6-K

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2019

Commission File Number: 001-32929

POLYMET MINING CORP.
(Translation of registrant's name into English)

100 King Street, Suite 5700 
Toronto, ON Canada M5X 1C7 
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[    ] Form 20-F   [ X ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): []

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): []

EXPLANATORY NOTE

This report on Form 6-K and attached exhibit are incorporated by reference into Registration Statement No. 333-192208 and this report on Form 6-K shall be deemed a part of such registration statement from the date on which this report on Form 6-K is filed, to the extent not superseded by documents or reports subsequently filed or furnished by PolyMet Mining Corp. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

SUBMITTED HEREWITH

Exhibits

99.1	CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and nine months ended September 30, 2019
99.2	MANAGEMENT DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2019
99.3	Form 52-109F2 Certification of Interim Filings - CEO
99.4	Form 52-109F2 Certification of Interim Filings - CFO

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		PolyMet Mining Corp.
		(Registrant)
Date: November 7, 2019	By:	/s/ Jonathan Cherry
		Jonathan Cherry
	Title:	President and CEO

EX-99.1

Exhibit 99.1

POLYMET MINING CORP.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended September 30, 2019

PolyMet Mining Corp.

Condensed Interim Consolidated Balance Sheets

Unaudited - All figures in thousands of U.S. Dollars

	September 30, 2019			December 31, 2018
ASSETS
Current
Cash	$	14,995		$	13,857
Amounts receivable		578			796
Prepaid expenses		938			1,161
		16,511			15,814
Non-Current
Restricted deposits (Note 6)		10,778			10,286
Amounts receivable (Note 5)		1,900			1,796
Mineral Property, Plant and Equipment (Notes 3 and 4)		455,920			433,548
Intangible (Note 5)		24,185			24,185
Total Assets		509,294			485,629
LIABILITIES
Current
Accounts payable and accruals		5,315			3,925
Lease liabilities		57			88
Convertible debt (Notes 7 and 8)		-			56,984
Non-convertible debt (Notes 7 and 9)		-			178,483
Environmental rehabilitation provision (Note 6)		2,639			1,693
		8,011			241,173
Non-Current
Lease liabilities		581			-
Promissory Note (Note 7)		15,188			-
Environmental rehabilitation provision (Note 6)		51,944			59,414
Total Liabilities		75,724			300,587
SHAREHOLDERS’ EQUITY
Share Capital (Note 10)		525,733			271,269
Share Premium		1,151			1,151
Equity Reserves		64,481			62,111
Deficit		(157,795	)		(149,489	)
Total Shareholders’ Equity		433,570			185,042
Total Liabilities and Shareholders’ Equity	$	509,294		$	485,629

Nature of Business and Liquidity (Note 1)

Commitments and Contingencies (Note 13)

ON BEHALF OF THE BOARD OF DIRECTORS:

/s/ Jonathan Cherry, Director           /s/ Dr. David Dreisinger        , Director

- See Accompanying Notes –

PolyMet Mining Corp.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

Unaudited - All figures in thousands of U.S. Dollars, except for shares and per share amounts

	Three months ended						Nine months ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
General and Administrative Expenses
Salaries, directors’ fees and related benefits	$	668		$	542		$	1,893		$	1,768
Share-based compensation (Note 10)		120			182			1,418			1,637
Professional fees		44			127			258			468
Regulatory fees		98			29			198			168
Investor and public relations		191			185			777			885
Office and administration		137			164			415			517
Depreciation		29			33			93			98
Total General and Administration Expenses		1,287			1,262			5,052			5,541
Other Expenses (Income)
Finance costs - net (Note 11)		630			404			1,872			1,846
Loss on foreign exchange		6			2			13			3
Loss on debenture modification (Notes 7, 8 and 9)		-			-			2,004			4,109
Loss on land exchange		-			-			-			553
Gain on disposal of assets		(207	)		-			(379	)		-
(Gain)/Loss on financial instrument fair value (Note 5)		(123	)		37			(221	)		112
Other income		(15	)		(17	)		(35	)		(30	)
Total Other Expenses		291			426			3,254			6,593
Total Loss and Comprehensive Loss for the Period		1,578			1,688			8,306			12,134
Basic and Diluted Loss per Share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.04	)
Weighted Average Number of Shares – basic and diluted		1,005,177,588			320,583,629			559,824,359			320,330,029

- See Accompanying Notes -

PolyMet Mining Corp.

Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

Unaudited - All figures in thousands of U.S. Dollars, except for shares

	Share Capital (authorized = unlimited)						Equity Reserves
										Accumulated									Total
	Issued		Share		Share		Contributed			Other Comp			Equity						Shareholders'
	Shares		Capital		Premium		Surplus			Inc / (Loss)			Reserves			Deficit			Equity
Balance - December 31, 2017		319,303,098	$	269,516	$	1,151	$	60,295		$	210		$	60,505		$	(132,497	)	$	198,675
Transition to IFRS 9		-		-		-		-			(210	)		(210	)		(1,949	)		(2,159	)
Restated - January 1, 2018		319,303,098	$	269,516	$	1,151	$	60,295		$	-		$	60,295		$	(134,446	)	$	196,516
Total comprehensive loss for the period		-		-		-		-			-			-			(12,134	)		(12,134	)
Modification of debentures (Notes 7, 8 and 9)		-		-		-		2,331			-			2,331			-			2,331
Payment of land purchase options (Note 10)		102,500		98		-		-			-			-			-			98
Exercise of share options and warrants (Note 10)		315,500		323		-		(81	)		-			(81	)		-			242
Vesting of restricted shares and RSU’s (Note 10)		843,413		624		-		(624	)		-			(624	)		-			-
Share-based compensation (Note 10)		99,308		105		-		1,649			-			1,649			-			1,754
Bonus share cost amortization		-		-		-		(1,519	)		-			(1,519	)		-			(1,519	)
Balance – September 30, 2018		320,663,819	$	270,666	$	1,151	$	62,051		$	-		$	62,051		$	(146,580	)	$	187,288

	Share Capital (authorized = unlimited)
													Total
	Issued		Share		Share		Equity						Shareholders'
	Shares		Capital		Premium		Reserves			Deficit			Equity
Balance – December 31, 2018		321,190,069	$	271,269	$	1,151	$	62,111		$	(149,489	)	$	185,042
Total comprehensive loss for the period		-		-		-		-			(8,306	)		(8,306	)
Rights offering and issuance costs (Note 10)		682,813,838		253,047		-		-			-			253,047
Debenture refinancing warrants (Note 7)		-		-		-		1,564			-			1,564
Payment of land purchase options (Note 10)		78,750		46		-		-			-			46
Exercise of share options (Note 10)		400,171		572		-		(298	)		-			274
Vesting of restricted shares and RSU’s (Note 10)		644,510		715		-		(715	)		-			-
Share-based compensation (Note 10)		102,921		84		-		1,819			-			1,903
Balance – September 30, 2019		1,005,230,259		525,733		1,151		64,481			(157,795	)		433,570

- See Accompanying Notes -

PolyMet Mining Corp.

Condensed Interim Consolidated Statements of Cash Flows

Unaudited - All figures in thousands of U.S. Dollars

	Three months ended						Nine months ended
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Operating Activities
Loss for the period	$	(1,578	)	$	(1,688	)	$	(8,306	)	$	(12,134	)
Items not involving cash:
Depreciation		29			33			93			98
Environmental rehabilitation provision accretion (Note 6)		671			456			1,527			1,327
Share-based compensation (Note 10)		120			182			1,418			1,637
Unrealized loss on foreign exchange		3			4			4			-
Loss on debenture modification (Notes 7, 8 and 9)		-			-			2,004			4,109
Loss on land exchange		-			-			-			553
Gain on disposal of property, plant & equipment		(207	)		-			(379	)		-
(Gain)/Loss on financial asset fair value (Notes 5 and 11)		(208	)		37			(713	)		112
Changes in non-cash working capital
Amounts receivable		60			(8	)		335			(3	)
Prepaid expenses		229			515			223			375
Accounts payable and accruals		(534	)		(43	)		1,715			(405	)
Net cash used in operating activities		(1,415	)		(512	)		(2,079	)		(4,331	)
Financing Activities
Share issuance proceeds (Note 10)		-			61			21,839			242
Share issuance costs (Note 10)		-			-			(11,953	)		-
Debenture funding, net of costs (Notes 7 and 9)		15,000			-			15,000			24,723
Debenture repayment (Notes 7, 8, 9 and 10)		-			-			(6,882	)		-
Cash settled RSU’s (Note 10)		(3	)		-			(232	)		(377	)
Net cash provided by financing activities		14,997			61			17,772			24,588
Investing Activities
Property, plant and equipment purchases (Note 4)		(4,956	)		(7,073	)		(15,801	)		(17,546	)
Intangible purchases (Note 5)		-			(3,105	)		-			(3,105	)
Property, plant and equipment disposal proceeds		207			-			1,250			-
Land disposal proceeds		-			-			-			425
Net cash used in investing activities		(4,749	)		(10,178	)		(14,551	)		(20,226	)
Net Increase (Decrease) in Cash		8,833			(10,629	)		1,142			31
Effect of foreign exchange on Cash		(3	)		(4	)		(4	)		-
Cash - Beginning of period		6,165			17,595			13,857			6,931
Cash - End of period	$	14,995		$	6,962		$	14,995		$	6,962
Supplemental information – non-cash investing and financing
Accounts payable and accruals	$	(1,252	)	$	1,013		$	(96	)	$	1,263
Debt accretion and capitalized interest (Notes 7, 8 and 9)		188			5,317			14,598			14,310
Share-based compensation (Note 10)		41			52			482			438
Bonus share amortization		-			-			-			25
Bonus share forfeiture		-			-			-			(1,544	)
Fair value of shares issued for land options (Note 10)		10			22			46			98
Share issuance proceeds (Note 10)		-			-			243,435			-
Debenture repayment (Note 10)	$	-		$	-		$	(243,435	)	$	-

- See Accompanying Notes -

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

1. Nature of Business and Liquidity

PolyMet Mining Corp. was incorporated in British Columbia, Canada on March 4, 1981 under the name Fleck Resources Ltd. and changed its name to PolyMet Mining Corp. on June 10, 1998.  Through its 100%-owned subsidiary, Poly Met Mining, Inc. (“PolyMet US” and, together with PolyMet Mining Corp., “PolyMet” or the “Company”), the Company is engaged in the exploration and development of natural resource properties.  The Company has a majority shareholder relationship with Glencore AG, a wholly owned subsidiary of Glencore plc (together “Glencore”), as a result of Glencore’s ownership of 71.6% of the Company’s issued shares.

