Talvivaaran Kaivososakeyhtiö Oyj - Company Announcement

Talvivaara Mining Company Plc: Operational and Resource Update

Stock Exchange Release
Talvivaara Mining Company Plc
28 November 2012


                   Talvivaara Operational and Resource Update

   Measures to improve water balance and bioheapleaching performance in focus
               32% increase in total resources to 2,053Mt of ore


Highlights
  * Full-year 2012 nickel production guidance updated to approximately 13,000t
  * Metals recovery plant successfully restarted following stoppage related to
    the gypsum pond leakage
  * Ore production to remain restricted until mid-2013 due to excess water in
    the open pit; near term focus on enhancing recovery of existing metals
    inventory in the heaps
  * Reverse osmosis water purification plant successfully commissioned; other
    measures to improve water balance advancing aided by special organizational
    changes
  * 32% increase in measured, indicated and inferred resources to 2,053Mt,
    further confirming Talvivaara's long mine life


Production guidance

Talvivaara  has stated  in its  Production Update  of 15 October 2012 and its Q3
Interim  Results  of  8 November  2012 that  it  anticipates  its fourth quarter
production  to increase over the 4,030t of nickel achieved in the third quarter.
Following  the stoppage of  its metals recovery  plant between 4 and 21 November
2012 due  to the previously  announced gypsum pond  leakage, the Company has re-
assessed  this target and now anticipates its fourth quarter and full-year 2012
production to reach approximately 2,500t and 13,000t nickel, respectively.

Talvivaara  anticipates announcing its nickel production guidance for the coming
year  in early 2013. The key  drivers for the production  level include the near
term  development in the water balance, the timing of re-start of ore production
and  the effectiveness of bioheapleaching following  the measures being taken to
reverse the recent effects of excess water and insufficient aeration. Whilst the
full  impact of  these factors  will only  become clear  over the  course of the
coming  year, the Company anticipates to be in a position to adequately estimate
their  effect  during  the  first  quarter. Furthermore, Talvivaara continues to
believe  that  the  existing,  over  55,000t nickel  inventory in the heaps will
provide sufficient supply of metals for a reasonable production ramp-up in 2013
despite the temporary suspension of ore production.

Operational update and key focus areas

Metals recovery

As  announced earlier, Talvivaara  received on 21 November  2012 the permit from
the  Kainuu  Centre  for  Economic  Development,  Transport  and the Environment
("Kainuu  ELY Centre")  to re-start  its metals  recovery plant. The Company had
suspended  the plant temporarily since 4 November 2012 following the gypsum pond
leakage  and  related  risk  analyses  and  steps  taken to ensure the safety of
operations  and to  minimize the  environmental impact  of the  leakage. Since a
successful  re-start on 21 November 2012, operations at the plant have ramped up
according to plan, and the facility has returned to the stable utilization rates
achieved  before the suspension. Solution flow rates  at the plant are now close
to  1,400 m(3)/h  and  ramp-up  to  around  1,600 m(3)/h is anticipated over the
coming weeks.

Talvivaara  commenced production  of saleable  quantities of  copper sulphide in
October  2012. For  the  time  being,  the  product  is  being  sold  under spot
arrangements.

Construction of the uranium recovery circuit is on track for completion by early
2013, and  uranium production will start  after the related environmental permit
has  been received. The decision on the  environmental permit is expected in May
2013 in  connection with the general update  of the mine's environmental permit.
The  permit decision was previously expected  in late January or February 2013,
and  the Company now anticipates a 3-4 month delay in the process due to certain
further clarification requests expected from the permitting authority due to the
gypsum pond leakage.

Bioheapleaching

Bioheapleaching has suffered from the historically heavy rainfall experienced in
the  Kainuu region  throughout the  spring, summer  and autumn.  As a  result, a
significant volume of excess water has accumulated into solution circulation and
diluted  metal grades  in solution  as well  as affected  the efficiency of heap
aeration  and reduced  evaporation. Nickel  grades in  solution pumped to metals
recovery  have declined from slightly below 2.0 g/l  at the start of the year to
1.4-1.5 g/l currently.

The  Company has undertaken  an extensive study  to further identify the factors
impacting  leaching  performance,  and  as  a  result  identified  a  number  of
additional  measures  to  improve  leaching  results.  As  part  of  the  study,
production  heap  sections  have  been  opened  to determine leaching properties
within the heap. Whilst some areas in the opened sections had been well oxidized
and leaching results were optimal, several other areas were found where aeration
had  been inefficient  and where  the ore  remained clearly  unreacted. Multiple
changes  are being implemented  to ensure constant  and balanced distribution of
air  within heaps, including elimination of aeration pipe blockages, alterations
in  the  physical  design  of  future  primary  heaps and aeration pipes, and an
improved  drainage system. In the near  term, the accelerated rate of reclaiming
and  re-stacking of the existing primary heaps also continues in order to enable
efficient  recovery of the  existing nickel inventory  in the heaps. Preliminary
results  since  September  indicate  significantly  improved  leaching,  as less
effectively leached sections are being better oxidized.

Development  work  is  also  ongoing  to  improve  agglomeration quality, as the
moisture  content  and  stability  of  agglomerates  is  a  key factor affecting
leaching times and recovery rates. Copper heap leaching operations have reported
up  to  30-50% improvements  in  leaching  times  depending  on  the  quality of
agglomerates.

Leaching  results may also  be impacted in  part by the  accumulation of certain
elements  in the solution circulation,  the impact of which  is being managed by
controlling their concentration in irrigation solution.

Ore production

As  previously announced, Talvivaara discontinued mining and crushing operations
on a temporary basis from the beginning of September due to the prevailing water
balance  situation. The temporary production  scheme alteration has proceeded as
planned, and anticipated cost savings are being realized.

