Talvivaaran Kaivososakeyhtiö Oyj - Interim report (Q1 and Q3)

Interim Management Statement for the period of 1 January – 27 April 2009

First nickel sulphides delivered to Norilsk Nickel Harjavalta 

Materialshandling systems to be upgraded to deal with delays with crushing and
to facilitate production expansion 

Highlights

• First shipment of nickel sulphide to Norilsk Nickel Harjavalta was sent on 19 
  February 2009                                                                 
• Mining, leaching and metals recovery processes are functioning well           
• Crushing capacity has continued to remain substantially below budgeted levels 
  for the year to                                                               
  date, but is expected to significantly improve during the second half of the  
  year                                                                          
• Our most recent analysis leads us to believe that it is unlikely that         
  previously stated nickel                                                      
  production targets for 2009 are met, reflecting the reduced levels of crushing
  to date                                                                       
• Agreement has been reached with Sandvik for the delivery and financing of     
  additional crushing                                                           
  equipment to increase crushing capacity from September 2009 by approximately  
  45% to 22 million tonnes per annum                                            
• Safety at the mine site remained good with 5 minor lost time injuries during  
  the period; there have                                                        
  been no LTI's since the launch of the Work Group Safety Challenge at the      
  beginning of February 2009                                                    
• The number of employees at Talvivaara increased from 239 at the end of 2008 to
  272 on 27 April                                                               
  2009; recruitment will continue throughout the ramp-up period during the      
  remainder of the year                                                         
• First EUR 20 million of the EUR 50 million investment and working capital loan
  from Finnvera Plc                                                             
  was drawn down in two instalments on 17 and 23 April 2009                     
• The Company continues to have sufficient facilities in place to execute its   
  original ramp up plans                                                        
  despite the delay                                                             
• The production target for 2010 of 30,000t remains unchanged; plans for        
  production expansion to                                                       
  45 thousand tonnes of nickel in 2011 and 50 thousand tonnes in 2012 are under 
  preparation                                                                   

Talvivaara's CEO, Pekka Perä comments:

“I am very pleased to have seen our first shipment of nickel and zinc sulphides 
been made, which is a major milestone. Having received invoices for several     
years now, it is gratifying to now be able to send them ourselves.              

With all the other main areas of work on the production ramp-up functioning     
well, it has been frustrating to have our production ramp-up delayed by         
difficulties with crushing capacity. With regard to the crushing issue, we have 
now come to the conclusion that in order to secure our overall production       
capacity in the long term, it is time to invest in additional crushing capacity 
as soon as possible. We are working on the expansion of crushing in close       
partnership with Sandvik with whom we have agreed a detailed implementation     
timetable.                                                                      

Our main focus remains the ramp-up process and maintaining Talvivaara's position
as a low cost metal producer. We intend to ensure we are in a position to catch 
up by the summer of 2010 on the crushing volumes lost this year. However, due to
the process related delay from crushing to the actual                           


metals production, the production target for 2010 of 30,000t remains unchanged. 
Our plans for production expansion now include output of 45 thousand tonnes of  
nickel in 2011 increasing to 50 thousand tonnes in 2012, with final decisions on
the expansion pending financing arrangements, but expected still this year.”    

Key events during the reporting period:

First nickel sulphides shipped to Norilsk Nickel - ramp-up continues

The first shipment of approximately 100 tonnes of nickel product was sent on 19 
February 2009 from the Talvivaara mine to the Norilsk Nickel Harjavalta         
refinery, marking the beginning of saleable quantity and quality metals         
production at Talvivaara. The 450 tonnes of zinc sulphide obtained from the     
first production campaign was sold as a spot sale.                              

The second metal sulphide production campaign started on 22 April 2009 and is   
estimated will continue until mid to late May.                                  

Mining and bioheapleaching processes progressed as planned during the period.   
The increase in overall production volumes continued to be limited by crushing  
capacity.                                                                       

Materials handling systems to be upgraded to catch up on delay with crushing
and to facilitate production expansion                                      

Further amendments to Talvivaara's fine crushing circuit were made during the   
first quarter of the year in order to achieve the name plate capacity of the    
system. As a result, the performance of the circuit has improved and around 80% 
of the targeted capacity can now be consistently achieved. However, the first   
quarter of 2009 fell approximately 50% short of the production target due to    
deficient system performance and production stoppages for the amendment works.  

In order to secure sufficient capacity in the long term and to catch up the     
already incurred crushing delay by Q3 2010, Talvivaara has decided to redesign  
the entire crushing system and to acquire additional crushing equipment with    
expected availability for use in September 2009. The Company has reached        
agreement with Sandvik Mining and Construction Oy on corrective actions required
for the original crushing and screening line, the delivery of additional        
crushing capacity, and on financing of the additional supply. The scope of the  
additional supply will be such that, together with the existing gear in a       
redesigned circuit, it enables steady state crushing capacity at approximately  
22 million tonnes per annum. This represents a 45% increase over the presently  
planned capacity and functions therefore as a first step towards the planned    
overall production expansion.                                                   

Modifications required for the increased capacity in the subsequent process     
stages, agglomeration and stacking, have already been defined and are under     
preparation.                                                                    

Personnel and safety

Talvivaara Group's personnel increased from 239 at the start of the reporting   
period to 272 by the date of this statement. The growth in personnel stemmed    
primarily from the recruitment of maintenance personnel and operators for       
various production processes. Recruitment of personnel will continue throughout 
the ramp-up period during the remainder of the year.                            


