TIDMTALV
Stock Exchange Release
Talvivaara Mining Company Plc
28 May 2014
Talvivaara Mining Company Interim Report for January-March 2014
Corporate reorganisation proceedings in progress
Metals recovery plant and bioheapleaching in stable operation
Highlights of Q1 2014
-- Nickel production of 3,068t and zinc production of 5,726t; best quarter
since Q3 2012
-- Net sales of EUR 29.0 million
-- Operating loss of EUR (7.1) million
-- New heaps leached well and provided most of the produced metals during
the quarter;
nickel grades in solution around 1.5g/l
-- Metals plant in stable operation throughout the quarter
-- Ore production remained suspended with re-start subject to securing
additional financing
Highlights after the reporting period
-- Loan and streaming holiday agreement with Nyrstar for an up to EUR 20
million loan facility and option to sell up to 80,000t of zinc to Nyrstar
at market price for an additional significant financing impact
-- Talvivaara Sotkamo was granted an environmental permit decision on 30
April 2014 relating to its whole operation and uranium recovery; however,
operations continue under the old permit for the time being, as the new
permit is not yet final and binding
-- Bioheapleaching and metals recovery operations continue steadily;
year-to-date metals production through 26 May amounted to 5,053t of
nickel and 9,592t of zinc
Corporate reorganisation
-- Reports by the Administrator on the financial status of Talvivaara Mining
Company Plc ("Talvivaara" or the "Company") and Talvivaara Sotkamo
completed on 14 April 2014 and conclude that executable restructuring
programmes can be set up for both companies subject to financing
solutions being achieved
-- The District Court of Espoo granted on 21 May 2014 an extension to the
deadlines for submitting the proposals for the respective reorganisation
programmes of the Company and Talvivaara Sotkamo until 30 September 2014
as applied by the Administrator
Guidance for 2014
Talvivaara's operational outlook in 2014 remains subject to the success
to completion, timing and extent of the financing transactions that are
currently being negotiated. In the absence of a comprehensive financing
solution and related operational plan for the time being, Talvivaara is
not in a position to give guidance on its production or its operational
and capital expenditure for the current year.
Key figures
Q1 Q4 Q1 FY
EUR million 2014 2013 2013 2013
Net sales 29.0 12.6 27.6 77.6
Operating loss (7.1) (628.7) (20.0) (701.8)
% of net sales (24.4)% (4,988.7)% (72.4)% (904.7)%
Loss for the period (17.1) (731.8) (23.9) (812.4)
Earnings per share, EUR (0.01) (0.43) (0.09) (0.48)
Equity-to-assets ratio (49.9)% (46.1)% 25.5% (46.1)%
Net interest bearing debt 552.1 548.7 530.1 548.7
Debt-to-equity ratio (181.3)% (190.9)% 159.1% (190.9)%
Capital expenditure 1.5 7.4 17.3 60.5
Cash and cash equivalents at the end
of the period 1.1 5.9 68.7 5.9
Number of employees at the end of the
period 516 549 583 549
All quarterly figures in this release are unaudited. Full year figures
are audited.
CEO Pekka Perä comments: "Our first quarter 2014 results reflect an
operationally steady period with best nickel and zinc production since
Q3 2012. Our new ore heaps, primary heaps 1 and 4, demonstrated very
good leaching performance after having started to contribute to our
metals production towards the end of 2013. Our metals recovery plant
also performed uneventfully, which, together with the improvements in
bioheapleaching, gives us confidence that our processes have come of age
and can be operated in a reliable, industrial fashion.
Our financial results continued to be impacted by the weak nickel price
that persisted through most of the first quarter and the yet limited
production volumes obtainable from the currently functioning two primary
heaps, resulting in an operating loss of EUR 7.1 million. However, our
cost profile compared to the year before confirmed substantial savings
as a result of our on-going work towards better operational efficiency,
and the write-downs recognized on our fixed assets at year-end 2013
resulted in a considerable reduction in depreciation. All-in-all, though,
we cannot be content with the results achieved, but must strive for
further improvements with the target of eventually being able to operate
profitably also during the lows of the commodity cycles.
Over the recent months, the sentiment in the nickel market has turned
for the positive with prices improving from around USD 14,000/t in
January and USD 15,000-16,000/t in March to around USD 19,500/t
currently. The main stimulus for the improvement has been the Indonesian
ban on nickel ore exports, which came into effect in January and which
has had a particularly strong impact on the nickel ore supply to China.
The market outlook is now more positive than in the last few years with
the nickel over-supply being foreseen to turn into a deficit possibly as
early as this year.
We believe the good results in bioheapleaching over the last several
months as well as the recent improvement in the nickel market are
helpful in our on-going financing efforts. As the first funding step
since the commencement of both Talvivaara Mining Company and Talvivaara
Sotkamo's corporate reorganisations in late 2013, we entered into a loan
and streaming holiday agreement with our zinc client Nyrstar in the
beginning of April. This entitles us to an up to EUR 20 million loan,
drawn down in stages in relation to zinc deliveries, and an option to
sell up to 80,000t of zinc to Nyrstar at market prices, which would have
an additional financing impact of more than EUR 50 million at current
zinc prices. Further financing negotiations are now also progressing and
we hope to be in a position to announce positive news on their
completion in the coming months.
The most important short term use of funds for us would be the re-start
of mining and materials handling operations, which have been suspended
since November 2013. The new Nyrstar agreement and the improvement in
nickel price have already given us the opportunity to start reclaiming
of the poorly leached primary heaps on a trial basis, but more funding
needs to be secured before we can commit to full scale reclaiming and
the re-start of mining new ore.
In longer term, financing will also be needed for our environmental
commitments, particularly those relating to water management. Following
a relatively light spring melt, the current status of the water balance
is reasonably good with ample emergency volume in all ponds and dams.
However, planning of longer term solutions, including e.g. discharge of
treated water to an alternative waterway and additional reverse osmosis
capacity, continues and must be financed in due course.
Talvivaara Sotkamo was granted an environmental permit decision relating
to its whole operation and uranium recovery by the Northern Finland
Regional State Administrative Agency on 30 April 2014. We have since
assessed the decision and will appeal against several parts of the
decision, including amongst other things the method of assessment of the
securities to be set as well as some other permit conditions which are
deemed to be against the prevailing permitting practice. As the new
permit decision will only be applicable when the appeal processes have
been completed, Talvivaara will continue to operate under the previously
obtained, existing permits for the time being and continue its work
towards increasingly sustainable operations."
Enquiries:
Talvivaara Mining Company Plc. Tel. +358 20 712 9800
Pekka Perä, CEO
Saila Miettinen-Lähde, Deputy CEO and CFO
Webcast and conference call on 28 May 2014 at 11:00 am Finland (EET) /
9:00 am UK (GMT)
A combined webcast and conference call on the January-March 2014 Interim
Result will be held on 28 May 2014 at 11:00am Finland (EET) / 9:00 am UK
(GMT). The call will be held in English.
