Talvivaara Enters into Zinc in Concentrate Streaming Agreement with Nyrstar and Refinances Project T
(Thomson Reuters ONE) - Stock Exchange Release25 January 2010Talvivaara Enters into Zinc in Concentrate Streaming Agreement with Nyrstar andRefinances Project Term Loan FacilityTalvivaara Mining Company Plc is pleased to announce that its operatingsubsidiary Talvivaara Sotkamo Limited (collectively "Talvivaara" or the"Company") has entered into a long-term Zinc in Concentrate Streaming Agreement("Agreement") with Nyrstar NV ("Nyrstar") (together, the "Parties") in line withthe strategic guidance communicated at the Company's 2009 Capital Markets Day.Under the terms of the agreement, Talvivaara will deliver all of its zinc inconcentrate production to Nyrstar until a total of 1,250,000 metric tonnes hasbeen delivered (equivalent to approximately 2 million tonnes of zinc concentrateat a grade of 65%). Based on Talvivaara's production plans, the Parties expect aramp-up to approximately 90,000 tonnes per annum of zinc in concentrate by2012, with deliveries occurring over a period of 10-15 years. Deliveries areexpected to commence in February 2010.Nyrstar will pay a purchase price of USD 335 million for the zinc stream. Inaddition, Nyrstar will pay Talvivaara an extraction and processing fee of EUR350 per tonne of zinc in concentrate delivered (with escalators in relation toprices of elemental sulphur and propane). The Parties have also agreed thefollowing price participation: * until the later of the seventh anniversary of the agreement or delivery of 600,000 tonnes of zinc in concentrate, Nyrstar will pay to Talvivaara 10% of the LME zinc price exceeding USD 2,500 per tonne (up to USD 3,000 per tonne), and 30% of the LME zinc price exceeding USD 3,000 per tonne;and * thereafter, Nyrstar will pay to Talvivaara 30% of the excess of the LME zinc price above the processing fee of EUR 350 per tonne of zinc in concentrate.Nyrstar has also agreed to supply to Talvivaara up to 150,000 tonnes ofsulphuric acid per annum for use in Talvivaara's leaching process during theperiod of supply of the zinc in concentrate.The Agreement is subject to certain customary conditions, and completion isexpected on or about 29 January 2010.With the Agreement, Talvivaara has secured an attractive long-term arrangementfor its zinc by-product production. The USD 335 million upfront payment enablesTalvivaara to completely refinance the existing Project Term Loan Facility,providing for significantly enhanced strategic and financial flexibility,appropriate for the Company's risk profile following the successfulcommissioning and ramp-up of our operations. The extraction and processing fee,together with the price participation formula, provides Talvivaara with a stableand secure cash flow profile and protects the Company's attractive cash costpositioning.In choosing to partner with Nyrstar, Talvivaara has achieved a mutuallybeneficial agreement for monetising the Company's zinc by-product, complementingthe existing nickel and cobalt off-take agreement with Norilsk Nickel HarjavaltaOy. This transaction is a further endorsement of the Company's operations by anestablished industrial operator.Talvivaara's CEO Pekka Per?ommented:"I am delighted to announce a significant milestone in Talvivaara's history,allowing the Company to monetise our zinc by-product at attractive terms and torefinance the Project Term Loan Facility. This Agreement results in a materiallyenhanced capital structure for the Company, providing us greater flexibility andan outstanding platform from which to develop the Company further. I am trulypleased to announce our long term partnership with Nyrstar, and we appreciatetheir recognition of our operations."Talvivaara will host a conference call at 10:00 UK time/ 12:00 Finnish time onMonday 25 January 2010. Details to access the conference call are as follows:UK Free Call: 0800 694 0257UK Standard International: +44 (0) 1452 555 566USA Free Call: 1866 966 9439Finland Free Call: 0800 112 363Finland Local Call: 0923 114 173The conference ID is 53007193A replay facility will be available on the following numbers until 7 February2010:Replay Access Number: 53007193#International Dial in: +44 (0) 1452 55 00 00UK Free Call Dial in: 0800 953 1533UK Local Dial in: 0845 245 5205USA Free Call Dial in: 1866 247 422Replay facility available until 7 February 2010:Replay Access Number: 53007193#International Dial in: +44 (0) 1452 55 00 00UK Free Call Dial In: 0800 953 1533UK Local Dial In: 0845 245 5205USA Free Call Dial In: 1866 247 4222ENQUIRIESTalvivaara Mining Company Plc Tel: +358 20 712 9800Pekka Per?CEOSaila Miettinen-L?e, CFOAbout Talvivaara Mining Company PlcTalvivaara is a Finnish mining company operating a large open pit nickel mine inSotkamo, Finland. Talvivaara aims to become an internationally significant basemetals producer with its primary focus on nickel and zinc using a technologyknown as bioheapleaching to extract metals out of ore. Bioheapleaching makesextraction of metals from low grade ore economically viable. The Talvivaaradeposits comprise one of the largest known sulphide nickel resources in Europe.The ore body is sufficient to support anticipated production for at least 46years. Talvivaara has secured a 10-year off-take agreement for 100 per cent ofits main output of nickel and cobalt to Norilsk Nickel. Talvivaara is listed onthe London Stock Exchange Main Market and Nasdaq OMX Helsinki and is included inthe FTSE 250 Index. Further information can be found at www.talvivaara.com
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Datum: 25.01.2010 - 01:51 Uhr
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