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2011-04-07 08:41:50 CEST 2011-04-07 08:42:16 CEST REGULATED INFORMATION Talvivaaran Kaivososakeyhtiö Oyj - Company AnnouncementProduction updateStock Exchange Release Talvivaara Mining Company Plc 7 April 2011 New production record slightly short of guidance achieved in Q1 2011 Production guidance for 2011 reduced to 22,000-28,000 tonnes of nickel due to necessary plant upgrades Talvivaara Mining Company Plc ("Talvivaara" or the "Company") announces that it has achieved a new quarterly production record of 4,215t of nickel during the period of January-March 2011. Although production was marginally below the Company's guidance, it exceeded the previous quarter's nickel output by 10% and confirmed further progress in production ramp-up at the Sotkamo mine. The new quarterly production record was achieved despite a series of technical issues resulting in low availability of the metals recovery plant. Particularly good production levels were achieved in March, when the nickel output averaged an annualised rate of over 32,000t for the last ten days of the month, achieving also new monthly and weekly records. Despite the recent success in metals recovery, the Company believes that certain upgrades and modifications at the plant are necessary in order to sustain the achieved throughput rates and to ramp up production further. The Company has therefore decided to bring the annual maintenance break forward to April-May 2011 and to extend this scheduled break to allow for all of the identified issues to be addressed and for the plant to be thoroughly inspected as part of the Company's preventive maintenance plan. The overall duration of the modification programme is to be extended by a fortnight. The Company anticipates scheduling a second maintenance stoppage for September or October in order to install long lead-time equipment which is not available during the first stoppage, and to further enhance parts of process equipment in order to avoid potential problems caused by exceptional winter conditions. The second maintenance programme is estimated to last approximately one week and will complete the upgrading of the plant for sustainable full scale production. The planned plant modifications and maintenance works involve increasing of sulphur melting and certain pumping capacities, cleaning and upgrading of hydrogen sulphide generators, inspection and maintenance of reactors and thickeners, and numerous small modification items, e.g. doubling up of selected process pipelines, that help improve production reliability and sustainable capacity. No major equipment additions or replacements are anticipated; hence the upgrading and maintenance programmes are not expected to materially affect the Company's capital expenditure during the year. The impact on production output of the planned modification and maintenance programmes depends on the timing and eventual length of the production stoppages and the resulting improvement in production reliability and capacity. Delays in reclaiming the primary heap may also have an impact on production due to corresponding delays in obtaining leach solution from the secondary heap to metals recovery. Overall, the Company believes it realistic to anticipate a production shortfall of 5,000-8,000t of nickel from the previous guidance. Accordingly, Talvivaara revises its production guidance for 2011 to 22,000-28,000t of nickel. Pekka Perä, Talvivaara's CEO commented: "Whilst the maintenance and upgrade work at our metals plant will have a short-term impact on our production targets, it will put Talvivaara in a stronger position in the long term. During the programme we will concentrate on both preventive maintenance, which should minimise unforeseen production problems in the future, and on upgrades which will boost production capacity and reliability and improve resilience during difficult weather conditions." ENQUIRIES Talvivaara Mining Company Plc Tel: +358 20 712 9800 Pekka Perä, Chief Executive Officer Saila Miettinen-Lähde, Chief Financial Officer Merlin PR Tel: +44 207 726 8400 David Simonson Anca Spiridon 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 atwww.talvivaara.com. [HUG#1504275] |
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