Talvivaara Mining Company Interim Report for January-September 2013

Stock Exchange Release
Talvivaara Mining Company Plc
7 November 2013


Talvivaara Mining Company Interim Report for January-September 2013

Focus on liquidity due to weak nickel price and prolonged impact of water on
production
Fundamentals for production recovery in place - new ore leaching well

Highlights

Q3 2013
* Nickel production of 2,595t and zinc production of 5,645t, up 46% and 26%,
respectively, from Q2 2013
* Net sales of EUR 24.4m, reflecting depressed nickel price and still modest
production volumes
* Operating loss of EUR (29.2)m
* Production continued to be impacted by low metal grades in leach solution
due to prolonged effect of excess water in the older heaps
* Leaching of new ore stacked since the re-start of mining in May proceeded in
line with best heaps historically
* Mining and materials handling operations continued at record volumes; new
heap section completed in September
* A scheduled maintenance stoppage to remove bottlenecks from the metals
recovery plant successfully executed in September
* Darin Cooper appointed COO from 16 September
* Company-wide efficiency and productivity programme continued with targeted
cash flow effect of
EUR 100m by July 2014


Q1-Q3 2013
* Nickel production of 7,103t and zinc production of 13,239t
* Net sales of EUR 65.0m
* Operating loss of EUR (73.1)m


Events after the reporting period
-Good operational progress with new monthly record in mining, crushing and
stacking of new ore at 1.7Mt in October; continued good leaching of new heaps in
line with best heaps historically

-Closed circuit of process waters achieved as a result of successful
commissioning of reverse osmosis water purification plants to full capacity; raw
water intake to the metals recovery plant discontinued under normal operating
conditions

Liquidity position

On 10 October 2013, Talvivaara announced that, as the market price of nickel had
declined by more than 20 per cent. since the first quarter of 2013 and as
Talvivaara's production had continued to be impacted by the prolonged effects of
excess water on older ore heaps, Talvivaara's liquidity position had weakened
more than anticipated.

Talvivaara is currently in advanced discussions with certain stakeholders
concerning a financing solution that would address Talvivaara's current
liquidity needs. Although there can be no assurance that such additional
financing will be obtained, the relevant parties are working towards a
definitive agreement in an expeditious manner.

The financial information included in this interim report has been prepared on
the basis that Talvivaara will obtain such additional financing and continue
operating on a going concern basis, in part, in reliance on such financing. If
such additional financing is not obtained, the Board of Directors of Talvivaara
will consider other alternatives available to Talvivaara, including filing for a
corporate restructuring or bankruptcy.



Key figures

-------------------------------------------------------------------------------
EUR million Q3 Q3 Q1-Q3 Q1-Q3 FY
2013 2012 2013 2012 2012
-------------------------------------------------------------------------------
Net sales 24.4 44.8 65.0 117.3 142.9
-------------------------------------------------------------------------------
Operating profit (loss) (29.2) (4.3) (73.1) (26.6) (83.6)
-------------------------------------------------------------------------------
      % of net sales (120.0%) (9.6%) (112.5%) (22.7%) (58.5%)
-------------------------------------------------------------------------------
Profit (loss) for the period (29.2) (12.1) (80.7) (44.5) (103.9)
-------------------------------------------------------------------------------
Earnings per share, EUR (0.02) (0.05) (0.07) (0.16) (0.38)
-------------------------------------------------------------------------------
Equity-to-assets ratio 35.4% 28.0% 35.4% 28.0% 24.3%
-------------------------------------------------------------------------------
Net interest bearing debt 463.6 514.6 463.6 514.6 563.8
-------------------------------------------------------------------------------
Debt-to-equity ratio 97.5% 140.6% 97.5% 140.6% 183.3%
-------------------------------------------------------------------------------
Capital expenditure 20.6 32.5 53.2 67.9 97.5
-------------------------------------------------------------------------------
Cash and cash equivalents at the end 46.5 87.3 46.5 87.3 36.1
of the period
-------------------------------------------------------------------------------
Number of employees at the end of the 584 551 584 551 588
period
-------------------------------------------------------------------------------
All reported figures in this release are unaudited.


CEO Pekka Perä comments: The past quarter was a challenging period for us, but
at the same it was operationally very promising. Since the re-start of mining in
mid-May, ore production and materials handling operations have continued at
record levels. Leaching of newly stacked ore has also progressed well. A new
primary heap section was completed in September, and by the end of October the
entire heap was producing metals according to plan and in line with our best
ever heaps. Our nickel production increased by 46% and zinc production by 26%
from the previous quarter, indicating that the worst is now over and we can look
forward to continued improvement in our production volumes in the coming months.

Excess water has continued to impact the leaching performance of our older
heaps, reducing the metal grades in solution both through dilution and poor
reactivity. The relative significance of this issue will diminish over time as
the older heaps are replaced by new ones, but during the third quarter, our
production still continued to suffer from this. In September, we also lost some
production due to a planned maintenance stoppage, during which we successfully
removed bottlenecks to allow increased flow rates through the plant.

Whilst our production volumes improved during the third quarter, they still
remained modest. This, together with the remarkably low nickel price, weakened
our financial results significantly. However, we believe this to be a temporary
situation. Whilst we cannot influence metal prices, we are improving our
operations and we expect to produce more metals in the second half of the year
than we did in the first, although our short term production planning may in
part be driven by cash optimization rather than production volume maximization.
In October, we achieved a new monthly record in ore production, which also
speaks for our ability to continue ramping up towards full production.

As we announced in October, the persistently weak nickel price and the prolonged
effect of excess water on our production volumes have contributed to our
liquidity position weakening more than anticipated over the recent months. We
have put considerable effort into securing sufficient funding to get us through
this difficult period, and I am satisfied we are now in advanced discussions
with our stakeholder concerning a financing solution that would address
Talvivaara's current liquidity needs.

Our personnel has worked under considerable pressure during the recent months,
but nevertheless performed phenomenally despite the challenging situation. Our
aim is to demonstrate that our bioheapleaching technology and operations can
deliver sustainable and profitable production on a consistent basis.


Enquiries:

Talvivaara Mining Company Plc Tel. +358 20 712 9800
Pekka Perä, CEO
Saila Miettinen-Lähde, Deputy CEO and CFO

College Hill Tel. +44 20 7457 2020
David Simonson
Anca Spiridon


Webcast and conference call on 7 November 2013 at 2:00 pm EET / 12:00 pm GMT

A combined webcast and conference call on the January-September 2013 Interim
Result will be held on
7 August 2013 at 2:00 pm EET / 12:00 pm GMT. The call will be held in English.

The webcast can be accessed through the following link:

http://qsb.webcast.fi/t/talvivaara/talvivaara_2013_1107_q3/


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: 937163
The webcast will also be available for viewing on the Talvivaara website shortly
after the event.