The Company’s primary mineral property is the NorthMet Project (“NorthMet” or “Project”), a polymetallic project in northeastern Minnesota, United States of America, which comprises the NorthMet copper-nickel-precious metals ore body and the Erie Plant, a processing facility located approximately six miles from the ore body.  The realization of the Company’s investment in NorthMet and other assets is dependent upon various factors, including the existence of economically recoverable mineral reserves, the ability to obtain and maintain permits necessary to construct and operate NorthMet, the ability to obtain financing necessary to complete the development of NorthMet, and to conduct future profitable operations or alternatively, disposal of the investment on an advantageous basis.

The corporate address and records office of the Company are located at 100 King Street West, Suite 5700, Toronto, Ontario, Canada M5X 1C7, and 700 West Georgia, 25^th Floor, Vancouver, British Columbia, Canada, V7Y 1B3, respectively.  The executive office of PolyMet US is located at 444 Cedar Street, Suite 2060, St. Paul, Minnesota, United States of America, 55101.

The condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of operations.

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they become due and arises through the excess of financial obligations over financial assets due at any point in time.  As at September 30, 2019, the Company had cash of $14.995 million and working capital of $8.500 million.  Management believes, based upon the underlying value of the NorthMet Project, the receipt of all permits necessary to construct and operate the NorthMet Project, ongoing discussions with potential financiers and the majority shareholder relationship with Glencore, that financing will continue to be available allowing the Company to complete the development of NorthMet and to conduct future profitable operations.  While in the past the Company has been successful in closing financing agreements, there can be no assurance it will be able to do so again.

1

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

2. Summary of Significant Accounting Policies

Statement of Compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting and follow the same accounting policies as set out in Note 2 of the audited consolidated financial statements for the year ended December 31, 2018.  These condensed interim consolidated financial statements do not include all the information and note disclosures required by IFRS for annual financial statements and therefore should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018.  The financial statements were approved by the Board of Directors on November 7, 2019.

3. Mineral Property Agreements

NorthMet, Minnesota, U.S.A.

Pursuant to an agreement dated January 4, 1989, subsequently amended and assigned, the Company leases certain mineral property rights in St. Louis County, Minnesota from RGGS Land & Minerals Ltd., L.P.  Provided the Company continues to make annual lease payments, the lease period continues until June 12, 2048 with an option to extend the lease for up to five additional ten-year periods on the same terms and further extend as long as there are commercial mining operations.  All lease payments have been paid to date with the next annual payment of $0.175 million due in January 2020.

Pursuant to an agreement dated December 1, 2008, the Company leases certain mineral property rights in St. Louis County, Minnesota from LMC Minerals.  Provided the Company continues to make annual lease payments, the lease period continues until December 1, 2028 with an option to extend the lease for up to four additional five-year periods on the same terms.  All lease payments have been paid to date with the next annual payment of $0.030 million due in November 2019.

The lease payments are considered advance royalty payments and will be deducted from future production royalties payable to the lessor, which range from 3% to 5% based on the net smelter return per ton received by the Company.  The Company’s recovery of $3.000 million in advance royalty payments to RGGS Land & Minerals Ltd., L.P. is subject to the lessor receiving an amount not less than the amount of the annual lease payment due for that year.  The Company’s recovery of $0.219 million in advance royalty payments to LMC Minerals is subject to the lessor receiving an amount not less than the amount of the annual lease payment due for that year.

2

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

4. Mineral Property, Plant and Equipment

Details of Mineral Property, Plant, and Equipment are as follows:

Net Book Value	NorthMet			Other fixed assets			Total
Balance at December 31, 2018		433,347			201			433,548
Additions		30,239			650			30,889
Disposals		(871	)		-			(871	)
Changes to environmental rehabilitation provision (Note 6)		(7,515	)		-			(7,515	)
Amortization and Depreciation		-			(131	)		(131	)
Balance at September 30, 2019	$	455,200			720			455,920

NorthMet	September 30, 2019		December 31, 2018
Mineral property acquisition and interest costs	$	126,600	$	112,002
Mine plan and development		51,302		48,383
Environmental		141,036		133,638
Consulting and wages		58,033		55,076
Reclamation and remediation (Note 6)		49,296		56,811
Site activities		28,855		26,488
Mine equipment		78		949
Total	$	455,200	$	433,347

Erie Plant, Minnesota, U.S.A.

In November 2005, the Company acquired from Cliffs Erie LLC, a subsidiary of Cleveland Cliffs Inc. (together “Cliffs”) large parts of the Erie Plant, a processing facility located approximately six miles from the ore body.

In December 2006, the Company acquired from Cliffs additional property and associated rights sufficient to provide it with a railroad connection linking the mine development site and the Erie Plant. The transaction also included a railcar fleet, locomotive fueling and maintenance facilities, water rights and pipelines, administrative offices on site and an additional 6,000 acres of land to the east and west of the existing tailings storage facilities.

The consideration paid for the Erie Plant and associated infrastructure was $18.9 million in cash and 9,200,547 shares at a fair market value of $13.953 million. As part of the consideration, the Company indemnified Cliffs for reclamation and remediation obligations of the acquired property (see Note 6).

During the nine months ended September 30, 2019, the Company capitalized 100% of the borrowing costs on the promissory note (see Note 7), convertible debt (see Note 8) and non-convertible debt (see Note 9) in the amount of $14.598 million (September 30, 2018 - $14.310 million) as part of the cost of NorthMet assets. As NorthMet assets are not in use or capable of operating in a manner intended by management, no depreciation or amortization of these assets has been recorded to September 30, 2019.

3

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

5. Intangible and EIP Receivable

Details of the Intangible are as follows:

	Nine months ended September 30, 2019		Twelve months ended December 31, 2018
Intangible – beginning of period	$	24,185	$	3,130
Purchases		-		21,055
Intangible – end of period	$	24,185	$	24,185

In October 2017, the Company entered into an agreement with EIP Credit Co., LLC to reserve wetland bank credits the Company can use for the NorthMet Project for a minimum of five years in exchange for an initial down payment applicable to the purchase price, contractual transfer of certain lands, and annual option payments not applicable to the purchase price.  Annual option payments of $0.250 million are expensed as incurred whereas option exercise payments will be recorded to Intangible and transferred to Mineral Property, Plant and Equipment once placed into service.  During the twelve months ended December 31, 2018, the Company exercised part of its rights and purchased wetland bank credits, which resulted in a $21.055 million addition to Intangible.

Details of the EIP receivable are as follows:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
EIP Receivable – beginning of period	$	1,912		$	2,883
Gain/(loss) on re-measurement		221			(971	)
EIP Receivable – end of period		2,133			1,912
Less current portion		(233	)		(116	)
Non-current portion	$	1,900		$	1,796

In April 2015, the Company entered into an agreement with EIP Minnesota, LLC (“EIP”) whereby EIP will seek to sell wetland credits the Company is unable to use for the NorthMet Project to third parties and, over time, reimburse the Company for its costs.  The timing of EIP’s sale to third parties and reimbursement of the Company is uncertain and volatile.   The EIP receivable is recorded at fair value at each reporting period, based on management’s best estimate of cash flows expected from future sales by EIP.

4

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

6. Environmental Rehabilitation Provision

Details of the Environmental Rehabilitation Provision are as follows:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
Environmental Rehabilitation Provision – beginning of period	$	61,107		$	65,402
Change in estimate		(7,515	)		(3,478	)
Liabilities discharged		(536	)		(2,613	)
Accretion expense		1,527			1,796
Environmental Rehabilitation Provision – end of period		54,583			61,107
Less current portion		(2,639	)		(1,693	)
Non-current portion	$	51,944		$	59,414

Federal, state and local laws and regulations concerning environmental protection affect the Company’s assets.  As part of the consideration for the asset acquisitions from Cliffs (see Note 4), the Company indemnified Cliffs for reclamation and remediation obligations of the acquired property.  The Company’s provisions are based upon existing laws and regulations.  It is not currently possible to estimate the impact on operating results, if any, of future legislative or regulatory developments.

The Company’s best estimate of the environmental rehabilitation provision as at September 30, 2019 was $54.583 million (December 31, 2018 - $61.107 million) based on estimated cash flows required to settle this obligation in present day costs of $70.610 million (December 31, 2018 - $71.146 million), a projected inflation rate of 2.2% (December 31, 2018 – 2.0%), a market risk-free nominal interest rate (“discount rate”) of 4.0% (December 31, 2018 – 2.87%) and expenditures expected to occur over a period of approximately 30 years.  During the quarter ended September 30, 2019, the Company refined the inputs for determining the discount rate in order to better reflect the expected rates over the period of future cash flows.   This change in estimate resulted in a $12.8 million decrease to the environmental rehabilitation provision for the quarter ended September 30, 2019 which is included in the year to date decrease of $7.5 million and has been accounted for prospectively as a change in accounting estimate in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates, and Errors.

The carrying value of the provision is sensitive to the estimates and assumptions used in its measurement.  If the discount rate had been 1% lower than management’s estimate, the liability would have increased by $7.9 million and conversely, if the discount rate had been 1% higher than management’s estimate, the liability would have decreased by $6.3 million.

On November 1, 2018, the Company received the Permit to Mine for NorthMet and certain other permits from the Minnesota Department of Natural Resources (“MDNR”) which included a schedule for financial assurance obligations, including required cash contributions to a trust fund.  The Company has satisfied its current financial assurance obligations primarily by establishing and contributing $10.0 million in restricted deposits to a trust fund and providing $65.0 million in surety bonds and letters of credit, with the MDNR as the beneficiary in each case.  Financial assurance obligations must be reviewed annually based on the Company’s planned reclamation activities, with the total assurance and related financial instruments adjusted accordingly if the underlying estimated reclamation costs are revised.  The Company may terminate these financial instruments, partially or in full, only upon meeting site reclamation requirements and securing approval from the MDNR.  Future required cash contributions to the trust fund are $2.0 million per year beginning in the first year of mining operations and continue until the eighth year after which annual contributions will be prorated based on the expected reclamation obligation at the end of mining.  In addition, the Company provided Cliffs with a $13.4 million letter of credit to satisfy requirements under the asset acquisition agreements and related obligations.

