RNS Number:7202O
Talvivaara Mining Company Ltd
26 February 2008
STOCK EXCHANGE RELEASE
26 February 2008
Talvivaara Mining Company annual accounts review for year ended 31 December 2007
Mine construction proceeding according to plan
Highlights of 2007
* Bankable Feasibility Study for the Talvivaara mine was completed on 23
March
* Environmental permit and starting order were obtained on 29 March
* Project finance facility of USD 320 million was signed on 7 May
* Initial Public Offering (IPO) on the London Stock Exchange Main Market
with gross proceeds of EUR 302 million was successfully closed on 1 June,
ensuring that together with the committed project finance facility the
project was fully financed
* Talvivaara joined the FTSE 250 index with effect from 24 September
* A 26% increase in measured and indicated mineral resource at the
Kuusilampi and Kolmisoppi deposits to 336 million tonnes was announced on 4
December
* Construction work at the Talvivaara mine is proceeding according to
timetable and on schedule for production to begin in Q4 2008
* No material capital or operational cost overruns
Talvivaara's key figures
2007 2006
Operating profit (loss) EUR '000 2,332 -34,609
Capital expenditure EUR '000 134,139 6,686
Research & development EUR '000 734 1,361
expenditure
Earnings per share EUR -0.06 -0.41
Cash and cash equivalents at EUR '000 153,466 29,361
the end of the year(2)
Equity-to-assets ratio 90% -2.0%
Equity per share EUR 1.76 -0.01
Market capitalization EUR '000 911,829 -
at the end of the year(3)
Number of employees at 64 25
the end of the year
All reported figures in this release are unaudited
1 Includes Available-for-sale financial assets and for 2006 financial assets at
fair value through profit or loss.
2 Market capitalization is calculated on the EUR/GBP exchange rate 0.73335
published by the European Central Bank on
31 December 2007.
CEO Pekka Pera:
"2007 was a remarkable year for Talvivaara. We achieved all of the key goals we
set for the period, including successful financing of the project through the
IPO and committed project finance, timely commencement of construction after the
environmental permit was granted at the end of March, and progress in
construction according to plan and on budget throughout the rest of the year. In
a project the size of Talvivaara, we knew we would be faced with unexpected
challenges, but the experience and skills of the team enabled the Company to
take corrective measures when needed and stay on course. All our people
over-achieved on numerous occasions during the year. Their individual and joint
efforts are what make me especially proud.
Following our IPO the Talvivaara share price stood up despite the turmoil in the
markets and the volatility in commodity prices. I trust that our investors
appreciated our hard work and delivery on promises.
In 2008 we will continue to work hard, together with our dedicated contractors
and suppliers, to achieve our primary goal of bringing the mine into production
before the year end. With our first production now in sight I am looking forward
to getting on with the business of mining nickel, where I see continuing strong
global demand."
Enquiries:
Talvivaara Mining Company Ltd.
Pekka Pera, CEO Tel. +358 20 712 9800
Saila Miettinen-Lahde, CFO
Merlin Tel. +44 207 653 6620
David Simonson
Tom Randell
Anca Spiridon
JPMorgan Cazenove Tel. +44 207 588 2828
Steve Baldwin
Shona Graham
Competence Communications
Anna-Mari Tiilikainen Tel. +358 9 6689 6925
Talvivaara Mining Company will hold a conference call for investors and analysts
following the release of its Annual Results at 2:00pm GMT 4:00pm Finnish time.
Conference call details are as follows:
UK Dial-in: 0870 043 6305
International dial-in: +44 (0) 1452 556 620
Conference call ID: 37018028
A pivotal year in Talvivaara Mining Company's development
In 2007, Talvivaara evolved from a privately held project Company finalising its
Bankable Feasibility Study for the Talvivaara nickel mine to a FTSE 250 Company
well on its way to starting production, as planned, during the last quarter of
2008. Along the way, the Company achieved several major milestones, including
the environmental permit for the mine in March 2007, and the securing of
financing for the construction of the mine through a committed project finance
facility of USD 320 million and a successful IPO raising EUR 302 million in June
2007.
The latter half of the year saw remarkable progress with the construction of the
mine and the metals processing facilities, leading to the project reaching year
end having been on time and on budget throughout the period. Finally, the
geological work done at the Kuusilampi deposit resulted in a significant
increase in mineral resources being reported in December 2007.
