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| 1.                                  | INTRODUCTORY NOTES                                     | 1  |
|-------------------------------------|--------------------------------------------------------|----|
| 2.                                  | CORPORATE STRUCTURE                                    | 3  |
| 3.                                  | GENERAL DEVELOPMENT OF THE BUSINESS                    | 3  |
| 4.                                  | **DESCRIPTION OF THE BUSINESS**                        | 5  |
| 5.                                  | RISK FACTORS                                           | 16 |
| 6.                                  | DIVIDENDS                                              | 23 |
| 7.                                  | CAPITAL STRUCTURE                                      | 24 |
| 8.                                  | MARKET FOR SECURITIES                                  | 24 |
| 9.                                  | SECURITIES NOT LISTED OR QUOTED                        | 25 |
| 10.                                 | DIRECTORS AND OFFICERS                                 | 26 |
| 11.                                 | LEGAL PROCEEDINGS AND REGULATORY ACTIONS               | 27 |
| 12.                                 | INTEREST OF MANAGEMENT AND OTHER MATERIAL TRANSACTIONS | 27 |
| 13.                                 | AUDITORS, TRANSFER AGENT AND REGISTRAR                 | 28 |
| 14.                                 | MATERIAL CONTRACTS                                     | 28 |
| 15.                                 | INTEREST OF EXPERTS                                    | 29 |
| 16.                                 | CONTROLS AND PROCEDURES                                | 30 |
| 17.                                 | AUDIT COMMITTEE                                        | 30 |
| 18.                                 | ADDITIONAL INFORMATION                                 | 32 |
| SCHEDULE A. AUDIT COMMITTEE CHARTER | 33                                                     |

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| 1. | Introductory Notes |
|----|--------------------|

| · | Obtaining permits on a timely basis; |
|--------|--------------------------------------|

| · | Raising the funds necessary to develop the NorthMet Project and continue operations; |
|--------|--------------------------------------------------------------------------------------|

| · | Execution of prospective business plans; and |
|--------|----------------------------------------------|

| · | Complying with applicable governmental regulations and standards. |
|--------|-------------------------------------------------------------------|

| · | 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. |
|--------|----------------------------------------------------------------------|

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| · | Pierre Desautels, P. Geo., of AGP Mining Consultants Inc., of Barrie, ON; |
|--------|---------------------------------------------------------------------------|

| · | Gordon Zurowski, P. Eng., of AGP Mining Consultants Inc., of Barrie, ON; |
|--------|--------------------------------------------------------------------------|

| · | Karl Everett, P. E., of Foth Infrastructure & Environment LLC, of Duluth, MN; |
|--------|-----------------------------------------------------------------------------------|

| · | David Dreisinger, Ph.D., P Eng., of Dreisinger Consulting Inc., of Delta, BC; and |
|--------|-----------------------------------------------------------------------------------|

| · | William Murray, P. Eng., of Optimum Project Services Ltd., of Richmond, BC. |
|--------|-----------------------------------------------------------------------------|

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| 2. | Corporate Structure |
|----|---------------------|

| 3. | General Development of the Business |
|----|-------------------------------------|