5

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

7. Glencore Financing

Since October 2008, the Company and Glencore have entered into a series of financing agreements comprising:

• Equity – $25.0 million placement of common shares in 2009; $30.0 million placement of common shares in 2010; $20.0 million placement of common shares in 2011; $20.960 million purchase of common shares in 2013; $10.583 million purchase of common shares in the 2016 Private Placement; and a $243.435 million purchase of common shares in the 2019 Rights Offering;

• Convertible debt (“Glencore Convertible Debt”) –$25.0 million initial principal secured convertible debentures drawn in 2008 and 2009.  The convertible debt balance was fully repaid with proceeds from the 2019 Rights Offering;

• Non-convertible debt (“Glencore Non-Convertible Debt”) – 30.0 million initial principal secured debentures drawn in 2015; $11.0 million initial principal secured debenture drawn in 2016; $14.0 million initial principal secured debentures drawn in 2016; $20.0 million initial principal secured debentures drawn in 2017 and 2018; and $80.0 million initial principal secured debenture 2018 drawn in 2018 with the final tranche in the amount of $15.0 million cancelled by the Company.  The non-convertible balance was fully repaid with proceeds from the 2019 Rights Offering; and

• Promissory Note – agreement comprising $15.0 million initial principal note drawn in August 2019.  

As a result of these financing transactions and the purchase by Glencore of PolyMet common shares previously owned by Cliffs, Glencore's ownership and ownership rights of PolyMet as at September 30, 2019 comprises:

• 720,084,055 shares representing 71.6% of PolyMet's issued shares (December 31, 2018 - 92,836,072 shares);

• Warrants to purchase 7,453,068 common shares at $0.6384 per share at any time until March 31, 2024, subject to mandatory exercise if the 20-day volume weighted average price (“VWAP”) of PolyMet common shares is equal to or greater than 150% of the exercise price and PolyMet has received permits and construction finance is available (“Exercise Triggering Event”), and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions triggered upon closing of the Rights Offering on June 28, 2019;

• Warrants to purchase 8,142,776 common shares at $0.8665 per share at any time until October 28, 2021, subject to acceleration at the Company’s option provided all permits necessary to construct NorthMet have been received (“Acceleration Triggering Event”), and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions triggered upon closing of the Rights Offering on June 28, 2019; and

• Warrants to purchase 721,302 common shares at $0.6756 per share at any time until October 28, 2021, and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions triggered upon closing of the Rights Offering on June 28, 2019.

6

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

7.   Glencore Financing - Continued

If Glencore were to exercise all of its rights and obligations under these agreements, it would own 736,401,201 common shares of PolyMet, representing 72.1% on a partially diluted basis, that is, if no other options or warrants were exercised or 69.1% on a fully diluted basis, if all other options and warrants were exercised.

2019 Agreement

On March 22, 2019, the Company entered into an extension agreement with Glencore with respect to the secured convertible and non-convertible debt set to mature on March 31, 2019.  Glencore agreed to extend the maturity date of the debt to June 30, 2019 to provide the Company time to prepare for and complete a rights offering, fully backstopped by Glencore, to raise sufficient funds to repay all outstanding debt.  In connection with the extension agreement, the Company issued 6,458,001 purchase warrants to Glencore with an expiration date of March 31, 2024 and an exercise price of $0.7368 which was approved by the NYSE American and TSX.  In addition, the Company agreed to extend the expiration date of the convertible debt exchange warrant to the earlier of March 31, 2020 or the date on which the convertible debt is fully repaid, which occurred on June 28, 2019 (see Notes 8 and 9).

The March 2019 transaction was accounted for as a modification of the existing debentures with a $2.014 million modification loss consisting of the following:

• $0.810 million to increase the convertible debt carrying value to the revised cash flows discounted using the original effective interest rate of 7.3%;

• $0.360 million to reduce the non-convertible debt carrying value to the revised cash flows discounted using the original effective interest rate of 14.3%; and

• $1.564 million to recognize fair value of the purchase warrants issued.

On June 28, 2019, Glencore purchased 430,521,941 common shares under its standby commitment under the Rights Offering in addition to the 196,726,042 common shares purchased under its rights (see Note 10).  Proceeds of the rights offering were used to repay the convertible debt (see Note 8) and non-convertible debt (see Note 9) resulting in a gain on convertible debt repayment of $0.018 million and loss on non-convertible debt repayment of $0.008 million.

On August 7, 2019, the Company issued to Glencore a promissory note in the amount of $15.0 million with proceeds to be used for general corporate purposes.  The promissory note bears interest at three month U.S. dollar LIBOR plus 6.0% and is payable on the earlier of (i) December 31, 2021 or (ii) the availability of at least $100 million of debt or equity financing, on which date all principal and interest accrued to such date will be due and payable.  Since inception, $0.188 million of interest was capitalized to the principal amount of the promissory note.  All borrowing costs were eligible for capitalization and 100% of these costs were capitalized during the nine months ended September 30, 2019.

7

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

8. Convertible Debt

Details of the Convertible Debt are as follows:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
Convertible Debt – beginning of period	$	56,984		$	49,067
Transition to IFRS 9 (Note 2)		-			1,346
Convertible Debt – adjusted beginning of period		56,984			50,413
Change due to modification (Note 7)		792			3,142
Accretion and capitalized interest		2,105			3,429
Repayment		(59,881	)		-
Convertible Debt – end of period		-			56,984
Less current portion		-			(56,984	)
Non-current portion	$	-		$	-

Since October 2008, the Company issued $25.0 million of secured convertible debentures to Glencore.  The Company provided security on these debentures covering all of the assets of PolyMet.

These debentures bore interest at the twelve month U.S. dollar LIBOR plus 4.0% through July 31, 2015, twelve month U.S. dollar LIBOR plus 8.0% through December 31, 2015, twelve month U.S. dollar LIBOR plus 15.0% beginning January 1, 2016, and twelve month U.S. dollar LIBOR plus 10.0% beginning April 1, 2018.  Interest was compounded quarterly and payable in cash or by increasing the principal amount of the debentures, at the option of Glencore.  Since inception, $34.881 million of interest was capitalized to the principal amount of the debenture.  All borrowing costs were eligible for capitalization and 100% of these costs were capitalized during the nine months ended September 30, 2019.

Following the Rights Offering close on June 28, 2019 (see Note 10), these debentures were fully repaid on June 28, 2019.

8

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

9. Non-Convertible Debt

Details of the Non-Convertible Debt are as follows:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
Non-Convertible Debt – beginning of period	$	178,483		$	92,268
Transition to IFRS 9 (Note 2)		-			813
Non-Convertible Debt – adjusted beginning of period		178,483			93,081
Change due to modification (Note 7)		(352	)		(1,452	)
Accretion and capitalized interest		12,305			17,131
Funding, net of costs		-			69,723
Repayment		(190,436	)		-
Total Non-Convertible Debt		-			178,483
Less current portion		-			(178,483	)
Non-current portion	$	-		$	-

Since January 2015, the Company issued $140.0 million of secured non-convertible debentures to Glencore.  The Company provided security on these debentures covering all of the assets of PolyMet.

These debentures bore interest at twelve month U.S. dollar LIBOR plus 8.0% through December 31, 2015, twelve month U.S. dollar LIBOR plus 15.0% beginning January 1, 2016, and twelve month U.S. dollar LIBOR plus 10.0% beginning April 1, 2018.  Interest was compounded quarterly and payable in cash or by increasing the principal amount of the debentures, at the option of Glencore.  Since inception, $50.436 million of interest was capitalized to the principal amount of the debenture.  All borrowing costs were eligible for capitalization and 100% of these costs were capitalized during the nine months ended September 30, 2019.

Following the Rights Offering close on June 28, 2019 (see Note 10), these debentures were fully repaid on June 28, 2019.

9

 

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

10. Share Capital

a) Issuances for Cash and Land Acquisition

On May 24, 2019, the Company filed a prospectus for an offering of rights to holders of common shares of the Company to raise up to $265.0 million in gross proceeds (“Rights Offering”).  Every shareholder received one Right ("Right") for each common share owned on June 3, 2019, the Record Date, and each Right entitled the holder to acquire 2.119069 new common shares of the Company at $0.3881 per share. This offering of Rights expired on June 26, 2019.

Under the terms of a Standby Purchase Agreement, Glencore agreed to purchase any common shares not subscribed for by holders of Rights, subject to certain conditions.  Because the Rights Offering was not fully subscribed, Glencore purchased 430,521,941 shares under its standby commitment in addition to the 196,726,042 shares purchased under Glencore’s Rights.

Upon closing of the Rights Offering on June 28, 2019, the Company issued a total of 682,813,838 common shares for gross proceeds of $265.0 million.  Expenses and fees relating to the Rights Offering were $11.953 million, including a $7.690 million standby commitment fee paid to Glencore, and reduced the gross proceeds recorded as share capital.  Closing of the Rights Offering triggered customary anti-dilution provisions for outstanding warrants, share options, and unissued restricted share units.  Proceeds of the Rights Offering were used to repay the convertible debt of $59.881 million owed to Glencore and non-convertible debt of $190.436 million owed to Glencore (see Notes 8 and 9).  The Company and Glencore agreed to net settle Glencore’s Rights Offering subscription amount of $243.435 million against the debt amounts owed.

During the nine months ended September 30, 2019 the Company issued 400,171 shares (September 30, 2018 – 225,000) pursuant to the exercise of share options for proceeds of $0.274 million (September 30, 2018 - $0.152 million).

During the nine months ended September 30, 2019 the Company issued nil shares (September 30, 2018 – 90,500 shares) pursuant to the exercise of warrants for proceeds of $nil (September 30, 2018 - $0.090 million).

