2009-11-11 08:02:24 CET

2009-11-11 08:03:47 CET


REGULATED INFORMATION

English
Talvivaaran Kaivososakeyhtiö Oyj - Interim report (Q1 and Q3)

Quarterly Interim Results for the period ending 30 September 2009



Talvivaara Mining Company Plc
Stock Exchange Release 11 November 2009


  Quarterly Interim Results for the period ending 30 September 2009


Talvivaara Mining Company Plc ("Talvivaara" or the "Company") today
announces its unaudited Interim Results for the three and nine month
periods ended 30 September 2009.


Third quarter highlights

*          Successful installation and commissioning of the upgraded
  crushing circuit to increase crushing capacity to approximately 22
  million tonnes per annum

*          Start-up of metals recovery plant in mid September in
  anticipation of continuous production

*          Placing of orders for critical long-lead items, notably
  the second hydrogen plant and additional mining fleet, for capacity
  expansion

*          Permitting and commissioning of the Talvivaara-Murtomäki
  railhead for regular transport from September

*          Continued good safety record at the mine site with one
  Lost Time Injury (LTI) to Talvivaara personnel during the third
  quarter

*          Closing of equity placing raising EUR 82.7 million in July
  to provide sufficient liquidity to take production target to 50,000
  tonnes of nickel per annum from 2012


Key figures


                              Q3      Q3     Q1-Q3    Q1-Q3
                             2009    2008     2009     2008   FY 2008

                      EUR
Turnover              '000      826       -    2,604        -       -
Operating profit      EUR
(loss)                '000 (15,303) (4,955) (23,208)  (9,576) (4,296)
Profit (loss) before  EUR
taxes                 '000 (15,314) (9,001) (30,003) (13,452) (8,033)
Earnings per share    EUR    (0.04)  (0.03)   (0.08)   (0.05)    0.03
                      EUR
Capital expenditure   '000   24,315 100,128   82,052  273,030 429,086
Net interest-bearing  EUR
debt                  '000  354,130 100,131  354,130  100,131 285,467
Debt-to-equity ratio         84.2 %  28.3 %   84.2 %   28.3 %  67.3 %
Cash and cash
equivalents
 at the end of the    EUR
period                '000   68,624  93,028   68,624   93,028  82,713
Derivative financial  EUR
instruments           '000   64,975  74,393   64,975   74,393 152,545
Number of employees
at the
end of the period               283     229      283      229     239


Pekka Perä, CEO  of Talvivaara  commented: "We are  pleased that  our
decision to  proceed  with  the  installation  of  an  upgraded  fine
crushing circuit  has enabled  us to  overcome the  most  challenging
hurdles in  the way  of achieving  full production.  The end  of  the
quarter saw all processes at the  mine operating as planned. After  a
modification of the primary  crusher at the end  of October to  allow
crushing rates  at the  level of  60,000 tonnes  per day,  we  remain
confident that the ramp up towards production levels of approximately
30,000 tonnes of nickel per annum in 2010 remains on track."
."

Enquiries:

Talvivaara Mining Company Plc    Tel. +358 20 712 9800
Pekka Perä, CEO
Saila Miettinen-Lähde, CFO
Merlin Tel. +44 207 726 8400
Tom Randell
Anca Spiridon

A conference call to discuss the Third Quarter 2009 Results will be
held at 12:00 UK time / 14:00 Finnish time on 11 November 2009.
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
The conference ID is 40892036

A replay facility will be available on the following numbers until 17
November 2009:
Replay Access Number: 40892036#
International Dial in: +44 (0) 1452 55 0000
UK Free Call Dial In: 0800 953 1533
UK Local Dial In: 0845 245 5205
USA Free Call Dial In: 1866 247 4222

CEO Statement

Our operations during the third quarter progressed as expected,  with
focus for much of the period on the installation and commissioning of
the upgraded  crushing  circuit.  The  installation  took  place,  as
anticipated, during the latter half  of August, followed by  start-up
of the redesigned circuit in the beginning of September. The budgeted
levels of  crushing  at  around  40,000 tonnes  per  day  were  first
achieved in October, and with all  assembly work now complete we  are
looking forward to progressing towards  the planned full capacity  of
60,000 tonnes per day during the remainder of the year.

We  have  made  considerable  progress  in  improving  the  materials
handling processes to a level that now allows the overall process  to
achieve the planned  volumes of  production. I am  pleased to  report
that in  early  September  we  concluded that  the  amount  of  leach
solution was  sufficient  for  continuous  operation  of  the  metals
recovery  plant.  The  plant   was  subsequently  re-started  on   14
September, and the quality  of the metal  sulphide output since  then
has again been better than before  and is getting close to the  final
targeted specifications. Production volumes during the fourth quarter
are  anticipated  to  be  commercially  significant,  although   some
modifications at the plant will still be necessary to allow a further
increase in volumes in 2010.

The capacity expansion project is proceeding on target, and all major
orders for new  equipment have been  placed following the  successful
EUR 82.7 million  equity placing  in July. These  include the  second
hydrogen plant and  additional mining fleet  to serve the  increasing
mining capacity.

Health and safety continues to be one of our key focus areas and I am
proud to report  that our safety  record remains good  with just  one
Lost Time Injury  to our  own personnel  since we  launched our  Work
Group Safety  Challenge  in February.  We  also remain  committed  to
responsible conduct in environmental matters and strive to maintain a
good record in  terms of  our operational impact  on the  surrounding
areas.

The commodities markets have remained surprisingly strong  throughout
the third quarter and into the  fourth despite the continued lack  of
industrial demand particularly in the developed nations. We  continue
to expect that  commodities prices will  retract somewhat from  their
present levels in the short term. However, this may at least in  part
be countered by  the weakness of  the US dollar.  Our long term  view
remains very  positive with  the developing  economies and  potential
supply-demand disparities as the key drivers.