The financial development of the Company largely reflected the above named
financing transactions and project related spending. At EUR 134 million, capital
expenditure for the period was in line with the development plan and financed
entirely from equity. The initial drawdown of the project term loan is
anticipated during the spring of 2008. With production anticipated to commence
in late 2008, the Company had no revenues in 2007.
Volatile market environment
In the base metal markets, 2007 will be remembered for extreme volatility in
nickel prices, with the London Metals Exchange (LME) nickel cash quotations
ranging from the historical high of more than USD 54,000/tonne in the spring
down to around USD 25,000/tonne in August. After the substantial fall in prices
during the summer months, nickel prices were more stable during the rest of the
year, closing at around USD 26,000/tonne at the end of December.
The other metals of relevance to Talvivaara - zinc, cobalt and copper - also
experienced substantial volatility through the year, with zinc, which is the
most significant of Talvivaara's by-products, on a mostly downward trend after a
price peak above USD 4,000/tonne in the spring. At year end, the zinc price was
around USD 2,400/tonne. Copper started the year at USD 6,200/tonne and closed at
slightly above USD 6,600/tonne, exhibiting the least price volatility of these
metals during the period. Cobalt prices, on the other hand, rose from USD 23/lb
in January to USD 39/lb at the end of December, with a very strong upward trend
seen especially during the last four months of the year.
The future outlook for nickel and zinc remains solid, and the present price
levels of nickel and zinc of around USD 29,000/tonne and USD 2,400/tonne,
respectively, are some two and a half times as high as the assumptions used in
Talvivaara's financial planning.
Financial review
Owing to its status as a project Company with production anticipated to start in
late 2008, Talvivaara had no revenues during the year ended 31 December 2007
(2006: EUR 0). Overall, the financial development of the Company reflected the
fundraising of EUR 285 million (net) through the IPO, capital expenditure of EUR
134 million in line with the development plan, and operating costs that,
compared to 2006, grew in line with the growth of the Company.
The Company's other operating income, amounting in total to EUR 13.6 million
(2006: EUR 0.2 million), consisted mainly of unrealised gains in biological
assets (living trees) and fair value gains in nickel forward sales contracts.
The operating profit amounted to EUR 2.3 million (2006: EUR (34.6) million), and
loss for the period to EUR (9.9) million (2006: EUR (36.1) million), reflecting
to a large extent finance costs related to the EUR 33 million convertible loan
issued in 2006. In comparison to 2006, it should be noted that the loss of EUR
(36.1) million recognised in the previous period resulted primarily from the
revaluation of Outokumpu Mining Oy's option for a 20% shareholding in Talvivaara
Project Ltd. rather than costs related to the Company's operations. Outokumpu
Mining Oy exercised this option on 14 May 2007.
On the balance sheet as at 31 December 2007, the Company's current assets
amounted to EUR 165.6 million (2006: EUR 30.0 million), with the year end figure
reflecting largely the IPO proceeds less subsequent capital expenditure on the
mine project. The Company's total equity was EUR 315.0 million (2006: EUR (0.8)
million) and total assets EUR 350.0 million (2006: EUR 39.7 million).
Talvivaara's total borrowings amounted to EUR 1.4 million (2006: EUR 38.0
million). The change from the previous period resulted from the conversion of
the EUR 5.3 million convertible capital loan issued in 2005, and the conversion
and partial redemption of the EUR 33 million convertible loan of 2006 in
connection with the IPO. The committed project term loan of USD 320 million has
not yet been drawn down.
Significant progress with the mine project
Talvivaara completed the Bankable Feasibility Study for the Talvivaara mine in
March 2007. The technical solutions described in the study were largely based on
successful pilot trials of bioheapleaching and metals recovery, which,
respectively, demonstrated high yields from the ore and from the leach
solutions. In all, the results of the study confirmed both the technical and
economic feasibility of the project using relatively conservative assumptions
for key parameters such as metal recoveries and metal prices.
Construction of the mine started in April 2007, as soon as the environmental
permit had been obtained. At the time, most of the area was uninhabited forested
land. By July 2007, access roads to the industrial site had been constructed,
substantial areas for the bioheapleaching pads had been cleared and levelled,
and the plant site was taking shape with foundations for buildings under
construction.
By October, critical earthworks which could not be carried out during the winter
months, such as the construction of heap foundations, had progressed as planned.
All major equipment had been ordered and the removal of the overburden had
started slightly ahead of schedule.