During the nine months ended September 30, 2019 the Company issued 78,750 shares (September 30, 2018 – 102,500 shares) to maintain land purchase options with the shares valued at $0.046 million (September 30, 2018 - $0.098 million).

b) Share-Based Compensation

The Omnibus Share Compensation Plan (“Omnibus Plan”) was created to align the interests of the Company’s employees, directors, officers and consultants with those of shareholders. Effective May 25, 2007, the Company adopted the Omnibus Plan, which was approved by the Company’s shareholders on June 27, 2007, modified and further ratified and reconfirmed by the Company’s shareholders most recently on June 27, 2018.  The Omnibus Plan restricts the award of share options, restricted shares, restricted share units, and other share-based awards to 10% of the common shares issued and outstanding on the grant date, excluding 2,500,000 common shares underlying options pursuant to an exemption approved by the Toronto Stock Exchange.

10

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

10.  Share Capital - Continued

During the nine months ended September 30, 2019, the Company recorded $1.894 million for share-based compensation (September 30, 2018 - $2.075 million) with $1.418 million expensed to share-based compensation (September 30, 2018 - $1.637 million) and $0.476 million capitalized to mineral property, plant and equipment (September 30, 2018 - $0.438 million).  The offsetting entries were to equity reserves for $1.819 million (September 30, 2018 - $1.649 million), share capital for $0.084 million (September 30, 2018 - $0.105 million) and payables for $-0.009 million (September 30, 2018 - $0.321 million).  Total share-based compensation for the period comprised $1.142 million for share options (September 30, 2018 - $0.766 million), $0.668 million for restricted share units (September 30, 2018 - $1.204 million), and $0.084 million for issuance of unrestricted shares (September 30, 2018 - $0.105 million).  Exercise of share options and warrants and vesting of restricted share units during the period resulted in $1.013 million being transferred from equity reserves to share capital (September 30, 2018 - $0.705 million).

c) Share Options

Share options granted may not exceed a term of ten years and are forfeited if the grantee ceases to be an eligible person under the Omnibus Plan.  Details of share options are as follows:

	Nine months ended September 30, 2019		Twelve months ended December 31, 2018
	Number of Options	Weighted Average Exercise Price	Number of Options	Weighted Average Exercise Price
Outstanding – beginning of period	22,692,002	0.91	21,659,002	0.98
Granted	3,625,000	0.81	2,503,000	0.91
Exercised	(625,000)	0.71	(225,000)	0.67
Expired	(610,000)	0.71	(1,245,000)	2.06
Anti-dilution price adjustment	-	(0.12)	-	-
Outstanding – end of period	25,082,002	0.79	22,692,002	0.91

Effective June 28, 2019, the Company reduced the exercise price of all options that were outstanding prior to the Rights Offering subject to stock exchange approval, to reflect the dilutive effect of the common shares that were issued in connection with the Rights Offering.  The adjustment did not impact the financial statements.

The weighted average share price when share options were exercised during the nine months ended September 30, 2019 was $0.78.

During the nine months ended September 30, 2019, there were 240,000 share options net settled with 15,171 shares upon exercise.

The fair value of share options granted were estimated at the date of grant using the Black-Scholes pricing model with the following weighted average assumptions:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
Risk-free interest rate		2.52	%	2.33% to 2.58%
Expected dividend yield		-			-
Expected forfeiture rate		-			-
Expected volatility		54.56	%	56.07% to 61.80%
Expected life in years		2.50		2.50 to 5.00
Weighted average fair value of each option	$	0.29		$	0.34 to $0.61

11

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

10.  Share Capital - Continued

The expected volatility reflects the Company’s expectation that historical volatility over a period similar to the life of the option is indicative of future trends, which may or may not necessarily be the actual outcome.

Details of the share options outstanding as at September 30, 2019 are as follows:

Range of Exercise Prices	Number of options outstanding		Number of options exercisable		Weighted Average Exercise Price		Weighted Average Remaining Life
0.52 to 0.69		10,294,000		9,994,000	$	0.63		2.49
0.70 to 0.86		9,717,000		9,018,000		0.77		4.04
0.87 to 1.30		3,846,002		3,846,002		0.96		1.77
1.31 to 1.63		1,050,000		1,050,000		1.56		1.41
1.64 to 2.66		175,000		115,000		2.23		0.12
		25,082,002		24,023,002	$	0.79		2.92

As at September 30, 2019 all outstanding share options had vested and were exercisable, with the exception of 1,059,000, which are scheduled to vest upon completion of specific targets or dates (June 2020 – 300,000; Production – 699,000; Other – 60,000).  The outstanding share options have expiry periods between 0.04 and 8.43years and are expected to be settled in shares upon exercise.

d)Restricted Shares and Restricted Share Units

Restricted shares and restricted share units granted are forfeited if the grantee ceases to be an eligible person under the Omnibus Plan.  Details of restricted shares and restricted share units are as follows:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
Outstanding - beginning of period		3,347,907			3,281,030
Issued		1,632,119			1,227,004
Vested		(1,049,364	)		(1,160,127	)
Anti-dilution quantity adjustment		624,452			-
Outstanding - end of period		4,555,114			3,347,907

Effective June 28, 2019, the Company increased the number of common shares issuable for all restricted share units outstanding prior to the Rights Offering subject to stock exchange approval, to reflect the dilutive effect of the common shares that were issued in connection with the Rights Offering.  The adjustment did not impact the financial statements.

During the nine months ended September 30, 2019, the Company issued 1,632,119 restricted share units, which had a fair value of $1.325 million to be expensed and capitalized over the vesting periods.

During the nine months ended September 30, 2019, there were 309,354 restricted share units settled upon vesting with $0.232 million in cash and 95,500 restricted shares released upon vesting.

12

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

10.  Share Capital - Continued

As at September 30, 2019, outstanding restricted shares and restricted share units are scheduled to vest upon completion of specific targets or dates (Construction Finance – 865,575; Production – 459,272; June 2020 – 126,130; March 2020 – 707,649; January 2021 – 1,545,837).  The remaining 850,651 outstanding restricted shares and restricted share units have vested but share delivery is deferred until retirement, termination, or death.  The Company expects 935,076 outstanding restricted share units will be settled in cash and the remainder will be settled in shares as allowed under the Omnibus Plan.

e) Bonus Shares

The bonus share incentive plan was established for the Company’s directors and key employees and was approved by the disinterested shareholders at the Company’s shareholders’ meeting held in May 2004.  The Company has authorized 3,640,000 bonus shares for the achievement of Milestone 4 representing commencement of commercial production at NorthMet at a time when the Company has not less than 50% ownership interest in NorthMet.   At the Company’s Annual General Meeting of shareholders held in June 2008, the disinterested shareholders approved issuance of these shares upon achievement of Milestone 4.  Regulatory approval is also required prior to issuance of these shares.  Details of the bonus shares are as follows:

	Nine months ended September 30, 2019				Twelve months ended December 31, 2018
	Allocated		Authorized & Unissued		Allocated			Authorized & Unissued
Outstanding – beginning of period		2,700,000		3,640,000		3,150,000			3,640,000
Forfeited		-		-		(450,000	)		-
Outstanding – end of period		2,700,000		3,640,000		2,700,000			3,640,000

The fair value of these unissued bonus shares was being amortized until the estimated date of issuance and has now been fully amortized.  During the nine months ended September 30, 2019, the Company recorded $nil amortization related to Milestone 4 bonus shares (September 30, 2018 – $0.025 million), which was capitalized to Mineral Property, Plant and Equipment.

13

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

10.  Share Capital - Continued

f)Share Purchase Warrants

Details of the share purchase warrants are as follows:

	Nine months ended September 30, 2019						Twelve months ended December 31, 2018
	Number of Purchase Warrants			Weighted Average Exercise Price			Number of Purchase Warrants			Weighted Average Exercise Price
Outstanding – beginning of period		27,189,713		$	0.95			21,322,212		$	0.99
Issued		6,458,001			0.74			6,458,001			0.82
Anti-dilution price adjustment		-			(0.12	)		-			-
Anti-dilution quantity adjustment		4,189,466			-			-			-
Exercised		-			-			(590,500	)		1.00
Expiration		(6,458,001	)		0.82			-			-
Outstanding – end of period		31,379,179		$	0.80			27,189,713		$	0.95

The outstanding share purchase warrants have expiry periods between 2.05 years and 4.50 years, subject to acceleration in certain circumstances.

Effective June 28, 2019, the Company increased the number of common shares issuable and reduced the exercise price of all warrants that were outstanding prior to the Rights Offering subject to stock exchange approval, to reflect the dilutive effect of the common shares that were issued in connection with the Rights Offering.  The adjustment did not impact the financial statements.

Issuances and expirations during the nine months ended September 30, 2019 relate to Glencore financing (see Note 7).

The fair value of share purchase warrants granted were estimated at the date of grant using the Black-Scholes pricing model with the following weighted average assumptions:

	Nine months ended September 30, 2019			Twelve months ended December 31, 2018
Risk-free interest rate		2.18	%		2.05	%
Expected dividend yield		-			-
Expected forfeiture rate		-			-
Expected volatility		52.59	%		54.54	%
Expected life in years		3.00			1.02
Weighted average fair value of each warrant	$	0.24		$	0.36

The expected volatility reflects the Company’s expectation that historical volatility over a period similar to the life of the warrant is indicative of future trends, which may or may not necessarily be the actual outcome.

14

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

11. Finance Costs - Net

Details of net finance costs are as follows:

	Nine months ended
	September 30, 2019			September 30, 2018
Debt accretion and capitalized interest:    Convertible debt (Note 8)	$	2,105		$	2,414
Non-convertible debt (Note 9)		12,305			11,896
Promissory note (Note 7)		188			-
Environmental rehabilitation provision accretion (Note 6)		1,527			1,327
Other finance costs		1,000			682
Less: amounts capitalized on qualifying assets		(14,598	)		(14,310	)
Finance costs		2,527			2,009
Income on cash and restricted deposits		(655	)		(163	)
Finance income		(655	)		(163	)
Finance costs - net	$	1,872		$	1,846

12. Related Party Transactions

The Company conducted transactions with senior management, directors and persons or companies related to these individuals, and paid or accrued amounts as follows:

	Nine months ended
	September 30, 2019		September 30, 2018
Salaries and other short-term benefits	$	1,918	$	1,624
Other long-term benefits		44		36
Share-based payment (1)		1,713		1,526
Total	$	3,675	$	3,186

⁽¹⁾ Share-based payment represents the amount capitalized or expensed during the period (see Note 10).

