a step closer to reality Wednesday after the state's Department of Natural Resources and U.S. Army Corps of Engineers released a long-awaited environmental review to the public.

The draft environmental impact statement, more than four years in the making, aims to explain how the proposed PolyMet copper mine and processing plant could operate within state and federal environmental rules and regulations.

While the agencies haven't sanctioned the mine plan, release of the EIS means the DNR and corps are moving the process forward.

"The DEIS is simply an assessment of environmental impacts and not a referendum on the merits or demerits of the project,'' Colleen Coyne, the DNR's communications director, told the News Tribune. The report "looks at potential environmental impacts and provides alternatives to avoid, minimize and mitigate these impacts.''

The agencies will take public comments in coming months, then tweak the plan before it's final. The company then must apply for permits for water and air pollution, to fill wetlands and to dig a mine at the site, among others.

"We've got more than $20 million invested in the regulatory process alone, so it is a milestone for us,'' said LaTisha Gietzen, PolyMet vice president for public affairs. "But this wasn't meant to be a thumbs up or thumbs down decision document … It lays out alternatives and mitigations and we go on from here.''

PolyMet's open-pit copper mine also would produce nickel, platinum and other valuable metals. The site of the proposed mine is near Babbitt, while the company would use the former LTV Steel taconite plant near Hoyt Lakes as a processing center.

The $600 million project would create 400 or more jobs for about 20 years, digging and processing billions of dollars of high-value minerals. The project has been praised by Iron Range leaders as a critical step toward diversifying the region's dependence on iron-ore mining. PolyMet is the first of what could be a half-dozen or more copper mines stretching from the Ely area to Aitkin County.

But several environmental groups, American Indian resource agencies, some Northland residents and even the U.S. Environmental Protection Agency have been critical of the proposal because of the long history of pollution at other copper mines worldwide.

Opponents say sulfuric acid runoff, which occurs when sulfur-bearing rock is exposed to air and water, could damage waterways for centuries to come. Iron ore, by comparison, is found in low-sulfur rock and does not cause acid runoff. Other concerns include wetland and habitat loss and an increase in toxic mercury in local waters.

Company officials say, and the environmental impact statement proposes, that the rock in the proposed mine area is unusually low in sulfur for a copper deposit. They also contend that they can take precautions when digging and storing rock and by using new technology to minimize acid runoff while treating any runoff that occurs.

The draft environmental impact statement, a review of all the possible environmental issues surrounding the project, is considered critical because it not only sets up the scenario for how PolyMet may move forward but also because it is expected to set precedent for a half-dozen or more other possible copper mine proposals from Babbitt to Aitkin County.

Frank Ongaro, president of the industry group Mining Minnesota, downplayed the EIS release as only one of many steps in the state's lengthy regulatory process. He also dismissed any major precedent-setting value to the PolyMet review.

"If there are other [copper mining] projects that come forward in the future, each will be evaluated on its own merits,'' Ongaro said. "This is a step in the process. It's an important one, but it's only one step.''

Environmental groups urged the public to pay attention to the project as it moves forward, saying the state has tough choices to make weighing jobs against potential long-term environmental impacts.

"PolyMet's project represents a new kind of mining which has never been done in Minnesota before," Mary Marrow, staff attorney at Minnesota Center for Environmental Advocacy, said in a statement. "It's a type of mining that has led to major environmental disasters in other places. We're very concerned because PolyMet wants to do sulfide mining in Minnesota's water-rich environment, right next to the Boundary Waters Canoe Area Wilderness and Lake Superior."

Other critics note that the DNR has not yet developed a plan to require PolyMet to set aside money to treat water and conduct other cleanup at the site once the mine is played out or should the company fail. DNR officials say they will address financial assurances in the permitting stage of the process.

Opponents cite the Gilt Edge Mine in South Dakota's Black Hills where a copper mining company in the 1990s claimed its low-sulfur rock would not cause acid runoff problems. But acid runoff leaked from the mine and killed fish in area streams. The company filed for bankruptcy without finishing the cleanup and taxpayers paid millions of dollars to mitigate the damage.

After public comments and revisions by the DNR and Corps of Engineers, the environmental review will become final and the company is expected to apply for mining and air and water pollution permits.

In addition, PolyMet, while it owns mineral rights to the mine site, still does not own the property where the mine would be located. The company is in the process of a land trade with the U.S. Forest Service. But the company must first secure an equal value of private land within the Superior National Forest. That could take many more months.