The webcast can be accessed through:
http://qsb.webcast.fi/t/talvivaara/talvivaara_2014_0528_q1/
A conference call facility will be available for a Q&A with senior
management following the presentation.
Participant - Finland: +358 (0)9 2313 9201
Participant - UK: +44 (0)20 7162 0077
Participant - US: +1 334 323 6201
Conference ID: 945070
The webcast will also be available for viewing on the Talvivaara website
shortly after the event.
Financial review
Q1 2014 (January-March)
Net sales and financial result
Talvivaara's net sales for nickel and cobalt deliveries to Norilsk
Nickel during the quarter ended 31 March 2014 amounted to EUR 29.0
million (Q1 2013: EUR 27.6 million). No zinc deliveries to Nyrstar Sales
and Marketing AG under the zinc streaming agreement were made. Compared
to Q4 2013, net sales increased by 130% due to increased nickel product
deliveries enabled by stable production throughout the quarter. Nickel
prices remained depressed at around USD 14,000/t for most of the quarter,
hence the sharp increase in nickel price seen towards the end of Q1 2014
and thereafter did not yet have a material impact on the first quarter
revenues and financial results. Product deliveries in Q1 2014 amounted
to 3,107t of nickel and 63t of cobalt (Q1 2013: 2,746t of nickel, 2,217t
of zinc, 88t of cobalt).
The Group's other operating income amounted to EUR 0.5 million (Q1 2013:
EUR 0.7 million) and mainly resulted sales of trees.
Changes in inventories of finished goods and work in progress amounted
to EUR (1.2) million (Q1 2013: EUR 7.3 million). Due to the temporary
suspension of mining and materials handling operations, no new ore was
stacked on leaching heaps during Q1 2014. The change in work in progress
therefore primarily reflected the removal of metals from the existing
heaps as a result of metal sulphide production.
Personnel expenses were EUR (6.2) million in Q1 2014 (Q1 2013: EUR (7.3)
million). The decrease in the personnel expenses compared to the year
before reflects a decrease in the number of employees as well as the
lay-offs implemented subsequent to the conclusion of the Group's
co-operation consultations on 7 January 2014.
Operating loss for Q1 2014 was EUR (7.1) million (Q1 2013: EUR (20.0)
million). Materials and services were EUR (14.9) million in Q1 2014 (Q1
2013: EUR (22.6) million) and other operating expenses were EUR (8.4)
million (Q1 2013: EUR (12.6) million). Metals production in Q1 2014 was
higher than that the year before, yet a substantial reduction in costs
was seen. This reflects the savings and improved operating efficiency in
metals recovery realized through the Company's Turnaround project in
2013. Mining and materials handling were suspended throughout Q1 2014 as
well as the first quarter of the year before with the exception of
reclaiming, which was operational in January 2013. Depreciation
decreased from EUR (12.6) million in Q1 2013 to EUR (8.4) million in Q1
2014 as a result of the impairment charges on property, plant and
equipment recognised at the end of 2013. The reduction in depreciation
is, however, not directly proportional to the impairment charge, as
depreciations on leased equipment continued unaffected.
Finance income for Q1 2014 was EUR 0.2 million (Q1 2013: EUR 0.3
million). Finance costs of EUR (10.2) million (Q1 2013: EUR (12.1)
million) were mainly related to interest accrued on borrowings. However,
due to the ongoing corporate reorganisation proceedings of the Company
and Talvivaara Sotkamo, no interest payments on borrowings, with the
exception of leasing arrangements, were made. The eventual treatment of
interests and repayment of restructuring debt will be decided as a part
of the reorganisation programmes, the proposals for which are due to be
submitted by 30 September 2014.
Loss for the period and the total comprehensive income amounted to EUR
(17.1) million (Q1 2013: EUR (23.9) million). Earnings per share were
EUR (0.01) in Q1 2014 (Q1 2013: EUR (0.09)).
Balance sheet
Capital expenditure in Q1 2014 totalled EUR 1.5 million (Q1 2013: EUR
17.3 million). The expenditure primarily related to water management. On
the consolidated statement of financial position as at 31 March 2014,
property, plant and equipment totalled EUR 300.5 million (31 December
2013: EUR 305.0 million), reflecting the EUR 499.3 million impairment
charge recognized at year-end 2013.
In the Group's assets, inventories amounted to EUR 259.9 million on 31
March 2014 (31 December 2013: EUR 261.5 million). At year-end 2013, an
impairment charge of EUR 93.7 million was recognized on the inventory.
Subsequently, the decrease in inventory in Q1 2014 reflects metals
production from the heaps while no new ore was added to the inventory
due to the temporary suspension of ore production.
Trade receivables amounted to EUR 16.3 million on 31 March 2014 (31
December 2013: EUR 10.4 million). The increase compared to the year
before was attributable to the discontinuation of the sale of
receivables and higher amount of product deliveries. Nickel price was,
however, lower than in Q1 2013, which on the other hand had a decreasing
impact on the receivables.
On 31 March 2014, cash and cash equivalents totalled EUR 1.1 million (31
December 2013: EUR 5.9 million).
In equity and liabilities, total equity amounted to EUR (304.6) million
on 31 March 2014 (31 December 2013: EUR (287.5) million).
Provisions decreased from EUR 13.3 million on 31 December 2013 to EUR
10.9 million at the end of March 2014, reflecting costs related to water
management and the gypsum pond leakage of November 2012, and the
corresponding de-recognition of provisions. The incurred costs came from
the treatment of excess waters with limestone and milk of lime.
Borrowings decreased from EUR 554.6 million on 31 December 2013 to EUR
553.1 million at the end of March 2014. The changes in borrowings during
Q1 2014 mainly related to finance lease liabilities. Most of the Group's
other debts are restructuring debts, the payment terms of which,
including repayment amounts, interests and repayment schedules, will be
decided as part of the Company and Talvivaara Sotkamo's reorganisation
programmes. Proposals for the reorganisation programmes are due to be
submitted by the Administrator by 30 September 2014.
Total advance payments as at 31 March 2014 amounted to EUR 286.1 million,
which is the same value as at 31 December 2013, as no zinc deliveries to
Nyrstar took place during the quarter.
Total equity and liabilities as at 31 March 2014 amounted to EUR 610.7
million (31 December 2013: EUR 623.3 million).
Going concern
Talvivaara's interim results for the first quarter of 2014 have been
prepared on a going concern basis, which assumes that the Company will
be able to realise its assets and discharge its liabilities in the
normal course of business for the foreseeable future.