There are agreements with senior management, including the President and Chief Executive Officer who is also a director, containing severance provisions for termination without cause or in the event of a change in control.  No other PolyMet director has an agreement providing for benefits upon termination.

As a result of Glencore’s 71.6% ownership and majority shareholder relationship, Glencore is also a related party.  In addition to the transactions described in Notes 7, 8, 9 and 10, the Company has entered into a Technical Services Agreement with Glencore whereby the Company reimburses Glencore for NorthMet technical support costs requested under an agreed scope of work, primarily in detailed project design and mineral processing.  During the nine months ended September 30, 2019, the Company recorded $0.304 million (September 30, 2018 - $0.050 million) for services under this agreement.

15

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

13. Commitments and Contingencies

In addition to items described elsewhere in these financial statements, the Company had firm commitments as at September 30, 2019 related to compliance and land options of approximately $0.5 million with approximately $0.1 million due over the next year and the remainder due over four years.

14. Financial Instruments and Risk Management

The carrying values of each classification of financial instrument at September 30, 2019 are:

	Amortized Cost		Fair value through profit or loss		Total carrying value
Financial assets
Cash	$	14,995	$	-	$	14,995
Restricted deposits		662		10,116		10,778
Amounts receivable		345		2,133		2,478
Total financial assets		16,002		12,249		28,251
Financial liabilities
Accounts payable and accruals		5,183		132		5,315
Lease liabilities		638		-		638
Total financial liabilities	$	5,821	$	132	$	5,953

The carrying values of each classification of financial instrument at December 31, 2018 are:

	Amortized Cost		Fair value through profit or loss		Total carrying value
Financial assets
Cash	$	13,857	$	-	$	13,857
Restricted deposits		10,286		-		10,286
Amounts receivable		680		1,912		2,592
Total financial assets		24,823		1,912		26,735
Financial liabilities
Accounts payable and accruals		3,554		371		3,925
Lease liabilities		88		-		88
Convertible debt		56,984		-		56,984
Non-convertible debt		178,483		-		178,483
Total financial liabilities	$	239,109	$	371	$	239,480

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1	–	Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	–	Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3	–	Inputs for the asset or liability that are not based on observable market data.

16

PolyMet Mining Corp.

Notes to Condensed Interim Consolidated Financial Statements

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Unaudited - Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

14.  Financial Instruments and Risk Management - Continued

Financial instruments measured at fair value subsequent to recognition include the restricted deposits (see Note 6) which are measured at fair value through profit or loss using Level 1 inputs resulting in a carrying value of $10.116 million (December 31, 2018 - $nil), the receivable from EIP (see Note 5) which is measured at fair value through profit or loss using Level 3 inputs resulting in a carrying value of $2.133 million (December 31, 2018 - $1.912 million) and accruals representing expected payments to settle restricted share units measured at fair value through profit or loss using Level 2 inputs resulting in a carrying value of $0.132 million (December 31, 2018 - $0.371 million).

The fair values of cash, restricted deposits, other current amounts receivable, accounts payable and accruals approximate their carrying amounts due to their short-term nature.

Liquidity Risk

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they become due and arises through the excess of financial obligations over available financial assets due at any point in time.  The Company’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time and is achieved by maintaining sufficient cash.  See additional discussion in Note 1.

17

EX-99.2

Exhibit 99.2

POLYMET MINING CORP.

MANAGEMENT DISCUSSION AND ANALYSIS

For the three and nine months ended September 30, 2019

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

General

The following information, prepared as at November 7, 2019,should be read in conjunction with the unaudited condensed interim consolidated financial statements of PolyMet Mining Corp. and its subsidiaries (together “PolyMet” or the “Company”) as at September 30, 2019 and for the three and nine months ended September 30, 2019 and related notes attached thereto, which are prepared in accordance with IAS 34, Interim Financial Reporting and in conjunction with the audited consolidated financial statements for the twelve months ended December 31, 2018 prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).  All amounts are expressed in United States (“U.S.”) dollars unless otherwise indicated.

Forward Looking Statements

This Management Discussion and Analysis (“MD&A”) contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended (the “US Exchange Act”). These statements appear in a number of different places in this MD&A and can frequently, but not always, be 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.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause PolyMet’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.  Forward-looking statements include statements regarding the outlook for the Company’s future operations, plans and timing for PolyMet’s exploration and development programs, statements about future market conditions, supply and demand conditions, forecasts of future costs and expenditures, the outcome of legal proceedings, and other expectations, intentions and plans that are not historical fact.  The Company’s 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 the Company’s predictions.

The forward-looking statements contained in this MD&A are based on assumptions, which include, but are not limited to:

• Obtaining and maintaining permits;

• Raising the funds necessary to develop the NorthMet Project and continue operations;

• Execution of prospective business plans; and

• Complying with applicable government regulations and standards.

Such forward-looking statements are subject to risks, uncertainties and other factors, including those listed or incorporated by reference under “Risk Factors” in the Annual Information Form.  These risks, uncertainties and other factors include, but are not limited to:

• Changes in general economic and business conditions, including changes in interest rates and exchange rates;

• Changes in the resource market including prices of natural resources, costs associated with mineral exploration and development, and other economic conditions;

• Natural phenomena;

• Actions by governments and authorities including changes in government regulation;

• Uncertainties associated with legal proceedings; and

• Other factors, many of which are beyond the Company’s control.

All forward-looking statements included in this MD&A are based on information available to the Company on the date of this MD&A.  The Company expressly disclaims any obligation to update publicly, or otherwise, these statements, whether as a result of new information, future events or otherwise except to the extent required by law, rule or regulation.  Readers should not place undue reliance on forward-looking statements.  Readers should carefully review the cautionary statements and risk factors contained in this and all other documents that the Company files from time to time with regulatory authorities.

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Cautionary note to U.S. investors: The terms “measured and indicated mineral resource”, “mineral resource”, and “inferred mineral resource” used in this MD&A are Canadian geological and mining terms as defined in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”) under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resources and Mineral Reserves.  U.S. investors are advised that while such terms are recognized and required under Canadian regulations, the SEC does not recognize these terms.  Mineral Resources do not have demonstrated economic viability.  It cannot be assumed that all or any part of a Mineral Resource will be upgraded to Mineral Reserves.  Under Canadian rules, estimates of inferred mineral resources may not form the basis of or be included in feasibility or other studies.  U.S. investors are cautioned not to assume that any part of an inferred mineral resource exists or is economically or legally mineable.

Summary of Business

PolyMet is a TSX and NYSE American listed Issuer engaged in the exploration and development of natural resource properties.  The Company’s primary mineral property and principal focus is the commercial development of its NorthMet Project (“NorthMet” or “Project”), a polymetallic project in northeastern Minnesota, United States of America, which hosts copper, nickel, cobalt, gold, silver and platinum group metal mineralization.

The NorthMet ore body is at the western end of a series of known copper-nickel-precious metals deposits in the Duluth Complex.  An updated technical report and feasibility study published in March 2018 confirmed the technical and economic viability, positioning NorthMet as the most advanced of the four main deposits in the Duluth Complex: namely, from west to east, NorthMet, Mesaba, Serpentine and Maturi.

The Erie Plant is located about six miles west of the NorthMet ore body and comprises a 100,000 ton-per-day crushing and milling facility, a railroad and railroad access rights connecting the Erie Plant to the NorthMet ore body, tailings storage facilities, 120 railcars, locomotive fueling and maintenance facilities, water rights and pipelines, administrative offices and lands to the east and west of the existing tailings storage facilities.

PolyMet completed a land exchange with the U.S. Forest Service (“USFS”) on June 28, 2018 and now controls surface rights to approximately 19,050 acres or 30 square miles of contiguous surface rights stretching from west of the Erie Plant to east of the proposed East Pit at NorthMet.

PolyMet received its Permit to Mine from the State of Minnesota on November 1, 2018, a crucial permit for construction and operation of the NorthMet Project.  The Minnesota Department of Natural Resources (“MDNR”) also issued all other permits for which the Company had applied including dam safety, water appropriations, takings, and public waters work permits, along with Wetlands Conservation Act approval.   In addition, PolyMet received air and water permits from the Minnesota Pollution Control Agency (“MPCA”) on December 18, 2018.  Further, PolyMet received the federal Record of Decision and Section 404 wetlands permit from the U.S. Army Corps of Engineers (“USACE”) on March 21, 2019, which was the last key permit or approval needed to construct and operate the NorthMet Project.

See additional discussion below.

4

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Summary of Recent Events and Outlook

Highlights and recent events

PolyMet made significant progress during 2018 and 2019 to date.  Notably the Company received key permits and approvals required to construct and operate NorthMet and secured title to the surface rights over and around the NorthMet mineral rights.  PolyMet also released an updated technical report which included an assessment of higher potential production scenarios, and secured additional financing to complete permitting, including required wetland credits and financial assurance, advanced final engineering and other activities to facilitate the transition to construction.

More specifically:

• In June 2019, the Company completed a $265.0 million rights offering, fully backstopped by Glencore, AG (“Glencore”) with the proceeds used to fully repay outstanding debt and strengthen the Company’s financial position.  As a result of the rights offering, Glencore’s ownership of the Company’s issued shares increased to 71.6%;

• In preparation for construction, the Company completed geotechnical investigations, installed monitoring wells, advanced project execution planning and implemented its environmental management system;

• In March 2019, the Company received the federal Record of Decision and wetlands permit from the USACE, which was the last key permit or approval needed to construct and operate the NorthMet Project;

• In December 2018, the Company received all MPCA permits for NorthMet for which the Company had applied, including air and water permits; and

• In November 2018, the Company received all MDNR permits for NorthMet for which the Company had applied, including the Permit to Mine, dam safety and water appropriations permits.

Net cash used in operating and investing activities during the nine months ended September 30, 2019 was $16.630 million.  Primary activities during the period were related to permitting, monitoring and compliance of the NorthMet Project.  Other spending related to defending the permits, engineering and studies, early works to prepare the site for construction, maintaining existing infrastructure, financing and general corporate purposes.

Goals and Objectives for the Next Twelve Months

PolyMet’s objectives include:

• Continue successful resolution of ongoing legal challenges to permits;

• Maintain political, social and regulatory support for the Project;

• Finalize Project optimization plan;

• Finalize Project implementation plan; and

• Complete construction finance, subject to typical conditions precedent.