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| · | March 2014 – EPA review of the supplemental draft EIS ("SDEIS"), including an EC-2 rating which is the highest rating for a proposed mining project, so far as the Company is aware;                                                                                                                                                                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | February 2015 – $30 million senior secured non-convertible loan facility from Glencore;                                                                                                                                                                                                                                                                                                                                                                                         |
| · | November 2015 – publication of the Final EIS and USFS Draft Record of Decision ("ROD") on the proposed land exchange;                                                                                                                                                                                                                                                                                                                                                           |
| · | January 2016 – additional $11 million senior secured non-convertible loan facility from Glencore;                                                                                                                                                                                                                                                                                                                                                                               |
| · | March 2016 – Minnesota determined that the Final EIS addresses the objectives defined in the EIS scoping review, meets procedural requirements and responds appropriately to public comments.  The 30-day period allowed by law to challenge the state's decision passed without any legal challenge being filed.  The Final EIS demonstrates that the NorthMet Project can be constructed and operated in compliance with environmental and human health standards;  |
| · | June 2016 – additional $14 million senior secured non-convertible loan facility from Glencore;                                                                                                                                                                                                                                                                                                                                                                                  |
| · | July 2016 – the Company submitted applications for water-related permits required to construct and operate NorthMet.  The Eastern Region Regional Office of the USFS issued its response to comments on the Draft ROD for the land exchange and instructed the Superior National Forest to proceed with completing the Final ROD.  The Company also repaid the $4.0 million initial principal loan from the Iron Range Resources and Rehabilitation Board ("IRRRB");  |
| · | August 2016 – the Company renewed its request for Water Quality Certification under Section 401 of the Clean Water Act and submitted the air quality permit application required to construct and operate NorthMet;                                                                                                                                                                                                                                                             |
| · | October 2016 – the Company closed the initial tranche of a private placement of 25,963,167 units for gross proceeds of $19.472 million and a second tranche of a private placement of 14,111,251 units for gross proceeds of $10.583 million pursuant to Glencore's right to maintain its pro rata ownership;                                                                                                                                                                   |
| · | November 2016 – the Company submitted the permit to mine application required to construct and operate NorthMet;                                                                                                                                                                                                                                                                                                                                                                |
| · | December 2016 – the Company received AEMA's Environmental Excellence Award for its responsible development of the NorthMet Project.  The Memorandum of Agreement of the Section 106 Consultation under the National Historic Preservation Act was signed by the statutory parties; and                                                                                                                                                                                     |
| · | January 2017 – the USFS issued its Final ROD authorizing the land exchange.                                                                                                                                                                                                                                                                                                                                                                                                          |

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| 4. | Description of the Business |
|----|-----------------------------|

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| · | A 505-acre net increase of wetlands to the federal estate; |
|--------|------------------------------------------------------------|

| · | A net increase of 94 acres with public water frontage available for public and tribal use; |
|--------|--------------------------------------------------------------------------------------------|

| · | A 40-acre net gain in USFS lands; |
|--------|-----------------------------------|

| · | Improved management effectiveness by exchanging lands that have no public overland access with lands that do have access; |
|--------|---------------------------------------------------------------------------------------------------------------------------|

| · | Reduction of 33 miles in property boundaries to be managed by the USFS; |
|--------|-------------------------------------------------------------------------|

| · | Federal cost savings from the elimination of two easements and their associated administrative costs; and |
|--------|-----------------------------------------------------------------------------------------------------------|

| · | Conveyance of federal lands already adjacent to intensively developed private lands for other inholdings in the Superior National Forest. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Section 404 Individual Permit for Impacted Wetlands |
|--------|-----------------------------------------------------|

| · | Permit to Mine |
|--------|----------------|

| · | Water Appropriations Permit |
|--------|-----------------------------|

| · | Dam Safety Permit |
|--------|-------------------|

| · | Wetland Replacement Plan |
|--------|--------------------------|

| · | Section 401 Certification (required before the USACE can issue its ROD and Section 404 Permit) |
|--------|------------------------------------------------------------------------------------------------|

| · | National Pollutant Discharge Elimination System (NPDES) Permit |
|--------|----------------------------------------------------------------|

| · | State Disposal System (SDS) Permit |
|--------|------------------------------------|

| · | Air Emissions Permit |
|--------|----------------------|

| · | Transfer of title to the surface rights over and around the NorthMet mineral rights to PolyMet; |
|--------|-------------------------------------------------------------------------------------------------|

| · | Decision by the state on 401 Water Quality Certification and USACE Final ROD and 404 wetlands permit under Clean Water Act; |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

| · | Publication of draft state permits (Permit to Mine, air, water, dam safety and water appropriation permits) for public comment; |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | Decisions on state permit issuances; |
|--------|--------------------------------------|

| · | Completion of definitive cost estimate and Project update following permits; |
|--------|------------------------------------------------------------------------------|

| · | Completion of project implementation plan; |
|--------|--------------------------------------------|

| · | Repayment, restructuring and/or conversion of Glencore loans; and |
|--------|-------------------------------------------------------------------|

| · | Completion of construction finance plan including commitment of debt prior to the issuance of permits, subject to typical conditions precedent such as receipt of key permits. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (i) | NorthMet Leases |
|-----|-----------------|