The Company is working together with the Administrator towards finding
appropriate financing solutions for the Group going forward. On 1 April
2014, Talvivaara entered into a loan and streaming holiday agreement
with Nyrstar Sales and Marketing AG ("Nyrstar") for a loan facility of
up to EUR 20 million and an arrangement whereby, subject to Talvivaara
securing a long-term financial solution, the Group also has an option to
enter into a streaming holiday for delivery volumes of up to 80,000
tonnes of zinc in concentrate. During the streaming holiday, Nyrstar
commits, outside the framework of the original contract between the
parties, to purchase zinc concentrate from Talvivaara at market terms
for an additional financing impact of more than EUR 50 million at
current market prices for zinc.
The agreement with Nyrstar, together with the recent positive
development in nickel price, have provided Talvivaara with sufficient
liquidity to continue the corporate reorganisation and its operations in
the short term. To secure the Group's long term viability, Talvivaara
also explores the options of identifying potential investor(s) to
participate in a medium term bridge financing and/or a long-term,
overall financial solution for the Group.
As of the date of the announcement of the Company's Q1 2014 interim
results, the Directors, Management and the Administrator do not
contemplate the liquidation of the Company or Talvivaara Sotkamo. As
such, Directors and Management believe that the going concern basis of
presentation is appropriate regardless of the on-going financing
discussions and commencement of the reorganisation proceedings. However,
the Company's liquidity situation continues to cause material
uncertainty that casts significant doubt upon the Company and Talvivaara
Sotkamo's ability to continue as a going concern and that, therefore,
the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business. Should the going concern
basis prove inappropriate in the foreseeable future, adjustments to the
carrying amounts and/or classifications of Talvivaara's assets and
liabilities would be necessary.
The Group's ability to continue as a going concern is dependent on the
successful completion of the contemplated financing transactions as well
as the development and authorisation of executable restructuring
programmes for both the Company and Talvivaara Sotkamo. Furthermore,
Talvivaara's future profitability is dependent on the prevailing market
conditions and the Group's ability to successfully implement its
business plan at the Talvivaara mine. At the time of the Company's Q1
2014 interim results on 28 May 2014, it is not possible to foresee
whether Talvivaara will be able to execute its financing, reorganisation
and operational plans or whether the execution of these will improve the
Group's financial condition sufficiently to allow it to continue as a
going concern.
The corporate reorganisation plans to be authorised by the District
Court of Espoo could materially change the carrying amounts and
classifications reported in the Group's financial statements. The assets
and liabilities in the Company's Q1 2014 interim results do not reflect
any adjustments potentially proposed or authorised as part of such
reorganisation plans. Furthermore, the interim results do not aim to
reflect or provide for the consequences of the corporate reorganisation
proceedings, such as: (i) the realisable value of the Group's assets on
a liquidation basis or their availability to satisfy liabilities, (ii)
the amounts of loans and debts subject to reorganisation and priority
thereof, (iii) or the effect on the Group's consolidated income
statement of any changes potentially made to its business as a result of
the final corporate reorganisation plan. However, in view of the
inherent uncertainty brought about by the corporate reorganization
proceedings, operational challenges caused by and partly continuing as a
result of water balance issues, and the weak nickel price environment
that prevailed for most of 2013 and into early 2014, the Group has made
substantial impairment charges in its FY 2013 financial statements
related to its tangible assets, inventories and deferred tax assets.
Further, the challenging liquidity position and the commencement of the
corporate reorganisation proceedings for the Company and Talvivaara
Sotkamo have resulted in breach of covenants and default events in
accordance with the respective terms and conditions of the companies'
loan agreements resulting in adjustments to the carrying values and
classifications of such loans.
Progress of corporate reorganisation
Upon deciding to commence the reorganisation proceedings of the Company
and Talvivaara Sotkamo on
29 November 2013 and 17 December 2013, respectively, the District Court
of Espoo, Finland, appointed Mr. Pekka Jaatinen, Attorney-at-Law, from
Castrèn & Snellman Attorneys Ltd. to act as the Administrator for
both processes.
On 17 January 2014, the District Court of Espoo issued a ruling in
respect of certain deadlines in connection with the Company and
Talvivaara Sotkamo's respective corporate reorganisations. According to
the Court's ruling, reports on the financial status of both companies
were to be completed by 28 March 2014, and proposals for their
respective reorganisation were to be submitted by the Administrator by
28 May 2014. However, the District Court has since amended these
deadlines such that the reports on the financial status of the companies
were completed on 14 April 2014, and the new deadline for the submission
of the reorganisation proposals is 30 September 2014.
The District Court has also appointed creditor committees, which will
act as the joint representatives of the creditors in the reorganisation
proceedings of both companies. Various creditor groups, including
secured creditors, other debt financiers, as well as business partners
and subcontractors essential for the operations of both companies, are
represented in the creditor committees. The creditor committees of the
Company and Talvivaara Sotkamo have the same composition.
Production review
Talvivaara produced 3,068t (Q1 2013: 2,732t) of nickel and 5,726t (Q1
2013: 3,128t) of zinc during Q1 2014. Metals production was stable with
good leaching performance from the two new heaps and high availability
of the metals plant. Mining and materials handling processes have been
suspended since November 2013. Subject to financing, re-start of these
functions is planned to take place in stages during the coming summer
and autumn.
As a result of the improved grades in leach solution from the new
primary heaps 1 and 4, the nickel grade in solution pumped to the metals
plant rose from around 1.0g/l at the end of 2013 to 1.5-1.6g/l in
February, allowing 45-55t of nickel production on a daily basis at
solution flow rates of around 1,400 m3/h through the metals plant.
The old primary heaps 2 and 3 continued to suffer from the effects of
excess water and remained largely inactive. Consequently the decision
was taken to cease acid addition to these heaps until they are reclaimed
and re-stacked on the secondary leaching area.
The cost efficiency of production at the metals plant improved
significantly as a result of the higher metal grades in solution as well
as the substantially higher temperature of the leach solution compared
to the winter of 2013. The increased solution temperature, around 20degC
this winter vs. 6degC the year before, reflects the high level of
chemical and biological activity in the new primary heaps 1 and 4.
The steady production over the recent months demonstrates that the
technologies applied by Talvivaara are functional and have matured to a
stage where they can be considered reliable industrial processes.
Production key figures
Q1 Q4 Q1 FY
2014 2013 2013 2013
Mining
Ore production Mt - 1.6 - 7.4
Waste production Mt - 0.9 - 3.1
Materials handling
Stacked ore Mt - 1.7 - 7.6
Bioheapleaching
Ore under leaching Mt 51.8 51.8 44.3 51.8
Metals recovery
Nickel metal content Tonnes 3,068 1,559 2,732 8,662
Zinc metal content Tonnes 5,726 4,179 3,128 17,418
Sustainable development, safety and permitting
Safety
With respect to safety issues, Talvivaara's goal is a safe and healthy
working environment, and the Company continued to develop its safety
culture based on zero accident philosophy.