Financial review

Q3 2013 (July - September)

Net sales and financial result

Talvivaara's net sales for nickel and cobalt deliveries to Norilsk Nickel and
for zinc deliveries to Nyrstar during the quarter ended 30 September 2013
amounted to EUR 24.4 million (Q3 2012: EUR 44.8 million). The net sales
increased by 87% compared to Q2 2013 primarily due to an increase of 51% in
nickel deliveries and an increase of 239% in zinc deliveries. However, the
increase in product deliveries was partially offset by the nickel price which
remained weak throughout the quarter. The product deliveries in Q3 2013 amounted
to 2,646 tonnes of nickel, 88 tonnes of cobalt and 7,062 tonnes of zinc.

Changes in inventories of finished goods and work in progress amounted to EUR
18.1 million (Q3 2012: EUR 10.4 million) and included an impairment of EUR 1.0
million based on the anticipated metals prices and the Group's profit generating
capability in the near term.

Operating loss for Q3 2013 was EUR (29.2) million (Q3 2012: EUR (4.3) million),
corresponding to an operating margin of (120.0%) (Q3 2012: (9.6%)).  During the
period, materials and services amounted to EUR (32.3) million (Q3 2012: EUR
(29.3) million) and other operating expenses to EUR (18.3) million (Q3 2012: EUR
(13.9) million). Materials and services and other operating expenses increased
by 59% compared to Q2 2013. The largest cost items were production chemicals,
external services, electricity and maintenance. Low metal grades in leach
solution decreased the chemicals efficiency in Q3 2013, and treatment and
discharge of excess waters from the mine area also continued to have a
significant cost impact. Furthermore, the efforts to reverse the effects of
excess water in the older heaps have impacted the operating result.

Loss for the quarter amounted to EUR (29.2) million (Q3 2012: EUR (12.1)
million).

Balance sheet and financing

Capital expenditure during the third quarter of 2013 totalled EUR 20.6 million
(Q3 2012: EUR 32.5 million). The expenditure related primarily to uranium
extraction circuit and the construction of secondary leaching areas.

Q1-Q3 2013 (January-September)

Net sales and financial result

Talvivaara's net sales for nickel and cobalt deliveries to Norilsk Nickel and
for zinc deliveries to Nyrstar during the nine month period ended 30 September
2013 amounted to EUR 65.0 million (Q1-Q3 2012: EUR 117.3 million).  Throughout
the year nickel production has suffered from the prolonged effects of excess
water on the older heaps and consequent low nickel concentration in leach
solution. In addition, zinc production was impacted in the early part of 2013 by
poor recoveries at the metals recovery plant resulting from a process
modification that proved unsuccessful and has since been reversed. Owing to
these factors the product deliveries in Q1-Q3 2013 only amounted to 7,148 tonnes
of nickel, 243 tonnes of cobalt and 11,359 tonnes of zinc (Q1-Q3 2012: 10,457
tonnes of nickel, 285 tonnes of cobalt, 21,078 tonnes of zinc).

The Group's other operating income amounted to EUR 1.4 million (Q1-Q3 2012: EUR
4.0 million) and came mainly from indemnities on property damages.

Changes in inventories of finished goods and work in progress amounted to EUR
41.3 million (Q1-Q3 2012: EUR 56.7 million). Due to a temporary discontinuation
of mining and crushing operations, no new ore was stacked during Q1 2013 and
part of Q2 2013. Consequently the work in progress grew less than during normal
operations during the first half of 2013. Ore production was successfully re-
commenced in May and has since proceeded according to plan. Due to the
prevailing low nickel prices and the Group's anticipated profit generating
capability in the near term, an impairment of EUR 4.8 million has been
recognized in the inventories of finished goods and work in progress in January-
September 2013.

Employee benefit expenses were EUR (23.1) million in Q1-Q3 2013 (Q1-Q3 2012: EUR
(20.7) million). The increase was attributable to the increased number of
personnel. The increase was partially offset by temporary lay-offs, which
Talvivaara started in February 2013 and ended in April 2013, and the co-
operation consultations concluded in August 2013 and resulting in the reduction
of 68 jobs through retirement or terminations of employment.

Operating loss for Q1-Q3 2013 was EUR (73.1) million (Q1-Q3 2012: EUR (26.6)
million. Materials and services were EUR (74.1) million in Q1-Q3 2013 (Q1-Q3
2012: EUR (97.8) million) and other operating expenses were EUR (43.6) million
(Q1-Q3 2012: EUR (47.8) million). The largest cost items were production
chemicals, external services and electricity. Mining and materials handling
costs were lower than in 2012 during Q1-Q3 2013 due to the temporary suspension
of ore mining. In metals recovery, the unit production costs per tonne of nickel
produced were significantly higher than the year before due to inefficiencies in
chemicals consumption caused by low metals grades in feed solution. In addition,
the costs of neutralizing the excess waters in process have affected the
operating result in Q1-Q3 2013.

Finance income for Q1-Q3 2013 was EUR 0.4 million (Q1-Q3 2012: EUR 2.1 million).
Finance costs of EUR (34.2) million (Q1-Q3 2012: EUR (34.1) million) were mainly
caused by interest and related financing expenses on borrowings.

Loss for Q1-Q3 2013 and the total comprehensive income amounted to EUR (80.7)
million (Q1-Q3 2012: EUR (44.5) million) reflecting the depressed nickel price,
lower than anticipated level of product deliveries, high cost of treatment and
discharge of excess waters and reassessment of environmental provisions.
Earnings per share were EUR (0.07) in Q1-Q3 2013 (Q1-Q3 2012: EUR (0.16)).

Balance sheet

Capital expenditure in Q1-Q3 2013 totalled EUR 53.2 million (Q1-Q3 2012: EUR
67.9 million). The expenditure related primarily to water management structures
such as dams, pipings, pumps and water treatment ponds, uranium extraction
circuit and secondary leaching. On the consolidated statement of financial
position as at 30 September 2013, property, plant and equipment totalled EUR
812.6 million (31 December 2012: EUR 809.5 million).

In the Group's assets, inventories amounted to EUR 344.1 million on 30 September
2013 (31 December 2012: EUR 297.8 million). The increase in inventories reflects
the ramp-up of production and the consequent increase in the amount of ore
stacked on heaps, valued at cost. The temporary suspension of ore mining reduced
the rate at which the inventories increased during first half of 2013. In
addition, Talvivaara has recognized an impairment of EUR 3.6 million relating to
work in progress and an impairment of EUR 1.3 million relating to the
inventories of finished goods on 30 September 2013 based on the Group's profit
generating outlook for Q4 2013. However, it should be noted that work in
progress added by the estimated costs to complete production, i.e. operational
expenditure related to metals recovery, does not exceed the estimated revenue in
the long run.

Trade receivables amounted to EUR 21.5 million on 30 September 2013 (31 December
2012: EUR 32.2 million). Trade receivables increased by 139% compared to the
previous quarter due to increased product deliveries.

On 30 September 2013, cash and cash equivalents totalled EUR 46.5 million (31
December 2012: EUR 36.1 million).