All in all,  our outlook remains  positive for the  remainder of  the
year, with the  most challenging production  problems now behind  us.
While sustained ramp-up of crushing according to plan continues to be
critical, we  remain confident  that our  2010 production  target  of
approximately 30,000 tonnes of nickel is achievable.


Pekka Perä
CEO

Financial review

Talvivaara's sales during the three  and nine month periods ended  30
September 2009 amounted to EUR 0.8  million (Q3 2008: 0) and EUR  2.6
million (Q1-Q3  2008: 0),  respectively. The  sales volumes  remained
below budgeted levels due to limited crushing capacity resulting from
technical design issues in the crushing circuit. The crushing circuit
was redesigned in the spring,  and the upgraded system was  installed
and commissioned during Q3 2009.

The Company's other operating income,  amounting to EUR 11.6  million
in Q3 2009 (Q3 2008: EUR 3.4 million) and EUR 37.2 million for  Q1-Q3
2009 (Q1-Q3 2008: EUR 12.6 million), consisted of realised (EUR  21.1
million) and unrealised (EUR 15.6 million) gains on nickel, zinc  and
USD forwards. Other operating expenses, which in Q3 2009 amounted  to
EUR (17.0) million (Q3 2008: EUR (4.3) million) and in Q1-Q3 2009  to
EUR  (32.6)  million  (Q1-Q3  2008:  EUR  (12.3)  million),  included
unrealised fair value losses on biological assets (trees) and  nickel
and zinc forwards held for trading.

Employee benefit expenses, including  the value of employee  expenses
related to the employee share option  scheme of 2007, were EUR  (3.6)
million in  Q3 2009  (Q3  2008: EUR  (3.2)  million) and  EUR  (11.6)
million for the nine  months from January  to September (Q1-Q3  2008:
EUR (7.3) million). The increase was attributable to increased number
of personnel.

Operating loss for Q3 2009 amounted  to EUR (15.3) million (Q3  2008:
EUR (5.0) million)  and was EUR  (23.2) million for  the nine  months
from January to September (Q1-Q3 2008: EUR (9.6) million).

Finance income  in Q3  2009 of  EUR  8.0 million  (Q3 2008:  EUR  0.5
million) and in Q1-Q3 2009 of  EUR 15.0 million (Q1-Q3 2008: EUR  2.8
million) included exchange rate gains on the USD 320 million  project
loan facility  and  on bank  accounts.  Finance costs  of  EUR  (8.0)
million in  Q3 2009  (Q3  2008: EUR  (4.6)  million) and  EUR  (21.8)
million in Q1-Q3 2009 (Q1-Q3 2008: EUR (6.7) million) related  mostly
to the  Company's  borrowings,  in particular  to  the  project  loan
facility and the EUR 85 million convertible loan, as well as exchange
rate losses.

Loss for the  period in Q3  2009 amounted to  EUR (10.7) million  (Q3
2008: EUR (9.4) million) and totalled EUR (21.9) million for the nine
months from January to September (Q1-Q3 2008: EUR (15.3) million).

The Company's total comprehensive  income in Q3  2009 was EUR  (27.2)
million (Q3 2008:  EUR 23.0  million) and  in Q1-Q3  2009 EUR  (85.8)
million (Q1-Q3  2008:  EUR  26.8  million),  reflecting  primarily  a
decrease in hedge reserves  brought about by  the increase in  nickel
price during 2009.

On  the  consolidated  statement  of  financial  position  as  at  30
September 2009,  property, plant  and  equipment totalled  EUR  615.2
million (31  December 2008:  EUR 552.5  million), with  the  increase
since  the  2008  year  end   attributable  to  expenditure  on   and
capitalisation of  mine  related  assets  according  to  plan.  Other
notable changes  in  the  Company's assets  include  the  substantial
decrease in the  fair value of  derivative financial instruments,  in
particular nickel and zinc  forward swaps. The  change was caused  by
increase in nickel  and zinc  prices during the  reporting period  as
well as  the maturity  of some  of the  forward contracts.  As at  30
September 2009, the derivative  financial instruments were valued  at
EUR 65.0 million (31 December 2008: EUR 152.5 million).

Deferred  tax  assets  were  EUR  7.4  million  (31  December   2008:
liabilities of  EUR  23.1 million).  The  change was  caused  by  the
decrease in fair value of derivative financial instruments during the
reporting period and the tax losses of 2009.

Inventories amounted to EUR 82.1 million (31 December 2008: EUR  31.7
million), with the increase relating mostly to ore on leach pads  and
work in  progress, both  valued at  cost. Cash  and cash  equivalents
totalled EUR  68.6  million (31  December  2008: EUR  82.7  million).
Talvivaara's cash position was improved from  Q2 2009 as a result  of
an equity placing with gross proceeds of EUR 82.7 million.

In equity and liabilities, the invested unrestricted equity increased
from EUR 320.6 million on 31 December 2008 to EUR 401.3 million on 30
September 2009 due to the equity  placing in July. The hedge  reserve
related to nickel cash flow hedges decreased from EUR 72.3 million on
31 December 2008 to EUR 21.3 million on 30 September 2009 due to  the
increase in the market price of nickel. Borrowings increased from EUR
368.2 million to EUR 422.8 million, reflecting drawdown of the EUR 45
million investment and working capital loan from Finnvera Plc.

Total equity and liabilities as at 30 September 2009 amounted to  EUR
879.9 million (31 December 2008: EUR 874.0 million).