At the end of the first quarter, the injury frequency among the
Talvivaara personnel was 34.9 lost time injuries/million working hours
on a rolling 12 month basis (31 March 2013: 15.7 lost time
injuries/million working hours).
Environment
Talvivaara continues to focus on minimising the environmental impact of
its operations. Current primary focus is on water balance management and
purification and discharge of excess waters from the mine site.
During the first quarter of 2014, significant effort was made to
ascertain sufficient emergency volumes in ponds and dams ahead of the
spring melt and in case of any leakages. Particular focus was on the
Kortelampi dam, from where water was treated and released directly to
the southern Vuoksi waterways as well as through the Tammalampi water
treatment unit to the northern Oulujoki water system. Removal of excess
water from the gypsum ponds also continued with the target of having all
excess water removed by the end of August 2014 (see also Permitting).
Hydrogen sulphide (odour) emissions have been largely addressed. Odour
complaints from nearby residents reduced further from five in Q1 2013 to
three in Q1 2014. Notices of noise increased, however, from one to seven
as a result of an increased number of blowers used for the aeration of
leaching heaps.
Talvivaara continues to place significant emphasis on timely and
transparent communication on environmental matters with the neighbouring
communities and other interested stakeholders. During the first quarter,
a new text message service targeted for nearby neighbours was
implemented. Furthermore, the Company's first ever Twitter question and
answer session with Talvivaara's sustainability experts was successfully
held.
Permitting
At the end of May 2013, Talvivaara received from the Northern Finland
Regional State Administrative Agency ("AVI") an environmental permit
decision relating to the storage, treatment and discharge of waters to
the Oulujoki and Vuoksi water systems. Among other regulations, the
decision required the Company to direct the water contained in the
existing gypsum ponds to neutralisation or back to leach solution
circulation by 31 October 2013. The Vaasa Administrative Court
subsequently extended the deadline until the end of 2013. After this,
the Company applied for and obtained permission from the AVI for a
two-staged emptying schedule such that section 5 of the gypsum pond
should be void of excess water by the end of January 2014, and section 6
by the end of August 2014. Prior to the end of January, Talvivaara
notified the Kainuu Centre for Economic Development, Transport and the
Environment ("Kainuu ELY-Centre") of its inability to comply with the
interim deadline of January, however stating that the Company believes
the final emptying deadline for the entire pond to be achievable. After
this, the Kainuu ELY-Centre has requested section 5 of the gypsum pond
to be emptied of excess water and sufficient emergency volume to be
arranged in the Kortelampi dam for all waters contained in the gypsum
pond by 1 April 2014. Talvivaara noted, in turn, to the ELY-Centre that
the requested timetable was not technically feasible and that a
realistic deadline would rather be 15 May 2014.
Subsequently the Kainuu ELY-Centre gave a ruling on 25 April 2014
stating that, under a threat of a fine, Talvivaara would have to reduce
the amount of water in gypsum pond section 6 to below 500,000 cubic
metres by 15 May 2014. As at 7 May 2014, the amount of water in the pond
was measured to be approximately 407,000 cubic metres and in compliance
with the requirement. Gypsum pond section 5 had been emptied of excess
water already in April. On 15 May 2014, Kainuu ELY-Centre confirmed the
removal of the threat of a fine.
On 5 December 2013 the Supreme Administrative Court returned the permit
to extract uranium granted to Talvivaara Sotkamo under the Nuclear
Energy Act on 1 March 2012 for reassessment by the Finnish Government.
According to the Supreme Administrative Court there had been several
changes in the operations of Talvivaara Sotkamo following the permit
decision, including the filing for corporate reorganization. Therefore,
the Government should reassess the permit application documentation and,
if needed, obtain additional information on the economical and safety
related requirements. During the first quarter of 2014, preliminary
discussions with the Ministry of Employment and the Economy were held to
prepare for the re-application.
Business development and commercial arrangements
Participation in Fennovoima nuclear power project
Talvivaara announced on 21 February 2014 its support for the Fennovoima
nuclear power project, but noted that under the current circumstances
the Company focuses all its financial resources on the Sotkamo operation
and the ongoing corporate reorganisation process. For the time being
Talvivaara is not in a position to commit to additional funding of the
Fennovoima project, but will reassess its ability for further
participation once more clarity into its financing situation is obtained
and the corporate reorganisation process proceeds.
Risk management and key risks
In line with current corporate governance guidelines on risk management,
Talvivaara carries out an on-going 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. During 2013, the Company's focus was on developing its hazardous
risk management and contingency planning. As a result, a new risk
register for environmental, safety and accident risks was introduced.
Contingency planning focused primarily on hazard risks such power
failure and dam or pond leakages.
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 counterparties, currency exchange ratios, management
and control systems, historical losses and uncertainties about the
future profitability of Talvivaara, dependence on key personnel, effect
of laws, governmental regulations and related costs, environmental
hazards, and risks related to Talvivaara's mining concessions and
permits.
Liquidity and refinancing risks may arise as a result of the Company's
inability to produce sufficient volumes of its saleable products,
particularly nickel, unexpected increase in production costs, and sudden
or substantial changes in the prices of commodities or currency exchange
rates. In the second half of 2013, the liquidity and refinancing risks
realized as a result of persistent production problems relating to
excess water, and due to a substantial fall in the nickel price. As a
result, Talvivaara and its operating subsidiary Talvivaara Sotkamo were
unable to obtain new financing and applied for corporate reorganisation,
which for the two companies commenced on 29 November 2013 and 17
December 2013, respectively. Going forward, Talvivaara's key financial
and operational risks relate to the on-going corporate reorganisation
proceedings and Talvivaara's ability to obtain sufficient additional
funding to continue its operations and to return to the planned ramp-up
of production.
Operationally, the Company has to date demonstrated that all of its
production processes work and can be operated on industrial scale,
however the rate of ramp-up is still subject to risk factors including
the reliability and sustainable capacity of production equipment, and
eventual speed of leaching and rates of metals recovery in
bioheapleaching. In addition, the return to production ramp-up remains
subject to further financing for the time being and there may also be
production and ramp-up related risks that are currently unknown or
beyond the Company's control.
The market price of nickel has historically been volatile and in the
Company's view this is likely to persist, driven by shifts in the
supply-demand balance, macroeconomic indicators and variations in
currency exchange ratios. Nickel sales currently represent close to 90%
of the Company's revenues and variations in the nickel price therefore
have a direct and significant effect on Talvivaara's financial result
and economic viability. Talvivaara is, since February 2010, unhedged
against variations in metal prices. Full or substantially full exposure
to nickel prices is in line with Talvivaara's strategy and supported by
the Company's view that it can operate the Talvivaara mine, once it has
been fully ramped up, profitably also during the lows of commodity price
cycles.