In equity and liabilities, the total equity amounted to EUR 475.3 million on 30
September 2013 (31 December 2012: EUR 306.8 million). During the reporting
period, Talvivaara raised EUR 250.8 million, net of transaction costs, from a
rights issue completed in April 2013. In addition, interest cost of EUR 3.2
million of a perpetual capital loan has been capitalized in equity during 2013.

Provisions decreased from EUR 27.5 million on 31 December 2012 to EUR 16.7
million at the end of September 2013. The costs related to Water Management and
Gypsum Pond Leakage of November 2012 amounted to EUR 14.9 million in Q1-Q3 2013
and the corresponding provisions were de-recognised. Treatment and discharge of
excess waters from the mine area continued throughout the period, reducing the
water management related risk level whilst also allowing mining activities to be
re-started and subsequently continued according to plan. During Q3 2013
Talvivaara has reviewed the provision related to Water Management, Gypsum Pond
Leakage and Environmental Restoration and recognized additional provisions
amounting to EUR 4.6 million.


Borrowings decreased from EUR 599.8 million on 31 December 2012 to EUR 510.0
million at the end of September 2013. The changes in borrowings during Q1-Q3
2013 mainly related to the repayment of Senior Unsecured Convertible Bonds of
2008 and termination of finance lease contracts amounting to EUR 7.5 million.
Total advance payments as at 30 September 2013 amounted to EUR 287.3 million,
representing an increase of EUR 13.6 million from EUR 273.7 million on 31
December 2012. During Q1-Q3 2013, Talvivaara received a total of EUR 7.4 million
in advance payments from Cameco Corp. based on the amended uranium off-
take agreement between the companies and EUR 12.0 million in advance payments
from Nyrstar based on the amendment agreement regarding the zinc in concentrate
streaming agreement (see section Financing), whilst the advance payments from
Nyrstar was amortised by EUR 5.8 million as a result of zinc deliveries.

Total equity and liabilities as at 30 September 2013 amounted to EUR 1,340.9
million (31 December 2012: EUR 1,260.8 million).

Financing

On 12 February 2013 Talvivaara Sotkamo entered into an amendment agreement with
Cameco concerning the uranium take-in-kind agreement pursuant to which the
amount of the up-front investment that Cameco is to pay to Talvivaara Sotkamo
for the construction of the uranium extraction facility was increased by USD 10
million to USD 70 million.  In addition, the duration of the agreement was
extended to 31 December 2017 and commercial terms revised accordingly.
Talvivaara received the additional up-front investment in February 2013.

On 14 February 2013, Talvivaara Sotkamo entered into an amendment agreement with
Nyrstar regarding the zinc in concentrate streaming agreement pursuant to which
Nyrstar made an additional up-front payment of EUR 12 million to Talvivaara
Sotkamo in return for Talvivaara Sotkamo agreeing not to charge Nyrstar the EUR
350 per tonne extraction and processing fee on the next 38,000 tonnes of zinc in
concentrate delivered to Nyrstar as was agreed in the original zinc in
concentrate streaming agreement. The up-front payment was received in February
2013. As at 30 September, 11,359 tonnes of zinc had been delivered towards the
38,000 tonnes commitment agreed in the amendment agreement.

On 8 March 2013 an Extraordinary General Meeting of Talvivaara Mining Company
resolved to approve the proposal by the Board of Directors to authorise the
Board of Directors to undertake a share issue for consideration pursuant to the
shareholders' pre-emptive subscription right. The share issue was finalised in
April and all 1,633,857,840 new shares offered in the rights issue were
subscribed for. The gross proceeds amounted to approximately EUR 261 million.
Total number of shares in Talvivaara Mining Company increased to 1,906,167,480
shares.

On 20 May 2013, Talvivaara completed the repayment of its Senior Unsecured
Convertible Bonds of 2008. The remaining convertible bonds amounted to EUR 76.9
million and the repayment was made according to the terms.

Production review

Metals production

Talvivaara produced 2,595t of nickel and 5,645t of zinc in Q3 2013. In January-
September 2013, nickel production amounted to 7,103t and zinc production to
13,239t. Metals production continued to be impacted by low metal grades in leach
solution. However, the average feed flow to the metals recovery plant during Q3,
excluding scheduled maintenance, was 1,375 m3/h, which is a new quarterly record
and indicates continued improvement in plant availability and production
stability.

A scheduled maintenance break at the metals recovery plant was held at the end
of September with a total stoppage time of seven days. The maintenance was
primarily designed to remove bottlenecks from the plant and it was successfully
executed to allow feed flow rates of up to 1,750m3/h following the stoppage.
Other works carried out during the break included e.g. reactor maintenance,
scheduled inspection of thickeners, cleaning of vent gas scrubbers and doubling
of the critical process automation stations in order to increase plant
availability.

In the plant operation, focus has remained on improving chemical efficiency as
part of the broader efficiency and productivity programme.

Ore production

Ore production during the quarter amounted to 4.1Mt. The amount of nickel
stacked during the period was approximately 11,000t, which exceeds the 2012
quarterly average of 7,000t by 57%. The increase is both a result of increased
tonnages of ore production and of improved grade control. The average nickel
grade of the ore stacked in Q3 was 0.27%.

Bioheapleaching

The excess water in the heaps stacked prior to the shut-down of mining in
September 2012 has diluted metal grades in leach solution, reduced the
efficiency of aeration, slowed down the leaching reactions and impacted the rate
of evaporation throughout the current year. Efforts to reverse the effects of
excess water continued through the third quarter and resulted in the release of
substantial amounts of solution from the older heaps. Consequently, aeration has
become more efficient and signs of increasing reactivity in these heaps are
emerging. The rate of improvement has, however, remained below expectations and
resulted in the leach solutions remaining diluted throughout the third quarter.
The nickel grade in solution pumped to metals recovery averaged 1.0 g/l during
the quarter, reflecting the subdued performance of the older heaps.

Improved metal grades in leach solution are expected to be seen in the fourth
quarter as a result of the newly stacked primary heap 4 coming into production.
Stacking of this heap was completed in the beginning of September and its
leaching has progressed well as a result of efficient aeration, appropriate
water balance and careful maintenance. Leach solution temperature remained at
around 45°C through then end of the quarter despite the seasonal drop in ambient
temperature.

Following the completion of heap 4, stacking of a new round of heap 1 commenced
in early September and has progressed according to plan. This heap section is
anticipated to be completed at around the year-end and to start contributing to
metals production in the middle of the first quarter of 2014.

Production key figures

------------------------------------------------------------------
    Q3 Q3 Q1-Q3 Q1-Q3 FY
2013 2012 2013 2012 2012
------------------------------------------------------------------
Mining
------------------------------------------------------------------
     Ore production Mt 4.1 2.6 5.8 8.7 8.7
------------------------------------------------------------------
     Waste production Mt 1.2 1.5 2.1 4.1 5.3
------------------------------------------------------------------
Materials handling
------------------------------------------------------------------
     Stacked ore Mt 4.1 2.6 5.8 8.7 8.7
------------------------------------------------------------------
Bioheapleaching
------------------------------------------------------------------
     Ore under leaching Mt 50.2 44.3 50.2 44.3 44.3
------------------------------------------------------------------
Metals recovery
------------------------------------------------------------------
     Nickel metal content Tonnes 2,595 4,030 7,103 10,598 12,916
------------------------------------------------------------------
     Zinc metal content Tonnes 5,645 7,184 13,239 21,760 25,867
------------------------------------------------------------------


Efficiency and productivity programme

Talvivaara is committed to a broad efficiency and productivity programme, which
was launched in June 2013 and targets at achieving a EUR 100 million cash flow
effect from savings and productivity improvements within 12 months.