| (ii) | The Erie Plant |
|------|----------------|

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| Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred ResourcesThis section uses the terms ”measured resources”, ”indicated resources”, and ”inferred resources”. The Company advises United States investors that while these terms are recognized and required by Canadian regulations (under NI-43-101), the SEC does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted to reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian Rules, estimates of Inferred Mineral Resources may not form the basis of Feasibility or Pre-Feasibility Studies, or economic studies except for a Preliminary Assessment as defined under NI 43-101. United States investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.Important Notes and Assumptions Throughout.1.  The terms Mineral Resources and Reserves as used herein conform to the definitions contained in NI 43-101.2.  Reserves are contained within the envelope of Measured & Indicated Mineral Resource. Mineral Resources are not Reserves and do not have demonstrated economic viability.3.  Mineral Resources and Reserves have been calculated using the following metal prices: Copper - $1.25/lb, Nickel - $5.60 per pound, Cobalt - $15.25/lb, Palladium - $210 per ounce, Platinum - $800 per ounce and Gold - $400 per ounce.4.  Base Case economics for the purpose of the 2006 DFS and associated NI 43-101 Technical Report are the weighted average of the three-year trailing (60%) and two-year forward (40%) market prices using July 31, 2006 as a reference for the three-year trailing price and average forward prices during July 2006 for forward prices. Specifically, these prices are: Copper - $2.25/lb, Nickel - $7.80 per pound, Cobalt - $16.34/lb, Palladium - $274 per ounce, Platinum - $1,040 per ounce and Gold - $540 per ounce.5.  The copper equivalent grade is calculated by multiplying the grade of each metal by the metal price (in the same units) used in reserve and resource modeling (see note 3) and dividing the product by the copper price.6.  The Net Metal Value (NMV) is calculated by summing the product of the grade of each metal, the metal price (in the same units) used in reserve and resource modeling (see note 3), the expected metal recovery, and the expected payment terms. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                               | Short Tons | Copper | Nickel | Cobalt | Platinum | Palladium | Gold   |
|------------------------------------|------------|--------|--------|--------|----------|-----------|--------|
|                               | (million)  | (%)    | (%)    | (%)    | (ppb)    | (ppb)     | (ppb)  |
| 2008 Updated Resources             |       |   |   |   |     |      |   |
| Measured (M)                       | 202.5      | 0.29   | 0.08   | 0.01   | 71       | 258       | 36     |
| Indicated (I)                      | 491.7      | 0.26   | 0.08   | 0.01   | 66       | 231       | 34     |
| Measured & Indicated (M&I) | 694.2      | 0.27   | 0.08   | 0.01   | 68       | 239       | 35     |
| Inferred                           | 229.7      | 0.27   | 0.08   | 0.01   | 73       | 263       | 37     |
|                               |       |   |   |   |     |      |   |
| 2006 DFS Resources                 |       |   |   |   |     |      |   |
| Measured (M)                       | 133.7      | 0.30   | 0.09   | 0.01   | 67       | 269       | 35     |
| Indicated (I)                      | 288.4      | 0.27   | 0.08   | 0.01   | 66       | 231       | 33     |
| Measured & Indicated (M&I) | 422.1      | 0.28   | 0.08   | 0.01   | 66       | 243       | 34     |
| Inferred                           | 120.6      | 0.25   | 0.07   | 0.01   | 65       | 217       | 33     |

| · | Data from the 2007 drill program which confirmed the continuity of the main mineralized zone and the size of the Magenta Zone, which was extended down dip and to the west; and |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Extension of the overall mineral envelope to approximately 1,620 feet below surface (0’ – elevation), compared with the prior cutoff at approximately 1,120 feet below surface (500’ – elevation). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  | Short Tons | Copper | Nickel | Cobalt | Platinum | Palladium | Gold   |
|-----------------------|------------|--------|--------|--------|----------|-----------|--------|
|                  | (million)  | (%)    | (%)    | (%)    | (ppb)    | (ppb)     | (ppb)  |
| 2008 Updated Reserves |       |   |   |   |     |      |   |
| Proven                | 118.1      | 0.30   | 0.09   | 0.008  | 75       | 275       | 38     |
| Probable              | 156.5      | 0.27   | 0.08   | 0.008  | 75       | 248       | 37     |
| Proven and Probable   | 274.7      | 0.28   | 0.08   | 0.008  | 75       | 260       | 37     |
| Waste                 | 401.2      |   |   |   |     |      |   |
| Strip Ratio           | 1.46       |   |   |   |     |      |   |
|                  |       |   |   |   |     |      |   |
| 2006 DFS Reserves     |       |   |   |   |     |      |   |
| Proven                | 80.4       | 0.32   | 0.09   | 0.008  | 75       | 292       | 39     |
| Probable              | 101.3      | 0.30   | 0.08   | 0.007  | 79       | 268       | 38     |
| Proven and Probable   | 181.7      | 0.31   | 0.08   | 0.008  | 77       | 279       | 39     |
| Waste                 | 302.3      |   |   |   |     |      |   |
| Strip Ratio           | 1.66       |   |   |   |     |      |   |