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 hedges its exposure to the US dollar on a case by
case basis with the aim of limiting the adverse effects of US dollar
weakness as considered justified from time to time.
Personnel and management
Wages and salaries
The number of personnel employed by the Group on 31 March 2014 was 516
(Q1 2013: 583).
Wages and salaries paid during the three months to 31 March 2014
totalled EUR 5.1 million (Q1 2013: EUR 4.2 million).
Conclusion of co-operation consultations
Talvivaara concluded its co-operation consultations on 7 January 2014.
All personnel groups in the Company and its subsidiaries Talvivaara
Sotkamo and Talvivaara Exploration were within the scope of the
consultations. Following the consultation process, Talvivaara decided to
gradually lay off 246 employees for an indefinite period. The lay-offs
support the Company and Talvivaara Sotkamo's corporate reorganisation
and adjust the number of personnel to the current operating scheme under
which ore production is temporarily suspended.
As at 31 March 2014 2014, 97 employees were laid off, which is less than
anticipated when the co-operation consultations were concluded due to
previously subcontracted work having been taken in-house and done by the
Group's own workforce.
Management changes
Lassi Lammassaari, M.Sc. (Environmental Engineering) was appointed Chief
Corporate Development Officer as of 27 February 2014. He leads a newly
established Corporate Development function, which focuses on industrial
engineering, planning and development. Lassi Lammassaari has held
several positions at Talvivaara since 2005, most lately as Senior Vice
President - Projects. In his new position he is a member of the
Executive Committee and reports to CEO Pekka Perä.
Chief Operating Officer Darin Cooper resigned from his position on 7
March 2014 to pursue his career outside the Company. Chief Technology
Officer Pertti Pekkala subsequently assumed interim responsibility for
the Sotkamo mine's operations until a new COO is appointed. In addition,
the Company's Technical Executive Committee, consisting of CEO Pekka
Perä, Chief Corporate Development Officer Lassi Lammassaari, CTO
Pertti Pekkala and Environmental Manager Veli-Matti Hilla as a newly
appointed member, takes an increasingly active role in the management of
the operations at the Sotkamo mine.
Non-Executive Director Kirsi Sormunen announced her resignation from the
Company's Board of Directors due to personal reasons on 7 March 2014.
Shares and shareholders
The number of shares issued and outstanding and registered on the
Euroclear Shareholder Register as of 31 March 2014 was 1,906,167,480.
Including the effect of the EUR 225 million convertible bond of 16
December 2010 and the stock options of 2007 and 2011, the authorised
full number of shares of the Company amounted to 2,041,901,379.
After the adjustments to the terms and conditions of the 2007 stock
options in April 2013 as a consequence of the Company's rights issue, a
total of 16,289,000 option rights 2007C have been issued to employees
and the subscription period for stock options 2007C was between 1 April
2012 and 31 March 2014. No new shares of Talvivaara were subscribed for
under the stock option rights 2007C between 1 January and 31 March 2014.
A total of 16,289,000 stock option rights 2007C remained unexercised
following the end of the subscription period and expired.
Of the stock options of 2011, option rights 2011A and 2011B have expired
due to the agreed implementation criteria having not been met. Option
rights 2011C have not been allocated.
As at 31 March 2014, the shareholders who held more than 5% of the
shares and votes of Talvivaara were Solidium Oy (16.7%) and Pekka
Perä (6.5%).
Legal proceedings
On 19 March 2014, the Kainuu ELY Centre issued an administrative
injunction, requesting Talvivaara Sotkamo to carry on the neutralization
of metal and sulphate containing waters at the site under all
circumstances. Further, the ELY Centre requested Talvivaara Sotkamo to
immediately continue and complete negotiations on the supply of
additional water purification capacity at the site, as well as on the
construction of new pond capacity for purified waters. Should Talvivaara
Sotkamo fail to comply with the request, the Kainuu ELY Centre may
consider having the investments completed at the cost of Talvivaara
Sotkamo. In addition, the Kainuu ELY Centre required that the weekly
utilization rate of Talvivaara Sotkamo's existing reverse osmosis plants
must stay on or above 60 per cent, failing which could give rise to an
administrative penalty of EUR 100,000. Talvivaara Sotkamo has appealed
the injunction to Vaasa Administrative Court.
Kainuu ELY Centre prohibited on 5 March 2014 Talvivaara Sotkamo to
discharge raffinate or secondary leach solution into the open pit and
issued a threat of an administrative penalty of 150,000 euros to enforce
its decision. Due to the improved water balance situation Talvivaara
Sotkamo no longer has any need to discharge untreated solutions into the
open pit.
In addition, as at the date of these interim results, there are a number
of on-going legal proceedings and police investigations in relation to
Talvivaara's mining, environmental and occupational health and safety
issues. In addition, Talvivaara is subject to, or may become subject to,
private claims seeking compensation for damages caused by environmental
issues originating from the Talvivaara mine, although Talvivaara
currently believes that such claims are not material. The current legal
proceedings are further discussed in the Company's financial statements
for 2013.
Events after the review period
Loan and streaming holiday agreement with Nyrstar
On 1 April 2014, the Company and Talvivaara Sotkamo entered into a loan
and streaming holiday agreement ('the Agreement') with Nyrstar Sales and
Marketing AG ("Nyrstar"). Under the Agreement, Nyrstar makes available
to Talvivaara a loan facility of up to EUR 20 million. Nyrstar makes the
facility available in several tranches with the amount of each advance
calculated with reference to a corresponding delivery by Talvivaara
Sotkamo of zinc in concentrate under the original zinc streaming
agreement of February 2010.
In the short term, the Agreement enables the continuation of the Company
and Talvivaara Sotkamo's corporate reorganisation and the process,
whereby Talvivaara explores the options of identifying potential
investor(s) to participate in a long-term, overall financial solution
for the Group.
Subject to Talvivaara securing the overall financial solution, the
Company also has an option to enter into a streaming holiday for
delivery volumes of up to 80,000 tonnes of zinc in concentrate. During
the streaming holiday, Nyrstar commits, outside the framework of the
original contract, to purchase zinc concentrate from Talvivaara at
market terms. The streaming holiday, if used in full, has an over EUR 50
million additional financing impact for the Company at current zinc
prices.
In return for the holiday, the value sharing mechanism of the original
zinc streaming agreement will be amended to reduce on a pro rata basis
such that, if the full holiday period is elected, the value sharing
mechanism thereafter becomes nil. When applied, the value sharing
mechanism allows Talvivaara to receive a cash consideration for its
deliveries that is higher than the extraction and processing fee
determined in the zinc streaming agreement.