PolyMet environmental impact statement made public

Duluth News Tribune
October 28, 2009

Minnesota's first copper mine is a step closer to reality this morning after the Minnesota Department of Natural Resources and U.S. Army Corps of Engineers released a long-awaited environmental review to the public.

The draft environmental impact statement, more than four years in the making, aims to explain how the proposed PolyMet "NorthMet" copper mine and processing center could operate within state and federal environmental rules and regulations.

The environmental report is open to public comments before the DNR and Corps make finishing touches. The company then must apply for and obtain permits for water and air pollution and to dig a mine at the site.

PolyMet is proposing Minnesota's first copper mine that also would produce nickel, platinum and other valuable metals. The site of the proposed open-pit mine is near Babbitt, while the company would use the former LTV Steel taconite plant near Hoyt Lakes as a processing center.

The $600 million project would create 400 or more jobs for more than 20 years, digging and processing billions of dollars of high-value minerals. The project is seen as a critical step toward diversifying the Iron Range's dependence on iron-ore mining and is the first of what could be a half-dozen or more copper mines stretching from the Ely area to Aitkin County.

But several environmental groups, tribal agencies, Northland residents and even the federal Environmental Protection Agency have been critical of the proposal because of the long history of pollution at other copper mines worldwide.

Opponents say sulfuric acid runoff, which occurs when sulfur-bearing rocks are exposed to air and water, could damage waterways in the area for centuries to come. Other concerns include wetland and habitat loss and an increase in toxic mercury in local waters.

Company officials say, and the environmental impact statement proposes, that the rock in the proposed mine area is unusually low in sulfur for a copper deposit. They also contend that they can use new technology to minimize acid runoff and treat any that occurs.

The draft environmental impact statement, a review of all the possible environmental issues surrounding the project, is considered critical because it not only sets up the scenario for how PolyMet may move forward but is expected to set precedent for a half-dozen or more additional copper mine proposals possible in coming years from Babbitt to Aitkin County.

After public comments and revisions by the DNR and Corps of Engineers, the environmental review will become final and the company is expected to apply for permits to mine and to create air and water pollution.

In addition, PolyMet, while it owns mineral rights to the mine site, still does not own the property where the mine would be located. The company is in the process of a land trade with the U.S. Forest Service. But the company must first secure an equal value of private land within the Superior National Forest to trade for the mine. That could take many more months.

•The draft environmental impact statement report on the proposed PolyMet copper mine can be seen at the DNR Web site.

•Public comments will be accepted by the DNR and Corps of Engineers beginning Monday. It's not yet clear how long comments will be accepted.

For more information, contact Stuart Arkley, EIS Project Manager, Minnesota DNR, 500 Lafayette Rd., St. Paul, MN, 55155-4025; e-mail environmentalrev.dnr@state.mn.us or call (651) 259-5089. Be sure to include "NorthMet" in the subject line of e-mails.

Duluth Metals Expands Nokomis Resource to 550 Million Indicated Tonnes and 274 Million Inferred Tonnes

Duluth Metals News Release
October 26, 2009

TORONTO, Ontario, October 26, 2009 — Duluth Metals Limited ("Duluth") (TSX: DM) (TSX:DM.U) today announces a 101 million tonne expansion in Indicated Resources of the Nokomis Deposit. This represents a 22% increase from the Scott Wilson Roscoe Postle Associates Inc., ("Scott Wilson RPA") June 2008 NI 43-101 Resource Estimate. The new NI 43-101 Resource Estimate has increased to 550 million tonnes of Indicated Resources with an additional 274 million tonnes of Inferred Resources. The global resource grade also increased by 3% for the Indicated Resources and by 2% for the Inferred Resources compared to the June 2008 estimate. This new Resource Estimate incorporates assay data from 96 additional holes from what was largely an infill drilling program completed during the 2008-2009 period. All vertical and wedge holes drilled in the Nokomis Deposit were used in this analysis.

The new Nokomis Resource Estimate now contains 550 million tonnes of Indicated Resources grading 0.639% copper, 0.200% nickel, 0.660 grams per tonne TPM (TPM = Pt + Pd + Au) for a copper equivalent (CuEq) grade of 1.51%, plus an additional 274 million tonnes of Inferred Resources grading 0.632% copper, 0.207% nickel, 0.685 grams per tonne TPM for a CuEq grade of 1.53% (see Table footnotes for an explanation of the copper equivalent formula).