Currency and commodity hedges and hedge accounting

As at 30 September 2009, the Company had 13,547 tonnes of nickel  and
33,579 tonnes of zinc forward swaps remaining of its commodity  hedge
programme executed in 2007 and  2008 and extending through 2011.  The
volume weighted average prices of  the outstanding positions are  USD
23,452 per  tonne  for nickel  and  USD  1,949 per  tonne  for  zinc.
Talvivaara applies hedge accounting to  nickel hedges maturing in  Q1
2010 - Q4 2011.

The Company has entered into a currency hedging programme  comprising
USD forwards for  seven quarters from  Q2 2009 through  Q4 2010.  The
hedged amount  is EUR  175  million in  total,  with EUR  25  million
maturing each quarter. The  forwards were executed  in April 2009  at
EUR/USD rates ranging from 1.26 to 1.28. The realized gain from these
hedges was EUR 4.4 million during the reporting period.

In addition, the  company has outstanding  currency option  contracts
amounting to USD 64 million. The EUR/USD rate of the option contracts
is 1.60. The options will mature during Q4 2009.

Financing

In July,  the  Company  successfully  closed  an  equity  placing  of
22,280,000 shares,  representing approximately  10  per cent  of  the
number of  the  existing  shares,  to  institutional  investors.  The
placing was conducted  through an  accelerated book-building  process
and priced at EUR 3.70 (GBP  3.20) per share, raising gross  proceeds
of EUR 82.7 million (GBP 71.3 million). The share issue was  approved
by the  shareholders  of the  Company  in the  Extraordinary  General
Meeting on 6 July 2009.

In August,  Talvivaara  entered  into an  agreement  with  a  Finnish
financial institution for the factoring of sales receivables from the
Company's nickel and cobalt products.

During Q2, Talvivaara drew  down EUR 45 million  of a EUR 50  million
investment and  working capital  loan granted  by Finnvera  Plc.  The
remaining  EUR  5  million  of  the  total  commitment  is  used  for
capitalisation of interest. The loan carries an interest of EURIBOR 6
months + 3.00% and  is due to  be repaid over  a five-year period  of
2013 to 2018.

In June, the Company received a EUR 5 million reimbursement from  the
Finnish Government for infrastructure  investments relating to  power
supply and  electrification.  The subsidy  was  part of  the  overall
decision by the Finnish Parliament in 2007 to grant EUR 52 million to
support  the  construction  of   necessary  infrastructure  for   the
Talvivaara mine.

Production summary

The  key  task  in  production  during  the  third  quarter  was  the
installation and commissioning  of the upgraded  crushing circuit  to
enable a significant  increase in production  volumes going  forward.
While corrective  measures to  alleviate the  crushing problems  were
being taken, all other processes continued to perform well.

The mining department blasted 2.0 million tonnes of ore and excavated
1.0 million  tonnes of  waste  during the  third quarter,  while  the
corresponding figures  for the  first nine  months were  7.3  million
tonnes and  2.9 million  tonnes. The  period was  uneventful for  the
mining  department  and  optimisation  of  the  operating  procedures
continued. Running  of  the  operations  at  full  capacity  remained
untested due to the bottleneck in crushing. Ore hauling capacity also
continued to limit the throughput for the time being, but  Talvivaara
is confident  the  upgraded target  for  the mining  volumes  can  be
achieved  following  the  commissioning  of  additional  mobile  gear
towards the end of 2009 and early 2010.
The third quarter performance in materials handling reflected firstly
the limited capacity of the old crushing circuit in July and early
August and secondly the production stoppage for the installation of
the upgraded system from 12 August until the end of the month. The
redesigned circuit started operation, as planned, in the beginning of
September, after which production volumes have been gradually
increased. The volume of ore crushed and stacked in Q3 2009 amounted
to 1.4 million tonnes, while the corresponding figure for the first
nine months of the year was 5.5 million tonnes.
The Company's primary crusher also continued to experience  technical
problems and  performed at  less than  budgeted capacity  during  the
third  quarter.  Further  modifications  to  improve  the   crusher's
performance  were  agreed  with   the  supplier,  but  delivery   and
installation of new  components could only  be arranged for  October.
Problems in  primary  crushing are  not  a rate-limiting  factor  for
overall production, as contractor  capacity is readily available  and
was used  to  complement  Talvivaara's own  capacity  throughout  the
reporting period.

In bioheapleaching, heat generation throughout the summer months  was
high. In such  circumstances, some  of the  nickel precipitated  back
into the heap. However, the re-precipitated nickel in the heap is  in
readily soluble form and can  be returned to circulation by  flushing
the heap with water.  It has also been  seen that despite  continuous
bleeding of  more than  15%  of the  circulating solution  to  metals
recovery and/or storage ponds since  mid September, nickel grades  in
the solution have  continued to  increase. As the  long term  planned
bleeding rate, as based on earlier experience from the pilot heap, is
only 10%,  this  indicates  promising  development  in  the  leaching
process. Some  further increase  in leach  solution metal  grades  is
still expected and will be important  in order to reach the  targeted
full scale production levels in mid  2011 and beyond, but until  then
the existing reactor capacity is sufficient to treat even lower grade
solutions.

The metals recovery process was re-started in mid September, once the
volume of leach solution  was estimated to  be sufficient to  support
continuous production. Due to the  short operating time in the  third
quarter, the production  volumes remained limited,  at 101 tonnes  of
contained nickel  and  114  tonnes  of  contained  zinc  in  sulphide
concentrate.  The  quality  of  the  products  was  again  good   and
approached target specifications set for steady state operation.

Similarly to the first half of 2009, the operating cost of  materials
handling   relative   to    metals   recovery    continued   to    be
disproportionately high  during the  third quarter.  Hence, the  unit
cost of production during  the period was  not representative of  the
estimated production costs in steady state operation.