Nyrstar's obligation to extend financing under the loan facility will
cease at the earlier of the aggregate amount outstanding including
accrued interest exceeding EUR 20 million or the commencement of a
streaming holiday. The zinc concentrate deliveries entitling Talvivaara
to the full loan amount are estimated to be made during the remainder of
2014. As at the date of these interim results, Talvivaara has drawn down
EUR 6.7 million of the Nyrstar loan facility.
Corporate reorganisation
The reports on the financial status of the Company and Talvivaara
Sotkamo were completed by the Administrator of the corporate
reorganisation on 14 April 2014. According to the Administrator, an
executable restructuring programme can be set up for both companies,
provided that financing solutions for an interim period and for the
longer term are achieved.
On 21 May 2014 the District Court of Espoo granted an extension to the
deadlines for submitting the proposals for the respective reorganisation
programmes of the Company Talvivaara Sotkamo until 30 September 2014.
According to the prior District Court ruling, the proposals for the
reorganisation programmes were to be submitted by 28 May 2014.
The Administrator and Talvivaara are engaged in discussions with
potential financing and industrial partners for a long-term financing
solution for the Talvivaara Group. Certain industrial and financial
arrangements for the continuation of operations of the Company and
Talvivaara Sotkamo have already been reached so that the restructuring
programmes can be set up. The extension was applied for as submission of
the restructuring programme proposals is not considered feasible until
sufficient long-term financing has been secured.
Environmental permit decision
Talvivaara Sotkamo was granted an environmental permit decision relating
to its whole operation and uranium recovery by the Northern Finland
Regional State Administrative Agency on 30 April 2014. Talvivaara has
assessed the decision and will appeal against several parts of the
decision, including amongst other things the method of assessment of the
securities to be set as well as some other permit conditions which are
deemed to be against the prevailing permitting practice. The permit
decision will only be applicable when the appeal processes have been
completed and Talvivaara will operate under the previously obtained,
existing permits until the new permit is final.
Production update
Talvivaara's year-to-date production through 26 May 2014 has reached
5,053t of nickel and 9,592t of zinc. Metals production has continued
stable with good leaching performance from the two new heaps and high
availability of the metals plant. However, during the second quarter,
nickel grade in leach solution has declined slightly to a level of
1.2-1.3g/l due to continued heavy depletion from the two new heaps.
Mining and materials handling processes have been suspended since
November 2013. Since mid-May 2014, preparatory work has been undertaken
to re-commence reclaiming of old primary heaps, and as at the date of
these interim results, reclaiming is ongoing on a trial basis. However,
more funding needs to be secured before commitment to full scale
reclaiming can be made or the mining of new ore re-started.
Short-term outlook
Market outlook
The LME nickel price has shown an approximately 40% recovery since the
implementation of the Indonesian nickel ore export ban in January 2014,
moving from levels below USD 14,000/t to around USD 19,500/t currently.
The surplus in nickel production that has been prevailing over the last
few years is now expected to turn into a deficit possibly as early as
this year, which further underpins the recent price development and may
offer additional upside potential going forward. Provided the Indonesian
ore export ban stays in force, the nickel price can be anticipated to
start reflecting also the increasing marginal cost of production across
the nickel industry and lack of new committed nickel projects to replace
depleting supply from the existing operations.
Operational outlook
The operational outlook for Talvivaara is greatly dependent on the
success to closing, timing and extent of the short as well longer term
financing solutions currently under negotiation. The key operational
priority of the Company has been to start reclaiming old primary heaps 2
and 3 as soon as possible, preferably during Q2 2014. Moving these heaps
to the secondary pad will allow the so far poorly leached ore to be
reconditioned and leaching to be restarted. There is significant
unleached nickel in these two heaps, which will improve production in
the coming months prior to leaching from any newly mined and stacked ore
can start contributing to production. The recent increase in nickel
price and the loan agreement with Nyrstar have allowed Talvivaara to
re-start reclaiming on a trial basis during the latter half of May.
However, further funding will need to be secured before commitment to
full scale reclaiming can be made. Similarly subject to financing, the
Company plans to re-start mining of new ore during the summer or early
autumn.
Talvivaara believes the pre-requisites for continued production ramp-up
are in place with substantial improvements having been made over the
recent months in bioheapleaching, as well as in mining and materials
handling prior to their suspension in November 2013. Furthermore, the
metals plant is currently operating uneventfully.
28 May 2014
Talvivaara Mining Company Plc.
Board of Directors
CONSOLIDATED INCOME STATEMENT
(Applications for corporate reorganisation proceeding
filed on 15 Nov 2013)
Unaudited Unaudited
three three
months to months to
31 March 31 March
(all amounts in EUR '000) 2014 2013
Net sales 29,014 27,605
Other operating income 547 729
Changes in inventories of finished goods and work
in progress (1,185) 7,288
Impairment charges on inventories - -
Materials and services (14,896) (22,614)
Personnel expenses (6,188) (7,285)
Depreciation and amortization (6,032) (13,099)
Impairment charges on PPE - -
Other operating expenses (8,353) (12,612)
Operating loss (7,092) (19,988)
Finance income 169 339
Finance cost (10,195) (12,080)
Finance income (cost) (net) (10,026) (11,741)
Loss before income tax (17,118) (31,729)
Income tax expense - 7,797
Loss for the period (17,118) (23,932)
Attributable to:
Owners of the parent (14,570) (21,005)
Non-controlling interest (2,549) (2,927)
(17,118) (23,932)
Earnings per share for profit (loss) attributable
to the owners of the parent (expressed in EUR per
share)
Basic and diluted (0.01) (0.07)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Applications for corporate reorganisation proceeding
filed on 15 Nov 2013)
Unaudited Unaudited
three three
months to months to
(all amounts in EUR '000) 31 Mar 14 31 Mar 13
Loss for the period (17,118) (23,932)
Other comprehensive income, net of tax - -
Total comprehensive income (17,118) (23,932)
Attributable to:
Owners of the parent (14,570) (21,005)
Non-controlling interest (2,549) (2,927)
(17,118) (23,932)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Applications for corporate reorganisation proceeding
filed on 15 Nov 2013)
Unaudited Audited
(all amounts in EUR '000) 31 Mar 14 31 Dec 13
ASSETS
Non-current assets
Property, plant and equipment 300,485 304,956
Biological assets 6,488 6,641
Intangible assets 6,520 6,582
Investments in associates 6,968 6,968
Other receivables 8,267 8,412
Available-for-sale financial assets 2 2
328,729 333,560
Current assets
Inventories 259,816 261,451
Trade receivables 16,327 10,389
Other receivables 4,723 12,047
Cash and cash equivalent 1,070 5,867
281,937 289,754
Total assets 610,666 623,314
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 80 80
