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PolyMet Mining Corp.

Audit Committee Charter

|1. | PURPOSE
|-- | -------

The purpose of the Audit Committee (in this charter, the
Committee") is to oversee the accounting and financial reporting processes of
PolyMet Mining Corp. (the Company), the audits of the Company's financial
statements, the qualifications of the public accounting firm engaged as the
Company's independent auditor to prepare or issue an audit report on the
financial statements of the Company and internal control over financial
reporting, and the performance of the Company's internal audit function and
independent auditor. The Committee reviews and assesses the qualitative aspects
of the Companys financial reporting to shareholders, the Companys financial
risk assessment and management, and the Companys ethics and compliance
programs. The Committee is directly responsible for the appointment (subject to
shareholder ratification), compensation, retention, and oversight of the
independent auditor. The Committee also reviews and assesses the Companys processes to
manage and control risk, except for risks assigned to other committees of the
Board or retained by the Board.

|2. | STRUCTURE AND OPERATIONS
|-- | ------------------------

The Committee shall be composed of not less than three (3)
directors. Members of the Committee shall be independent and each shall be
financially literate and will be appointed or reappointed at the meeting of
the Board, immediately following the AGM, and in the normal course of business
will serve a minimum of three (3) years. At least one member of the Committee
shall in the judgment of the Board be an "audit committee financial expert" as
defined by the rules and regulations of the Securities and Exchange Commission.
Each member shall continue to be a member of the Committee until a successor is
appointed, unless the member resigns, is removed or ceases to be a director. The
Board may fill a vacancy that occurs in the Committee at any time. Generally, no
member of the Committee may serve on more than three audit committees of
publicly traded companies (including the Audit Committee of the Company) at the
same time.

Financially Literate means the ability to read and understand
a set of financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity of
the issues that can reasonably be expected to be raised by the Companys financial statements.

The Board or, in the event of its failure to do so, the members
of the Committee, shall appoint or reappoint, at the meeting of the Board
immediately following the AGM, a chairman among their number. The chairman shall
not be a former officer of the Company and shall serve as a liaison between the
Committee and Management.

|PolyMetAudit Committee Charter, Nov
      8th, 2012
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Meetings of the Committee shall be held at least four times
annually, provided that due notice is given and a quorum of a majority of the
members is present. Where a meeting is not possible, resolutions in writing
which are signed by all members of the Committee are as valid as if they had
been passed at a duly held meeting. The frequency and nature of the meeting
agendas are dependent upon business matters and affairs which the Company faces
from time to time.

The Committee shall report to the Board on its activities after
each of its meetings. In addition, it shall review and assess the adequacy of
this charter annually and, where necessary, recommend changes to the Board for
approval. The Committee shall undertake and review with the Board an annual
performance evaluation of the Committee.

|3. | RESOURCES AND AUTHORITY
|-- | -----------------------

The Committee shall have the resources and authority
appropriate to discharge its responsibilities, including the authority to use
internal personnel and to obtain advice and assistance from internal or external
legal, accounting or other advisors and the funding for compensating any such
external advisors. In addition, the Committee shall have sole authority to
retain and terminate any such firms and to approve the fees and other retention
terms related to the appointment such firms.

|4. | RESPONSIBILITIES
|-- | ----------------

The responsibilities of the Committee are:

| | 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;
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| | 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,

|PolyMetAudit Committee Charter, Nov
      8th, 2012
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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 20-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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 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;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 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;                                                                                                                                                                                                                                 

|PolyMetAudit Committee Charter, Nov
      8th, 2012
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| | 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;                                                                                                                                               
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| |     |                                                                                                                                                                                                                                                                                                                                                                                                      
| | 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;                                                        
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| | 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;

|PolyMetAudit Committee Charter, Nov
      8th, 2012
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| | 17. | To ensure that the Company disseminates information
      concerning its financial position and results of operations to the public
      in a timely fashion;                                                                                                
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| |     |                                                                                                                                                                                                                                                               
| | 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;                         
| |     |                                                                                                                                                                                                                                                               
| | 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.                                                                                                                                                            

|5.0 | COMMUNICATIONS
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The independent auditor reports directly to the Committee. The
Committee is expected to maintain free and open communication with the
independent auditor, the internal auditors, and management. This communication
will include periodic private executive sessions with each of these parties.

|6.0 | EDUCATION
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The Company is responsible for providing new members with
appropriate orientation briefings and educational opportunities, and the full
Committee with educational resources related to accounting principles and
procedures, current accounting topics pertinent to the Company, and other
matters as may be requested by the Committee. The Company will assist the
Committee in maintaining appropriate financial literacy.

|PolyMetAudit Committee Charter, Nov
      8th, 2012
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