Production key figures 2008 - Q3 2009


                                         Q3 2009 Q1-Q3 2009 2008-2009
Mining
Blasted ore               million tonnes     2.0        7.3      10.3
Excavated waste           million tonnes     1.0        2.9       4.2
Materials handling
Stacked ore               million tonnes     1.4        5.5       8.0
Bioheapleaching
Ore in primary heap
at end of period          million tonnes     8.0        8.0       8.0
Metals recovery
Nickel sulphide           dry metric
production                tonnes             208        668       668
Nickel metal content      tonnes             101        325       325
                          dry metric
Zinc sulphide production  tonnes             190      1,444     1,444
Zinc metal content        tonnes             114        820       820



Research and development

Talvivaara continued active  studies relating  to manganese  recovery
from the  leach  solution.  Other ongoing  research  and  development
projects related to optimisation  of the bioheapleaching  technology,
and chemical and biological iron removal from leach solution.

Environment, health and safety

The Company  continued its  environmental management  and  monitoring
programme  in  accordance  with  the  requirements  set  out  in  its
Environmental  Permit.  Some  temporarily  decreased  pH  levels  and
increases in suspended solids and metal contents in downstream waters
have been  detected and  such deviations  have been  reported to  the
environmental authorities.  Any  deviations  have  been  followed  by
increased level of monitoring until  all parameters have returned  to
permitted levels.

Dust emissions from the mining  area have also occasionally  exceeded
permitted  levels.  Since  the  discontinuation  of  contractor  fine
crushing at the end  of March the  dust emissions have  substantially
decreased, but the Company continues to focus on decreasing the  dust
levels.

Talvivaara is preparing its environmental  processes to meet the  ISO
14001 environmental standard.  Audit of the  environmental system  is
targeted for Q4 2010.

No environmental compensation was  paid during the reporting  period.
The environmental security  placed for future  rehabilitation of  the
area amounted to EUR 13.8 million on 30 September 2009. Of the total,
EUR 9 million was covered by bank guarantees and guarantee insurance,
and EUR 4.8 million was deposited in escrow accounts.

Occupational safety  is  one of  Talvivaara's  key focus  areas.  The
safety record remained  good during the  reporting period with  three
relatively minor  Lost  Time  Injuries  (LTI's)  reported  among  the
Company's personnel  in January  and one  in September.  The  overall
safety rating at the end of the  period was 11 LTI's per million  man
hours.

Legal and permitting matters

Talvivaara  Infrastructure  Oy,  a  wholly-owned  subsidiary  of  the
Company constructing the new railhead  connecting the mine site  with
the national railway  grid, received the  operating permits from  the
Finnish Rail  Agency  on 15  September  2009. Regular  train  traffic
started on 16  September with limestone  deliveries from the  Kokkola
port located in the west coast of Finland.

Personnel

Talvivaara employed an average of 266 employees during the first nine
months of 2009 (Q1-Q3  2008: 158). At the  end of September 2009  the
number of employees was 283,  while the corresponding number was  239
at the end of 2008  and 229 at the end  of September 2008. Wages  and
salaries paid during the period totalled EUR 9.9 million (Q1-Q3 2008:
EUR 6.2 million).

Shares and shareholders

The issued share  capital of  the Company  on 30  September 2009  was
245,176,718 and (assuming share issues in relation to the convertible
bond of May 2008 and option scheme of 2007) the fully diluted  issued
share capital of the Company was 263,669,291.

As at 30 September  2009, the shareholders who  held more than 5%  of
the shares and votes  of the Company were  Pekka Perä (23.3%),  Varma
Mutual Pension  Insurance Company  (8.6%)  and Capital  Research  and
Management (5.0%).


Risks and uncertainties

Talvivaara carries out an  ongoing process endorsed  by the Board  of
Directors to  identify risks,  measure their  impact against  certain
assumptions and  implement the  necessary proactive  steps to  manage
these risks. The Company's operations  are affected by various  risks
common to  the  mining  industry,  such  as  risks  relating  to  the
development of  Talvivaara's  mineral  deposits,  and  volatility  of
commodities prices and currency exchange ratios.

In the  short  term, Talvivaara's  operational  risks relate  to  the
ongoing ramp-up of operations.  Because of uncertainties relating  to
the materials handling processes, Talvivaara has previously withdrawn
its production targets  for the  current year and  continues to  take
measures  to  secure  2010  production  at  the  targeted  level   of
approximately 30,000 tonnes of nickel.

The market  price of  nickel has  remained relatively  stable at  USD
17,000-19,000  per  tonne  since  early  August.  In  light  of   the
relatively  modest  industrial  demand  of  nickel  in  the   Western
economies for the time being, there  may in the Company's view  still
be downward pressure on the prices in the short term. Talvivaara  has
executed significant hedges against low nickel and zinc prices in the
short to  medium term.  In  the long  term, Talvivaara  believes  its
operations to also be profitable at substantially lower nickel prices
than the present market prices.

Talvivaara's revenues are almost entirely  in US dollars, whilst  the
majority of  the  Company's costs  are  incurred in  Euro.  Potential
strengthening of the  Euro against the  US dollar could  thus have  a
material adverse effect  on the business  and financial condition  of
the Company. Talvivaara's existing currency hedges have been executed
to partly  mitigate this  through the  end of  2010 and  the  Company
anticipates hedging against currency  exchange volatility also  going
forward.