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| · | Unit 7 and Unit 6 – texturally homogeneous plagioclase-rich troctolite, each with a persistent ultramafic base.  Units 6 and 7 are each about 400 ft. thick.                                                                                                                                                                                                                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Unit 5 – coarse grained anorthositic troctolite (300 ft.) grading down to Unit 4.                                                                                                                                                                                                                                                                                                                                                                                                                   |
| · | Unit 4 – homogeneous augite troctolite and troctolite, with a less persistent ultramafic horizon. The contact between Unit 4 and Unit 5 is difficult to establish and the two units may actually be a single unit.                                                                                                                                                                                                                                                                                  |
| · | Unit 3 – the most easily recognized unit because of its mottled appearance due to olivine oikocrysts.  It is fine grained troctolitic anorthosite to anorthositic troctolite.  Average thickness is 250 ft. but locally can be up to 500 ft.                                                                                                                                                                                                                                              |
| · | Unit 2 – homogeneous troctolite with abundant ultramafic units and a generally persistent basal ultramafic.  This unit shows the most variation in thickness and may be locally absent.  Units 2 & 3 are modeled as a single package for resource estimation.                                                                                                                                                                                                                         |
| · | Unit 1 – the most heterogeneous unit, both texturally and compositionally.  Grain size is generally coarser at the top of the unit and fines downward.  The unit contains abundant inclusions of the footwall rock and is noritic towards the base.  This is the main sulfide mineral bearing unit.  Two internal ultramafic layers are generally present.  Unit 1 is probably the result of multiple pulses of magma injection.  Average thickness is about 450 ft.  |

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| 5. | Risk Factors |
|----|--------------|

| · | delays in the issuance of permits; |
|--------|------------------------------------|

| · | delays or higher than expected costs in obtaining the necessary equipment or services to build and operate the Project; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

| · | adverse mining conditions may delay and hamper PolyMet’s ability to produce the expected quantities of minerals. |
|--------|------------------------------------------------------------------------------------------------------------------------|

| · | protect the environment, including the quality of the air and water in the vicinity of exploration, development, and mining operations; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

| · | remediate the environmental impacts of those exploration, development, and mining operations; |
|--------|-----------------------------------------------------------------------------------------------|

| · | protect and preserve wetlands and endangered species; and |
|--------|-----------------------------------------------------------|

| · | mitigate negative impacts on certain archaeological and cultural sites. |
|--------|-------------------------------------------------------------------------|

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| · | global and regional supply and demand; |
|--------|----------------------------------------|

| · | political and economic conditions and production costs in major metal producing regions; |
|--------|------------------------------------------------------------------------------------------|

| · | the strength of the United States dollar; and |
|--------|-----------------------------------------------|

| · | expectations for inflation. |
|--------|-----------------------------|

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| · | Success in discovering and developing commercially viable quantities of minerals is the result of a number of factors, including the quality of management, the interpretation of geological data, the level of geological and technical expertise and the quality of land available for exploration; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | A large number of factors beyond PolyMet’s control, including fluctuations in metal prices and production costs, inflation, the proximity and liquidity of precious metals and energy fuels markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection, and other economic conditions, will affect the economic feasibility of mining; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Substantial expenditures are required to construct mining and processing facilities; |
|--------|--------------------------------------------------------------------------------------|

| · | Title to mining properties may be subject to other claims; and |
|--------|----------------------------------------------------------------|