The Company is in discussions with commercial banks and other sources of debt and equity finance sufficient to fund construction of the Project.  Construction and ramp-up to commercial production is anticipated to take approximately thirty months from receipt of construction funding.

See additional discussion in the “Liquidity and Capital Resources” section below.

5

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Detailed Description of Business

Asset Acquisitions

In November 2005, the Company acquired the Erie Plant, which is located approximately six miles west of the NorthMet deposit and includes crushing and milling equipment, comprehensive spare parts, plant site buildings, real estate, tailings storage facilities and mine workshops, as well as access to extensive mining infrastructure including roads, rail, water and power.   The plant was managed by Cliffs Erie LLC, a subsidiary of Cleveland-Cliffs Inc. (together “Cliffs”) for many years and was acquired by Cliffs from LTV Steel Mining Company (“LTV”) after LTV’s bankruptcy, at which time the plant was shut down with a view to a potential restart.

Plans are to refurbish, reactivate and, as appropriate, update the crushing, concentrating and tailings storage facilities at the Erie Plant to produce concentrates containing copper, nickel, cobalt and precious metals – platinum, palladium, gold and silver.  Once commercial operations are established, the Company may install an autoclave to upgrade nickel concentrates to produce a nickel-cobalt hydroxide and a precious metals precipitate.

In December 2006, the Company acquired from Cliffs additional property and associated rights sufficient to provide a railroad connection linking the NorthMet deposit and the Erie Plant.  The transaction also included 120 railcars, locomotive fueling and maintenance facilities, water rights and pipelines, administrative offices and land to the east and west of the existing tailings storage facilities.

PolyMet indemnified Cliffs for reclamation and remediation associated with the property under both transactions.  In April 2010, Cliffs entered into a consent decree with the MPCA regarding short-term and long-term environmental mitigation.  Field studies were completed in 2010 and 2011 and short-term mitigations approved by the MPCA were initiated in 2011.  In April 2012, long-term mitigation plans were submitted to the MPCA and in October 2012, the MPCA approved plans for pilot tests of various treatment options to determine the best course of action.  Although there is substantial uncertainty related to applicable water quality standards and engineering scope, the October 2012 response from the MPCA, subsequent communications amongst the MPCA, Cliffs and the Company, and closure plans reflected in the Permit to Mine support the long-term mitigation plans included in the Company’s environmental rehabilitation provision.

In June 2018, the Company acquired surface rights over the NorthMet deposit through a land exchange with the USFS using land the Company previously owned.  With the exchange, PolyMet has total surface rights, including ownership and other use and occupancy rights, to approximately 19,050 contiguous acres or 30 square miles of land including the land at the mine and processing sites, the transportation corridor connecting those sites, and buffer lands.

Mineral rights in and around the NorthMet ore body are held through two mineral leases with RGGS Land & Minerals Ltd., L.P. (“RGGS”) and LMC Minerals ("LMC").  The RGGS lease covers 5,123 acres. Provided the Company continues to make annual lease payments, the lease period continues until June 12, 2048 with an option to extend the lease for up to five additional ten-year periods on the same terms and further extend as long as there are commercial mining operations. The LMC lease covers 120 acres that are encircled by the RGGS property. Provided the Company continues to make annual lease payments, the lease period continues until December 1, 2028 with an option to extend the lease for up to four additional five-year periods on the same terms.  Lease payments to both lessors are considered advance royalty payments and will be deducted from future production royalties payable to the lessor, which range from 3% to 5% based on the net smelter return per ton received by the Company.

6

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Feasibility Study, Mineral Resources and Mineral Reserves

PolyMet published an updated Technical Report under NI 43-101 dated March 26, 2018 incorporating process improvements, Project improvements and environmental controls described in the Final Environmental Impact Statement (“EIS”) and draft permits.  The update also includes detailed capital costs, operating costs and economic valuations for the mine plan being permitted.  Preliminary economic assessments for higher production scenarios were also presented.  Proven and Probable mineral reserves are estimated to be 254.7 million short tons grading 0.294% copper, 0.084% nickel, 80 ppb platinum, 268 ppb palladium, 39 ppb gold, 74.42 ppm cobalt, and 1.06 ppm silver.  These mineral reserves lie within Measured and Indicated mineral resources of an estimated 649.3 million short tons grading 0.245% copper, 0.074% nickel, 65 ppb platinum, 221 ppb palladium, 33 ppb gold, 71 ppm cobalt, and 0.91 ppm silver. The mineral reserve estimates are based on metal prices of $2.93 per pound copper, $6.50 per pound nickel, $13.28 per pound cobalt, $734 per ounce palladium, $1,286 per ounce platinum, $1,263 per ounce gold and $19.06 per ounce silver.   The mineral resource estimates are based on metal prices of $3.30 per pound copper, $8.50 per pound nickel, $13.28 per pound cobalt, $734 per ounce palladium, $1,286 per ounce platinum, $1,263 per ounce gold and $19.06 per ounce silver. Metal recovery factors are applied to each metal based on recovery curves developed. The net smelter return cutoff was set at $7.98 per ton for mineral reserves and $7.35 per ton for mineral resources and include processing, general and administrative, and water treatment costs.  See additional details in the Company’s most recent Annual Information Form or the Company’s NorthMet Project Form NI 43-101F1 Technical Report dated March 26, 2018, both filed on SEDAR and EDGAR.

Environmental Review and Permitting

In November 2015, the MDNR, USACE, and USFS published the Final EIS and in March 2016, the MDNR issued its decision that the Final EIS met the requirements under the Minnesota Environmental Policy Act.

In November 2018, the Company received all final MDNR permits for which the Company had applied, including the Permit to Mine, dam safety, water appropriations, endangered and threatened species takings, and public waters work permits, along with Wetland Conservation Act approval.

In December 2018, the Company received all final MPCA permits for which the Company had applied, including the water quality permit, air emission quality permit, and Section 401 Certification.

In March 2019, the Company received the federal Record of Decision and Section 404 wetlands permit from the USACE, which was the last key permit or approval needed to construct and operate the NorthMet Project. In September 2019, two lawsuits were filed in Minnesota federal court challenging the USACE permits. PolyMet was not named as a defendant in those actions, but it intends to intervene. Responses to these new complaints are due in December 2019.

Legal challenges were filed in the Minnesota Court of Appeals contesting various aspects of the MDNR and MPCA decisions.  PolyMet is a co-respondent in all suits.  In June 2019, the Court of Appeals transferred the challenge to the water quality permit to the Ramsey County District Court for the limited purpose of an evidentiary hearing.  The Court of Appeals ruled in PolyMet’s favor in two of the state court actions, one of which sought to force a supplemental environmental review and the other of which challenged the rules used to permit the project. While other Court of Appeals actions are still pending, the challenged permits are temporarily stayed.

7

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

USFS Land Exchange

In January 2017, the USFS issued its Final ROD authorizing the land exchange.  In June 2018, the Company and USFS exchanged titles to federal and private lands, completing the land exchange giving the Company control over both surface and mineral rights in and around the NorthMet ore body and consolidating the Superior National Forest’s land holdings in northeast Minnesota.

Four legal challenges were filed contesting various aspects of the land exchange Final ROD.  PolyMet was a co-defendant with the USFS in this proceeding.  Motions were filed by PolyMet to dismiss each of these suits for lack of standing.  On October 1, 2019, the U.S. District Court for the District of Minnesota dismissed all lawsuits challenging the land exchange Final ROD.

Financing Activities

Glencore Financing

Since October 2008, the Company and Glencore have entered into a series of financing agreements comprising:

• Equity – $25.0 million placement of PolyMet common shares in 2009; $30.0 million placement of PolyMet common shares in 2010; $20.0 million placement of PolyMet common shares in 2011; $20.960 million purchase of PolyMet common shares in 2013; $10.583 million purchase of PolyMet common shares in the 2016 Private Placement; and a $243.435 million purchase of PolyMet common shares in the 2019 Rights Offering;

• Convertible debt (“Glencore Convertible Debt”) – $25.0 million initial principal secured convertible debentures drawn in 2008 and 2009.  The convertible debt balance was fully repaid with proceeds from the 2019 Rights Offering; and

• Non-convertible debt (“Glencore Non-Convertible Debt”) – $30.0 million initial principal secured debentures drawn in 2015; $11.0 million initial principal secured debenture drawn in 2016; $14.0 million initial principal secured debentures drawn in 2016; $20.0 million initial principal secured debentures drawn in 2017 and 2018; and $80.0 million initial principal secured debenture 2018 drawn in 2018 with the final tranche in the amount of $15.0 million cancelled by the Company.  The non-convertible balance was fully repaid with proceeds from the 2019 Rights Offering; and

• Promissory Note – agreement comprising $15.0 million initial principal note drawn in August 2019.

As a result of these financing transactions and the purchase by Glencore of PolyMet common shares previously owned by Cliffs, Glencore's ownership and ownership rights of PolyMet as at September 30, 2019 comprises:

• 720,084,055 shares representing 71.6% of PolyMet's issued shares (December 31, 2018 - 92,836,072 shares);

• Warrants to purchase 7,453,068 common shares at $0.6384 per share at any time until March 31, 2024, subject to mandatory exercise if the 20-day volume weighted average price (“VWAP”) of PolyMet common shares is equal to or greater than 150% of the exercise price and PolyMet has received permits and construction finance is available (“Exercise Triggering Event”), and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions triggered upon closing of the Rights Offering on June 28, 2019;

• Warrants to purchase 8,142,776 common shares at $0.8665 per share at any time until October 28, 2021, subject to acceleration at the Company’s option provided all permits necessary to construct NorthMet have been received (“Acceleration Triggering Event”), and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions triggered upon closing of the Rights Offering on June 28, 2019; and

7

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

• Warrants to purchase 721,302 common shares at $0.6756 per share at any time until October 28, 2021, and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions triggered upon closing of the Rights Offering on June 28, 2019.

If Glencore were to exercise all of its rights and obligations under these agreements, it would own 736,401,201 common shares of PolyMet, representing 72.1% on a partially diluted basis, that is, if no other options or warrants were exercised or 69.1% on a fully diluted basis, if all other options and warrants were exercised.

