Talvivaaran Kaivososakeyhtiö Oyj - Interim Management statement

Interim Management Statement for the period of 1 July – 1 October 2008

Stock Exchange Release

First metal production at the Talvivaara mine

Appointment of Joint Broker

Talvivaara Mining Company Plc (“Talvivaara” or the “Company”) focused its
activities during the reporting period on the construction and commissioning of
the Talvivaara nickel mine in Sotkamo, Finland. The project progressed
according to plan both as regards its timetable and budget. 

Highlights

•	First nickel and zinc sulphides were produced at Talvivaara on 1 October
2008, as planned 
•	Operational materials handling and bioheapleaching processes started on
schedule in July 
•	Talvivaara successfully recruited 38 employees during the reporting period
bringing the total number of employees to 229 on 1 October; a sufficient
workforce is now in place for the first months of production 
•	Safety at the mine site remained good throughout the period - 22 lost time
injuries in 2008; 28 in total during the project 
•	Initial drawdown of USD 165 million of the USD 320 million project loan took
place on 
3 September 

Talvivaara's CEO, Pekka Perä comments: "We successfully produced our first
metal yesterday on time and within budget! I cannot stress enough how thankful
I am to the whole team for achieving this incredible milestone in the
development of Talvivaara. However, this is just the first step in building
Talvivaara into a world class business and there is more work ahead of us. 

“Separately, we are very pleased to welcome Liberum Capital as our Joint
Broker, alongside JPMorgan Cazenove. We highly value having such experienced
partners working together with us." 


Key events during the reporting period:
 
First metal production at the Talvivaara mine
 
Talvivaara produced its first metal sulphides on 1 October 2008 as planned. The
start-up of metals production followed the commencement of mining operations in
April and materials handling and bioheapleaching processes in July this year. 

The EUR 250 million metals recovery plant is scheduled to produce 33,000 tonnes
of nickel and 60,000 tonnes of zinc per annum by 2010. Approximately 60% of the
planned volumes, some 20,000 tonnes of nickel and 37,000 tonnes of zinc, is
expected to be produced in 2009. 

The successful start-up of metals recovery demonstrates that the entire
production process at Talvivaara, including bioheapleaching, is now
operational. While the production volumes during the rest of 2008 will still
remain low as per plan, the main target over the coming months will be to
optimize the various processes for commercially significant production from the
beginning of 2009 and beyond. 

Materials handling and bioheapleaching processes commenced in July

Ahead of the metals recovery stage of the production process, the ramp-up of
the materials handling and bioheapleaching processes commenced, as planned, in
July. 

By early August, contractor operated primary crushing, and Talvivaara operated
secondary and tertiary crushing, agglomeration and stacking were all
operational. Bioheapleaching had by then also got off to a good start with heap
temperatures reaching 80°C and bacterial counts rising. 

Personnel and safety

Talvivaara's personnel increased from 191 at the start of the reporting period
to 229 by the date of this statement. The growth in personnel stemmed primarily
from the recruitment of trainee operators who completed training courses for
process workers. 

During the reporting period, an average of 1,750 contractor personnel worked at
the mining site daily. 

During 2008, there have been altogether 22 lost-time-injuries (LTI's), none
serious. Since the start of the construction project in April 2007 the total
number of LTI's has been 28, which corresponds to 10 LTI's per million working
hours and is substantially below the average figures for the construction
industry in Finland. 

The Company will continue to place a special emphasis on safety issues at the
site. 

Initial drawdown of the USD 320 million project loan

Talvivaara made a USD 165 million initial drawdown of the USD 320 million
project loan facility on 3 September. 

As required under the facility agreement, Talvivaara had hedged prior to the
drawdown 15,961 tonnes of nickel and 38,017 tonnes of zinc for the period April
2009 to December 2011 through forward swaps. The average hedged prices for
nickel and zinc are USD 23,611 per tonne and USD 1,948 per tonne, respectively.
The Company has committed to hedge an additional 7,000 tonnes of nickel for the
same time period before the end of May 2009. 

Corporate broking 

Alongside Talvivaara's existing broker, JPMorgan Cazenove, the Company is
pleased to announce the appointment of Liberum Capital as Joint Corporate
Broker. Liberum Capital has a recognised research, sales and trading platform
in UK and European equities, with particular strength in the mining sector. 

Short term outlook

The short term outlook for the Company remains positive, with the major
milestone of metals production now achieved. The key task for the coming months
will be the continuation of the ramp-up and optimisation of production
processes. 

The recent turmoil on the financial markets is not anticipated to have a
material effect on Talvivaara's operations, as the project is fully funded. 

Talvivaara has hedged its exposure to the potential US dollar weakness at
EUR/USD levels of 1.5 and 1.6 through 2009 with EUR call options. These call
options are anticipated to cover the undrawn proportion of the project term
loan and the majority of the operational expenditure in 2009. 

The present spot prices of nickel and zinc (USD 16,250 per tonne and USD 1,680
per tonne, respectively) are substantially above Talvivaara's estimated cash
costs. Hence the Company anticipates being able to operate profitably at
present or lower price levels. 



Enquiries: 

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

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

Note: The information presented in this release is unaudited. 
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 metal out of low grade 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 a minimum of
24 years after the now realized production start-up in October 2008. 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.