The programme commenced with an intensive five-week diagnostics phase which was
completed in early July. Approximately 30 initiatives to enhance efficiency and
productivity were identified and are now being implemented. These consist of,
among others, improving the leaching performance of existing heaps, further
optimizing the production throughput and chemicals usage of the metals plant,
working capital management, capital expenditure cuts, sale of certain non-
operational assets and financing elements. The co-operation consultations
concluded in August 2013 also formed a part of the programme.

The efficiency and productivity programme is headed by COO Darin Cooper since
16 September and is proceeding according to plan.


Sustainable development, safety and permitting

Safety

Talvivaara's goal is a safe and healthy working environment, and the Company
continued to develop its safety culture based on a zero accident philosophy. A
company-wide evaluation and training project focusing on safety culture and
process safety was commenced in September.

At the end of the third quarter, the injury frequency among the Talvivaara
personnel was 26.5 lost time injuries/million working hours on a rolling 12
month basis (30 September 2012: 13.2 lost time injuries/million working hours).

Environment

In environmental management, Talvivaara's primary focus during the third quarter
continued to be on water balance. Treatment and discharge of excess waters from
the mine area continued throughout the period. However, the discharge rate was
limited by the reference flow in the Kalliojoki river, which remained low
throughout the quarter. At the end of September, the water balance overall was
at an acceptable level, but the discharge rate limitation had particularly
hindered Talvivaara's ability to empty gypsum pond sections 5 and 6 from excess
water.

The quality of discharged waters has remained at planned levels, with
environmental impact, if any, anticipated to be mainly caused by the sulphate
content. The metal burden to the environment has remained limited.

Whilst continuous improvement work continues, Talvivaara considers historical
hydrogen sulphide (odour) and dust emissions to have been largely resolved. Only
isolated complaints have been received from neighbouring residents during the
first nine months of 2013.

Talvivaara places significant emphasis on timely and transparent communication
on environmental matters with the neighbouring communities and other interested
stakeholders. The locally focused Finnish language website www.paikanpaalla.fi
continued to be successfully used for the delivery of locally relevant, timely
information and for interaction with interested stakeholders.

Permitting

On 31 May 2013, the Northern Finland Regional State Administrative Agency
("AVI") granted Talvivaara an environmental permit decision relating to water
discharges. The permit decision removed the volume quota on water discharges and
amended restrictions based on the amount of contaminants. Instead of the
previous volume quota, the new permit decision restricts the water discharge
flow rate on the basis of the prevailing flow rate in the nearby Kalliojoki
river at any given time. Talvivaara has submitted an appeal to the Vaasa
Administrative Court with respect to the flow rate restriction in the permit
decision, as the Company considers this permit condition to unnecessarily
restrict its ability to remove purified excess waters from the area and thereby
reduce the environmental risk level. As at 30 September 2013, no response to the
appeal had been obtained.

The environmental permit decision of 31 May 2013 also ruled that excess water
from the gypsum pond sections 5 and 6 should be removed by 31 October 2013.
Because of the discharge rate restriction tied to the Kalliojoki river flow,
this target was not achievable and Talvivaara has applied for an extension to
this time limit from the Vaasa Administrative Court and AVI. After the reporting
period, in October 2013, the Vaasa Administrative Court gave an interim ruling
whereby the deadline was postponed until 31 December 2013. AVI has not yet
responded to the Company's application to extend the time limit for pond section
5 until the end of January 2014, and for pond section 6 until the end of August
2014.

Talvivaara's existing environmental permit is currently being renewed under a
standard process. Decision on the permit by AVI is expected before the end of
2013. The environmental permit application for the planned uranium extraction is
also being processed by AVI and a decision on it is similarly expected by the
year-end.


Business development and commercial arrangements

Planned uranium extraction and uranium off-take agreement with Cameco

Talvivaara is preparing for the recovery of uranium as a by-product of the
Company's existing operations. Uranium occurs naturally in small concentrations
in the Talvivaara area and leaches into the process solution along with
Talvivaara's other products. Annual uranium production is estimated at ca.
350tU (ca. 770,000 pounds), corresponding to approximately 410t (900,000 pounds)
of yellow cake (UO(4)). Talvivaara's entire uranium production will be sold
under a long-term agreement to Cameco.

The uranium recovery facility is essentially completed, and commissioning is
expected to start soon following the receipt of the remaining required permits.

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.

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.

In the short term, Talvivaara's key operational risks continue to relate to
water management and the on-going ramp-up of operations. While the Company has
demonstrated that all of its production processes work and can be operated on
industrial scale, the rate of ramp-up is still subject to risk factors including
the time required to reach a sustainable level of water balance, reliability and
sustainable capacity of production equipment, and eventual speed of leaching and
rates of metals recovery in bioheapleaching. In addition, there may 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 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.

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. Recent weakness in nickel
price and production difficulties stemming from water balance issues since 2012
have resulted in the Company's liquidity position weakening more than
anticipated. As a result, the Company is undertaking an assessment of all
available funding options to secure its financial and operational flexibility
and a sufficient level of liquidity going forward.

Talvivaara has continued to recognise deferred tax assets on its consolidated
balance sheet in 2013 and the amount of deferred tax assets recognized on tax
loss carryforwards as at 30 September 2013 amounted to EUR 136.5 million (31
December 2012: EUR 103.8 million). During the reporting period the management
has reviewed the past operational challenges which have led to lower than
expected production and profitability levels at Talvivaara mine.
If Talvivaara generates future taxable profits lower than those assumed by the
management in determining the amounts of the recognized deferred tax assets, the
assets may become impaired, either in part or in full. Accordingly, the amounts
recognized on the balance sheet could be reversed through profit and loss. This
could have a material adverse effect on Talvivaara's business, financial
condition and results of operations.
Due to the historical losses of the mine project and the delays in the ramp-up
process, the management will review the amount of deferred tax assets recognized
on tax loss carryforwards during the last quarter of 2013. However, the
management continues to be confident that the Group can generate sufficient
taxable profits so that all deferred tax assets canl be utilized in the
foreseeable future.

Personnel and management

The number of personnel employed by the Group on 30 September 2013 was 584 (Q3
2012: 551). Wages and salaries paid during the three months to 30 September
2013 totalled EUR 6.3 million (Q3 2012: EUR 4.8 million). Wages and salaries
paid during the nine months to 30 September 2013 totalled EUR 19.1 million (Q1-
Q3 2012: EUR 17.1 million).