Share premium 8,086 8,086
Other reserves 764,626 764,603
Retained deficit (940,423) (925,854)
(167,631) (153,085)
Non-controlling interest in equity (136,927) (134,378)
Total equity (304,558) (287,463)
Non-current liabilities
Borrowings 15,264 30,592
Advance payments 270,641 270,641
Other payables 11 270
Provisions 10,891 10,785
296,807 312,288
Current liabilities
Borrowings 537,875 524,011
Advance payments 15,456 15,456
Trade payables 32,376 37,426
Other payables 32,710 19,065
Provisions - 2,531
618,418 598,489
Total liabilities 915,224 910,777
Total equity and liabilities 610,666 623,314
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Applications for corporate reorganisation proceeding filed on 15 Nov
2013)
A.Share capital
B. Share issue
C. Share premium
D. Invested unrestricted equity
E. Other reserves
F. Retained deficit
G. Total
H Non-controlling interest
I. Total equity
(all amounts in
EUR '000) A B C D E F G H I
304, 1, 306,
1 Jan 2013 80 - 8,086 490,749 48,810 (242,962) 763 989 752
Loss for the (21, (2, (23,
period - - - - - (21,005) 005) 927) 932)
Total
comprehensive
income for the (21, (2, (23,
period - - - - - (21,005) 005) 927) 932)
Transactions
with owners
Perpetual
capital loan - - - - 2,612 (1,851) 761 - 761
49, 49,
Rights issue - 49,463 - - - - 463 - 463
Incentive
arrangement for
Executive
Management - - - - 23 - 23 - 23
Employee share
option scheme
- value of
employee
services - - - - 61 - 61 - 61
Total
contribution by
and
distribution to 50, 50,
owners - 49,463 - - 2,696 (1,851) 308 - 308
Total
transactions 50, 50,
with owners - 49,463 - - 2,696 (1,851) 308 - 308
334, 333,
31 Mar 13 80 49,463 8,086 490,749 51,506 (265,818) 066 (938) 128
(153, (134, (287,
31 Dec 13 80 - 8,086 741,576 23,028 (925,854) 085) 378) 463)
(153, (134, (287,
1 Jan 14 80 - 8,086 741,576 23,028 (925,854) 085) 378) 463)
Loss for the (14, (2, (17,
period - - - - - (14,570) 570) 549) 118)
Total
comprehensive
income for the (14, (2, (17,
period - - - - - (14,570) 570) 549) 118)
Transactions
with owners
Incentive
arrangement for
Executive
Management - - - - 23 - 23 - 23
Total
contribution by
and
distribution to
owners - - - - 23 - 23 - 23
Total
transactions
with owners - - - - 23 - 23 - 23
(167, (136, (304,
31 Mar 14 80 - 8,086 741,576 23,051 (940,423) 631) 927) 558)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Applications for corporate reorganisation proceeding
filed on 15 Nov 2013)
Unaudited Unaudited
three three
months to months to
(all amounts in EUR '000) 31 Mar 14 31 Mar 2013
Cash flows from operating activities
Loss for the period (17,118) (23,932)
Adjustments for
Tax - (7,797)
Depreciation and amortization 6,032 13,099
Impairment charges on PPE - -
Impairment charges on inventories - -
Other adjustments 861 (6,758)
Interest income (169) (339)
Interest expense 10,195 12,080
(199) (13,647)
Change in working capital
Decrease(+)/increase(-) in other receivables 1,527 8,291
Decrease (+)/increase (-) in inventories 322 (8,702)
Decrease(-)/increase(+) in trade and other payables (2,116) (4,305)
Change in working capital (267) (4,716)
(466) (18,363)
Interest and other finance cost paid (409) (789)
Interest and other finance income 12 213
Net cash used in operating activities (863) (18,939)
Cash flows from investing activities
Investments in associates - (486)
Purchases of property, plant and equipment (1,471) (17,085)
Purchases of biological assets - (52)
Purchases of intangible assets (29) (176)
Proceeds from sale of biological assets 644 92
Net cash used in investing activities (856) (17,707)
Cash flows from financing activities
Proceeds from share issue net of transactions costs - 54,035
Related party investment in Talvivaara shares - -
Proceeds from advance payments - 19,480
Payment of interest-bearing liabilities (1,366) (1,317)
Payment of financial leasing liabilities (1,712) (2,919)
Net cash generated from financing activities (3,078) 69,279
Net increase (decrease) in cash and cash equivalents (4,797) 32,633
Cash and cash equivalents at beginning of the period 5,867 36,058
Cash and cash equivalents at end of the period 1,070 68,691
NOTES
1. Basis of preparation
This interim report has been prepared in compliance with IAS 34
The interim financial information set out herein has been prepared on
the same basis and using the same accounting policies as were applied in
drawing up the Group's statutory financial statements for the year ended
31 December 2013.
2. Property, plant and equipment
Machinery Construction Land Other
and in and tangible
(all amounts in EUR '000) equipment progress buildings assets Total
Gross carrying amount at 1 Jan 14 407,003 105,154 294,482 242,147 1,048,786
Additions 77 1,395 - - 1,472
Gross carrying amount at 31 Mar 14 407,080 106,549 294,482 242,147 1,050,258
Accumulated depreciation and
impairment losses at 1 Jan 14 293,759 67,305 204,757 178,010 743,831
Depreciation for the period 3,911 - 1,200 831 5,942
Accumulated depreciation and impairment losses at
31 Mar 14 297,670 67,305 205,957 178,841 749,773
Carrying amount at 1 Jan 14 113,244 37,849 89,725 64,137 304,955
Carrying amount at 31 Mar 14 109,410 39,244 88,525 63,306 300,485
3. Trade receivables
(all amounts in EUR '000)
As at As at
31 Mar 14 31 Dec 13
Nickel-Cobalt sulphide 15,952 9,977
Zinc sulphide 375 375
Copper sulphide - 37
Total trade receivables 16,327 10,389
4. Inventories
(all amounts in EUR '000)
As at 31 March 2014 As at 31 Dec 2013
Raw materials and consumables 24,350 24,800
Work in progress 231,625 234,193
Finished products 3,841 2,457
Total inventories 259,816 261,451
5. Borrowings
(all amounts in EUR '000)
As at As at
Non-current 31 Ma 14 31 Dec 13
Finance lease liabilities 15,264 17,000
Other - 13,593
15,264 30,592
Current
Capital loans 1,405 1,405
Perpetual capital loan 35,106 35,106
Investment and Working Capital loan 57,855 57,855
Finance lease liabilities 7,052 7,032
Revolving Credit Facility 70,000 70,000
Senior Unsecured Bonds due 2017 110,000 110,000
Senior Unsecured Convertible Bonds due 2015 244,230 242,613
Other 12,227 -
537,875 524,011
Total borrowings 553,139 554,603
6. Advance payments
(all amounts in EUR '000)
As at As at
Non-current 31 Mar 14 31 Dec 13
Deferred zinc sales revenue 216,713 216,713
Deferred uranium sales revenue 53,928 53,928
270,641 270,641
Current
Deferred zinc sales revenue 15,456 15,456
15,456 15,456
Total advance payments 286,097 286,097
7. Provisions
Gypsum Water
pond balance Environmental Mining
leakage management restoration fee Total
31 Dec 13 3,775 2,531 6,849 162 13,316
Charged/(credited) to the
income statement:
Additional provisions - - 106 8 114
Unwinding of discount - - 1 - 1
Used during the period (2,531) - - (2,531)
31 Dec 14 3,775 - 6,956 170 10,901
The non-current and current portions of provisions
are as follows:
As at As at
31 Mar 14 31 Dec 3
Non-current
Gypsum pond leakage 3,775 3,775
Environmental restoration 6,956 6,849
Mining fee 170 161
10,901 10,785
Current
Water balance management - 2,531
- 2,531
Total 10,901 13,316
8. Changes in the number of shares issued
Number
of shares
31 Dec 13 1,906,167,480
Changes -
31 Dec 14 1,906,167,480
9. Contingencies and commitments
(all amounts in EUR '000)
The future aggregate minimum lease payments under
non cancellable
operating leases
As at As at
31 Mar 14 31 Dec 13
Not later than 1 year 1,812 1,812
Later than 1 year and not later
than 5 years 549 552
Later than 5 years 25 29
2,386 2,393
Capital commitments
At 31 March 2014, the Group had capital commitments amounting to EUR 0.8
million (31 December 2013: EUR 1.2 million) principally relating to the
completion of the Talvivaara mine, improving the reliability and
expansion of production capacity. These commitments are for the
acquisition of new property, plant and equipment.