This Scott Wilson RPA Estimate also includes multiple higher grade areas. The three highest grade areas have a cumulative total of 92 million Indicated tonnes of 1.80 CuEq% (at a 1% CuEq cut-off grade) and 22 million Inferred tonnes of 1.81 CuEq% (also at a 1% CuEq cut-off grade). Duluth Metals notes that definition of these higher grade areas is important for mine planning and initial operations in order to enhance rapid payback of capital investment. 

Furthermore, Scott Wilson RPA has reported on silver in this estimate, and the Nokomis Deposit contains 37 million ounces of silver within the Indicated Resource outline (550 million tonnes at 2.116 g/t Ag) and 18 million ounces of silver within the Inferred Resource outline (274 million tonnes at 2.056 g/t Ag). 

The updated Resource Estimate used a 1% copper equivalent cut-off grade to define the resource model. A table of the new tonnes and grades for various cut-offs is shown below. Based on Scott Wilson RPA's review of metal prices, process recoveries, refining costs and underground mine operating costs likely to apply at the Nokomis deposit site, the 1.0% copper equivalent cut-off grade (highlighted) is reasonable for the statement of Indicated and Inferred Resources at this time.

Duluth Metals Limited Nokomis Deposit, Minnesota

 

Indicated Resources1-11

Cut-off

Tonnes

Cu

Ni

Co

Au

Pt

Pd

TPM

CuEq

Grade

(000's)

%

%

%

g/t

g/t

g/t

g/t

%

1.0% CuEq

550,038

0.639

0.200

0.010

0.092

0.176

0.392

0.660

1.51

0.5% Cu

482,438

0.666

0.206

0.010

0.098

0.188

0.420

0.706

1.57

0.6% Cu

327,847

0.719

0.216

0.011

0.110

0.216

0.482

0.808

1.69

0.7% Cu

157,803

0.797

0.231

0.011

0.127

0.256

0.567

0.950

1.87

0.8% Cu

59,958

0.886

0.242

0.011

0.149

0.307

0.676

1.132

2.07

 

 

Inferred Resources1-11

Cut-off

Tonnes

Cu

Ni

Co

Au

Pt

Pd

TPM

CuEq

Grade

(000's)

%

%

%

g/t

g/t

g/t

g/t

%

1.0% CuEq

273,835

0.632

0.207

0.010

0.091

0.185

0.409

0.685

1.53

0.5% Cu

252,000

0.648

0.210

0.010

0.094

0.192

0.424

0.710

1.57

0.6% Cu

158,651

0.700

0.218

0.010

0.109

0.227

0.499

0.835

1.69

0.7% Cu

63,846

0.785

0.229

0.010

0.131

0.278

0.601

1.010

1.88

0.8% Cu

20,275

0.865

0.239

0.010

0.134

0.307

0.657

1.098

2.03

 

•1.        CIM definitions were followed for Mineral Resource estimation and classification.

•2.        Mineral Resources are estimated at a zone definition (wireframe) cut-off grade of approximately 1.0% Cu equivalent grade (CuEq).

•3.        The approximately 1.0% CuEq cut-off grade includes all material in the wireframed zones.

•4.        Bulk density is 3.01 t/m3.

•5.        Resources were estimated to a maximum depth of approximately 1,350 m.

•6.        Copper equivalent (CuEq%) is based on Net Smelter Return Factors as determined for the Preliminary Economic Assessment by Scott Wilson RPA dated January 18, 2008.

•7.        Metal Prices used were $1.75/lb copper, $7.00/lb nickel, $10.00/lb Co, $600/oz Au, $1100/oz Pt and $350/oz Pd.

•8.        Copper equivalent (CuEq%) = Cu% + 3.03 x Ni% + 0.63 x Co% + 0.30 x Au g/t + 0.76 x Pt g/t + 0.24 x Pd g/t based on expected metal prices and process recovery and refining charges.

•9.        TPM is Au g/t + Pt g/t + Pd g/t.

•10.     Co, Au, Pt, Pd grades, that are lacking in historic drill holes, have been entered in the resource database based on regression of assay grades from DML drill hole assays.

