Talvivaaran Kaivososakeyhtiö Oyj - Company Announcement

Talvivaara launches Senior Convertible Bond due 2015

Talvivaara Mining Company PLC
9th December 2010


                         Talvivaara Mining Company PLC
                        ("Talvivaara" or the "Company")


              Talvivaara launches Senior Convertible Bond due 2015

**THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION,
 DISTRIBUTION OR RELEASE IN, OR INTO, DIRECTLY OF INDIRECTLY, THE UNITED STATES
 OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS), CANADA, SOUTH AFRICA,
AUSTRALIA OR JAPAN OR TO ANY OTHER JURISDICTION WHERE SUCH AN ANNOUNCEMENT WOULD
                                 BE UNLAWFUL**

This  announcement is not an offer of securities  for sale to U.S. persons or in
any  jurisdiction, including in or into the United States, Canada, South Africa,
Australia  or  Japan.  Neither  this  announcement nor anything contained herein
shall  form the  basis of,  or be  relied upon  in connection with, any offer or
commitment whatsoever in any jurisdiction.

Talvivaara  announces today that it intends to make an offering (the "Offering")
of  senior  unsecured  convertible  bonds  due  2015 (the  "Bonds")  to  certain
international  institutional investors. The Bonds are proposed to be issued at a
principal  amount of EUR  200 million, which may  be increased by  up to EUR 25
million, if the increase option is exercised at the end of the bookbuilding, and
by  a further  EUR 25 million  up to  EUR 250 million,  if the  greenshoe option
granted to BofA Merrill Lynch and J.P. Morgan (the "Joint Bookrunners") is fully
exercised  prior to the settlement  date. The net proceeds  of the Offering  are
intended to be used for general corporate purposes, including the development of
the  scope and structure  of Talvivaara's operations,  as well as refinancing of
certain of its existing indebtedness.

The  Bonds  are  expected  to  carry  a  coupon of 4.00% per annum payable semi-
annually  in arrear starting on the 16 June 2011 and to have a yield to maturity
of  between 5.50% and 6.50%. The initial conversion  price is expected to be set
at  a premium of 30% to  the volume weighted average  price during the placement
(the "Market Reference Price") of Talvivaara's ordinary shares (the "Shares") on
the London Stock Exchange (the "LSE"). The Bonds will be issued at 100% of their
principal  amount and,  unless previously  converted, redeemed  or purchased and
cancelled,  will  be  redeemed  at  between 108.5% and 114.5% of their principal
amount  ("Accreted Principal Amount")  on maturity and  which will accrue during
the life of the Bonds. The final terms of the Bonds are expected to be announced
today and closing is expected on or about 16(th) December 2010.

Talvivaara  will have the  right to redeem  all outstanding Bonds  at their then
Accreted  Principal Amount  together with  accrued interest  at any time if less
than 15% of the Bonds originally issued remain outstanding.

The  Bonds will become convertible into  Talvivaara's ordinary shares subject to
approval by the Extraordinary General Meeting of the Company's shareholders of a
resolution  for the issue of special rights to enable the issue of such ordinary
shares  upon  such  conversion,  following  which  the  Company  will  issue  an
appropriate  notice  to  the  Bondholders.  The Extraordinary General Meeting is
expected to take place no later than 18 February 2011. Talvivaara has the option
to  call the  bonds at  the greater  of (i)  102% of the then Accreted Principal
Amount  of the Bonds, together with accrued  interest, and (ii) 102% of the Fair
Bond  Value of the  Bonds, together with  accrued interest, should the necessary
shareholder  resolutions not be passed. In  connection with the Offering certain
shareholders,  including  Mr.  Pekka  Perä,  CEO  of  Talvivaara,  who  together
represent 36.0% of the outstanding share capital of the Company have irrevocably
agreed to vote in favour of the proposed resolution at the Extraordinary General
Meeting.

Prior  to  the  approval  of  the  proposed  resolution by Extraordinary General
Meeting,  Bondholders  will  be  entitled  to  exercise  a cash settlement right
whereby they would receive a cash amount equal to the market value of the shares
notionally  underlying the  Bonds as  detailed in  the Terms and Conditions. The
maximum number of Shares (assuming no exercise of increase and greenshoe options
and without any adjustments having been made to the conversion price) notionally
underlying  the  Initial  Issue  size  will  be approximately 24 million Shares,
representing approximately 9.8% of Talvivaara's current issued Share capital.