Talvivaara  previously anticipated  ore production  to re-start  around year-end
2012, but  the recent gypsum pond leakage  and overall water balance issues have
postponed  the Company's target for re-start  of mining and crushing operations.
Talvivaara  currently expects to re-commence ore production in mid-2013 once the
open-pit  has been de-watered and the overall water balance improvement measures
have been implemented.

Cost savings

Talvivaara  anticipates  continuing  to  realize  significant  cost savings as a
result of the temporarily suspended ore production. Given the recent disruptions
in  the Company's metals  production, additional costs  incurred in stemming the
gypsum  pond  leakage  and  minimizing  its  environmental impact as well as the
prevailing  weakness in the  nickel price, Talvivaara  considers systematic cost
savings to be one of its key targets in the near term.

Water balance management

Organisational changes

In  order  to  facilitate  an  efficient  and  sustainable solution to the water
balance  issues,  Talvivaara  has  established  a temporary special organization
focused  on  the  subject.  The  special  organization is headed by Chief Mining
Officer  Jari Voutilainen, reporting to CEO  Pekka Perä. Several of Talvivaara's
key  experts have been  seconded to the  team which focuses  on the planning and
execution  of necessary water storage and  pumping arrangements as well as waste
water neutralization measures.

Operational measures

In  the  medium  term,  Talvivaara  will  target  a  nearly closed circuit water
circulation  system,  reducing  the  risk  of  weather  conditions impacting the
Company's  operations or  environmental safety.  Talvivaara has commissioned the
new   reverse  osmosis  -based  water  treatment  plant  in  November  2012, and
additional   capacity  will  be  installed  next  spring.  The  reverse  osmosis
technology  is a key step in achieving  a closed circuit system, and enables the
Company  to significantly  reduce or  completely stop  raw water intake into the
process.

Environmental update following the gypsum pond leakage

As a result of the gypsum pond leakage, Talvivaara had to discharge some leakage
waters   into   the  environment  in  a  controlled  manner.  Due  to  immediate
safeguarding  measures, the  majority of  leakage waters  were however contained
within  the mining concession  area. Only local  environmental impact within the
immediate  vicinity of the mine area has  been detected to date, and the Company
and authorities continue to monitor the situation.

Organisational changes

As announced on 15 November 2012, Tapani Järvinen has been appointed Chairman of
the  Company's  Board  of  Directors  and  Pekka  Perä  has been appointed Chief
Executive  Officer. Both appointments  are of interim  nature and in force until
further  notice and at least until the Company's operations have been stabilized
following  the  recent  events.  Talvivaara's  previous Chief Executive Officer,
Harri Natunen, has been appointed Chief Operations Officer.


Resource update

Talvivaara's  recent drilling campaigns have  focused on the Kolmisoppi deposit,
where open-pit mining operations have not yet commenced.

The  total Mineral Resources, as  defined by the JORC  code, increased by 32% to
2,053Mt from  the  total  of  1,550Mt announced  in  October 2010. The increased
resources contain 4.5Mt of nickel and 10.3Mt of zinc, up from 3.4Mt and 7.6Mt in
2010, respectively.  Talvivaara's current total  Mineral Resources are presented
in the table below.

-------------------------------------------------------------------
 Category  Year   Mt    Nickel % Cobalt % Copper % Zinc % Uranium %
-------------------------------------------------------------------
 Measured  2012  504.0    0.23     0.02     0.13    0.50   0.0017
-------------------------------------------------------------------
           2010  432.2    0.23     0.02     0.13    0.50   0.0017
-------------------------------------------------------------------
 Indicated 2012  800.5    0.23     0.02     0.13    0.51   0.0017
-------------------------------------------------------------------
           2010  689.2    0.23     0.02     0.13    0.50   0.0018
-------------------------------------------------------------------
 Subtotal  2012 1,304.5   0.23     0.02     0.13    0.50   0.0017
-------------------------------------------------------------------
           2010 1,121.4   0.23     0.02     0.13    0.50   0.0018
-------------------------------------------------------------------
 Inferred  2012  748.3    0.21     0.02     0.12    0.49   0.0018
-------------------------------------------------------------------
           2010  428.8    0.20     0.02     0.12    0.47   0.0017
-------------------------------------------------------------------
 Total     2012 2,052.8   0.22     0.02     0.13    0.50   0.0017
-------------------------------------------------------------------
           2010 1,550.2   0.22     0.02     0.13    0.49   0.0017
-------------------------------------------------------------------

The  resource increase  further confirms  the long  mine life  of the Talvivaara
deposits.  Further excellent exploration potential  remains around the currently
known  ore body,  and 2013 exploration  targets focus  on infill drilling at the
Southern  and Northern parts of the Kolmisoppi  deposit and the area between the
Kuusilampi and Kolmisoppi deposits.

Talvivaara  has undertaken a  project to also  update its ore reserves estimates
and anticipates announcing the new reserves during the second half of 2013.


Enquiries
Talvivaara Mining Company Plc Tel +358 20 7129 800
Pekka Perä, Chief Executive Officer
Saila Miettinen-Lähde, Deputy CEO and CFO

Talvivaara Mining Company Plc
Talvivaara Mining Company is 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  estimated  to  support  anticipated  production  for  several decades.
Talvivaara has secured a 10-year off-take agreement for 100 per cent of its main
output  of nickel and cobalt to Norilsk Nickel and entered into a long-term zinc
streaming  agreement with Nyrstar  NV. Talvivaara is  listed on the London Stock
Exchange  Main Market and NASDAQ  OMX Helsinki and is  included in the FTSE 250
Index. Further information can be found at www.talvivaara.com.

[HUG#1660955]

Attachments:

Talvivaara production and resource update 28.11.12.pdf