•11.    There is no information available on silver recoveries for the Nokomis Deposit; these recoveries would be needed to include silver in the CuEq determination.


click to enlarge

On a contained metal basis, Duluth Metals currently holds one of the largest Copper-Nickel-PGM sulphide deposits in the world with the Nokomis Deposit. The seven contained metals in the expanded resource are as follows: 

CONTAINED METALS IN EXPANDED NOKOMIS RESOURCE*

 

METAL

INDICATED RESOURCE

INFERRED RESOURCE

Copper

7.75 Billion lbs.

3.82 Billion lbs.

Nickel

2.43 Billion lbs.

1.25 Billion lbs.

Cobalt

121.26 Million lbs.

60.37 Million lbs.

Platinum

3.11 Million ozs.

1.63 Million ozs.

Palladium

6.93 Million ozs.

3.60 Million ozs.

Gold

1.63 Million ozs.

0.80 Million ozs.

Silver

37.42 Million ozs.

18.10 Million ozs.

* Based on resources estimated at 1.0% copper equivalent cut-off grade.

"This new Resource Estimate on Nokomis has significantly increased the grade, tonnage, and contained metal in the deposit. The infill and step-out drilling confirm the continuous nature of the mineralization within the deposit and there is definite potential for the mineralization to extend outside of the currently defined resource block", stated Dr. Henry J. Sandri, President and CEO of Duluth Metals. "The incremental increase of 101 million tonnes in Indicated Resources is remarkable in terms of size and dimension, principally because the increase, by itself, is larger than the majority of the world's copper-nickel-PGM deposits and mines. Nokomis has demonstrated a unique characteristic — for each of the past three resource estimates – grades and tonnages have significantly continued to improve. In addition, there is considerable upside opportunity to find additional tonnes since approximately 40% of the property has yet to be drilled." 

A map showing the Indicated and Inferred resource regions for the third Nokomis Deposit Resource Estimate can be found on the Company website at http://www.duluthmetals.com/ under this press release.

Christopher Moreton, Ph.D., P.Geo., of Scott Wilson RPA, Toronto, Canada, is the Independent Qualified Person who prepared this Interim Resource Estimate and reviewed this press release. A NI 43-101 compliant Technical Report will be delivered by Scott Wilson RPA and filed on SEDAR within 45 days from today's date.

The Resource Estimate contains all of Duluth Metals in-fill and step-out drill holes (155) as well as all (67) of its wedge holes from the 2006-2009 drill programs. Half core samples were prepared at ALS Chemex Ltd. Laboratories in Thunder Bay and then shipped to its analytical facilities in Vancouver. Samples were analyzed for Au, Pt, and Pd using a standard fire assay with an ICP finish and for 27 other elements using a four acid (near total) digestion and a combination of ICPMS and ICPAES. ICP over limits were re-analyzed using sodium peroxide fusion, acid dissolution followed by ICPAES. The remaining half core samples are being stored in Minnesota.

David Oliver, P. Geo. is the Qualified Person and Project Manager for Duluth, in accordance with NI 43-101 of the Canadian Securities Administrators, and is responsible for the technical content of this press release and quality assurance of the exploration data and analytical results. 

About Duluth Metals

Duluth is committed to acquiring, exploring and developing copper, nickel and platinum group metal (PGM) deposits. Duluth's principal property is the Nokomis Property located within the rapidly emerging Duluth Complex mining camp in northeastern Minnesota. The Duluth Complex hosts 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. 

This document may contain forward-looking statements (including "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to Duluth's operations or to the environment in which it operates. Such statements are based on operations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and may be beyond Duluth's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in forward-looking statements, including those set forth in other public filings. In addition, such statements relate to the date on which they are made. Consequently, undue reliance should not be placed on such forward-looking statements. Duluth disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.

PolyMet EIS release a major step forward for company

Timberjay Newspaper
October 23, 2009

The public release of the draft environmental impact statement on PolyMet Mining's proposed copper-nickel and precious metals mine, near Hoyt Lakes, is an important step forward for the Vancouver-based company.

"It's the culmination of more than four years of work," said LaTisha Gietzen, PolyMet's Vice President for Public Governmental and Environmental Affairs. "We started the scoping process back in 2005," Gietzen noted.

The draft EIS, which was set to be released online by the DNR by Oct. 23, will examine alternatives for developing the mine site and operating a nearby processing facility, formerly owned by LTV. While critics of the plan view the release as an opportunity to re-engage in a debate over the future of non-ferrous mining in Minnesota, Gietzen said she thinks the study will strengthen the case for the proposed mine. "There's been a lot of misinformation out there about what we're trying to do. This study will provide the facts," she said.