| · | In the development stage of a mining operation, PolyMet’s mining activities could be subject to substantial operating risks and hazards, including metal bullion losses, environmental hazards, industrial accidents, labor disputes, encountering unusual or unexpected geologic formations or other geological or grade problems, encountering unanticipated ground or water conditions, cave-ins, pit-wall failures, flooding, rock falls, periodic interruptions due to inclement weather conditions or other unfavorable operating conditions and other acts of God. Some of these risks and hazards are not insurable or may be subject to exclusion or limitation in any coverage which the Company obtains or may not be insured due to economic considerations. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | industrial accidents; |
|--------|-----------------------|

| · | railroad accidents; |
|--------|---------------------|

| · | labor disputes; |
|--------|-----------------|

| · | environmental hazards; |
|--------|------------------------|

| · | electricity stoppages; |
|--------|------------------------|

| · | equipment failures; and |
|--------|-------------------------|

| · | severe weather and other natural phenomena. |
|--------|---------------------------------------------|

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| 6. | Dividends |
|----|-----------|

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| 7. | Capital Structure |
|----|-------------------|

| 8. | Market for Securities |
|----|-----------------------|

|           | TSX       | NYSE MKT |
|----------------|-----------|----------|
| Month          | High (C$) | Low (C$) | Volume | High (US$) | Low (US$) | Volume |
| February 2016  | 1.24      | 1.10     | 158,700 | 0.89 | 0.80 | 2,551,900 |
| March 2016     | 1.52      | 1.05     | 884,700 | 1.13 | 0.80 | 9,660,000 |
| April 2016     | 1.25      | 1.10     | 252,400 | 0.98 | 0.84 | 2,988,000 |
| May 2016       | 1.11      | 1.04     | 320,800 | 0.88 | 0.79 | 2,173,600 |
| June 2016      | 1.08      | 0.99     | 219,100 | 0.84 | 0.76 | 2,106,300 |
| July 2016      | 1.01      | 0.96     | 326,800 | 0.79 | 0.75 | 2,113,800 |
| August 2016    | 1.35      | 0.98     | 997,000 | 1.01 | 0.74 | 5,902,300 |
| September 2016 | 1.15      | 1.05     | 364,100 | 0.90 | 0.80 | 2,636,100 |
| October 2016   | 1.10      | 0.97     | 263,000 | 0.83 | 0.74 | 3,768,900 |
| November 2016  | 1.22      | 0.98     | 581,200 | 0.90 | 0.74 | 4,689,500 |
| December 2016  | 1.14      | 1.00     | 431,400 | 0.87 | 0.74 | 5,167,500 |
| January 2017   | 1.19      | 1.02     | 443,000 | 0.94 | 0.75 | 5,553,100 |

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| 9. | Securities Not Listed or Quoted |
|----|---------------------------------|

| Date of Issuance | Number of Stock Options Issued | Exercise Price (US$) |
|------------------|--------------------------------|----------------------|
| February 1, 2016 | 2,577,000                      | 0.76                 |
| July 14, 2016    | 250,000                        | 0.76                 |
| January 5, 2017  | 2,675,000                      | 0.75                 |
| Date of Issuance | Number of Restricted Share Units Issued | Exercise Price (US$) |
|------------------|-----------------------------------------|----------------------|
| February 1, 2016 | 1,226,521                               | N/A                  |
| January 5, 2017  | 1,076,718                               | N/A                  |
| Date of Issuance | Number of Share Purchase Warrants Issued | Exercise Price (U$) |
|------------------|------------------------------------------|---------------------|
| October 18, 2016 | 13,641,586                               | 1.00                |
| October 28, 2016 | 7,680,626                                | 1.00                |
|  Designation of Class | Number of Securitiesheld in Escrow |  Percentage of Class |
|----------------------------|------------------------------------|---------------------------|
| Common shares (1)          | 236,000                            | 0.01%                     |

| (1) | Common shares are held by Farris, Vaughan, Wills & Murphy LLP and were issued as restricted shares to certain United States employees.  Contractual restrictions on transfer ends on receipt of permits to commence construction (118,000 common shares) and commencement of commercial production (118,000 common shares). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10. | Directors and Officers |
|-----|------------------------|