In the third quarter, Talvivaara conducted co-operation consultations, which
were concluded in August and reduced the number of personnel by 68 through
terminations of employment and retirement, and by further 96 employees through a
decision not to renew temporary contracts.

On 28 August 2013, Talvivaara announced changes in its management to reinforce
and achieve the Company's operational and financial targets. Mr. Darin Cooper,
BEng, Metallurgy and MBA (British citizen, born in 1967), was appointed Chief
Operating Officer and a member of the Company's Executive Committee. Following
the changes, the members of Talvivaara's Executive Committee are CEO Pekka Perä,
Deputy CEO and Chief Financial Officer Saila Miettinen-Lähde, Chief Commercial
Officer Pekka Erkinheimo, Chief Sustainability Officer Eeva Ruokonen, Chief
Human Resources Officer Maija Kaski, Chief Operating Officer Darin Cooper, Chief
Metals Production Officer Pertti Pekkala and Chief Mining Officer Kari Vyhtinen.

In addition to the Executive Committee, CEO Pekka Perä set up a Technical
Executive Committee consisting of himself, Darin Cooper, Pertti Pekkala, Kari
Vyhtinen and Senior Vice President - Projects Lassi Lammassaari.

Shares and shareholders

The number of shares issued and outstanding and registered on the Euroclear
Shareholder Register as of 30 September 2013 was 1,906,167,480. Including the
effect of the EUR 225 million convertible bond of 16 December 2010 and the
Option Schemes of 2007 and 2011, the authorised full number of shares of the
Company amounted to 2,041,901,379.

The share subscription period for stock options 2007A was between 1 April 2010
and 31 March 2012. By the end of the subscription period a total of 2,279,373
Talvivaara Mining Company's new shares were subscribed for under the stock
option rights 2007A. A total of 53,727 stock option rights 2007A remained
unexercised following the end of the subscription period and expired.

After the adjustments to terms and conditions of the 2007 stock options in April
2013, a total of 16,289,000 option rights 2007C have been issued to employees
and the subscription period for stock options 2007C is between 1 April 2012 and
31 March 2014. No new shares of Talvivaara were subscribed for under the stock
option rights 2007C in Q3 2013 and a total of 16,289,000 stock options 2007C
remain unexercised.

After the adjustments to terms and conditions of the 2011 stock options in April
2013, a total of 9,432,500 option rights 2011B have been issued to key employees
and the subscription period for stock options 2011B is between 1 April 2015 and
31 March 2017. A total of 9,432,500 stock options 2011B remain unexercised.

In March 2013 an Extraordinary General Meeting of Talvivaara Mining Company
resolved to approve the proposal by the Board of Directors to authorise the
Board of Directors to undertake a share issue for consideration pursuant to the
shareholders' pre-emptive subscription rights. The share issue was completed in
April 2013 and the total number of shares in Talvivaara Mining Company Plc
increased to 1,906,167,480 shares.

As at 30 September 2013, the shareholders who held more than 5% of the shares
and votes of Talvivaara were Solidium Oy (16.7%) and Pekka Perä (6.5%).

Events after the review period

Liquidity position
On 10 October 2013, Talvivaara announced that, as the market price of nickel had
declined by more than 20 per cent. since the first quarter of 2013 and as
Talvivaara's production had continued to be impacted by the prolonged effects of
excess water on older ore heaps, Talvivaara's liquidity position had weakened
more than anticipated.

Talvivaara is currently in advanced discussions with certain stakeholders
concerning a financing solution that would address Talvivaara's current
liquidity needs. Although there can be no assurance that such additional
financing will be obtained, the relevant parties are working towards a
definitive agreement in an expeditious manner.

The financial information included in this interim report has been prepared on
the basis that Talvivaara will obtain such additional financing and continue
operating on a going concern basis, in part, in reliance on such financing. If
such additional financing is not obtained, the Board of Directors of Talvivaara
will consider other alternatives available to Talvivaara, including filing for a
corporate restructuring or bankruptcy.
.

Continued improvement in operations
Talvivaara's mining and materials handling operations reached an all-time
monthly record of 1.7Mt of ore processed in October.

Leaching of the ore stacked since the re-commencement of mining in mid-May is
progressing in line with the best historical heaps, from which nickel recovery
in excess of 70% in approximately 18-20 months has been obtained. All key
leaching parameters, including the development of metal grades in solution and
solution temperatures, indicate good performance of the new heaps, and the
entire primary heap section 4 had started producing metals by the end of
October.

Closed circuit of process waters was achieved in October as a result of
successful commissioning of reverse osmosis water purification plants to full
capacity. Subsequently the raw water intake to the metals recovery plant has
discontinued under normal operating conditions.

Short-term outlook

Operational outlook

All production processes at Talvivaara currently operate well and the Company
anticipates its production volumes to gradually increase over the coming months,
as newly stacked ore on the primary heaps replaces the old heaps still suffering
from the effects of excess water. In the near term, Talvivaara anticipates its
H2 2013 nickel production to increase compared to the H1 2013 output of 4,508t.
However, under the prevailing market conditions, the Company also considers
production planning measures that emphasize short term cash flow optimization
over maximization of production volumes.

Market outlook

Nickel price has been under significant pressure throughout most of 2013. The
LME nickel price declined from a level of USD 18,000-19,000/t in early 2013 to
below USD 14,000/t in the summer, and the depressed price level has persisted
through the current autumn. In the short term, concerns over the global
macroeconomic growth outlook, stainless steel utilisation rates and the build-up
of global nickel inventories are likely to continue weighing on the nickel
price. On the other hand, the prevailing price level is materially below the
marginal cost of production for a large part of the nickel mining industry,
which is likely to result in an increasing number of supply restrictions in the
absence of a noticeable price correction. The planned introduction of an export
ban to nickel pig iron ore from Indonesia from the beginning of 2014 may, if
successfully implemented, also contribute to positive price development, but
given the current high inventory levels and continuing global economic
uncertainty, Talvivaara anticipates the nickel price upside to be relatively
limited over the coming months.