The release of the study, which won't be official until it is published in the state's Environmental Quality Board's official register on Nov. 2, certainly won't be the final word on the project. The release opens an automatic 45-day public comment period, and that period could well be extended.

Environmental groups along with the Environmental Protection Agency have already suggested the comment period be extended to at least 120 days to allow the public more time to examine and comment on the hundreds of pages of technical documents and material associated with the EIS. "Recent similar projects elsewhere in the country that were submitted for public review under NEPA have had 120-day review periods, either initially or through one or more extensions," noted the EPA's Kenneth Westlake in a July 31 comment letter to the DNR. "We observe that public interest in copper mines in the Upper Midwest is high. Decisions made for this project may be precedent-setting, as it is the first large-scale copper mine in Minnesota," Westlake added.

PolyMet officials indicate they expect to complete the EIS and permitting process and be under construction by the end of 2010, but that could prove a challenging timeline, given the frequent delays associated with environmental review, particularly on major projects. Concerns raised by a number of cooperating agencies, both federal and tribal, could also require additional research in order to respond adequately to comments. Environmental groups will undoubtedly raise concerns about the adequacy of water quality protections and other issues. "Acid mine drainage is still the big issue," said Betsy Daub, with Friends of the Boundary Waters Wilderness. Daub points to acid leaching problems at other sulfide ore mines in the U.S. and questions why the public should expect a different result at the PolyMet site. "And all those other places with problems are typically in dry climates. Here it's wet. It's the water and air that make the problem," said Daub.

Gietzen says she thinks such concerns will be addressed in the EIS, and she doesn't expect a big political fight over the project. "There's a lot of technical information that will come out. There will be multiple alternatives and each one looks at ways to mitigate or avoid impacts," she said. "We know these metals are going to be mined someplace," added Gietzen. "Why not do it here, where we know it will be done right?"

Metals price recovery improves economics

While environmental effects are one factor in the success of PolyMet's proposed mining operation, economic factors will likely make or break the project. Little more than a year ago, metal prices were at record highs, but those prices slid sharply as the world economy tumbled in the wake of the global financial crisis. Nickel prices, for a time, dipped below the $4.53 per pound cost of production target determined by PolyMet, while copper dipped as low as $1.30 a pound, or just above the $1.05 cost of production cited by the company.

But metal prices have recovered substantially since their winter lows and most were trading well above the levels necessary for profitability, according to PolyMet officials. As of Wednesday, copper was trading at about $2.80 per pound, while nickel had improved to the eight dollar range.

PolyMet takes next steps for controversial mine

Minnesota Public Radio
October 23, 2009

Hoyt Lakes, Minn. – Plans are moving ahead for a copper-nickel mine in northeastern Minnesota, a type of mining new to the state, but in other parts of the world similar mines are polluting rivers and lakes.

The old LTV mine north of Aurora, on the eastern edge of Minnesota's Iron Range, is a bleak, windswept place, ringed by piles of waste rock. They look like flat-topped pyramids, about as high as a 20-story building. Eight years ago, the mine closed and the company went bankrupt, and now the hills are covered with grasses and young trees.

LaTisha Gietzen watched as workers cleaned up the land where the old pellet plant has been torn down. Gietzen is Vice President for Public, Environmental, and Governmental Affairs at PolyMet Mining.

PolyMet plans to use some of the 60-year-old buildings, and the expensive machinery in them, to coax copper, nickel and other metals far more valuable than taconite out of the rock.

"It's a huge asset for the state to have," Gietzen said. "To be able to reuse this existing infrastructure is an excellent opportunity for all of us."

PolyMet bought the buildings, the railroad track, and the electric substation. Six miles to the northeast, PolyMet wants to dig in a 4,300-acre tract of forested land for copper, nickel, and the precious metals platinum, palladium, gold, and cobalt.

The U.S. Forest Service owns that tract of land, but PolyMet owns the minerals beneath the surface. The two are negotiating a land exchange, in which PolyMet would add comparable acreage to the Superior National Forest in exchange for the piece with high mineral value.

LaTisha GietzenGeologists have known for years that those metals are there, locked up in a formation called the Duluth Complex. Now, the rise of robust economies in the developing world means there's profit to be made in extracting and purifying them. Half a dozen other exploration companies have staked out claims along the geological formation.

The minerals to be mined are used for everything from batteries to catalytic converters to artificial joints.

