Talvivaara Mining Company Plc - Production Update
Stock Exchange Release
Talvivaara Mining Company Plc
19 April 2012
Talvivaara Production Update
First quarter 2012 production impacted by environmental process modifications and unscheduled improvement measures in metals recovery
Full-year guidance maintained at 25,000-30,000t of nickel
Talvivaara Mining Company Plc ("Talvivaara" or the "Company") announces that it produced 3,374 tonnes of nickel in the first quarter of 2012. Production output was adversely impacted by downtime at the metals recovery plant, resulting from environmental investments and unscheduled occupational safety -related improvements.
In January, Talvivaara commissioned a new water recycling system reducing raw water intake by approximately 65-75%. The system marks another proactive step in executing the Company's sustainability strategy, but at the same time the installation caused downtime at the metals recovery plant and thereby impacted first quarter production volumes. As part of the undertaken process changes, the Company has also temporarily maintained excess water in circulation thereby somewhat diluting metal grades in solution, which has further impacted output of the metals recovery plant. Solution grades are expected to develop positively during the spring as the mine's water balance improves, solution in circulation warms up and the new primary heap section 2 is taken into production.
Further reduction in production followed from the regrettable fatal incident at the Sotkamo mine site in mid-March. Following the incident, Talvivaara lowered solution flow into metals recovery and also started an unscheduled stoppage with focus on preventative occupational safety -related modifications and improvements. Occupational safety remains a top priority for Talvivaara and the Company is focusing its efforts on making the workplace, both technically and operationally, as safe as possible.
The first quarter production volumes and the negative nickel price development during the period also had an adverse impact on Talvivaara's financial results. The nickel price rallied to above USD 21,000 per tonne at the start of 2012 but subsequently retreated to USD 17,000-18,000 per tonne in February and March primarily due to prevailing economic conditions. The Company will consequently report an operating loss for the quarter.
Talvivaara maintains its full-year 2012 production guidance at 25,000-30,000 tonnes of nickel. However, following the first quarter production volumes, the Company has less flexibility within the guidance range and expects full-year production to be closer to the lower end of the range.
Regardless of the short-term shortage in metals recovery output, the underlying development in the Company's operations has continued positively. Recent analysis of ore samples taken from heap section 3 indicates nickel recoveries of up to 85% in less than two years of leaching, which exceeds the Company's expectations. Run-rate crushing and primary heap reclaiming performance has also improved allowing the Company to accelerate the stacking of new ore. Progress in bioheapleaching and crushing puts Talvivaara in the position to offset the recent issues and to achieve the 2012 guidance and ramp up towards full capacity.
ENQUIRIES
Talvivaara Mining Company Plc. Tel: +358 20 7129 800
Lassi Lammassaari, COO
Saila Miettinen-Lähde, Deputy CEO and CFO
Talvivaara Mining Company Plc
Talvivaara Mining Company is an internationally significant base metals producer with its primary focus on nickel and zinc using a technology known as bioheapleaching to extract metals out of ore. Bioheapleaching makes extraction of metals from low grade ore economically viable. The Talvivaara deposits comprise one of the largest known sulphide nickel resources in Europe. The ore body is estimated to support anticipated production for several decades. Talvivaara has secured a 10-year off-take agreement for 100 per cent of its main output of nickel and cobalt to Norilsk Nickel and entered into a long-term zinc streaming agreement with Nyrstar NV. Talvivaara is listed on the London Stock Exchange Main Market and NASDAQ OMX Helsinki and is included in the FTSE 250 index. Further information can be found at www.talvivaara.com.
Copyright Thomson Reuters
Attachment(s)
http://hugin.info/136227/R/1603948/507304.pdf
Regulatory News
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: %s via Thomson Reuters ONE
[HUG#1603948]