No  application has been made or will be made to list the Bonds or admit them to
trading on any market.

BofA  Merrill Lynch and  J. P. Morgan  are acting as  Joint Bookrunners and BofA
Merrill  Lynch is acting as stabilising  manager (the "Stabilising Manager") and
Settlement  Agent.  The  Stabilising  Manager  may  stabilise  the  Offering  in
accordance to the stabilisation rules of the Financial Services Authority.

Enquiries:

+-----------------------+----------------+
|Talvivaara             |                |
|                       |                |
|Saila Miettinen-Lähde  |+358 20 712 9800|
|                       |                |
|Chief Financial Officer|                |
+-----------------------+----------------+
|BofA Merrill Lynch     |                |
|                       |                |
|Ignacio Maldonado      |+44 207 995 3700|
+-----------------------+----------------+
|J.P. Morgan            |                |
|                       |                |
|Adam Brett             |+44 207 155 4846|
|                       |                |
|Ben Davis              |+44 207 155 8644|
+-----------------------+----------------+

The  information contained in this announcement  is for background purposes only
and  does not purport to be full or complete.  No reliance may be placed for any
purpose  on  the  information  contained  in  this announcement or its accuracy,
completeness  or fairness.  The  information in this  announcement is subject to
change.

This  announcement is not for publication,  distribution or release, directly or
indirectly,  in or into the United  States of America (including its territories
and  possessions),  Canada,  South  Africa,  Australia  or Japan or to any other
jurisdiction  where such an announcement would be unlawful.  The distribution of
this  announcement may be restricted by law in certain jurisdictions and persons
into whose possession any document or other information referred to herein comes
should inform themselves about and observe any such restriction.  Any failure to
comply with these restrictions may constitute a violation of the securities laws
of any such jurisdiction.

This   announcement  does  not  contain  or  constitute  an  offer  of,  or  the
solicitation  of an  offer to  buy, Bonds  to any  person in  the United States,
Australia,  Canada, South  Africa or  Japan or  in any  other jurisdiction.  The
Bonds  referred to herein may not be offered or sold in the United States unless
registered under the US Securities Act of 1933 (the "Securities Act") or offered
in  a transaction exempt from, or  not subject to, the registration requirements
of  the Securities Act.  The offer and sale  of the Bonds referred to herein has
not  been  and  will  not  be  registered  under the Securities Act or under the
applicable  securities laws of Australia, Canada, South Africa or Japan. Subject
to  certain exceptions, the Bonds referred to  herein may not be offered or sold
in Australia, Canada, South Africa or Japan or to, or for the account or benefit
of,  any national,  resident or  citizen of  Australia, Canada,  South Africa or
Japan.   There  will  be  no  public  offer  of  the Bonds in the United States,
Australia, Canada, South Africa or Japan or elsewhere.

This  announcement may  include statements  that are,  or may  be deemed  to be,"forward-looking   statements".    These   forward-looking   statements  may  be
identified  by  the  use  of  forward-looking  terminology,  including the terms"believes",   "estimates",   "plans",   "projects",   "anticipates",  "expects","intends",  "may", "will" or "should" or, in  each case, their negative or other
variations  or  comparable  terminology,  or  by discussions of strategy, plans,
objectives,  goals, future events or intentions.  Forward-looking statements may
and  often  do  differ  materially  from  actual  results.   Any forward-looking
statements  reflect the Company's current view with respect to future events and
are  subject to risks  relating to future  events and other risks, uncertainties
and  assumptions  relating  to  the  Group's  business,  results  of operations,
financial  position,  liquidity,  prospects,  growth,  strategies  and the asset
management  business.  Forward-looking statements speak only as of the date they
are made.

Each  of the Company, Merrill Lynch International, J.P.Morgan Securities Limited
and   their   respective   affiliates  expressly  disclaims  any  obligation  or
undertaking  to update, review or revise any forward looking statement contained
in this announcement whether as a result of new information, future developments
or otherwise.

Investment in securities such as those discussed in this announcement may expose
an  investor to a  significant risk of  losing all of  the amount invested. Each
prospective  investor  should  consult  its  own  advisors as to the legal, tax,
business,  financial and related  aspects of a  purchase of the  Bonds needed to
make  its investment decision and to suitability  of the Offering for the person
concerned. This announcement does not constitute a recommendation concerning the
Offering.  The value of the  Bonds and Shares can  decrease as well as increase.
Investors  should be aware that they may be required to bear the financial risks
of this investment for an indefinite period of time.