Events after the reporting period

Commissioning of the upgraded crushing circuit
The redesigned and  upgraded crushing circuit  has been in  operation
since the beginning of September, and its overall production rate  on
a weekly basis has reached an  average of over 40,000 tonnes per  day
in October. Volumes  in excess  of 50,000  tonnes per  day have  been
reached on  individual  days.  The  achieved  volumes  have  recently
exceeded the budgeted  volumes so  that the  year-to-date actual  vs.
budgeted ratio of 47% following the production stoppage in August has
increased to 53%  by early November.  While further optimisation  and
capacity testing of the  process remains to  be done, the  production
volumes achieved so  far indicate the  circuit to be  capable of  the
targeted production rate of 60,000  tonnes per day, corresponding  to
22 million tonnes per annum.

Technical modification of the primary crusher
In late October, the Company's primary crusher was fitted with a new
mantle reducing the crusher's nib angle from 23° to 19°. Current
performance of the primary crusher is satisfactory with rates of
approximately 60,000 tonnes per day being achieved. This has allowed
discontinuation of contractor crushing. However, formal capacity
tests are yet to be carried out.

Production stoppage for relining of  reactors at the metals  recovery
plant
Mechanical failure in certain parts of the metals plant reactors was
detected in mid October and the plant was subsequently turned off
while the reactors were relined and the plant equipment was inspected
to rule out any other potential damage. The failure appears to have
been caused by human error during commissioning and is not believed
to be an inherent problem in the process or the reactor linings.
Production at the plant has since resumed and it is not anticipated
that the Company will incur any material loss from the incident,
which was covered by insurance.
Short-term outlook

Following the  commissioning of  the  expanded crushing  circuit  and
restart  of  the   metals  precipitation   processes  in   September,
Talvivaara expects  to continue  its production  ramp-up targeted  at
eventually achieving up to 50,000 tonnes in annual nickel  production
in  2012.   Since  the   re-start,  stepwise   increases  in   metals
precipitation  volumes  have  already  commenced  in  line  with  the
increasing size of the heap and the trend is anticipated to  continue
during the  remainder of  the  year and  into 2010.  While  sustained
ramp-up of crushing according to plan also continues to be a critical
prerequisite  for  next  year's   production,  the  Company   remains
confident that  its 2010  production target  of approximately  30,000
tonnes of nickel is achievable.

The Company does not anticipate  its production plans to be  affected
by commodity prices. Following the  successful closing of its  equity
placing in July, Talvivaara believes  it has sufficient liquidity  to
cover the cost of capacity expansion, expected to be incurred  mostly
in 2009 and 2010.

CONSOLIDATED INCOME STATEMENT


                    Unaudited Unaudited Unaudited Unaudited   Audited
                        three     three      nine      nine    twelve
                    months to months to months to months to months to
(all amounts in EUR
'000)               30 Sep 09 30 Sep 08 30 Sep 09 30 Sep 08 31 Dec 08

Turnover                  826         -     2,604         -         -

Other operating
income                 11,599     3,402    37,152    12,568    29,810
Changes in
inventories of
finished goods and
work in progress       15,100     3,773    47,177     3,773    24,006
Materials and
services             (12,763)   (4,389)  (40,267)   (5,910)  (20,407)
Employee benefit
expenses              (3,566)   (3,159)  (11,631)   (7,286)   (8,910)
Depreciation,
amortization,
depletion and
impairment charges    (9,458)     (265)  (25,677)     (462)   (5,756)
Other operating
expenses             (17,041)   (4,317)  (32,566)  (12,259)  (23,039)

Operating profit
(loss)               (15,303)   (4,955)  (23,208)   (9,576)   (4,296)

Finance income          8,026       514    15,039     2,799     9,219
Finance cost          (8,037)   (4,560)  (21,834)   (6,675)  (12,956)
Finance cost (net)       (11)   (4,046)   (6,795)   (3,876)   (3,737)

Loss before income
tax                  (15,314)   (9,001)  (30,003)  (13,452)   (8,033)

Income tax expense      4,565     (363)     8,056   (1,895)    13,865

Profit (loss) for
the period           (10,749)   (9,364)  (21,947)  (15,347)     5,832

Attributable to:
Equity holders of
the Company           (9,310)   (7,013)  (18,415)  (10,975)     7,042
Minority interest     (1,439)   (2,351)   (3,532)   (4,372)   (1,210)
                     (10,749)   (9,364)  (21,947)  (15,347)     5,832


Earnings per share
for profit (loss)
attributable to the
equity holders of
the Company
(expressed in € per
share)
Basic and diluted      (0.04)    (0.03)    (0.08)     0.05)      0.03



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


                      Unaudited Unaudited Unaudited Unaudited Audited
                          three     three      nine      nine  twelve
                                                               months
                      months to months to months to months to      to
(all amounts in EUR                                            31 Dec
'000)                 30 Sep 09 30 Sep 08 30 Sep 09 30 Sep 08      08

Profit (loss) for the
period                 (10,749)   (9,364)  (21,947)  (15,347)   5,832

Other comprehensive
income,
items net of tax
Available-for-sale
financial assets              -         -         -     (451)   (451)
Cash flow hedges       (16,461)    32,331  (63,828)    42,637  90,414

Other comprehensive
income, net of tax     (16,461)    32,331  (63,828)    42,186  89,963

Total comprehensive
income                 (27,210)    22,967  (85,775)    26,839  95,795

Attributable to:
Equity holders of the
Company                (22,479)    18,853  (69,478)    22,685  78,922
Minority interest       (4,731)     4,114  (16,297)     4,154  16,873
                       (27,210)    22,967  (85,775)    26,839  95,795




CONSOLIDATED STATEMENT OF FINANCIAL POSITION


                                        Unaudited   Audited Unaudited
 (all amounts in EUR '000)              30 Sep 09 31 Dec 08 30 Sep 08