But this kind of mining is different from iron or taconite mining. The valuable minerals are part of sulfide rock. When that rock is brought to the surface and exposed to air and water, the sulfur in the rock links with hydrogen and oxygen in the atmosphere to form sulfuric acid.

That means water that runs off the piles of waste rock can be so acidic that nothing can live in the streams or wetlands where the water flows. The acid water can also pull heavy metals such as arsenic and manganese out of the ground it flows over, further contaminating the water.

The U.S. EPA calls acid rock drainage an "enormous environmental problem," and said the industry has only developed "rudimentary" techniques to control it.

At the PolyMet site, LaTisha Gietzen said the mine is designed to keep a lot of the sulfur out of the environment. She said PolyMet will actually use some of the sulfur as fuel.

Tailings basin"It's important for us to collect the sulfur, because it's tied to the metal, we use the sulfur as a fuel for the process and collect and produce the metals," Gietzen said.

But there will be a lot of waste rock. PolyMet plans to process 3,200 tons of ore a day. The waste will be piled up in hills covering several hundred acres next to the mine pit.

Gietzen said, even though most of the rock has very low amounts of sulfur in it, the company will put all the waste rock on synthetic liners and capture the water running off the piles, and treat the water to remove the heavy metals.

"And that's only part of the treatment," she said. "You do that while you're in operation, and then you put a heavy-duty cover over it to eliminate the water coming in contact with the rock."

It's hard to picture a liner that could withstand the pressure and sharp edges of tons and tons of rock.

Lining"But it's just like a landfill," Gietzen said. "You drive heavy machinery and push garbage into landfills that are similar to what we're doing with our stockpiles."

Still, PolyMet predicts that some amount of acidified water will escape and enter the groundwater system that feeds wetlands and rivers for miles around, all the way to Lake Superior.

The company said that water will meet state standards for drinking water.

But Len Anderson, a retired biology teacher, said a drinking water standard for humans doesn't mean much to the fish. Anderson has made it his life's work to clean up the St. Louis River. His canoeing maps detail the watershed that could be affected by the PolyMet mine — from the Partridge River and the Embarrass River, 100 miles down the St. Louis River to Lake Superior.

Leonard AndersonThese waters have a lot of mercury in them. Elemental mercury, the kind you played with in high school chemistry lab, doesn't cause much of a problem. But bacteria living in the water can convert that mercury to an organic form, called methyl mercury, and that's when it gets into the fish. Fish advisories warn that children and pregnant women shouldn't eat certain kinds of fish in the St. Louis River and Lake Superior.

Len Anderson said the sulfate in the acidified water is just what the bacteria need to convert more mercury to the methyl mercury form.

"If you give them that extra shot of sulfate, you're going to get an extra shot of methylation," Anderson said. "And that's why the higher the dose upstream, the more damage it does downstream."

Sulfate is also bad for wild rice. Anderson said in his canoe trips he's seen healthy stands of wild rice upstream from the old LTV mine, and stunted growth below it. He said that would only get worse with the higher sulfate runoff from a copper-nickel mine.

Minnesota has never had a copper-nickel mine, but the state does have a little experience with the kinds of problems they create.

Proposed PolyMet siteJust north of the area where PolyMet plans to mine, there's a place where LTV used to mine taconite. It's right on the edge of the same Duluth complex formation that PolyMet wants to exploit. LTV unearthed some sulfide rock and pushed it aside as waste. For decades, the Dunka mine has been leaching acidified water and toxic metals. LTV's bankruptcy has complicated efforts to clean it up.

Len Anderson and other critics say that's just the kind of experience they don't want to see repeated.

"Across the world this type of mining creates a legacy of acid mine drainage and heavy metal seepages," Anderson said. "This company has no experience, and the state of Minnesota has none."

He said the DNR's Lands and Minerals division is used to taconite operations, which pose a far smaller threat to the environment than sulfide mining.

"Lands and Minerals are gung-ho for metallic sulfide mining, but they have no experience except for Dunka, which they have screwed up royally," he said.

The Environmental Impact Statement is being written by the Minnesota DNR and the U.S. Army Corps of Engineers. Several so-called cooperating agencies have commented on various drafts of the document.

The draft of the environmental review of the project is expected Friday.

The federal Environmental Protection Agency has said it would like more information about so-called financial assurance — that's a requirement that PolyMet set aside money to cover any clean-up needed after the mine closes. The EPA also pointed out that the study only documents mitigation for about two-thirds of the damage to wetlands that would occur with the mine.

