PolyMet Submits Financial Assurance Estimate to DNR in Updated Permit Application

Anticipates release of draft permit to mine in the near future

ST. PAUL, Minn.–(BUSINESS WIRE)–PolyMet Mining Corp., (“PolyMet” or the “company”) TSX: POM; NYSE
AMERICAN: PLM – announced today that its wholly owned subsidiary Poly
Met Mining, Inc. (together “PolyMet” or the “company”) has submitted to
the Minnesota Department of Natural Resources an updated Permit to Mine
application for its NorthMet Project that incorporates the state’s
requirements for bankruptcy-proof financial assurance.

“With this financial assurance estimate, we believe PolyMet has
fulfilled all of the requirements necessary for the state to issue a
draft Permit to Mine,” said Jon Cherry, president and CEO. The draft
permit is expected to be released by the DNR in the near future.

PolyMet’s application provides for $75 million in financial assurance
for the first two years of construction, about $60 million of which is
associated with historic iron ore mining at the former LTV Steel Mining
Company site. This will include approximately $65 million in financial
assurance instruments (letters of credit, surety bonds, etc.) and $10
million in cash to be held in trust by the state.

The revised application also provides assumptions and estimates that
show financial assurance for the first year of mining, at $544 million.
These figures represent the costs for the state to perform the closure
and reclamation activities, including long-term water treatment, to meet
current federal and state environmental standards if PolyMet is unable
to perform the work.

The costs for PolyMet to execute the closure and reclamation plan have
been considered in the project economics and are less than what it would
cost for the state to do the work.

During operations, financial assurance figures will be updated on an
annual basis to incorporate such things as new planned disturbances,
ongoing reclamation completed as part of normal operations and any
changes in regulations.

The largest single driver of cost in the financial assurance estimate
during operations is treatment of water to meet the state wild rice
sulfate standard of 10 mg/L, which is 25 times cleaner than the federal
drinking water standard. The financial assurance estimate in the
application is based on this standard.

State law stipulates that financial assurance be in place to cover
anticipated closure and reclamation liabilities for the upcoming
12-month period. The amount is reviewed annually and adjusted
accordingly. Because no mining or processing will have occurred during
construction for the NorthMet Project, the initial financial assurance
requirement covers the legacy liabilities and reclamation for any
facilities or infrastructure built during the construction phase. The
estimate increases in the first year of operations because mining, waste
rock storage, tailings management and water treatment begin.

“Financial assurance provided by the company is essentially an insurance
policy,” Cherry said. “Costs of reclaiming and closing the site are
already accounted for in our project plan. It protects the state and
taxpayers from incurring any costs should PolyMet not be able to do so.”

Financial assurance is an alternative source of funding that is
controlled by the state if needed. Estimates reflect the costs that
result from a government agency providing oversight and a government
contractor doing the work rather than the company doing the work itself.

“PolyMet anticipates it can execute the plan more cost efficiently and
absorb the reclamation costs as part of normal operating expenses,” he
said. “If we do our job right there will be no reason for government
intervention and no reason for the financial assurance instruments to
ever be called. We have both a financial and social incentive to ensure
that the financial assurance is never called upon. What’s most
important, whether we execute the plan or the state executes it, the
work will get done and the environment and taxpayers will be protected,”
Cherry said.

“At every part of the environmental review and permitting process,
including financial assurance, PolyMet has demonstrated that we can and
will meet or exceed regulatory standards and industry best practices,”
Cherry said. “This will be the case with our operations as well.”

About PolyMet

PolyMet Mining Corp. (www.polymetmining.com)
is a publicly traded mine development company that owns 100 percent of
Poly Met Mining, Inc., a Minnesota corporation that controls 100 percent
of the NorthMet copper-nickel-precious metals ore body through a
long-term lease and owns 100 percent of the former LTV Steel Mining
Company site, a large processing facility located approximately six
miles from the ore body in the established mining district of the Mesabi
Iron Range in northeastern Minnesota. Poly Met Mining, Inc. has
completed its Definitive Feasibility Study. The NorthMet Final EIS was
published in November 2015, preparing the way for decisions on permit
applications. NorthMet is expected to require approximately two million
hours of construction labor, create approximately 360 long-term jobs
directly, and generate a level of activity that will have a significant
multiplier effect in the local economy.

PolyMet Disclosures

This news release contains certain forward-looking statements
concerning anticipated developments in PolyMet’s operations in the
future. Forward-looking statements are frequently, but not always,
identified by words such as “expects,” “anticipates,” “believes,”
“intends,” “estimates,” “potential,” “possible,” “projects,” “plans,”
and similar expressions, or statements that events, conditions or
results “will,” “may,” “could,” or “should” occur or be achieved or
their negatives or other comparable words. These forward-looking
statements may include statements regarding the ability to receive
environmental and operating permits, job creation, and the effect on the
local economy, or other statements that are not a statement of fact.
Forward-looking statements address future events and conditions and
therefore involve inherent known and unknown risks and uncertainties.
Actual results may differ materially from those in the forward-looking
statements due to risks facing PolyMet or due to actual facts differing
from the assumptions underlying its predictions.

PolyMet’s forward-looking statements are based on the beliefs,
expectations and opinions of management on the date the statements are
made, and PolyMet does not assume any obligation to update
forward-looking statements if circumstances or management’s beliefs,
expectations and opinions should change.

Specific reference is made to risk factors and other considerations
underlying forward-looking statements discussed in PolyMet’s most
recent Annual Report on Form 40-F for the fiscal year ended January 31,
2017, and in our other filings with Canadian securities authorities and
the U.S. Securities and Exchange Commission, including our Report on
Form 6-K providing information with respect to our operations for the
three and nine months ended October 31, 2017.

The Annual Report on Form 40-F also contains the company’s mineral
resource and other data as required under National Instrument 43-101.

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

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Contacts

PolyMet Mining Corp.
Media:
Bruce Richardson, +1
651-389-4111
Corporate Communications
brichardson@polymetmining.com
or
Investor
Relations:
Jenny Knudson, +1 651-389-4110
Investor
Relations
jknudson@polymetmining.com