Talvivaaran Kaivososakeyhtiö Oyj - Company Announcement

Talvivaara and Terrafame have executed agreements on the sale of mining-related assets to Terrafame

Stock Exchange Release
Talvivaara Mining Company Plc
1 July 2016



Talvivaara and Terrafame have executed agreements on the sale of mining-related
                              assets to Terrafame


Talvivaara  Mining Company  Plc ("Talvivaara"  and "Company")  and Terrafame Ltd
("Terrafame") have on 30 June 2016 signed agreements, in which the parties agree
on  the sale of Talvivaara's assets related to the Sotkamo mining operations and
settlement  of Talvivaara's guarantee  liabilities under the  Loan and Streaming
Holiday   Agreement   ("Holiday   Agreement"),  with  the  principal  amount  of
approximately EUR 14 million (including interest up until 30 June 2016), and the
Zinc  in Concentrate  Purchase Agreement  ("Streaming Agreement"),  amounting to
approximately EUR 203.4 million. The assets sold include, among others, the lime
plant  needed for the Sotkamo  operations, laboratory, as well  as rights to the
geological,  laboratory and production related  data associated with the Sotkamo
mine.  The  agreements  include  a  cancellation clause whereby the transactions
contemplated  by the  agreements shall  become null  and void  in the  event the
extraordinary  general meeting  of shareholders  of Talvivaara  to be separately
convened  to  address  the  matter  does  not approve the transactions under the
agreements.

In addition, the parties have agreed on the transfer of the laboratory personnel
to  Terrafame as old employees,  as well as on  the possibility for Terrafame to
recruit  certain of Talvivaara's personnel  currently providing services related
to  operation of  the mine.  The parties  have agreed  to terminate  the service
agreement  and the  lime plant  lease agreement  of 19 November 2014, which were
transferred to Terrafame on 14 August 2015 with immediate effect.

The  purchase price for the  assets sold consists of  two components: (i) a full
and  final  settlement  of  the  guarantee  liabilities of the Company under the
Holiday  Agreement and the Streaming Agreement, and (ii) a cash component of EUR
1.4 million payable by Terrafame, which has been paid to the Company at closing.

The extraordinary general meeting of shareholders will be separately convened to
address  the matter. Certain shareholders of the Company, comprising of Solidium
Ltd  and Mr. Pekka Perä, CEO of Talvivaara, who together represent approximately
20 per  cent of the ordinary shares  currently issued and outstanding (excluding
192,883,000 shares  held  in  treasury  by  the  Company not carrying any voting
rights),  have preliminary agreed  to vote in  favour of the  transaction at the
extraordinary general meeting.

Should  the general meeting  not approve the  transactions under the agreements,
the agreements will be cancelled and the transactions revoked and, consequently,
the parties would resume the positions existing immediately prior to signing the
agreements.

Under the agreements, all main assets of Talvivaara previously generating income
for Talvivaara have been transferred to Terrafame. However, the arrangement will
materially  improve the possibility for the completion of Talvivaara's corporate
restructuring  proceedings and  facilitate the  development of  Talvivaara's new
business   opportunities.   The  agreement  has  no  effect  on  the  identified
restructuring  debts  of  the  Company,  including  the  receivables  of certain
commercial banks and Finnvera Plc.

Despite  the transaction published today, there can to date be no guarantee that
Talvivaara  will  eventually  be  able  to  successfully  complete the corporate
restructuring proceedings.

Enquiries
Talvivaara Mining Company Plc. Tel. +358 20 7129 800

Pekka Perä, CEO
Pekka Erkinheimo, Deputy CEO

[HUG#2024897]

Attachments:

Talvivaara and Terrafame have executed agreements on sale of assets.pdf