Talvivaara Mining Company Operational Update

Stock Exchange Release
Talvivaara Mining Company Plc
16 January 2013

Talvivaara Operational Update

Metals production stabilized after the gypsum pond leakage
Water balance situation being resolved but continues to be challenging

Highlights

• Nickel production of 2,317t in Q4 2012 and 12,916t for FY 2012
• Production impacted by gypsum pond leakage in November and continuing challenging water balance situation throughout the fourth quarter
• Metals plant operations stabilized; current flow rates at 1,500 m³/h
• Sustainable solutions to water balance issues being evaluated by a special task force;
  initial measures being implemented
• Following Pekka Perä's return as CEO in November 2012, further management changes taking effect on 16 January
• Co-operation consultations that may lead to temporary lay-off of a maximum of 230 employees for up to 90 days to start on 17 January

Production guidance

The achieved full year 2012 nickel production of 12,916t was in line with the Company's most recent guidance of approximately 13,000t, as updated on 28 November 2012 following the gypsum pond leakage.

Talvivaara intends to announce its production guidance for 2013 on 14 February 2013 in conjunction with its FY 2012 results. In the meantime, the Company continues to evaluate the impact of the key drivers for the production level, including the near term development in the water balance, the timing of re-start of ore production and the effectiveness of the bioheapleaching process following the measures being taken to reverse the recent effects of excess water and insufficient aeration. Talvivaara continues to believe that the greater than 50,000t of nickel currently in the heaps will provide a sufficient inventory for a reasonable increase in metals production in 2013 despite the temporary suspension of ore production, in effect since September 2012 and anticipated to continue through June 2013.

Production update

Metals recovery

Talvivaara's metals recovery plant was temporarily suspended between 4 and 21 November 2012 as a precautionary measure due to the gypsum pond leakage. Since the successful re-start on 21 November, plant performance has in general been satisfactory. However, some short term disturbances in the automation systems impacted production in December and are being investigated to avoid future re-occurrence.  

Solution flow rates at the plant varied from around 900 m³/h to 1,400 m³/h in December and have reached 1,500 m³/h in early January. Ramp-up to around 1,600 m³/h is anticipated in the near future.