Scientists for the Fond du Lac, Grand Portage, and Bois Fort bands of Ojibwe have expressed concerns about the impact of possible sulfate pollution on wild rice. They also question how long the water might need to be contained and treated after the mine closes.

The DNR said details about the financial assurance requirement and mine closure won't be known until later — when PolyMet applies for permits to begin mining.

The DNR said the Environmental Impact Statement is not designed to figure out whether the mine can be done without harming the environment. Rather, it lays out the possible harms, and outlines some ways to prevent or lessen them.

The public will have a chance to comment on the study. The normal comment period is 45 days, but many groups have requested more time.

 

Doubt remains about PolyMet environmental impact study

Duluth News Tribune
October 19, 2009

It's the economic salvation of the Iron Range. Or it's the poisoning of Northeastern Minnesota waterways. Or it's something in between.

A study of the proposed PolyMet copper mine by the Minnesota Department of Natural Resources and U.S. Army Corps of Engineers is expected to be made public this week, and the determination of which of the above scenarios it will support depends on who you talk to.

"This tells us the state has a handle on all of the issues and the parties involved and that the state feels comfortable moving forward," Frank Ongaro, president of the industry group Mining Minnesota, said of the draft environmental impact study. "And now, finally, everybody has to deal with the facts, and only the facts, on this issue. We'll all know what the facts are after this is out."

LaTisha Gietzen, vice president of public affairs for PolyMet, expressed similar optimism about the process she called "lengthy and thorough."

"The public can be confident that the draft EIS offers regulators the information they need to issue permits so that PolyMet can operate in a way that protects natural resources," she said.

But officials from the U.S. Environmental Protection Agency have questioned several aspects of the project and have asked for a 120-day comment period on report, rather than the usual 45-day period, to allow commenters more time to digest the information.

"We continue to have concerns related to potential impacts to water quality, wetlands impacts, mitigation and cumulative impacts to air and water quality," wrote Kenneth Westlake of the EPA's Regional office in Chicago, in an Aug. 25 letter to Army Corps of Engineers officials in St. Paul.

Westlake also questioned why the DNR and the corps were conducting a separate Environmental Impact Study for a proposed land exchange between Polymet and the U.S. Forest Service, saying the EPA believes that both aspects should be in one report.

PolyMet is proposing Minnesota's first copper mine that also would produce nickel, platinum and other valuable metals. The site of the proposed open-pit mine is near Babbitt, while the company would use the former LTV Steel taconite plant near Hoyt Lakes as a processing center.

The $600 million project would create 400 or more jobs for more than 20 years, digging and processing billions of dollars of high-value minerals. The project is seen as a critical step toward diversifying the Iron Range's dependence on iron ore mining and is the first of what could be a half-dozen copper mines stretching from the Ely area to Aitkin County.

Yet several environmental groups, tribal agencies and Northland residents are critical of the mine because of a long history of pollution at other copper mines worldwide. Opponents say sulfuric acid runoff, which occurs when sulfur-bearing rocks are exposed to air and water, could damage waterways in the area for centuries to come. Other concerns include wetland and habitat loss and an increase in mercury in local waters.

Three Ojibwe bands in Minnesota – Fond du Lac, Grand Portage and Bois Forte – have joined the Great Lakes Indian Fish and Wildlife Commission in drafting joint comments on the environmental review. Earlier this year, the bands went as far as saying the PolyMet proposal doesn't meet state or federal environmental laws and thus can't be legally permitted to operate, claiming tailing basins are likely to fail and that water leaving the site – both on the surface and below ground – is likely to be contaminated.

"Tribal cooperating agencies note that, under the proposed project, this facility will need to treat water for hundreds or thousands of years to avoid contamination to the Partridge River," the band's comments noted.

The bands also criticize the corps and DNR for dismissing an underground mine option in the environmental review, saying, "The ecological costs of open-pit mining and above-ground disposal of tailings and waste rock are immense."

Company officials counter that the rock in the proposed mine area is extremely low in sulfur and that technology can be used to reduce or buffer acid runoff and keep it out of local waterways. They've also said an underground mine is impractical because the copper is so close to the surface at the proposed location.

The DNR/corps study is considered critical not just for the PolyMet project but also for several other copper mines proposed for Northeastern Minnesota.

"Decisions made for this project may be precedent-setting," the EPA's Westlake noted.