ASSETS

Non-current assets
Property, plant and equipment             615,195   552,459   401,794
Biological assets                           6,368     8,152     8,249
Intangible assets                           7,609     7,774     7,164
Deferred tax assets                         7,412         -
Derivative financial instruments           39,391   116,004    61,355
Other receivables                          11,227     9,635    10,119
                                          687,202   694,024   488,681

Current assets
Inventories                                82,080    31,691     4,803
Trade receivables                             981         -         -
Other receivables                          10,609    24,721    19,500
Derivative financial instruments           30,413    40,805    13,700
Cash and cash equivalent                   68,624    82,713    93,028
                                          192,707   179,930   131,031

Total assets                              879,909   873,954   619,712

EQUITY AND LIABILITIES

Equity attributable to equity holders
of the parent
Share capital                                  80        80        80
Share premium                               8,086     8,086     8,086
Other reserves                            416,554   334,019   333,533
Hedge reserve                              21,269    72,332    34,111
Retained earnings                        (44,516)  (26,101)  (44,119)                 401,473   388,416   331,691
Minority interest in equity                19,119    35,470    22,745
Total equity                              420,592   423,886   354,436

Non-current liabilities
Borrowings                                412,852   367,955   193,135
Derivative financial instruments            3,487     1,985       662
Deferred tax liabilities                        -    23,070    22,044
Provisions                                  1,018       944       423
                                          417,357   393,954   216,264
Current liabilities
Borrowings                                  9,912       224        25
Trade payables                             19,401    45,283    41,819
Other payables                             11,305     8,294     7,134
Derivative financial instruments            1,342     2,279         -
Provisions                                      -        34        34
                                           41,960    56,114    49,012
Total liabilities                         459,317   450,068   265,276

Total equity and liabilities              879,909   873,954   619,712




CONSOLIDATED STATEMENT OF CASH FLOWS
                        Unaudited Unaudited Unaudited Unaudited   Audited
                            three     three      nine      nine    twelve
                        months to months to months to months to months to
(all amounts in EUR     30 Sep 09 30 Sep 08 30 Sep 09 30 Sep 08 31 Dec 08
'000)

Cash flows from
operating activities

Profit (loss) for the
period                   (10,749)   (9,364)  (21,947)  (15,347)     5,832
Adjustments for
      Tax                 (4,565)       363   (8,056)     1,895  (13,865)
      Depreciation and
      amortization          9,458       265    25,677       462     5,756
      Other non-cash
      income and
      expenses                603       922     3,327     2,430     4,780
      Interest income     (8,026)     (514)  (15,039)   (2,799)   (9,219)
      Fair value gains
      on financial
      assets at fair
      value through
      profit or loss       10,996   (3,003)     2,806   (7,604)  (24,796)
      Interest expense      8,037     4,560    21,834     6,675    12,956
                            5,754   (6,771)     8,602  (14,288)  (18,556)
Change in working
capital
Decrease(+)/increase(-)
in other receivables        2,533     9,239     9,314    12,537     4,552
Decrease (+)/increase
(-) in inventories       (16,404)   (4,803)  (51,122)   (4,803)  (30,661)
Decrease(-)/increase(+)
in trade and other
payables                    1,783     2,154  (24,072)    18,670    23,773
Change in working
capital                  (12,088)     6,590  (65,880)    26,404   (2,336)

                          (6,334)     (181)  (57,278)    12,116  (20,892)

Interest and other
finance cost paid         (4,578)   (1,169)  (16,132)   (4,855)   (7,468)
Interest income                52       501     3,430       956     9,581

Net cash used in
operating activities     (10,860)     (849)  (69,980)     8,217  (18,779)

Cash flows from
investing activities

Acquisition of
subsidiary, net of cash
acquired                     (54)         -      (54)         -         -
Purchases of property,
plant and equipment      (24,182) (100,045)  (81,842) (271,802) (427,187)
Purchases of biological
assets                          -         -      (35)      (26)      (26)
Purchases of intangible
assets                      (133)      (83)     (175)   (1,202)   (1,873)
Proceeds from sale of
property, plant and
equipment                       -         -         9         -         -
Proceeds from sale of
intangible assets               -         -        49         -         -
Proceeds from sale of
biological assets             104       124       104       251       707
Proceeds from
government grant
related to tangible
assets                          -         -     5,000         -         -
Proceeds from
government grant
related to intangible
assets                          -       204        13       204       203
Proceeds from sale of
available for sale
financial assets                -         -         -    26,356    26,356
Purchases of derivative
financial instruments           -                   -   (1,371)   (1,371)
Proceeds from sale of
derivative financial
instruments                     -         -         -         -         -
Proceeds from sale of
financial assets at
fair value through
profit or loss                  -         -         -     1,440     1,440
Net cash used in
investing activities     (24,265)  (99,800)  (76,931) (246,150) (401,751)

Cash flows from
financing activities
Proceeds from share
issue net of
transaction costs          80,644         -    80,644         -         -
Proceeds from
interest-bearing
liabilities                     -   119,560    53,357   204,460   396,734
Payment of
interest-bearing
liabilities               (1,154)         -   (1,179)         -  (20,000)
Capital investment by
minority shareholders           -         -         -         -         8

Net cash generated in
financing activities       79,490   119,560   132,822   204,460   376,742

Net (decrease)/increase
in cash and bank
overdrafts                 44,365    18,911  (14,089)  (33,473)  (43,788)

Cash and bank
overdrafts at beginning
of the period              24,259    74,117    82,713   126,501   126,501
Cash and bank
overdrafts at end of
the period                 68,624    93,028    68,624    93,028    82,713


CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

A. Share Capital
B. Share Premium
C. Invested unrestricted equity
D. Other Reserves
E. Hedge Reserves
F. Retained Earnings
G. Total
H. Minority interest
I. Total Equity



                A   B     C      D      E     F        G        H       I
Balance at 1
January 2008  16 8,086 320,671  1,106   -    (33,423) 296,456 18,591 315,047


Total
comprehensive
income for
1-9/2008       -     -       -  (451) 34,111 (10,975)  22,685  4,154  26,839

Transfers
within
equity,
change of the
corporate
form          64     -    (64)      -      -        -       -      -       -
Employee
share option
scheme
- value of
employee
services       -     -       -  1,377      -        -   1,377      -   1,377
Convertible
bond,
equity
component      -     -       - 10,894      -        -  10,894      -  10,894
Restatement
to capital
expenditure,
which
relates to
previous year  -     -       -      -      -      278     278      -     278
Minority
interest
arising
from
subsidiary     -     -       -      -      -        1       1      -       1
Balance at 30
September
2008          80 8,086 320,607 12,926 34,111 (44,119) 331,691 22,745 354,436

Balance at 31
December 2008 80 8,086 320,607 13,412 72,332 (26,101) 388,416 35,470 423,886

Balance at 1
January 2009  80 8,086 320,607 13,412 72,332 (26,101) 388,416 35,470 423,886

Total
comprehensive
income for                               (51              (69    (16     (85
1-9/2009       -     -       -      -   063) (18 415)    478)   297)    775)
Share issue,
net of
transaction
costs          -     -  82,691      -      -        -  82,691      -  82,691
External
costs
directly
attributable
to
The issue of
new shares     -     - (2,047)      -      -        - (2,047)      - (2,047)
Acquisition
of
subsidiary,
Hyena
Holding AB     -     -       -      -      -        -       -   (54)    (54)
Employee
share
option scheme
- value of
employee
services       -     -       -  1,891      -        -   1,891      -   1,891
Balance at 30
September
2009          80 8,086 401,251 15,303 21,269 (44,516) 401,473 19,119 420,592



NOTES


Inventories

(all amounts in EUR '000)      Unaudited     Audited
                              30 September 31 December
                                  2009        2008
Raw materials and consumables        8 819       6 655
Ore on leach pads                   43 911      22 965
Work in progress                    26 225       1 041
Finished products                    1 047           -
Advance payments                     2 078       1 030
Inventories total                   82 080      31 691




Derivative financial instrumentsFair values of the derivative
financial instruments

(all amounts in EUR '000)       Unaudited             Audited
                               30 September         31 December
                                   2009                2008
                            Assets  Liabilities  Assets Liabilities

Nickel forwards - cash
flow hedges                 46,418            - 135,355           -
Nickel forwards - held for
trading                      7,621            -   3,301           -
Zinc forwards - held for
trading                        122          940  18,153           -
Interest rate swaps - held
for trading                      -        3,100       -       2,279
Currency forwards - held
for trading                 15,643            -       -           -
Currency options - held
for trading                      -          789       -       1,985
Total                       69,804        4,829 156,809       4,264
                                Unaudited             Audited
                              30 September          31 December
                                  2009                  2008
                            Assets Liabilities   Assets   Liabilities

Derivative financial
instruments                 69,804       4,829  156,809         4,264
Total                       69,804       4,829  156,809         4,264

Less non-current portion
Nickel forwards - cash
flow hedges                 29,860           -  101,797             -
Nickel forwards - held for
trading                          -           -        -             -
Zinc forwards - held for
trading                          9         387   14,207             -
Interest rate swaps - held
for trading                      -       3,100        -         1,985
Currency forwards - held
for trading                  9,522           -        -             -
Current portion             30,413       1,342   40,805         2,279




Quantities of the derivative
financial instruments

                  Unaudited                       Audited          30 Sep 2009        Total       31 Dec 2008      Total
             Current  Non-current           Current Non-current

Nickel
forwards -
cash flow
hedges, in
tonnes          2,971       8,813    11,784   3,429      12,128  15,557
Nickel
forwards -
held for
trading, in
tonnes          1,763           -     1,763     404           -     404
Zinc
forwards -
held for
trading, in
tonnes         13,652     19,927,    33,579   7,458      30,559  38,017
Interest
rate swaps
- held for
trading, in
EUR'000             -      36,636    36,636       -      36,636  36,636
Currency
forwards -
held for
trading, in
USD '000      127,625      32,062   159,687       -           -       -
Currency
options -
held for
trading, in
USD'000        64,000           -    64,000 209,800           - 209,800


Borrowings

(all
amounts in
EUR '000)      Carrying amount       Fair value
            Unaudited     Audited Unaudited Audited
               30 Sep      31 Dec    30 Sep  31 Dec
Non-current      2009        2008      2009    2008
Capital
loans           1,405       1,405     1,405   1,405
Project
Term Loan
Facility      209,656     229,935   209,656 229,935
Senior
Unsecured
Convertible
Bonds          74,813      72,842    74,813  72,842
Railway
Term Loan
Facility       30,347      25,461    30,347  25,461
Working
capital
loan           44,403           -    44,403       -
Finance
lease
liabilities    13,734       1,694    13,734   1,694
Interest
Subsidy
Loans           4,186       4,182     4,186   4,182
Other          34,308      32,436    34,308  32,436
              412,852     367,955   412,852 367,955

Current
Finance
lease
liabilities     1,034         199     1,034     199
Project
Term Loan
Facility        8,878           -     8,878       -
Other               -          25         -      25
                9,912         224     9,912     224