The major goals for 2008 are the start of mining in April, the start of
bioheapleaching in July, and first metal sulphides production in October. The
key pre-requisites for meeting these goals are the timely delivery of critical
equipment and their successful installation particularly during the months of
June and July.
Due to the tight timetable, the mechanical, electrical and automation
installation and assembly of most major equipment will be carried out in
parallel during the summer months, contributing to a challenging project
management and staffing environment. At the time of this release, the Company
had not been notified of any material delays in equipment deliveries, and all
key supply processes are continuing to be monitored regularly by Talvivaara
personnel.
Equipment ordered from leading suppliers
Most of the equipment orders were placed during the first half of 2007 with
deliveries scheduled typically 12 to 18 months later. All significant supply
contracts for major equipment were awarded to internationally known companies
such as Sandvik (crushing circuit), Outotec (reactors), Mahler (oxygen and
hydrogen plants); FAM (stacking and reclaiming systems), Metso Minerals
(agglomeration drums), Larox (filters), Hitachi (dump trucks and excavators),
Siemens (electrical systems) and Metso Automation (automation).
Land acquisitions
Talvivaara has acquired land in the mining area since late 2006 in order to
secure full legal title to the areas it required to commence its activities
under the starting order granted together with the environmental permit in March
2007. Most of the acquisitions were made during the first half of 2007, and in
total Talvivaara has acquired approximately 53 square kilometres of land
representing some 90% of the expanded mining concession area.
Infrastructure
Through a parliamentary resolution in June 2007, the State of Finland made a
decision to support Talvivaara's infrastructure development by a total of EUR
53.2 million in subsidies, consisting of EUR 40.0 million (0% VAT) for a
railroad connection, EUR 7.2 million for road improvements, and EUR 5.0 million
for other mine related infrastructure expenditure. Funds for these expenditures
were reserved in the State budget for 2008-2011.
Design of the 26 km rail connection from Murtomaki, located west of the mine
area, to Talvivaara started in 2007 and the contract for its construction has
been awarded to VR-Track Ltd. The railroad is expected to be operational in
August 2009.
In accordance with the Finnish State budget decision, Talvivaara shall, through
its wholly owned subsidiary Talvivaara Infrastructure Ltd., initially fund the
construction of the connection. Provided the rail connection is used as the
primary transportation route of the mine, the Finnish State will subsequently
reimburse the costs over the two-year period of 2010-2011. Upon full payment by
the Finnish State the title to the railroad will transfer to the Finnish Rail
Administration.
Plans and designs for road works on the regional road number 870 bypassing the
mine area on its eastern side and the local road number 8714 crossing the mine
area in the east-to-west direction were made by Destia Oy. The improvement works
and partial re-direction of the roads are being carried out during 2008 and 2009
in cooperation with the Finnish Road Administration.
A 43 km power line connection was constructed from the Vuolijoki substation,
located west of Talvivaara, to the mine area, connecting the mine directly to
the national grid. The power line was commissioned in January 2008.
Process water will be initially obtained through a purpose-built pipeline from
Lake Kolmisoppi in the northern part of the mining concession area. Construction
of the pipeline started in 2007 and it is anticipated to be operational by early
summer 2008.
Significant increase in mineral resource
In December 2007, Talvivaara announced a 26% (76 million tonnes) increase in
Measured and Indicated Mineral Resources and a 23% increase (77 million tonnes)
in Measured, Indicated and Inferred Resources in the Kuusilampi and Kolmisoppi
deposits. The 26% addition took the Measured and Indicated Resources to a total
of 336 million tonnes and the total Mineral Resource up to 414 million tonnes.
The increased resources contain 1.1 million tonnes (earlier 0.88 million tonnes)
of nickel metal and 2.2 million tonnes of zinc metal (earlier 1.6 million
tonnes), reaffirming Talvivaara's prospective position as one of the top nickel
mines globally and an internationally significant zinc producer.
The resource increase was located within the existing known resource body and
excludes any additional resources Talvivaara may identify in adjacent areas. It
resulted from a drilling campaign focused on ore boundary definition at the
Kuusilampi orebody in anticipation of the planned production start-up in 2008.
Following the conclusions of this drilling campaign, Talvivaara commenced a
study to determine the feasibility of an increase in production capacity from
the currently planned levels. The study is anticipated to continue through 2008
and focus on economic, technical and environmental permitting aspects.