7 November 2013

Talvivaara Mining Company Plc
Board of Directors



CONSOLIDATED INCOME STATEMENT

Unaudited Unaudited Unaudited Unaudited
three three nine nine
months to months to months to months to
(all amounts in EUR '000) 30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12
-------------------------------------------
Net sales 24,351 44,787 64,969 117,254

Other operating income 206 2,497 1,383 3,996

Changes in inventories of finished
goods and work in progress 18,060 10,367 41,322 56,689

Materials and services (32,312) (29,317) (74,052) (97,791)

Personnel expenses (7,641) (5,863) (23,137) (20,662)

Depreciation, amortization,
depletion and impairment charges (13,605) (12,863) (40,004) (38,274)

Other operating expenses (18,286) (13,888) (43,554) (47,793)
-------------------------------------------
Operating profit (loss) (29,227) (4,280) (73,073) (26,581)

Finance income 29 574 405 2,142

Finance cost (9,423) (12,338) (34,151) (34,083)
-------------------------------------------
Finance income (cost) (net) (9,394) (11,764) (33,746) (31,941)

Profit (loss) before income tax (38,621) (16,044) (106,819) (58,522)

Income tax expense 9,421 3 908 26,107 14,001
-------------------------------------------
Profit (loss) for the period (29,200) (12,136) (80,712) (44,521)
-------------------------------------------
Attributable to:

Owners of the parent (29,903) (11,256) (83,046) (40,816)

Non-controlling interest 703 (880) 2,334 (3,705)
-------------------------------------------
  (29,200) (12,136) (80,712) (44,521)
-------------------------------------------
Earnings per share for profit (loss) attributable to the owners of the parent
(expressed in EUR per share)

Basic and diluted (0.02) (0.05) (0,07) (0.16)



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unaudited Unaudited Unaudited Unaudited
three three nine nine
months to months to months to months to
(all amounts in EUR '000) 30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12
----------------------------------------
Profit (loss) for the period (29,200) (12,136) (80,712) (44,521)

Other comprehensive income, net of tax - - - -
----------------------------------------
Total comprehensive income (29,200) (12,136) (80,712) (44,521)
----------------------------------------
Attributable to:

Owners of the parent (29,903) (11,256) (83,046) (40,816)

Non-controlling interest 703 (880) 2,334 (3,705)
----------------------------------------
  (29,200) (12,136) (80,712) (44,521)
----------------------------------------


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

  Unaudited Audited

(all amounts in EUR '000) 30 Sep 13 31 Dec 12

ASSETS

Non-current assets

Property, plant and equipment 812,561 809,452

Biological assets 8,423 9,125

Intangible assets 6,741 7,014

Investments in associates 6,710 5,694

Deferred tax assets 80,487 52,588

Other receivables 7,749 2,940

Available-for-sale financial assets 2 2

  922,673 886,815

Current assets

Inventories 344,073 297,761

Trade receivables 21,510 32,174

Other receivables 6,189 7,980

Cash and cash equivalent 46,463 36,058

  418,235 373,973

Total assets 1,340,908 1,260,788

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 80 80

Share premium 8,086 8,086

Other reserves 790,650 539,559

Retained earnings (336,262) (251,365)

  462,554 296,360

Non-controlling interest in equity 12,726 10,392

Total equity 475,280 306,752

Non-current liabilities

Borrowings 421,906 506,028

Advance payments 271,101 265,847

Other payables 260 228

Provisions 10,696 11,290

  703,963 783,393

Current liabilities

Borrowings 88,133 93,793

Advance payments 16,202 7,857

Trade payables 20,046 25,577

Other payables 31,313 27,178

Provisions 5,971 16,238

  161,665 170,643

Total liabilities 865,628 954,036

Total equity and liabilities 1,340,908 1,260,788



CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

A. Share capital
B. Share issue
C. Share premium
D. Invested unrestricted equity
E. Other reserves
F. Retained earnings
G. Total
H. Non-controlling interest
I. Total equity

(all amounts in
EUR '000) A B C D E F G H I
-------------------------------------------------------------------------------
1 Jan 12 322,
80 278 8,086 404,069 45,463 (151,129) 306,847 15,733 580

Profit (loss) (44,
for the period - - - - - (40,816) (40,816) (3,705) 521)

Other
comprehensive
income

- Other
comprehensive -
income - - - - - - - -
---------------------------------------------------------------
Total
comprehensive
income (44,
for the period - - - - - (40,816) (40,816) (3,705) 521)

Transactions
with owners

Stock options 4,
- (278) - 5,198 - - 4,920 - 920

Senior
unsecured
convertible
bonds (
due 2013 - - - - (251) - (251) - 251)

Perpetual
capital loan - - - - 2,353 (1,777) 576 109 685

81,
Share issue - - - 81,481 - - 81,481 - 481

Incentive
arrangement for
Executive
Management - - - - 71 - 71 - 71

Employee share
option scheme

- value of
employee 1,
services - - - - 1,106 - 1,106 - 106
---------------------------------------------------------------
Total
contribution by
and
distribution 88,
to owners - (278) - 86,679 3,279 (1,777) 87,903 109 012

Total
transactions 88,
with owners - (278) - 86,679 3,279 (1,777) 87,903 109 012
---------------------------------------------------------------
30 Sep 12 366,
80 - 8,086 490,748 48,742 (193,722) 353,934 12,137 071
---------------------------------------------------------------
31 Dec 12 306,
80 - 8,086 490,749 48,810 (251,365) 296,360 10,392 752
---------------------------------------------------------------
1 Jan 13 306,
80 - 8,086 490,749 48,810 (251,365) 296,360 10,392 752

Profit (loss) (80,
for the period - - - - - (83,046) (83,046) 2,334 712)

Other
comprehensive
income

- Other
comprehensive
income - - - - - - - - -
---------------------------------------------------------------
Total
comprehensive
income (80,
for the period - - - - - (83,046) (83,046) 2,334 712)

Transactions
with owners

Senior
unsecured
convertible (2,
bonds due 2013 - - - - (2,417) - (2,417) - 417)

Perpetual
capital loan - - - - 2,612 (1,851) 761 - 761

250,
Rights issue - - - 250,827 - - 250,827 - 827

Incentive
arrangement for
Executive (
Management - - - - (117) - (117) - 117)

Employee share
option scheme

- value of
employee
services - - - - 186 - 186 - 186
---------------------------------------------------------------
Total
contribution by
and
distribution to 249,
owners - - - 250,827 264 (1,851) 249,240 - 240

Total
transactions 249,
with owners - - - 250,827 264 (1,851) 249,240 - 240
---------------------------------------------------------------
30 Sep 13 475,
80 - 8,086 741,576 49,074 (336,262) 462,554 12,726 280
---------------------------------------------------------------


CONSOLIDATED STATEMENT OF CASH FLOWS

Unaudited Unaudited Unaudited Unaudited
three three nine nine
months to months to months to months to
(all amounts in EUR '000) 30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12
----------------------------------------
Cash flows from operating activities

Profit (loss) for the period (29,200) (12,136) (80,712) (44,521)

Adjustments for

Tax (9,421) (3,908) (26,107) (14,001)

Depreciation and amortization 13,605 12,863 40,004 38,274

Other non-cash income and expenses (415) (7,302) (20,246) (19,339)

Interest income (29) (574) (405) (2,142)

Fair value gains on financial assets
at fair value through profit or loss - (11) - (16)

Interest expense 9,423 12,338 34,151 34,083
----------------------------------------
  (16,037) 1,270 (53,315) (7,662)

Change in working capital

Decrease(+)/increase(-) in other
receivables (10,446) (5,656) 7,535 10,293

Decrease (+)/increase (-) in
inventories (18,740) (11,361) (49,947) (61,491)

Decrease(-)/increase(+) in trade and
other payables 14,307 (4,107) (6,556) (25,403)
----------------------------------------
Change in working capital (14,879) (21,124) (48,968) (76,601)
----------------------------------------
  (30,916) (19,854) (102,283) (84 263)