| Name & Residence                                       | Position(s) with theCompany                                        | Principal Occupation duringpast five years                                                                    | Director since   |
|------------------------------------------------------------|--------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|------------------|
| Jonathan Cherry (4,5,6) Minnesota, United States           | Director, President & Chief Executive Officer                  | Same                                                                                                          | July 16, 2012    |
| Matthew Daley (4,6) Ontario, Canada                        | Director                                                           | Project Manager for Australia, Asia andAmerican Copper Assets, Glencore                                       | July 9, 2014     |
| David Dreisinger (2,3,4,6) British Columbia, Canada        | Director                                                           | Professor and Chairholder of the Industrial Research and Chair in Hydrometallurgy,University British Columbia | October 3, 2003  |
| W. Ian L. Forrest (1,2,3,5,7)Vaud, Switzerland        | Director, Chairman                                                 | Chartered Accountant                                                                                          | October 3, 2003  |
| Helen Harper (2,4,6)Ontario, Canada                        | Director                                                           | Asset Manager for North AmericaCopper Operations, Glencore                                                    | July 13, 2016    |
| Alan R. Hodnik (1,3,4,5,7)Minnesota, United States    | Director                                                           | Chairman, President and ChiefExecutive Officer, Allete Inc.                                                   | March 9, 2011    |
| Stephen Rowland (3, 6) Connecticut, United States     | Director                                                           | Executive, Glencore                                                                                           | October 30, 2008 |
| Michael M. Sill (1,2,4,5,7) Minnesota, United States  | Director                                                           | Chief Executive Officer, RoadMachinery & Supplies Co.                                                     | March 9, 2011    |
| Douglas Newby New York, United States                 | Chief Financial Officer                                            | Same                                                                                                          | N/A              |
| Bradley Moore Minnesota, United States                     | Executive Vice President, Environmental & Governmental Affairs | Same                                                                                                          | N/A              |

|  | Notes: | (1)           | Member of the Compensation Committee. |
|--|--------|-----------------------------------------------------------------|---------------------------------------|

|  |  | (2)  | Member of the Audit Committee. Helen Harper is a non-voting participant. |
|--|--|-----------|--------------------------------------------------------------------------|

|  |  | (3)  | Member of the Nominating and Corporate Governance Committee. StephenRowland is a non-voting participant. |
|--|--|-----------|----------------------------------------------------------------------------------------------------------|

|  |  | (4)  | Member of the Health, Safety, Environment and Communities Committee. |
|--|--|-----------|----------------------------------------------------------------------|

|  |  | (5)  | Member of the Capital Finance Committee. |
|--|--|-----------|------------------------------------------|

|  |  | (6)  | Member of the Technical Steering Committee. |
|--|--|-----------|---------------------------------------------|

|  |  | (7)  | Member of the Business Development and Risk Committee. |
|--|--|-----------|--------------------------------------------------------|

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| 11. | Legal Proceedings and Regulatory Actions |
|-----|------------------------------------------|

| 12. | Interest of Management and Other Material Transactions |
|-----|--------------------------------------------------------|

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| 13. | Transfer Agent and Registrar |
|-----|------------------------------|

| 14. | Material Contracts |
|-----|--------------------|

| · | Acquisition of the mine site lease, see Item 4 for a complete description; |
|--------|----------------------------------------------------------------------------|

| · | Acquisition of the Erie Plant and associated infrastructure acquired in the Asset Purchase Agreements I and II, see Item 4 for a complete description; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Financing agreements entered into with Glencore, see below for a complete description. |
|--------|----------------------------------------------------------------------------------------|