Research and development
Talvivaara continued active development of the bioheapleaching technology at a
pilot scale as well as in numerous smaller scale studies. The on-site pilot
heap, which has been running since the fall of 2005, continued to perform well
in 2007, demonstrating good performance also in the secondary leaching phase in
which most of the saleable copper and cobalt is recovered. Recoveries of nickel
and zinc reached levels well above 90%, which presents substantial upside
compared to the Company's financial forecasts, which have been based on the
assumption of 85% final recovery.
In addition to the pilot study, particular focal points for research during the
period included chemical and biological iron removal from the leach solution;
recovery of additional metals, particularly manganese, from the leach solution
and utilisation of gypsum residue.
Active research and development cooperation continued with Tampere, Helsinki and
Lappeenranta Universities of Technology, University of Oulu and the Geological
Survey of Finland. The microbiology of the Talvivaara mine site and the
demonstration plant throughout the whole leaching period has also been
thoroughly investigated as part of the European Union funded Bioshale project at
the University of Wales and at Warwick University. Research funding has been
obtained from the Finnish Funding Agency for Technology and Innovation (Tekes).
Permit issues
An environmental permit for the operation of the Talvivaara mine, together with
a starting order, were granted by the Northern Finland Environmental Permit
Authority on 29 March 2007. Individual appeals against the permit and the
starting order were submitted to the Vaasa Court of Appeal by ten persons. The
Court of Appeal issued its ruling on the basis of the appeals on 15 February
2008, whereby it maintained the original permit and the starting order in force,
and rejected all demands for the revocation of the permit and the starting
order. The Court of Appeal made a few amendments and specifications to the terms
of the permit, all of which in the opinion of the management are immaterial in
terms of changes to the projected costs for or the conduct of, the mining and
metals recovery operations at the site. The ruling may be appealed to the
Supreme Administrative Court by 17 March 2008. The ruling of the Supreme
Administrative Court will be final and non-appealable.
On 24 March 2005, Talvivaara submitted an application to the Ministry of
Employment and Economy regarding an extension of the area covered by the
existing mining license. The extension was applied for in order to secure access
to the surrounding land and water areas as well as the right to construct the
required industrial infrastructure in the project area. On 3 October 2006, the
Ministry approved the application and issued a land surveying order to the local
surveying office regarding the extension of the concession area in accordance
with the application of Talvivaara. Two appeals were filed with the Supreme
Administrative Court regarding the decision of the Ministry on the extension.
The Supreme Administrative Court issued its final and non-appealable ruling on
the matter on 15 October 2007 and rejected both appeals in their entirety. The
land surveying and redemption session for the mining concession proceedings was
concluded on 11 December 2007, awarding in aggregate EUR 924,358.07 in
compensation to the remaining land owners within the mining concession area and
owners of land adjacent to the mining concession area. By 11 February 2008, both
Talvivaara and a number of land owners had filed an appeal against the awarded
compensations with the Land Court of Rovaniemi. By 28 January 2008, only one
appeal was filed with the Ministry of Employment and Economy against the land
surveying and redemption process. The management does not expect either of the
pending court cases to have any material bearing on the projected cost level,
the conduct of the mining and metals recovery operations or further development
of the project.
Environment, health and safety
In 2007 Talvivaara continued to observe its environmental management policy
based on responsibility, transparency, and continuous improvement and
assessment. Despite the ongoing construction activities, the impact of
Talvivaara's operations on the surrounding environment was minor. The main
environmental tasks of the year included reporting on the natural environment,
monitoring of the environment in accordance with the terms of the environmental
permit, and planning and construction of environmental protection structures for
the mining activities.
Safety is of key importance to Talvivaara and its contractors on the mining
site. Safety practices at the site are based on the instructions and guidelines
approved by the management and are in accordance with the Finnish industrial
safety legislation. In 2007, contractors' safety practices were controlled by
weekly safety rounds, and the local industrial safety authorities paid regular
visits to the construction site. Safety training is provided for personnel
working for sub-contractors as well as for Talvivaara's own employees.
The safety measures were effective, with only six relatively minor lost time
accidents during the period. Considering that several hundred employees from
numerous different contractors were working on a site of some 60 square
kilometres, this record can be considered remarkably good.
Risk management
In line with current corporate governance guidelines on risk management,
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.