Merrill  Lynch International, J.P.Morgan  Securities Limited, each  of which are
authorised  and  regulated  in  the  United  Kingdom  by  the  FSA,  are  acting
exclusively  for the  Company and  no-one else  in connection with the Offering.
 They  will not regard any other person  as their respective clients in relation
to the Offering and will not be responsible to anyone other than the Company for
providing  the  protections  afforded  to  their  respective  clients,  nor  for
providing  advice in relation to the Offering, the contents of this announcement
or any transaction, arrangement or other matter referred to herein.

In  connection  with  the  Offering,  Merrill  Lynch  International,  J.P.Morgan
Securities  Limited and any  of their affiliates,  acting as investors for their
own  accounts, may  subscribe for  or purchase  Bonds and  in that  capacity may
retain,  purchase, sell, offer to sell or  otherwise deal for their own accounts
in  such Bonds  and other  securities of  the Company  or related investments in
connection  with  the  Offering  or  otherwise.  Accordingly, references in this
announcement,  once published, to  the Bonds being  issued, offered, subscribed,
acquired,  placed or otherwise dealt in should be read as including any issue or
offer  to, or  subscription, acquisition,  placing or  dealing by, Merrill Lynch
International,  J.P.Morgan Securities Limited and any of their affiliates acting
as  investors for their  own accounts.  Merrill  Lynch International, J.P.Morgan
Securities  Limited do not intend to disclose  the extent of any such investment
or  transactions  otherwise  than  in  accordance  with  any legal or regulatory
obligations to do so.

None  of Merrill  Lynch International,  J.P.Morgan Securities  Limited or any of
their  respective directors, officers, employees, advisers or agents accepts any
responsibility  or  liability  whatsoever  for/or  makes  any  representation or
warranty,  express or implied, as to the  truth, accuracy or completeness of the
information  in this announcement  (or whether any  information has been omitted
from  the announcement)  or any  other information  relating to the Company, its
subsidiaries  or associated companies,  whether written, oral  or in a visual or
electronic  form, and  howsoever transmitted  or made  available or for any loss
howsoever  arising from  any use  of announcement  or its  contents or otherwise
arising in connection therewith.

This announcement and the offer when made are only addressed to and directed, in
member  states  of  the  European  Economic  Area  which  have  implemented  the
Prospectus  Directive  (each,  a  "relevant  member  state"), at persons who are"qualified  investors" within the  meaning of Article  2(1)(e) of the Prospectus
Directive (Directive 2003/71/EC) and pursuant to the relevant implementing rules
and  regulations adopted by each relevant member state ("Qualified Investors").
Each  person in the European Economic Area who initially acquires any securities
or  to  whom  any  offer  of  securities  may  be  made  will  be deemed to have
represented, acknowledged and agreed that it is a Qualified Investor.

In  addition, in the United Kingdom, this announcement is being distributed only
to,  and  is  directed  only  at,  Qualified Investors (i) who have professional
experience  in matters relating  to investments falling  within Article 19(5) of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as
amended  (the "Order") or  (ii) who fall  within Article 49(2)(a) to  (d) of the
Order,  and (iii) to  whom it may  otherwise lawfully be  communicated (all such
persons  together being  referred to  as "relevant  persons"). This announcement
must  not be acted on or relied on (i) in the United Kingdom, by persons who are
not relevant persons, and (ii) in any member state of the European Economic Area
other  than the United Kingdom,  by persons who are  not Qualified Investors. In
the  UK, the investment activity to which this announcement relates is available
only  to relevant persons and will only  be engaged in with relevant persons. In
the  case  of  any  securities  being  offered  to  any  investor as a financial
intermediary  as that term is used  in Article 3(2) of the Prospectus Directive,
such  investor  will  also  be  deemed  to  have represented and agreed that the
securities  acquired by it in  the Offering have not  been acquired on behalf of
persons  in the EEA other than Qualified Investors, nor have the securities been
acquired with a view to their offer or resale in the EEA where this would result
in  a requirement for publication  by the Company or  the Joint Bookrunners of a
prospectus pursuant to Article 3 of the Prospectus Directive.





[HUG#1470724]

Attachments:

Talvivaara launches Senior Convertible Bond due 2015.pdf