By the end of the reporting period, the number of contractor personnel at the   
mine site had reduced to approximately 200, indicating that the construction    
project is nearing its completion. During the summer of 2009 the preparations   
for and installation of the additional crushing circuit will temporarily        
increase the number of contractor workforce. At steady state production, the    
number of contractor personnel on site is anticipated to be approximately 100.  

During the reporting period there were 5 lost time injuries on site. Of these,  
three occurred to Talvivaara's own personnel. No lost time injuries have been   
reported after the Company launched a continuous Work Group Safety Challenge in 
the beginning of February 2009.                                                 

Investment and working capital loan from Finnvera Plc

The first EUR 20 million of the EUR 50 million investment and working capital   
loan from Finnvera Plc was drawn down in two instalments on 17 and 23 April     
2009.The loan is intended to cover Talvivaara's financing needs during the      
ramp-up period in 2009. Repayments of the loan are scheduled to start in        
December 2013.                                                                  

Talvivaara continues to have facilities in place to finance the original ramp-up
despite the production delays caused by technical difficulties in materials     
handling.                                                                       

Market environment

The base metals markets have continued to be challenging during the first months
of 2009. The spot prices of nickel and zinc have recently been around USD       
11,000-12,000 per tonne and USD 1,300- 1,500 per tonne, respectively, which is  
20-30% above the prices seen in the early part of the year. The demand for base 
metals has not yet markedly improved, however, indicating that no significant   
improvement in market prices can be expected in the short term.                 

Short term outlook

Crushing problems have affected production levels in the early part of the year 
but the upcoming installation of additional crushing capacity should mean that  
whilst output during the first half of the year will be substantially below the 
budgeted level, production levels will significantly improve during the latter  
half. The exact timing and length of the production stoppage required for the   
installation of the new crushing gear is not yet known. However, overall, it is 
unlikely that the previously stated production targets for 2009 will be         
achieved. Crushing volumes lost this year are anticipated to be caught up by Q3 
2010, while metals production potentially lost this year is anticipated to be   
caught up in 2011 at the latest.                                                

Due to the technical challenges experienced in crushing, the Company has        
continued to review both capital and operational expenditure with the goal of   
minimising costs during 2009. Operational expenditure is largely dependent on   
the eventual production volume, but savings are in any case expected to be      
achieved through lower than budgeted consumables prices. Some freight costs will
also be deferred, as Norilsk Nickel has informed Talvivaara of a delay in the   
completion of the facilities being built for the Talvivaara product. Due to this
delay, it has been agreed that Talvivaara will only ship further amounts of     
nickel sulphide to Norilsk Nickel from August 2009 onwards. All amounts produced
prior to that time will however be invoiced upon production and paid by Norilsk 
Nickel in accordance with the terms of the off-take agreement.                  

With the additional crushing capacity already committed, Talvivaara continues to
investigate possibilities to also commit to an overall capacity increase of     
40-45% over the presently planned level                                         


of 33,000 tonnes of nickel per annum. Negotiations are ongoing relating to the  
supply and financing of the necessary modifications to the metals plant and of  
the required earth works. Subject to financing arrangements being available, the
Company is prepared to pursue the capacity increase during the current year.    

There will be a conference to discuss the statement on 28 April 2009 at 11.00   
(UK)/13.00 (Finland).                                                           

Details to access the conference call are as follows:
UK Free Call: 0800 694 0257                    
UK Standard International: +44 (0) 1452 555 566 USA  
Free Call: 1866 966 9439 Finland Free Call: 0800 112 
363                                                  

and the conference ID is 97353284

A replay facility will be available on the following numbers until 5 May 2009:

Replay Access Number: 97353284#             
International Dial in: +44 (0) 1452 55 00 00
UK Free Call Dial In: 0800 953 1533 UK Local
Dial In: 0845 245 5205 USA Free Call Dial   
In: 1866 247 4222                           

Enquiries:

Talvivaara Mining Company Plc Tel. +358 20 7129 800
Pekka Perä                                         
Saila Miettinen-Lähde                              

Merlin        Tel: +44 207 653 6620
Tom Randell                        
Anca Spiridon                      

Note: The information presented in this release is unaudited.

About Talvivaara Mining Company Plc.                                            
Talvivaara is a Finnish mining company operating a large open pit nickel mine in
Sotkamo, Finland. Talvivaara aims to become 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 sufficient to support anticipated production for over 60 years. 
The Company has secured a 10-year off-take agreement for 100 per cent of its    
main output of nickel and cobalt to Norilsk Nickel. Talvivaara is listed on the 
London Stock Exchange Main Market and is included in the FTSE 250 Index. Further
information can be found at www.talvivaara.com                                  

Talvivaara Mining Company Plc             
Ahventie 4 B 47, 02170 Espoo, Finland     
Tel +358 20 712 9800, Fax +358 20 712 9801
Reg.No. 1847894-2                         
                      www.talvivaara.com

Attachments:

talvivaara interim management statement for period 1 january - 27 april 2009_ 28042009.pdf