Talvivaara's operations are affected by various risks common to the mining
industry, such as risks relating to the development of Talvivaara's mineral
deposits, estimates of reserves and resources, infrastructure risks, and
volatility of commodity prices. There are also risks related to currency
exchange ratios, management and control systems, intellectual property rights,
historical losses and uncertainties about the future profitability of the
Talvivaara Group, dependence on key personnel, effect of laws, governmental
regulations and related costs, environmental hazards and risks related to
Talvivaara's mining concessions.
Personnel
Talvivaara was successful in its recruiting during the year, nearly tripling its
number of personnel from 25 to 64 by the end of 2007. Most of the personnel
recruited during the period were management and administrative employees,
leaving the challenge of recruiting around 200 workers for the initial
production phase to 2008.
Preparations for worker recruitment started in 2007 through three tailored
training programmes designed and operated in cooperation with the Kainuu
province labour administration. These courses are attended by a total of 65
students who are trained as production drillers, crusher operators and process
workers. All students who successfully complete the training in 2008 will be
employed by Talvivaara. Further training programmes are planned for 2008.
The core principles of Talvivaara's human resources policy are diversity of age
and a broad variation of work experience among personnel.
Shares and shareholders
In connection with the Company's IPO on the London Stock Exchange, a total of
84,252,638 shares were issued. This number included 10,921,939 shares subscribed
by Outokumpu at a discount of 20% to the offer price of 250 pence, and 5,457,219
shares issued to Varma Mutual Pension Insurance Company and the Finnish Industry
Investment upon setting off their bridge loans of 2007 to the Company of EUR 15
million and EUR 5 million, respectively. In addition, a total of 48,811,050
conversion shares were issued to the holders of the EUR 33 million convertible
bond issued in 2006, and the holders of the EUR 5.3 million convertible capital
loan issued in 2005. The average number of shares issued and outstanding in 2007
was 168,213,011, and the number of shares at year end was 222,896,718.
As at 31 December 2007, the shareholders who held more than 5% of the shares and
votes of Talvivaara were Pekka Pera (27.1%), Varma Mutual Pension Insurance
Company (8.6%), Norilsk Nickel Holdings Ltd. (5.5%) and Eton Park Capital
Management LP (5.0%).
The IPO issue price on 30 May 2007 was GBP 2.50, after which the average trading
price through to 31 December was GBP 2.65 (EUR 3.84). The lowest and highest
trading prices during the period were GBP 2.05 (EUR 2.96) and GBP 3.13 (EUR
4.53), respectively(1). The trading price at year end was GBP 3.00 (EUR 4.09)
(2). The trading volume from the listing until the year end was 26,783,000
shares, which in relation to the weighted average number of shares during the
year represented 15.9%.
Share options
By resolution passed at the general meeting of the shareholders on 28th February
2007, the Company resolved to issue 99,990 stock options gratuitously to the key
personnel of the Company and its subsidiaries entitling, after the split of the
Company's shares 1:70, to subscribe for a maximum of 6,999,300 new shares in the
Company (2007 Option Scheme). Pursuant to the terms and conditions of the 2007
Option Scheme, the Board of Directors shall decide upon the distribution of the
stock options.
During 2007, the Board of Directors, based on the recommendation of the
Remuneration Committee, allocated 32,643 2007A Options, giving an entitlement to
subscribe to a total of 2,285,000 new shares in the Company, to the personnel of
Talvivaara and its subsidiaries (excluding options granted to the Directors and
members of the Executive Committee). The voting rights of the shares to be
issued against the outstanding share options amount to 1.0% of the total share
capital.
Events after the review period
A 43 km power line connection from the Vuolijoki substation, located west of
Talvivaara, to the mine area, was commissioned on 18 January 2008.
On 15 February 2008, the Appellate Court of Vaasa issued their ruling on the
environmental permit and the starting order for the Talvivaara mine. Under the
ruling, all the demands for revoking the permit and the starting order were
rejected, the compensations awarded and redemption decisions made by the
permitting agency were left unchanged. Certain specifications were made to four
permit terms, but these amendments are not expected to have material
implications to the cost basis of the mine. Following the ruling, there is a 30
day appeal period for potential appeals to the Supreme Administrative Court.