Talvivaara Mining Company Plc
Three Three Twelve
months to months to months to
Key financial figures of the Group 31 Mar 14 31 Mar 13 31 Dec 13
Net sales EUR '000 29,014 27,605 77,572
Operating loss EUR '000 (7,092) (19,988) (701,801)
Operating loss percentage -24.4 % -72.4 % -904.7 %
Loss before tax EUR '000 (17,118) (31,729) (758,043)
Loss for the period EUR '000 (17,118) (23,932) (812,447)
Return on equity - -7.5 % -12.9 %
Equity-to-assets ratio -49.9 % 25.5 % -46.1 %
Net interest-bearing debt EUR '000 552,069 530,063 548,736
Debt-to-equity ratio -181.3 % 159.1 % -190.9 %
Return on investment -2.7 % -1.3 % -1.2 %
Capital expenditure EUR '000 1,471 17,313 60,535
Property, plant and equipment EUR '000 300,485 813,604 304,956
Borrowings EUR '000 553,139 598,754 554,603
Cash and cash equivalents at
the end of the period EUR '000 1,070 68,691 5,867
Share-related key
figures
Three Three Twelve
months to months to months to
31 Mar 14 31 Mar 13 31 Dec 13
Earnings per share EUR (0.01) (0.09) (0.48)
Equity per share(1) EUR -0.09 1.00 -0.19
Development of share price at
London Stock Exchange
Average trading
price(2) EUR 0.06 0.53 0.12
GBP 0.05 0.45 0.10
Lowest trading
price(2) EUR 0.04 0.21 0.30
GBP 0.03 0.18 0.30
Highest trading
price(2) EUR 0.08 1.33 1.34
GBP 0.07 1.14 1.14
Trading price at the
end of the
period(3) EUR 0.04 0.25 0.08
GBP 0.04 0.21 0.07
Change during the period -45.0 % -79.7 % -93.2 %
Price-earnings ratio neg. neg. neg.
Market capitalization
at the end of the
period(4) EUR '000 84,928 66,821 159,759
GBP '000 70,338 56,504 133,622
Development in trading volume
Trading volume 1000 shares 87,344 42,435 776,597
In relation to weighted average
number of shares 4.6 % 15.6 % 54.2 %
Development of share price at OMX
Helsinki
Average trading price EUR 0.06 0.63 0.11
Lowest trading price EUR 0.04 0.22 0.03
Highest trading price EUR 0.08 1.39 1.39
Trading price at the
end of the period EUR 0.04 0.23 0.08
Change during the period -42.8 % -81.7 % -93.9 %
Price-earnings ratio neg. neg. neg.
Market capitalization
at the end of the
period EUR '000 82,918 61,814 145,059
Development in trading volume
Trading volume 1000 shares 273,786 113,082 3,086,423
In relation to weighted average
number of shares 14.4 % 41.5 % 215.6 %
Adjusted average number of shares 1,906,167,480 272,309,640 1,431,677,258
Fully diluted average number of
shares 1,903,899,480 271,205,640 1,530,295,193
Number of shares at the end of the
period 1,906,167,480 272,309,640 1,906,167,480
(1) The funds entered into share issue reserve are not included in the
calculation.
(2) Trading price is calculated on the average of EUR/GBP exchange rates
published by the European Central Bank during the period.
(3) Trading price is calculated on the EUR/GBP exchange rate published
by the European Central Bank at the end of the period.
(4) Market capitalization is calculated on the EUR/GBP exchange rate
published by the European Central Bank at the end of the period.
Employee-related key figures
Three Three Twelve
months to months to months to
31 Mar 14 31 Mar 13 31 Dec 13
Wages and salaries EUR '000 5,092 4,204 23,274
Average number of employees 523 586 603
Number of employees at the
end of the period 516 583 549
Other figures
Three Three Twelve
months to months to months to
31 Mar 14 31 Mar 13 31 Dec 13
Share options outstanding at
the end of the period - 16,289,000 5,958,837
Number of shares to be issued
against the outstanding share options - 16,289,000 5,958,837
Rights to vote of shares to be issued
against the outstanding share options - 0.8 % 2.1 %
Talvivaara Mining Company Plc
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
Net interest-bearing Interest-bearing debt - Cash and cash equivalent
debt
Debt-to-equity ratio Net interest-bearing debt
Total equity
Return on investment Profit (loss) for the period + Finance cost
(Total equity at the beginning of period + Total equity
at the end of period)/2 +
(Borrowings at the beginning of period + Borrowings
at the end of period)/2
Share-related key
figures
Earnings per share Profit (loss) attributable to equity holders of the
Company
Adjusted average number of shares
Equity per share Equity attributable to equity holders of the Company
Adjusted average number of shares
Price-earnings ratio Trading price at the end of the period
Earnings per share
Market capitalization at Number of shares at the end of the period * trading
the end of the period price at the end of the
period
Talvivaara Interim Report for January March 2014:
http://hugin.info/136227/R/1789013/614835.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Talvivaaran Kaivososakeyhtiö Oyj via Globenewswire
HUG#1789013
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Talvivaara (LSE:TALV)
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Talvivaara (LSE:TALV)
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