| · | Equity – five separate agreements comprising $25.0 million placement of PolyMet common shares in calendar 2009 in two tranches; a $30.0 million placement of PolyMet common shares in calendar 2010 in three tranches; a $20.0 million placement of PolyMet common shares in calendar 2011 in one tranche; a $20.960 million purchase of PolyMet common shares in the 2013 Rights Offering; and a $10.583 million purchase of PolyMet common shares in the 2016 Private Placement; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Convertible debt (“Glencore Convertible Debt”) – agreement comprising $25.0 million initial principal secured convertible debentures drawn in four tranches; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Non-convertible debt (“Glencore Non-Convertible Debt”) – three separate agreements comprising $30.0 million initial principal secured debentures in calendar 2015 drawn in four tranches; an $11.0 million initial principal secured debenture in calendar 2016 drawn in one tranche; and a $14.0 million initial principal secured debenture in calendar 2016 drawn in four tranches; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Marketing Agreement whereby Glencore committed to purchase all of the Company’s production of concentrates, metal, or intermediate products on market terms at the time of delivery for at least the first five years of production; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Corporate Governance Agreement whereby from January 1, 2014 as long as Glencore holds 10% or more of PolyMet's shares (on a fully diluted basis), Glencore has the right, but not obligation, to nominate at least one director and not more than the number of directors proportionate to Glencore's fully diluted ownership of PolyMet, rounded down to the nearest whole number, such number to not exceed 49% of the total board.   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 92,836,072 shares representing 29.1% of PolyMet's issued shares; |
|--------|------------------------------------------------------------------|

| · | Glencore Convertible Debt exchangeable through the exercise of an exchange warrant (“Exchange Warrant”) at $1.2696 per share into 33,265,768 common shares of PolyMet (including capitalized and accrued interest as at January 31, 2017) until the earlier of March 31, 2018, availability of $100 million of debt or equity financing, or an earlier date on which PolyMet can demonstrate that it is prudent to repay the debentures, subject to ten days notice during which time Glencore can elect to exercise the Exchange Warrant, and where the exercise price and the number of shares issuable are subject to conventional anti-dilution provisions; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Warrants to purchase 6,458,001 common shares at $0.8231 per share at any time until December 31, 2017, 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; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Warrants to purchase 7,055,626 common shares at $1.00 per share at any time until October 28, 2021, subject to acceleration on the earlier of receipt of permits necessary to construct NorthMet or the 12 month anniversary of the issue date provided the 20-day VWAP of PolyMet common shares is equal to or greater than $1.50 (“Acceleration Triggering Event”), and where the exercise price and the number of warrants are subject to conventional anti-dilution provisions; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Warrants to purchase 625,000 common shares at $0.7797 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. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15. | Interest of Experts |
|-----|---------------------|

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| 16. | Controls and Procedures |
|-----|-------------------------|

| 17. | Audit Committee |
|-----|-----------------|

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| Fiscal Year Ending | Audit Fees   | Audit Related Fees | Tax Fees    | All Other Fees |
|--------------------|--------------|--------------------|-------------|----------------|
| January 31, 2017   | CDN $199,000 | CDN $54,000        | CDN $21,060 | CDN $Nil       |
| January 31, 2016   | CDN $203,000 | CDN $58,000        | CDN $18,950 | CDN $Nil       |

| 18. | Additional Information |
|-----|------------------------|

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|  | 1. | To assist the Board of Directors in fulfilling its fiduciary responsibilities’ relating to the Company's quality and integrity of accounting, auditing, and reporting practices and the integrity of the Company's internal accounting controls and management information systems; |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | To review with the auditors, internal accountants and management of the Company: |
|--|----|----------------------------------------------------------------------------------|

|  | a. | any audited financial statement of the Company, including any such statement that is to be presented to an annual general meeting or provided to shareholders or filed with regulatory authorities and including any audited financial statement contained in a prospectus, registration statement or other similar document, and |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b. | the financial disclosure in each Annual Report and Management Discussion and Analysis of the Company which accompanies such audited financial statement and in each such filing, prospectus, registration statement or other similar document; |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | To review with the internal accountants and management of the Company: |
|--|----|------------------------------------------------------------------------|

|  | a. | any unaudited financial statement of the Company, including any such statement that is to be presented to an annual general meeting or provided to shareholders or filed with regulatory authorities and including any unaudited financial statement contained in a prospectus, registration statement, Quarterly Report or other similar document, |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b. | the financial disclosure in each Quarterly Report and when applicable, Management Discussion and Analysis of the Company accompanying such unaudited financial statement and in each such filing, prospectus, registration statement or other similar document which accompanies such unaudited financial statement, and |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | c. | in connection with the Form 40-F of the Company, review (i) Management's disclosure to the Committee and the independent auditor under Section 302 of the Sarbanes-Oxley Act, including identified changes in internal control over financial reporting; and (ii) the contents of the Chief Executive Officer and the Chief Financial Officer certificates to be filed under Sections 302 and 906 of the Sarbanes-Oxley Act and the process conducted to support the certifications; |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 4. | To otherwise review as required and report to the Board of Directors with respect to the adequacy of internal accounting and audit procedures and the adequacy of the Company’s management information systems; |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 5. | To otherwise ensure that no restrictions are placed by Management on the scope of the auditors review and examination of the Company’s accounts; |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 6. | To appoint or replace the independent auditor and approve the terms on which the independent auditor is engaged for the ensuing fiscal year; |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------|