Short-term outlook
The short-term outlook for the Company is positive, with the construction
project at the Talvivaara mine progressing according to plan, and the mine
anticipated to commence production during the last quarter of 2008. The market
outlook for the Company's main products, nickel and zinc, remain solid with
present and forward prices and demand forecasts all at healthy levels. As the
Company's cost base is primarily in euros and the committed project finance
facility is US dollar denominated, the recent weakness of the US dollar has
caused the Company to secure a minimum level of euros obtainable in connection
with the draw down of the loan through currency options. With this protective
measure having been taken, the Company feels confident that the funding
available is sufficient to complete the construction of the Talvivaara mine.
Board of Directors proposal for profit distribution
The Board of Directors is proposing to the Annual General Meeting to be held on
14 March 2008 that no dividend be declared in respect for the year 2007.
Annual General Meeting 2008
The Annual General Meeting of Talvivaara Mining Company will be held on Friday,
14 March 2008 starting at 10:00 a.m. in Sotkamo, at Lahnasjarventie 73, 88120
Tuhkakyla, Finland.
--------------------------
(1) Trading price in euro has been calculated on the average of EUR/GBP exchange
rates published by the European Central Bank between 30 May and 31 December
2007.
(2) Trading price in euro is calculated on the EUR/GBP exchange rate 0.73335
published by the European Central Bank on 31 December 2007.
CONSOLIDATED BALANCE SHEET
all amounts in EUR) 2007 2006
ASSETS
Non-current assets
Property, plant and equipment 129,718,177 3,959,629
Biological assets 9,048,538 963,576
Intangible assets 6,202,032 4,771,793
Derivative financial instruments 9,830,966 -
Other receivables 29,651,794 42,030
184,451,507 9,737,028
Current assets
Other receivables 11,352,710 651,854
Available-for-sale financial assets 26,965,327 22,537,285
Derivative financial instruments 779,323 -
Financial assets at fair value - 5,039,726
through profit or loss
Cash and cash equivalent 126,500,712 1,784,055
165,598,072 30,012,920
Total assets 350,049,579 39,749,948
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 15,624 12,715
Share premium 8,085,842 2,755,433
Other reserves 321,777,699 1,336,065
Retained earnings (33,422,978) (4,991,395)
296,456,187 (887,182)
Minority interest in equity 18,590,725 87,538
Total equity 315,046,912 (799,644)
Non-current liabilities
Borrowings 1,405,000 1,148,600
Other payables - 41,302
Deferred tax liabilities 5,326,885 193,247
Provisions 32,401 31,187
6,764,286 1,414,336
Current liabilities
Borrowings 24,600 36,879,112
Trade payables 25,982,941 1,037,033
Other payables 2,230,840 1,219,111
28,238,381 39,135,256
Total liabilities 35,002,667 40,549,592
Total equity and liabilities 350,049,579 39,749,948
CONSOLIDATED INCOME STATEMENT
(all amounts in EUR) 2007 2006
Other operating income 13,563,766 218,016
Materials and services (2,212,618) (855,991)
Employee benefit expenses (3,986,882) (1,393,822)
Depreciation, amortization, (761,404) (13,003)
depletion and impairment charges
Other operating expenses (4,270,940) (32,564,009)
Operating profit (loss) 2,331,922 (34,608,809)
Finance income 4,265,806 1,883
Finance cost (11,506,191) (1,514,190)
Finance cost (net) (7,240,385) (1,512,307)
Loss before income tax (4,908,463) (36,121,116)
Income tax expense (5,019,933) (14,800)
Loss for the year (9,928,396) (36,135,916)
Attributable to:
Equity holders of the Company (9,383,804) (36,123,454)
Minority interest (544,592) (12,462)
(9,928,396) (36,135,916)
Earnings per share for loss
attributable to the equity holders
of the Company
(expressed in Euro per share)
Basic and diluted (0.06) (0.41)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the parent
(all amounts Share Share Invested Other Retained Total
in EUR) capital premium non-restricted reserves earnings
equity
Minority Total
interest equity
Balance at 12,715 2,755,433 - 57,686 (672,941) 2,152,893 - 2,152,893
Fair value
gains net of
tax on
available-
for-sale
financial
assets - - - 126,442 - 126,442 - 126,442
Net income/
(expense)
recognized
directly in