Interest and other finance cost paid (1,895) (844) (18,537) (13,375)

Interest and other finance income (41) 119 135 476

Income taxes paid - - (12) -
----------------------------------------
Net cash generated (used) in operating
activities (32,852) (20,579) (120,697) (97,162)

Cash flows from investing activities

Investments in associates - (1,025) (1,016) (4,973)

Purchases of property, plant and
equipment (20,548) (32,513) (52,672) (67,640)

Purchases of biological assets (17) - (262) -

Purchases of intangible assets (9) (19) (221) (213)

Proceeds from sale of property, plant
and equipment - - - 18

Proceeds from sale of biological
assets 87 10 179 101
----------------------------------------
Net cash generated (used) in investing
activities (20,487) (33,547) (53,992) (72,707)

Cash flows from financing activities

Proceeds from share issue net of
transactions costs - (30) 247,390 81,108

Realised stock options - - - 4,920

Related party investment in Talvivaara
shares - - (186) -

Proceeds from interest-bearing
liabilities - - - 130,000

Proceeds from advance payments - 14,016 19,488 22,349

Buy-back of convertible bonds - - - (8,168)

Payment of interest-bearing
liabilities (1,338) (1,289) (81,598) (13,053)
----------------------------------------
Net cash generated (used) in financing
activities (1,338) 12,697 185,094 217,156

Net increase (decrease) in cash and
cash equivalents (54,677) (41,429) 10,405 47,287

Cash and cash equivalents at beginning
of the period 101,140 128,735 36,058 40,019
----------------------------------------
Cash and cash equivalents at end of
the period 46,463 87,306 46,463 87,306
----------------------------------------



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 2012.

On 10 October 2013, Talvivaara announced that, as the market price of nickel had
declined by more than 20 per cent. since the first quarter of 2013 and as
Talvivaara's production had continued to be impacted by the prolonged effects of
excess water on older ore heaps, Talvivaara's liquidity position had weakened
more than anticipated.

The directors have concluded there exist a material uncertainty that casts
significant doubt upon the company's ability to continue as a going concern and
that, therefore, the company may be unable to realise its assets and discharge
its liabilities in the normal course of business. Talvivaara is currently in
advanced discussions with certain stakeholders concerning a financing solution
that would address Talvivaara's current liquidity needs. Although there can be
no assurance that such additional financing will be obtained, the relevant
parties are working towards a definitive agreement in an expeditious manner and
the directors have a reasonable expectation that the company has adequate
resources to continue in operational existence for the foreseeable future. For
these reasons, they continue to adopt the going concern basis of accounting in
preparing the interim financial statements.


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 13 376,741 114,378 281,209 229,479 1,001,807

Additions 537 42,074 8 - 42,619

Transfers 11,403 (26,647) 11,389 3,855 -
-------------------------------------------------------------------------------
Gross carrying amount at
30 Sep 13 388,681 129,805 292,606 233,334 1,044,426
----------------------------------------------------
Accumulated depreciation
and
impairment losses at 1 Jan
13 96,677 - 44,918 50,760 192,355

Depreciation for the
period 23,509 - 9,546 6,455 39,510
-------------------------------------------------------------------------------
Accumulated depreciation
and
impairment losses at 30
Sep 13 120,186 - 54,464 57,215 231,865
----------------------------------------------------
Carrying amount at 1 Jan
13 280,064 114,378 236,291 178,719 809,452
----------------------------------------------------
Carrying amount at 30 Sep
13 268,495 129,805 238,142 176,119 812,561
----------------------------------------------------


3. Trade receivables

(all amounts in EUR '000)

  30 Sep 13 31 Dec 12
--------------------
Nickel-Cobalt sulphide 16,140 25,254

Zinc sulphide 5,370 6,912

Copper sulphide - 8
--------------------
Total trade receivables 21,510 32,174
--------------------

4. Inventories

(all amounts in EUR '000)

  30 Sep 13 31 Dec 12
--------------------
Raw materials and consumables 26,066 21,077

Work in progress 315,791 272,775

Finished products 2,216 3,909
--------------------
Total inventories 344,073 297,761
--------------------



5. Borrowings

(all amounts in EUR '000)

Non-current 30 Sep 13 31 Dec 12
--------------------
Capital loans 1,405 1,405

Investment and Working Capital loan 46,014 51,600

Senior Unsecured Bonds due 2017 108,877 108,683

Revolving Credit Facility - 69,451

Senior Unsecured Convertible Bonds due 2015 232,623 225,875

Finance lease liabilities 18,704 30,748

Other 14,283 18,266
--------------------
  421,906 506,028
--------------------
Current

Investment and Working Capital loan 11,430 6,430

Senior Unsecured Convertible Bonds due 2013 - 75,805

Revolving Credit Facility 69,681 -

Finance lease liabilities 7,022 11,558
--------------------
  88,133 93,793
--------------------

--------------------
Total borrowings 510,039 599,821
--------------------


On 30 September 2013, Talvivaara had an outstanding revolving credit facility of
EUR 100 million with a carrying amount of EUR 70 million (the "Revolving Credit
Facility"). The Revolving Credit Facility was subject to two financial
covenants, one of which stated that at the end of each quarter of a fiscal year,
the Group's liquidity (defined in the covenant as the aggregate amount of cash
and cash equivalents, and the available undrawn facility) shall exceed EUR 100
million.

Due to the weak nickel price development since early 2013 and the prolonged
effects of excess water on production levels, Talvivaara's liquidity position
has weakened more than anticipated. As a result, the Group was unable to meet
the covenant for liquidity at the end of the third quarter of 2013. As
Talvivaara had not received a waiver relating to the breach of the liquidity
covenant by 30 September 2013, the outstanding loan amount of EUR 70 million is
presented as a current liability in accordance with IFRS.

On 30 October 2013 Talvivaara received a waiver from the lenders relating to the
breach of the liquidity covenant. Simultaneously the terms, including the
financial covenants and the margin, of the Revolving Credit Facility were
amended and the undrawn commitment of EUR 30 million was cancelled.