Environmental groups joined the EPA and last week made public their request to the corps to extend the usual comment period for the PolyMet EIS to at least 120 days.

Because this is PolyMet's first mining project, critics say the DNR and corps should have included a provision in the study on "financial assurance" – how much money PolyMet needs to set aside in advance to pay for any troubles, including long-term treatment of water.

Colleen Coyne, DNR spokeswoman, said that will be addressed when PolyMet applies for mining permits from the state.

"Financial assurance for ongoing treatment is addressed at the permitting stage, not the draft EIS stage," Coyne said.

But both the EPA and tribal officials disagree, saying cleanups at copper mines in the past have cost taxpayers because mining companies didn't set aside money to clean up problems.

"Given the history of adverse environmental effects resulting from some hard rock mines, and the expenditure of public funds used in some cases to address environmental problems caused by mining, EPA believes it is necessary to analyze" financial assurance issues during the Environmental Impact Statement phase of projects, an EPA newsletter noted in August.

After release of the PolyMet Environmental Impact Statement this week, the DNR's public comment period will begin Nov. 2, while the Army Corps of Engineers' public comment period will begin on Nov. 6 after publication in the Federal Register.

The DNR and Army Corps of Engineers will schedule two public information meetings during the public comment period, one in the Hoyt Lakes area and one in the Twin Cities. After the public comment period, the draft EIS will be revised, including agency responses to comments, and re-released as a final EIS. That process could take well into 2010.

PolyMet EIS release likely to intensify mining debate

Timberjay News
October 9, 2009

The long-awaited PolyMet draft environmental impact statement is set for public release by the state Department of Natural Resources later this month, and its release is expected to mark the start of a vigorous debate over the safety of non-ferrous mining in the state.

The state's public comment period on the EIS is slated to begin Nov. 2, while the federal comment period is set to begin Nov. 6. Comments will be taken for a minimum of 45 days, although the agencies involved are already discussing an extension, according to Stuart Arkley, EIS coordinator for the DNR.

The DNR expects to receive its copy of the draft EIS on Oct. 19, but Arkley said it may take a few days of formatting before it is made available on the DNR website. The document is quite large- close to 1,000 pages, according to Arkley.

The draft EIS is the culmination of more than four years of analysis and input by a number of state and federal agencies, overseen by the DNR and the Army Corps of Engineers. The document examines the impacts of PolyMet Mining's proposed copper-nickel and platinum-group metals mine near Hoyt Lakes, and considers a number of alternatives and mitigation strategies associated with the proposal.

Major issues considered by the draft EIS include water quality effects from the disposal of sulfide-based tailings, impacts to thousands of acres of wetlands, and loss of wildlife habitat. While the effects of iron mining are quite well-known in northeastern Minnesota, the non-ferrous mining operation proposed by PolyMet poses a different set of environmental challenges, particularly due to the effect of acid drainage. "Water quality, both at the surface and underground, are the big environmental issues," said Arkley.

Environmental groups have already raised alarms about a number of issues, most prominently acid drainage, which is created as water percolates through sulfide-bearing waste rock, creating sulfuric acid. "What we're seeing is a lot of problems," said Betsy Daub, who has closely followed progress on the EIS for the group Friends of the Boundary Waters Wilderness.

PolyMet officials point out that the ore they plan to mine is relatively low in sulfides, compared to other mining operations, averaging 1-2 percent. But Daub contends that other low sulfur mines have proven to be significant polluters.

While sulfides are likely to be a significant point of contention, the issue of sulfates prompted state and federal regulators to propose an alternative to the company's handling of water from its proposed tailings basin- an alternative that caused one of several delays in completion of the draft EIS. According to Arkley, regulators are concerned that water seeping through the tailings basin will send excessive levels of sulfates into the Embarrass River. Sulfates are known to facilitate the conversion of elemental mercury into the more toxic methyl mercury, which has found its way into many fish in the region.

Some cooperating agencies, including the Great Lakes Indian Fish and Wildlife Commission, have pushed for the consideration of underground mining at the site as a way to reduce some of the environmental effects. Arkley said the option of underground mining was considered, but was not developed as an alternative to the company's plan for open pit mining.

Both the DNR and the Army Corps will be holding public hearings on the draft EIS as part of the public comment phase, with one set to be held in Hoyt Lakes and the other in the Twin Cities. Dates, times, and locations on those meetings will be released once the EIS is officially published.

The Timberjay will be providing much more information on this issue as it becomes available.