Total
borrowings    422,764     368,179   422,764 368,179




                                     Three     Nine     Nine   Twelve
Employee-related key        Three   months   months   months   months
figures                 months to       to       to       to       to
                           30 Sep   30 Sep   30 Sep   30 Sep   31 Dec
                             2009     2008     2009     2008     2008

Wages and
salaries       EUR '000     3,062    2,722    9,912    6,247    5,756
Average number
of
employees                     277      210      266      158      178
Number of
employees
at the end of
the
period                        283      229      283      229      239





                        Three     Three      Nine      Nine    Twelve
                    months to months to months to months to months to
                       30 Sep    30 Sep    30 Sep    30 Sep    31 Dec
Other figures            2009      2008      2009      2008      2008

Share options
outstanding at the
end
of the period       4,334,500 2,285,000 4,334,500 2,285,000 4,442,500
Number of shares to
be issued against
the outstanding
share
options             4,334,500 2,285,000 4,334,500 2,285,000 4,442,500
Rights to vote of
shares to be issued
against
the outstanding
share
options                  1.7%      1.0%      1.7%      1.0%      2.0%



KEY FIGURES

                           Three    Three      Nine    Nine    Twelve
                          months   months    months  months    months
                              to       to        to      to        to
                                   30 Sep            30 Sep
                       30 Sep 09       08 30 Sep 09      08 31 Dec 08

Operating
profit         EUR
(loss)         '000     (15,303)  (4,955)  (23,208) (9,576)   (4,296)

Return on
equity                    (2.7%)   (2.7%)    (5.2%)  (4.6%)      1.6%

Equity-to
assets ratio                 48%    57.2%       48%   57.2%     48.5%

Net interest   EUR
bearing debt   '000      354,130  100,131   354,130 100,131   285,467

Debt-to
equity
ratio                      84.2%    28.3%     84.2%   28.3%     67.3%

Capital        EUR
expenditure    '000       24,315  100,128    82,052 273,030   429,086

Research &
development    EUR
expenditure    '000            -        -         -       -       181

Property,
plant and      EUR
equipment      '000      615,194  401,794   615,194 401,794   552,458

Derivative
financial      EUR
instruments    '000       64,975   74,393    64,975  74,393   152,545

               EUR
Borrowings     '000      422,764  193,160   422,764 193,160   368,179

Cash and
cash
equivalents
at the end     EUR
of the period  '000       68,624   93,028    68,624  93,028    82,713


                           Three    Three      Nine    Nine    Twelve
                          months   months    months  months    months
                              to       to        to      to        to
Share-
related                            30 Sep            30 Sep
key figures            30 Sep 09       09 30 Sep 09      08 31 Dec 08

Earnings per
share          EUR        (0.04)   (0.03)    (0.08)  (0.05)      0.03

Equity per
share          EUR          1.75     1.49      1.75    1.49      1.74

Development
of share
price at
London
Stock
Exchange
Average
trading
price1         EUR          4.27     3.60      3.39    4.27    3.64
               GBP          3.72     2.86      3.00    3.34    2.90

Lowest
trading
price1         EUR          3.70     2.96      1.45    3.01    1.22
               GBP          3.23     2.35      1.29    2.35    0.98

Highest
trading
price1         EUR          4.78     4.45      4.71    5.74    5.64
               GBP          4.17     3.54      4.17    4.49    4.49

Trading
price at
the end of
the period2    EUR          4.18     2.97      4.18    2.97    1.25
               GBP          3.80     2.35      3.80    2.35    1.19

Change
during the
period                     11.7%  (36.4%)    219.1% (21.7%) (60.3%)

Market
capitalization
at the end
of the         EUR
period3        '000    1,023,794  662,796 1,023,794 662,796 278,475
               GBP
               '000      930,936  523,807   930,936 523,807 265,247

Development
in trading
volume
Trading        1000
volume         shares     35,736   24,694   119,239  63,463  84,780
In relation to
weighted
average
number of
shares                     15.5%    11.1%     51.9%   28.5%   38.0%

Development
of share
price at OMX
Helsinki
Average
trading price  EUR          4.38               4.19

Lowest
trading price  EUR          3.75               3.05

Highest
trading price  EUR          4.86               4.86

Trading price
at the
end of the
period         EUR          4.18               4.18

Change
during
the period                  3.2%              33.5%

Market
capitalization
at the end of  EUR
the period     '000      931,708            931,708

Development
in trading
volume
Trading        1000
volume         shares     45,054             86.452
In relation to
weighted
average
number of
shares                     19.6%              37.6%

Adjusted
average
number of                222 896  222 896   222 896 222 896   222 896
shares                       718      718       718     718       718

Number of
shares at
the end of               222 896  222 896   222 896 222 896   222 896
the period                   718      718       718     718       718



1) Trading price is calculated on the average of EUR/GBP exchange
rates published by the European Central Bank during the period
2) Trading price is calculated on the EUR/GBP exchange rate published
by the European Central Bank at the end of the period
3) Market capitalization is calculated on the EUR/GBP exchange rate
published by the European Central Bank at the end of the period


Key financial figures of the Group



Return on equity             Profit (loss) for the period/
                             (Total equity at the beginning of period
                             +
                              Total equity at the end of period)/2

Equity-to-assets ratio       Total equity/
                             Total assets






                             Interest-bearing debt - Cash and cash
Net interest-bearing debt    equivalent

Debt-to-equity ratio         Net interest-bearing debt/
                             Total equity


Share-related key figures

                             Profit (loss) attributable to equity
Earnings per share           holders of the Company/
                             Adjusted average number of shares

                             Equity attributable to equity holders of
Equity per share             the Company/
                             Adjusted average number of shares

                             Number of shares at the end of the
Market capitalization at the period * trading price
end of the period            at the end of the period