|  | 7. | At least annually, evaluate the independent auditor's qualifications, performance, and independence, including that of the lead partner. The evaluation will include obtaining a written report from the independent auditor describing the firm's internal quality control procedures; any material issues raised by the most recent Public Company Accounting Oversight Board inspection, internal quality control review, or PCAOB review, of the firm or by any inquiry or investigation by governmental or professional authorities within the past five years, concerning an independent audit or audits carried out by the firm, and any steps taken to deal with those issues; and all relationships between the independent auditor and the Company; |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | 8. | Resolve any disagreements between Management and the independent auditor about financial reporting; |
|--|----|-----------------------------------------------------------------------------------------------------|

|  | 9. | Establish and oversee a policy designating permissible services that the independent auditor may perform for the Company, providing for preapproval of those services by the Committee subject to the de minimis exceptions permitted under applicable rules, and quarterly review of any services approved by the designated member under the policy and the firm's non-audit services and related fees; |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 10. | Ensure receipt from the independent auditor of a formal written statement delineating all relationships between the auditor and the Company, consistent with applicable requirements of the PCAOB regarding the independent auditor’s communications with the Committee concerning independence, actively engage in a dialogue with the auditor about any disclosed relationships or services that may impact the objectivity and independence of the auditor, and take appropriate action to oversee the independence of the independent auditor; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 11. | Advise the Board about the Committee's determination whether the Committee consists of three or more members who are Financially Literate, including at least one member who has financial sophistication and is a financial expert; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 12. | Inquire of Management and the independent auditor about significant risks or exposures, review the Company's policies for risk assessment and risk management, and assess the steps Management has taken to control such risk to the Company, except as to those risks for which oversight has been assigned to other committees of the Board or retained by the Board; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 13. | Review with Management and the independent auditor: |
|--|-----|-----------------------------------------------------|

|  | a. | The Company's annual assessment of the effectiveness of its internal controls and the independent auditor's attestation, |
|--|----|--------------------------------------------------------------------------------------------------------------------------|

|  | b. | The adequacy of the Company's internal controls, including computerized information system controls and security, |
|--|----|-------------------------------------------------------------------------------------------------------------------|

|  | c. | Any "material weakness" or "significant deficiency" in the design or operation of internal control over financial reporting, and any steps taken to resolve the issue, and |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | d. | Any related significant findings and recommendations of the independent auditor and internal audit together with Management's responses; |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------|

|  | 14. | Develop, review, and oversee procedures for (i) receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, and auditing matters and (ii) the confidential, anonymous submission of employee concerns regarding accounting or auditing matters; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 15. | Review policies and procedures with respect to transactions between the Company and officers and directors, or affiliates of officers or directors, or transactions that are not a normal part of the Company’s business, and review and approve those related-party transactions that would be disclosed pursuant to SEC Regulation S-K, Item 404; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 16. | Review with Management and the independent auditor at least annually the Company's critical accounting policies and significant judgments and estimates, including any significant changes in the Company's selection or application of accounting principles and the effect of regulatory and accounting initiatives on the financial statements of the Company; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 17. | To ensure that the Company disseminates information concerning its financial position and results of operations to the public in a timely fashion; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 18. | Complete an annual evaluation of the Committee’s performance; |
|--|-----|---------------------------------------------------------------------|

|  | 19. | Include a copy of the Committee charter as an appendix to the proxy statement at least once every three years, or disclose annually in the proxy statement where the charter can be found on the Company's website; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | 20. | Set clear hiring policies for the Company's hiring of employees or former employees of the independent auditor who were engaged in the Company's account, and ensure the policies comply with any regulations applicable to the Company; and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 21. | Review with Management the Company’s policies and processes for tax planning and compliance. |
|--|-----|----------------------------------------------------------------------------------------------------|