6. Advance payments

(all amounts in EUR '000)

Non-current 30 Sep 13 31 Dec 12
--------------------
Deferred zinc sales revenue 217,173 219,385

Deferred uranium sales revenue 53,928 46,462
--------------------
  271,101 265,847
--------------------
Current

Deferred zinc sales revenue 16,202 7,790

Other - 67
--------------------
  16,202 7,857
--------------------

--------------------
Total advance payments 287,303 273,704
--------------------


7. Provisions

Gypsum Water
pond balance Environmental Mining
  leakage management restoration fee Total
-------------------------------------------------------
31 Dec 12 12,156 9,082 6,136 154 27,528
-------------------------------------------------------
Charged/(credited) to
the
income statement:

Additional provisions - 3,965 595 23 4,583

Unused amounts reversed (579) - - - (579)

Unwinding of discount - - 13 - 13

Used during the period (7,802) (7,076) - - (14,878)
-------------------------------------------------------
30 Sep 13 3,775 5,971 6,744 177 16,667
-------------------------------------------------------
The non-current and current portions of provisions
are as follows:

  30 Sep 13 31 Dec 12
--------------------------
Non-current

Gypsum pond leakage 3,775 5,000

Environmental restoration 6,744 6,136

Mining fee 177 154
--------------------------
  10,696 11,290

Current

Gypsum pond leakage - 7,156

Water balance management 5,971 9,082
--------------------------
  5,971 16,238
--------------------------
Total 16,667 27,528
--------------------------



8. Changes in the number of shares issued

  Number
of
shares
-----------------------------
31 Dec 12 272,309,640

Rights issue 1,633,857,840
-----------------------------
30 Sep 13 1,906,167,480
-----------------------------


9. Contingencies and commitments

(all amounts in EUR '000)

The future aggregate minimum lease payments under non-cancellable operating
leases

  30 Sep 13 31 Dec 12
--------------------------------------
Not later than 1 year 1,770 1,910

Later than 1 year and not later than 5
years 692 1,036

Later than 5 years 39 47
--------------------------------------
  2,501 2,993



Capital commitments
At 30 September 2013, the Group had capital commitments amounting to EUR 6.8
million (31 December 2012: EUR 15.1 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.


Key financial figures of the Group

Three Three Nine Nine Twelve
months to months to months to months to months to
    30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12 31 Dec 12
--------------------------------------------------
Net sales EUR '000 24,351 44,787 64,969 117,254 142,948

Operating profit
(loss) EUR '000 (29,227) (4,280) (73,073) (26,581) (83,588)

Operating profit
(loss) percentage   -120.0 % -9.6 % -112.5 % -22.7 % -58.5 %

Profit (loss)
before tax EUR '000 (38,621) (16,044) (106,819) (58,522) (129,292)

Profit (loss) for
the period EUR '000 (29,200) (12,136) (80,712) (44,521) (103,911)

Return on equity   -6.0 % -3.3 % -20.6 % -12.9 % -33.0 %

Equity-to-assets
ratio   35.4 % 28.0 % 35.4 % 28.0 % 24.3 %

Net interest-
bearing debt EUR '000 463,576 514,619 463,576 514,619 563,763

Debt-to-equity
ratio   97.5 % 140.6 % 97.5 % 140.6 % 183.8 %

Return on
investment   -2.0 % 0.0 % -4.9 % -1.2 % -6.7 %

Capital expenditure EUR '000 20,574 32,532 53,155 67,853 97,451

Property, plant and
equipment EUR '000 812,561 793,437 812,561 793,437 809,452

Borrowings EUR '000 510,039 601,925 510,039 601,925 599,821

Cash and cash
equivalents at the
end of the period EUR '000 46,463 87,306 46,463 87,306 36,058



Share-related key
figures

Three Three Nine Nine Twelve
months to months to months to months to months to
    30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12 31 Dec 12
--------------------------------------------------
Earnings per share EUR (0.02) (0.05) (0.07) (0.16) (0.38)

Equity per share EUR 0.36 1.34 0.36 1.34 1.11

Development of
share price at
London Stock
Exchange

Average trading
price(1) EUR 0.11 1.84 0.20 2.83 2.50

  GBP 0.09 1.46 0.17 2.30 2.02

Lowest trading
price(1) EUR 0.08 1.50 0.08 1.50 1.03

  GBP 0.07 1.22 0.07 1.22 0.83

Highest trading
price(1) EUR 0.15 2.16 1.33 4.42 4.43

  GBP 0.13 1.76 1.14 3.59 3.59

Trading price at
the
end of the
period(2) EUR 0.10 1.91 0.10 1.91 1.25

  GBP 0.09 1.52 0.09 1.52 1.02

Change during the
period   -30.2 % -11.1 % -91.5 % -23.8 % -48.8 %

Price-earnings
ratio   neg. neg. neg. neg. neg.

Market
capitalization at
the end of the
period(3) EUR '000 199,041 520,017 199,041 520,017 341,597

  GBP '000 166,408 415,000 166,408 415,000 278,777

Development in
trading
volume

1000
Trading volume shares 128,032 12,765 288,299 79,481 103,218

In relation to
weighted
average number of
shares   10.1 % 4.8 % 22.7 % 30.1 % 38.7 %

Development of
share
price at OMX
Helsinki

Average trading
price EUR 0.11 1.82 0.18 2.73 2.31

Lowest trading
price EUR 0.08 1.55 0.08 1.55 1.08

Highest trading
price EUR 0.15 2.17 1.39 4.35 4.35

Trading price at
the end
of the period EUR 0.10 1.90 0.10 1.90 1.24

Change during the
period   -27.3 % -10.6 % -91.6 % -24.0 % -50.2 %

Price-earnings
ratio   neg. neg. neg. neg. neg.

Market
capitalization at
the end of the
period EUR '000 198,241 516,027 198,241 516,027 338,209

Development in
trading volume

1000
Trading volume shares 607,287 32,199 1,253,296 147,094 209,565

In relation to
weighted
average number of
shares   47.8 % 12.2 % 98.5 % 55.7 % 78.5 %

Adjusted average 1,271,775 265,011 1,271,775 265,011 266,846,
number of shares   791 605 791 605 084

Fully diluted
average 1,269,507 263,907 1,269,507 263,907 265,742
number of shares   791 605 791 605 084

Number of shares
at
the end of the 1,906,167 272,309 1,906,167 272,309 272,309
period   480 640 480 640 640



(1.) Trading price is calculated on the average of EUR/GBP exchange rates
published by the European Central Bank during the period.
2. Trading price is calculated on the EUR/GBP exchange rate published by the
European Central Bank at the end of the period.
3. 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 Nine Nine Twelve
months to months to months to months to months to
    30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12 31 Dec 12
--------------------------------------------------
Wages and salaries EUR '000 6,283 4,824 19,070 17,098 23,080

Average number of
employees   636 577 617 536 547

Number of employees
at the end of the
period   584 551 584 551 588



Other figures

Three Three Nine Nine Twelve
months to months to months to months to months to
  30 Sep 13 30 Sep 12 30 Sep 13 30 Sep 12 31 Dec 12
----------------------------------------------------
Share options outstanding
at
the end of the period 25,721,500 4,611,337 25,721,500 4,611,337 5,958,837

Number of shares to be
issued
against the outstanding
share options 25,721,500 4,611,337 25,721,500 4,611,337 5,958,837

Rights to vote of shares
to be issued
against the outstanding
share options 1.3 % 1.7 % 1.3 % 1.7 % 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 debt Interest-bearing debt - Cash and cash equivalent



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



Profit (loss) attributable to equity holders of the
Earnings per share 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



Number of shares at the end of the period * trading
Market capitalization price at
at the end of the period the end of the period




Talvivaara Interim Report_Jan-Sep 2013 7.11.2013:
http://hugin.info/136227/R/1741370/585060.pdf



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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Talvivaaran Kaivososakeyhtiö Oyj via Thomson Reuters ONE
[HUG#1741370]