equity - - - 126,442 - 126,442 - 126,442
Loss for
the year - - - - (36,123,454) (36,123,454) (12,462) (36,135,916)
Total recognised
income and expense
for 2006 - - - 126,442 (36,123,454) (35,997,012) (12,462) (36,009,474)
Issue of share
capital
(Authorized) - - 825,020 - - 825,020 - 825,020
Options issued
to acquire
assets - - - - 31,805,000 31,805,000 - 31,805,000
Convertible
capital loan - - - 326,917 - 326,917 - 326,917
Minority
interest
arising from
business
combinations - - - - - - 100,000 100,000
100,000
Balance at
31 December
2006 12,715 2,755,433 825,020 511,045 (4,991,395) (887,182) 87,538 (799,644)
Balance at
1 January
2007 12,715 2,755,433 825,020 511,045 (4,991,395) (887,182) 87,538 (799,644)
Fair value
gains net of
tax on
available-for-
sale financial
assets - - - 323,619 - 323,619 - 323,619
External costs,
net of tax,
directly
attributable to
the issue of
new shares - - (16,901,873) - - (16,901,873) - (16,901,873)
Net income/
(expense)
recognized
directly
in equity - - (16,901,873) 323,619 - (16,578,254) - (16,578,254)
Loss for
the year - - - - (9,383,804) (9,383,804) (544,592) (9,928,396)
Total
recognised
income and
expense for
2007 - - (16,901,873) 323,619 (9,383,804) (25,962,058) (544,592) (26,506,650)
Transactions
related with
the sale of
Talvivaara
Project shares - - - - (19,047,779) (19,047,779) (953,820) (20,001,599)
Issue of new
shares - - 302,056,012 - - 302,056,012 - -
Employee
share option
scheme
- value of
employee
services - - - 271,383 - 271,383 - 271,383
Convertible
capital loan
- conversion
into shares 2,909 5,330,409 - - - 5,333,318 - 5,333,318
Convertible
bond
- conversion
into shares - - 34,692,493 - - 34,692,493 - 34,692,493
Minority
interest
arising
from subsidiary - - - - - - 20,001,599 20,001,599
Balance at
31 December
2007 15,624 8,085,842 320,671,652 1,106,047 (33,422,978) 296,456,187 18,590,725 315,046,912
CONSOLIDATED CASH FLOW STATEMENT
(all amounts in EUR)
2007 2006
Cash flows from operating activities
Loss for the year (9,928,396) (36,135,916)
Adjustments for
Tax 5,019,933 14,800
Depreciation and amortization 761,404 13,003
Other non-cash income and
expenses 12,031,672 31,805,000
Interest income (4,265,806) (1,883)
Fair value gains on
financial assets at fair value
through profit or loss (9,830,966) (39,726)
Interest expense 11,506,191 1,514,190
5,294,032 (2,830,532)
Change in working capital
Decrease(+)/increase(-) in other
receivables (32,049,753) (396,158)
Decrease(-)/increase(+) in trade
and other payables 25,667,182 948,281
Change in working capital (6,382,571) 552,124
(1,088,539) (2,278,408)
Interest and other finance
cost paid (30,696,605) (9,704)
Interest income 4,162,026 1,883
Income taxes paid - -
Net cash used in operating activities (27,623,118) (2,286,229)
Cash flows from investing activities
Purchases of property, plant
and equipment (126,547,258) (3,931,647)
Purchases of biological assets (5,688,860) (963,576)
Purchases of intangible assets (1,903,190) (1,791,187)
Proceeds from sale of biological assets 527,712 -
Proceeds from government grant related
to intangible assets 458,824 -
Purchases of available for sale
financial assets (24,000,000) (36,468,000)
Proceeds from sale of available
for sale financial assets 20,009,281 14,953,126
Purchases of derivative financial
instruments (951,873) -
Purchases of other financial assets
at fair value through
profit or loss (104,000,000) (5,000,000)
Proceeds from sale of other financial
assets at fair value trough
profit or loss 109,000,000 -
Net cash used in investing activities (133,095,364) (33,201,284)
Cash flows from financing activities
Proceeds from share issue net
of transaction costs 285,154,139 825,020
Proceeds from interest-bearing
liabilities 20,281,000 36,283,714
Payment of interest-bearing liabilities (20,000,000) -
Capital investment by minority shareholders - 100,000
Net cash generated in financing
activities 285,435,139 37,208,734
Net (decrease)/increase
in cash and bank overdrafts 124,716,657 1,721,221
Cash and bank overdrafts at beginning
of the year 1,784,055 62,834
Cash and bank overdrafts at end of
the year 126,500,712 1,784,055
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IIFIIFFIRFIT
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