On March 22, 2019, the Company entered into an extension agreement with Glencore with respect to the secured convertible and non-convertible debt set to mature on March 31, 2019.  Glencore agreed to extend the maturity date of the debt to June 30, 2019 to provide the Company time to prepare for and complete a rights offering, fully backstopped by Glencore, to raise sufficient funds to repay all outstanding debt.  In connection with the extension agreement, the Company issued 6,458,001 purchase warrants to Glencore with an expiration date of March 31, 2024 and an exercise price of $0.7368 which was approved by the NYSE American and TSX.  In addition, the Company agreed to extend the expiration date of the convertible debt exchange warrant to the earlier of March 31, 2020 or the date on which the convertible debt is fully repaid, which occurred on June 28, 2019.

On June 28, 2019, Glencore purchased 430,521,941 shares under its standby commitment under the rights offering in addition to the 196,726,042 shares purchased under its rights.

On August 7, 2019, the Company issued to Glencore a promissory note in the amount of $15.0 million with proceeds to be used for general corporate purposes.  The promissory note bears interest at three month U.S. dollar LIBOR plus 6.0% and is payable on the earlier of (i) December 31, 2021 or (ii) the availability of at least $100 million of debt or equity financing, on which date all principal and interest accrued to such date will be due and payable.Since inception, $0.188 million of interest was capitalized to the principal amount of the promissory note.  All borrowing costs were eligible for capitalization and 100% of these costs were capitalized during the nine months ended September 30, 2019.

Rights Offering

On May 24, 2019, the Company filed a prospectus for an offering of rights to holders of common shares of the Company to raise up to $265.0 million in gross proceeds (“Rights Offering”).  Every shareholder received one Right ("Right") for each common share owned on June 3, 2019, the Record Date, and each Right entitled the holder to acquire 2.119069 new common shares of the Company at $0.3881 per share. This offering of Rights expired on June 26, 2019.

Under the terms of a Standby Purchase Agreement, Glencore agreed to purchase any common shares not subscribed for by holders of Rights, subject to certain conditions.  As the Rights Offering was not fully subscribed, Glencore purchased 430,521,941 shares under its standby commitment in addition to the 196,726,042 shares purchased under its Rights.

Upon closing of the Rights Offering on June 28, 2019, the Company issued a total of 682,813,838 common shares for gross proceeds of $265.0 million.  Expenses and fees relating to the Rights Offering were $11.953 million, including a $7.690 million standby commitment fee paid to Glencore, and reduced the gross proceeds recorded as share capital.  Closing of the Rights Offering triggered customary anti-dilution provisions for outstanding warrants, share options, and unissued restricted share units.  Proceeds of the Rights Offering were used to repay the convertible debt of $58.881 million owed to Glencore and non-convertible debt of $190.437 million owed to Glencore.  The Company and Glencore agreed to net settle its Rights Offering subscription amount of $243.435 million against the debt amounts owed.

8

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

The prospectus stated the proceeds of the Rights Offering were to be used as follows: (a) repayment of the Glencore debt upon closing of the Rights Offering at a cost of approximately $251.310 million (b) payment of rights offering standby fee to Glencore at a cost of approximately $7.690 million, and (c) payment of other rights offering expenses at a cost of approximately $6.0 million.

As at September 30, 2019, approximate proceeds usage from the Rights Offering was as follows:

Purpose	Planned	Actual To Date	Variance
Rights Offering Proceeds	265,000	265,000	-0-
Repay Glencore Debt	(251,310)	(250,318)	992	(1)
Rights Offering Standby Fee	(7,690)	(7,690)	-0-
Rights Offering Expenses	(6,000)	(4,263)	1,737	(2)
General Corporate Purposes	-	(2,729)	(2,729)
TOTAL	-0-	-0-	-0-

⁽¹⁾ Rights offering closed and debt repaid sooner than planned due to expedited Hart-Scott-Rodino approval.

⁽²⁾ Expenses lower than planned.

Land Financing

During the nine months ended September 30, 2019, the Company issued 78,750 shares (September 30, 2018 – 102,500 shares) to maintain land purchase options with the shares valued at $0.046 million (September 30, 2018 - $0.098 million).

Other Financings

During the nine months ended September 30, 2019 the Company issued 400,171 shares (September 30, 2018 – 225,000) pursuant to the exercise of share options for proceeds of $0.274 million (September 30, 2018 - $0.152 million).

During the nine months ended September 30, 2019 the Company issued nil shares (September 30, 2018 – 90,500 shares) pursuant to the exercise of warrants for proceeds of $nil (September 30, 2018 - $0.090 million).

9

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Summary of Quarterly Results

(All figures in thousands of U.S. dollars, except loss per share)

										Period Ended
	Sep 30, 2019			Jun 30, 2019			Mar 31, 2019			Dec 31, 2018			Sep 30, 2018			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017
General and Administrative		(1,287	)		(1,021	)		(2,744	)		(1,529	)		(1,262	)		(1,509	)		(2,770	)		(1,584	)
Other Income (Expenses)		(291	)		111			(3,074	)		(1,380	)		(426	)		(1,147	)		(5,020	)		(350	)
Loss for the Period		(1,578	)		(910	)		(5,818	)		(2,909	)		(1,688	)		(2,656	)		(7,790	)		(1,934	)
Loss per Share (1)		(0.00	)		(0.00	)		(0.02	)		(0.01	)		(0.01	)		(0.01	)		(0.02	)		(0.01	)
Cash provided by (used in) operating activities		(1,415	)		1,290			(1,954	)		(1,804	)		(512	)		(1,164	)		(2,322	)		(748	)
Cash provided by financing activities		14,997			2,713			62			45,500			61			19,723			4,804			-
Cash used in investing activities		(4,749	)		(4,138	)		(5,664	)		(36,794	)		(10,178	)		(5,383	)		(4,998	)		(3,569	)

⁽¹⁾ Loss per share amounts may not reconcile due to rounding differences.

The loss for the period includes share-based compensation for the period ended:

September 30, 2019 - $0.120 million	September 30, 2018 - $0.182 million
June 30, 2019 - $0.109 million	June 30, 2018 - $0.276 million
March 31, 2019 - $1.189 million	March 31, 2018 - $1.179 million
December 31, 2018 - $0.105 million	December 31, 2017 - $0.223 million

Results fluctuate from period to period based on NorthMet development, corporate activities, and non-cash items.   Additional discussion of significant items is included below.

Three months ended September 30, 2019 compared to three months ended September 30, 2018

Focus during the three months ended September 30, 2019 was on defending the permits, monitoring and compliance, maintenance of existing infrastructure, early works to prepare the site for construction, and financing.

a) Loss for the Period:

During the current year period, the Company incurred a loss of $1.578 million ($0.00 loss per share) compared to a loss of $1.688 million ($0.01 loss per share) during the prior year period.

b) Cash Flows for the Period:

Cash used by operating activities during the current year period was $1.415 million compared to cash used during the prior year period of $0.512 million. The variance in cash was primarily due changes in working capital balances.

Cash provided by financing activities during the current year period was $14.997 million compared to cash provided during the prior year period of $0.061 million.  The increase was primarily due to promissory note funding in the current year period.

Cash used in investing activities during the current year period was $4.749 million compared to cash used in the prior year period of $10.178 million.  The decrease was primarily due to the purchase of wetland credit intangible in the prior year period and reduction in spend following receipt of permits.

Including the effect of foreign exchange, total cash on hand increased during the current year period by $8.830 million to $14.995 million compared to the prior year period where cash decreased by $10.633 million to $6.962 million.

10

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

c) Capital Expenditures for the Period:

During the current year period, the Company reversed capitalization of $8.578 million of mineral property, plant and equipment costs related to the acquisition, development and preservation of the NorthMet Project and other fixed assets as compared to capitalization of $10.208 million during the prior year period.  The decrease is primarily due to a change in the market risk-free interest rate used to discount the environmental rehabilitation provision resulting in a decrease to the asset.  The decrease is also due to a decrease in capitalized borrowing costs.

Nine months ended September 30, 2019 compared to nine months ended September 30, 2018

Focus during the nine months ended September 30, 2019 was on permitting the NorthMet Project, defending the permits, monitoring and compliance, maintenance of existing infrastructure, early works to prepare the site for construction, and financing.

a) Loss for the Period:

During the current year period, the Company incurred a loss of $8.306 million ($0.01 loss per share) compared to a loss of $12.134 million ($0.04 loss per share) during the prior year period.  The improvement was primarily due to a lower non-cash loss on debenture refinancing in the current year period compared to the prior year and a non-cash loss on the land exchange in the prior year period.

b) Cash Flows for the Period:

Cash used in operating activities during the current year period was $2.079 million compared to cash used during the prior year period of $4.331 million. The variance in cash was primarily due to a larger increase in accounts payable and accruals in the current year period compared with the prior year period.

Cash provided by financing activities during the current year period was $17.772 million compared to cash provided during the prior year period of $24.588 million. The decrease was primarily due to additional debenture funding in the prior year period.

Cash used in investing activities during the current year period was $14.551 million compared to cash used during the prior year period of $20.226 million.  The decrease was primarily due to the purchase of wetland credit intangible in the prior year period and reduction in spend following receipt of permits.

Including the effect of foreign exchange, total cash on hand increased by $1.138 million to $14.995 million compared to the prior year period where cash decreased by $0.031 million to $6.962 million.

c) Capital Expenditures for the Period:

During the current year period, the Company capitalized $22.372 million of mineral property, plant and equipment costs related to the acquisition, development and preservation of the NorthMet Project and other fixed assets as compared to $24.377 million during the prior year period.  The decrease is primarily due to a change in the market risk-free interest rate used to discount the environmental rehabilitation provision resulting in an increase to the asset.

11

PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Liquidity and Capital Resources

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they become due and arises through the excess of financial obligations over financial assets due at any point in time.  As at September 30, 2019, PolyMet had cash of $14.995 million and working capital of $8.500 million.  Management believes, based upon the underlying value of the NorthMet Project, the receipt of all permits necessary to construct and operate the NorthMet Project, ongoing discussions with potential financiers, and the majority shareholder relationship with Glencore, that financing will continue to be available to allow the Company to complete the development of NorthMet and generate future profitable operations.  While in the past the Company has been successful in closing financing agreements, there can be no assurance it will be able to do so again.

The Company is in discussions with commercial banks and other sources of debt and equity finance sufficient to fund construction of the Project.  Construction and ramp up to commercial production is anticipated to take approximately thirty months from receipt of construction funding.

In addition to items described elsewhere in the financial statements, as at September 30, 2019, the Company had firm commitments related to compliance and land options of approximately $0.5 million with approximately $0.1 million due over the next year and the majority due over a period of three to ten years.

Financial Instruments and Risk Management

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1	–	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2	–	Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3	–	Inputs for the asset or liability that are not based on observable market data.

Financial instruments measured at fair value subsequent to recognition include the restricted deposits which are measured at fair value through profit or loss using Level 1 inputs resulting in a carrying value of $10.116 million (December 31, 2018 - $nil), the receivable from EIP which is measured at fair value through profit or loss using Level 3 inputs resulting in a carrying value of $2.133 million (December 31, 2018 - $1.912 million) and accruals representing expected payments to settle restricted share units measured at fair value through profit or loss using Level 2 inputs resulting in a carrying value of $0.132 million (December 31, 2018 - $0.371 million).

The fair values of cash, restricted deposits, other current amounts receivable, and accounts payable and accruals approximate their carrying amounts due to their short-term nature.

Liquidity Risk

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they become due and arises through the excess of financial obligations over available financial assets due at any point in time.  The Company’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time and is achieved by maintaining sufficient cash.  See additional discussion in the “Liquidity and Capital Resources” section above.

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PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Related Party Transactions

The Company conducted transactions with senior management, directors and persons or companies related to these individuals, and paid or accrued amounts as follows:

	Nine months ended
	September 30, 2019 (1)		September 30, 2018 (2)
Salaries and other short-term benefits	$	1,918	$	1,624
Other long-term benefits		44		36
Share-based payment (3)		1,713		1,526
Total	$	3,675	$	3,186

⁽¹⁾ Nine months ended September 30, 2019 includes Directors (Dennis Bartlett, Jonathan Cherry, Mike Ciricillo, David Dreisinger, W. Ian L. Forrest, Peter Freyberg, Helen Harper, Alan Hodnik, Stephen Rowland and Michael Sill) and senior management (Jonathan Cherry, Patrick Keenan and Bradley Moore).

⁽²⁾ Nine months ended September 30, 2018 includes Directors (Dennis Bartlett, Jonathan Cherry, Mike Ciricillo, David Dreisinger, W. Ian L. Forrest, Helen Harper, Alan Hodnik, Stephen Rowland, Michael Sill) and senior management (Jonathan Cherry, Patrick Keenan and Bradley Moore).

⁽³⁾ Share-based payment represents the amount expensed during the period.

There are agreements with senior management (Jonathan Cherry, Patrick Keenan and Bradley Moore) containing severance provisions for termination without cause or in the event of a change in control.  No other PolyMet director has an agreement providing for benefits upon termination.

As a result of Glencore’s 71.6% ownership and majority shareholder relationship, Glencore is also a related party.  In addition to the transactions described in the “Financing Activities” section above, the Company has entered into a Technical Services Agreement with Glencore whereby the Company reimburses Glencore for NorthMet technical support costs requested under an agreed scope of work, primarily in detailed project design and mineral processing.  During the nine months ended September 30, 2019, the Company recorded $0.304 million (September 30, 2018 - $0.050 million) for services under this agreement.

Off Balance-Sheet Arrangements

The Company does not utilize off-balance sheet arrangements.

Proposed Transactions

There are no proposed asset or business acquisition/disposition transactions that will materially affect the performance of the Company.

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PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Critical Accounting Estimates and Judgments

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates.  These critical accounting estimates require management to make judgments and estimates that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the financial statements.

Critical accounting estimates and judgments used in the preparation of the condensed interim consolidated financial statements are as follows:

Determination of mineral reserves

Reserves are estimates of the amount of product that can be economically and legally extracted from the Company’s property. In order to estimate reserves, estimates are required about a range of geological, technical and economic factors, including quantities, production techniques, production costs, capital costs, transport costs, demand, prices and exchange rates. Estimating the quantity of reserves requires the size, shape and depth of deposits to be determined by analyzing geological data. This process may require complex and difficult geological judgments to interpret the data. In addition, management will form a view of forecast sales prices, based on current and long-term historical average price trends. Changes in the proven and probable reserves estimates may impact the carrying value of property, plant and equipment, rehabilitation provisions, recognition of deferred tax amounts and depreciation, depletion and amortization.

Impairment of non-financial assets

Carrying amounts of non-financial assets, including mineral property, plant and equipment, and intangibles are reviewed at each reporting date or when events or changes in circumstances occur that indicate the asset may not be recoverable to determine whether there is any indication of impairment.  If any such indication exists, the asset’s recoverable amount is estimated at the greater of its value in use and its fair value less costs of disposal.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  An impairment loss is recognized if the carrying amount of an asset exceeds its estimated recoverable amount.  An impairment loss previously recorded is reversed if there has been a change in the estimates used to determine the recoverable amount resulting in an increase in the estimated service potential of an asset.

For mineral property interests, the Company considers both external and internal sources of information in assessing whether there are indications of impairment. External sources of information include changes in the market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount of mineral property interests. Internal sources of information include indications of economic performance of the asset.

Provision for Environmental Rehabilitation Costs

Provisions for environmental rehabilitation costs associated with mineral property, plant and equipment, are recognized when the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax risk-free rate that reflects current market assessments of the time value of money.

The Company’s estimates of its ultimate environmental rehabilitation liabilities could be affected by changes in regulations, changes in the extent of environmental rehabilitation required, changes in the means of rehabilitation, changes in the extent of responsibility for the financial liability, changes in operating plans, or changes in cost estimates.  The operations of the Company may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restoration costs.  Both the likelihood of new regulations and their overall effect upon the Company may vary greatly and are not predictable.

The Company’s provision for environmental rehabilitation cost obligations represents management’s best estimate of the present value of the future cash outflows required to settle the liability.

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PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Other MD&A Requirements

Outstanding Share Data

Authorized Capital:  Unlimited common shares without par value.

The following table summarizes the outstanding share information as at November 1, 2019:

Type of Security	Number Outstanding		Weighted Average Exercise Price
Issued and outstanding common shares (1)		1,005,230,259	$	-
Restricted share units		4,459,614	$	-
Share options		24,967,002	$	0.78
Share purchase warrants		31,379,179	$	0.80

⁽¹⁾ Includes 95,500 of restricted shares which vest upon production.

As at September 30, 2019, the Company had obligations to issue up to 3,640,000 shares under the Company’s bonus share incentive plan upon achievement of Milestone 4 representing commencement of commercial production at NorthMet at a time when the Company has not less than 50% ownership interest in NorthMet.  At the Company’s Annual General Meeting of shareholders held in June 2008, the disinterested shareholders approved issuance of these shares upon achievement of Milestone 4.  Regulatory approval is also required prior to issuance of these shares.

Risks and Uncertainties

An investment in the Company’s common shares is highly speculative and subject to a number of risks and uncertainties.  Only those persons who can bear the risk of the entire loss of their investment should participate.  An investor should carefully consider the risks described in PolyMet’s Annual Information Form for the year ended December 31, 2018 and other information filed with both the Canadian and United States securities regulators before investing in the Company’s common shares.  The risks described in PolyMet’s Annual Information Form are not the only ones faced.  Additional risks that the Company currently believes are immaterial may become important factors that affect the Company’s business.  If any of the risks described in PolyMet’s Annual Information Form for the twelve months ended December 31, 2018 occur, the Company’s business, operating results and financial condition could be seriously harmed and investors could lose all of their investment.

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PolyMet Mining Corp.

Management Discussion and Analysis

As at September 30, 2019 and for the three and nine months ended September 30, 2019

Tabular amounts in thousands of U.S. Dollars, except for shares and per share amounts

Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13(a)-15(e) and 15(d)-15(e) under the US Exchange Act and the rules of the Canadian Securities Administrators as at December 31, 2018 (the "Evaluation Date"). Based on such evaluation, such officers concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective. Such disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company in reports that it files or submits to the US Securities and Exchange Commission and the Canadian Securities Administrators is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and includes controls and procedures designed to ensure information relating to the Company required to be included in reports filed or submitted under Canadian and United States securities legislation is accumulated and communicated to the Company’s management to allow timely decision regarding disclosure.

There have been no changes in the Company’s disclosure controls and procedures during the nine month period ended September 30, 2019 that have materially affected, or are reasonably likely to material affect, its disclosure controls and procedures.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Consolidated Financial Statements for external reporting purposes in accordance with IFRS as issued by the IASB.

Internal control over financial reporting, no matter how well designed, has inherent limitations.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There have been no changes in the Company’s internal control over financial reporting during the nine month period ended September 30, 2019 that have materially affected, or are reasonably likely to material affect, its internal control over financial reporting.

Additional Information

Additional information related to the Company is available on SEDAR and EDGAR, respectively, at www.sedar.com and at www.sec.gov, and on the Company’s website www.polymetmining.com.

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EX-99.3

Exhibit 99.3

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Jonathan Cherry, President and Chief Executive Officer of PolyMet Mining Corp., certify the following:

1. Review:I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of PolyMet Mining Corp. (the “issuer”) for the interim period ended September 30, 2019.

2. No misrepresentations:Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation:Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design:  Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework:  The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2N/A

5.3N/A

6. Reporting changes in ICFR:The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2019and ended on September 30, 2019that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 7, 2019

“Jonathan Cherry” (signed)

Jonathan Cherry

President and Chief Executive Officer

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EX-99.4

Exhibit 99.4

Form 52-109F2

Certification of Interim Filings

Full Certificate

I, Patrick Keenan, Chief Financial Officer of PolyMet Mining Corp., certify the following:

1. Review:I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of PolyMet Mining Corp. (the “issuer”) for the interim period ended September 30, 2019.

2. No misrepresentations:Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation:Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design:  Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework:  The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2N/A

5.3N/A

6. Reporting changes in ICFR:The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2019and ended on September 30, 2019that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: November 7, 2019

“Patrick Keenan” (signed)

Patrick Keenan

Chief Financial Officer

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